"It is our heritage that we keep the link between the unions and the party," says Labour's last Prime Minister. Only if you believe that, can you understand the party
At the age of 84, Lord Callaghan surveys the political scene from a unique perspective. He is the sole surviving former Labour Prime Minister, and the only politician from any party who has held all the great offices of state. He was Chancellor, Home Secretary and Foreign Secretary before becoming Prime Minister in 1976. And yet, with Labour on the verge of government for the first time since he left Downing Street more than 17 years ago, Callaghan keeps a low profile. Until now, he has not given a full-length interview since Blair became leader.
On my arrival at his office in the House of Lords, he warns that he is not as fluent as he once was, but then proceeds to be highly articulate on issues ranging from the recent changes to the Labour Party, its links with the trade unions, and the prospects for a Blair government. His long silence should not be mistaken for an elder statesman's indifference to contemporary events. Rather, it is to do with the fear of playing the "back-seat driver", offering advice or throwing hand grenades in from the sidelines in the manner of the Conservatives' two living former Prime Ministers.
Callaghan's political personality is unchanged. At first, it is almost unnerving to hear a voice and style so closely associated with the sixties and seventies discussing the nineties. He still combines avuncularity with occasional signs of grumpiness, and a conservative reverence for those institutions that have an egalitarian purpose. He remains a formidable politician. In her memoirs, Margaret Thatcher revealed that he was the only MP on the opposition benches who worried her when he rose to speak. Today he conveys a wariness about aspects of new Labour, without appearing disloyal.
Callaghan always had sharp political antennae. During the 1979 election he confided to his senior adviser, Bernard Donoughue, that he thought the political tide had turned and there was nothing he or anyone else in the Labour Party could do about it. A few days later he was out of power and the party has been in opposition ever since. In his analysis of the "tide" 17 years later, he is brutally candid about his and his generation s failure to adapt.
"A new generation was growing up and had reached the stage where their ideas were becoming popular - and we failed to adjust to that. To understand the reason, one has to go right back to the war and before. In the thirties, what we now call the market economy failed. There was the great Depression with millions unemployed. As soon as the war came, that disappeared. We had a centralised economy which provided work for everyone. So when my generation of young people came into the public eye we said there was no going back to the twenties and thirties, and we said: 'Look what happened during the war - a centralised economy has shown that we can plan for success.'
"But by the 1970s a new generation had grown up that did not have our wartime experience and didn't think it was relevant. So I think we failed to recognise the new expectations of the younger generation. The think-tanks of the right, with their new people - we simply failed to pay any attention to them."
The tide moved in a Thatcherite direction for a long time. Indeed, it can be argued that it is still moving relentlessly on. But Callaghan does not agree. "It's full tide now and it's beginning to go out. I think the market economy has shown up so much harshness, so much shortcoming in the matter of public provision, that the tide is in retreat. And I think what Tony Blair is attempting to do is to synthesise what is happening in the market economy with a growing feeling that this is not enough, that there has to be a social perspective in health and education and that we must stand against exploitation, privilege and injustice. Tony Blair has recognised this need for synthesis and we older people have got to come to terms with it. And I'm trying to, desperately!"
The last sentence is expressed with a smile and just a hint of mischief, prompting the obvious question. Does he worry that the new Labour synthesis is biased too much in favour of the market economy? "Labour has moved with the tide quite clearly and was right to move with it, provided it doesn't forget the basic principles on which it was founded. That's why I welcome the emphasis on ethical principles, which informed the writings of so many early socialist writers and pamphleteers."
So far Lord Callaghan sounds like a moderniser, albeit a reluctant one. In his Fabian lecture last year, Tony Blair made similar points about adapting to changing times while retaining basic principles. But the former Prime Minister, who, apart from Harold Wilson, was the most prominent figure in the Labour Party of the sixties and seventies, is less happy about the way a distinction has been drawn between "old" and "new". The failings of previous Labour governments have been openly accepted by the party's leadership as they have gone out of their way to emphasise the freshness of new Labour. "I think that shows rather a failure to understand the historical background in which we were operating. For much of the time in the 1970s we did not have a majority. People don't take that into account. This is their way of trying to win the election and I understand that."
What he understands less is the specific attempt by the leadership, first Blair, now Jack Straw, to suggest they are adopting a tougher stance on crime than their predecessors. Callaghan thinks the party was always tough on crime, as well as on its causes.
"I listened to what our people in the cities and housing estates were having to put up with. I remember Eric Heffer, who was on the left of the party, exploding with anger when anyone suggested we ought to be soft on these matters. I was seen as being on the right of the party, so we formed an odd alliance.
"There are a number of myths about the way we behaved which have been promulgated by the Conservative government and which somehow our own people, our spokesmen, have come to accept. They seem to have been brainwashed by Conservative propaganda as everybody else has been."
He then adds in a half-conciliatory, half-resentful sort of way: "I can't be bothered now. I look to history to put it right."
Callaghan has a well-developed sense of history, not least that of his party. This is hardly surprising, as he has been alive for most of its existence. Indeed, when people ask him whether he is old or new Labour he describes himself as "original Labour". He wants the modernised version to respect its origins. In particular, he regards it as essential that the party retains its links with the trade unions. Callaghan enjoyed a closer relationship with trade union leaders than anybody else in the Labour governments of the sixties and seventies. Tony Benn captured this rapport by secretly recording Callaghan leading a singalong at a dinner with union leaders on the night before the Durham Miners' Gala. He was Prime Minister at the time. It is impossible to imagine Tony Blair behaving in a similar way. "Yes, I remember that dinner. It was a private one, but Tony recorded everything. I seem to remember the Archbishop of Canterbury gave us a song at the same dinner as well."
He moves on to make his only direct plea to the current leadership. "I would be very opposed to breaking the relationship between the trade unions and the party. And I suspect most party members would agree. It is part of our heritage and it is instinctive in the party and movement that we should keep the link. Anyone who doesn't believe that doesn't understand our history or the natural foundation of our party.
"I do hope new party members will read the history and learn from the background of the party before they come to any conclusions too quickly. Now there are many party members who, by family or by instinct, understand the nature of the Labour Party, what its roots are. Therefore, in this area, I'm confident that the room for manoeuvre for our splendid new recruits would be limited."
Callaghan is too sharp a politician to suggest that Tony Blair himself may need instruction on the value of the link with the trade unions, merely saying that some of the "splendid new recruits" might.
It is ironic that Callaghan feels so strongly about the trade unions, as it is generally accepted that they played a significant part in his downfall in 1979. Although he is critical of their role in the Winter of Discontent, he also acknowledges mistakes on the government's part. "In the 1970s some of the unions were weakly led and didn't represent their own members. But we were asking them to do impossible things on incomes policy. The important thing is that they have changed now. They're adjusting to the thinking of the new generation and we must be very careful about how we handle that relationship."
The two big issues that dominated the last Labour government - Europe and devolution - are certain to play a similar role again. "A new Labour government is going to have Europe in its lap from day one and it's going to be very awkward. The decision about the single currency is extremely difficult. I think about it a great deal. I find myself going through the issues in my mind, the political and economic possibilities and the dangers. I think John Major made the right choice in getting us the option and I am personally proposing to delay my decision until the sky is clearer. But on the broad question of European unity, I have no doubt that it is in Britain's interests to cooperate fully."
He is clearly worried about the scale of Labour's constitutional programme. "Labour has so many constitutional changes it wants to introduce - much more than we had in the seventies. But what is more important is that we pursue issues the public think very important. I don't think the public see the reform of the Lords as a number one priority, for example, although I personally support it. I think the solution is to lay out a five-year plan of constitutional reform, rather than tackle every issue at once. When you count the number of legislative days a government has you find there are very few. The problem is always at the beginning of a new government when every eager young minister will have his own priorities, which will be more important than anyone else's, and there will be great pressure to try to legislate on too much."
Does he think the constitutional package can be achieved? "Devolution is certainly achievable. It is very sensible to go ahead with a referendum on the principle, as that will stop some of the obstructionism in the Commons."
As for reform of the Lords, he would put it lower down the list of priorities, but aim to achieve it during the lifetime of the government.
Former Labour ministers have praised Callaghan as a first-rate chairman of cabinet meetings. Even those such as Tony Benn, who opposed the government's economic policy, have acknowledged that Callaghan was masterly in conducting the often-heated cabinet meetings. For his part Callaghan has always emphasised the importance of cabinets as a whole being involved in big decisions. So while he is largely impressed with the shadow cabinet, he has one reservation. "I doubt if the front bench understands the frightening number of problems they have to have a view on. I mean those individuals not directly responsible for the economy or Europe. They are masters of their own briefs, whether it be education or health, but they need to become masters of the general problems that are going to make the weather for the next Labour government. And they had better inform themselves fully on the general policies which will need a collective decision."
On a more positive note, he offers a fresh perspective on the Today programme's impact on daily politics. "The shadow cabinet members have to be well informed to survive the grillings on Today. It has forced them to think out their positions much more closely than previous oppositions have had to do."
Given that Callaghan remains as politically alert as ever and is in the unique position of being the only living Labour Prime Minister, is he consulted much by Tony Blair? "I said to Tony at the beginning that I did not wish to intrude in any way. This is the first interview I have given. But I told him I was always at his service if he wanted my opinion."
In fact Blair has more often turned to Lord Jenkins for advice. "I don't feel resentful," Lord Callaghan insists. He is confident that history will place him and his government in a more positive context.
In the meantime he looks forward to being an observer of the next Labour administration. By chance, he deploys another metaphor on the eve of this election, which contrasts with the overwhelming "tide" he detected as Labour was heading for defeat in 1979. "I think a new stream is sweeping away the rather threadbare thoughts of the Conservatives. We're living in uncertain times. People and institutions don't seem sure of themselves, whether it is the monarchy, the church or the legal system. I think the election will help these institutions find their way forward. The election of a new government can, by its stance oh public affairs, set a moral tone, without preaching morality, just by its very existence and the way it behaves. Yes, I am sanguine about the future."
1979 WHERE WERE THEY THEN?
Tony Blair worked in Lord Irvine's chambers, specialising in employment law. He became engaged to Cherie Booth and wrote his first article in the NS - on trade union rights. A year later he started looking for a Commons seat.
Stubborn John Major finally made it into parliament, on his third attempt. He joined the Guy Fawkes Club, whose members included David Melior and Stephen Dorrell. At that stage he had no trouble from Michael Portillo, 25, who was working in the Conservative Research Department, or John Redwood, an employee of bankers NM Rothschild, working alongside Norman Lamont.…