Yet he held the respect of the Unionists for his straight dealing and blunt manner. In dealing with the civil rights marches there and in understanding the resentment of the Catholic minority he won their trust. He never hesitated to go to the province, to the streets of Belfast and Londonderry. He sent troops to protect the Catholics and disbanded the detested “B Specials”. For the Chancellor, committed to advancing the Government’s modernisation and reform programme, the prospect must have been gloomy indeed.Yet the two dramatic responses that might have changed that prospect, devaluation and a massive reduction in the scale of Britain’s overseas commitments, were both ruled out by the Prime Minister himself, who had the support of his Chancellor of the Exchequer.Devaluation spelled, for Harold Wilson, not only a retreat from Britain’s world role, but also loss of trust in a new Labour government elected after 13 years of Conservative administrations.

A few minutes later, amazed organisers saw the Home Secretary attended only by one senior policeman and a few hangers-on like me, saying it was a lovely day for a demonstration and he hoped there wouldn’t be any trouble.There was some, of course. A group of marchers broke away from the main body and tried to attack the American Embassy. Jim, back in the war room, consulted the Metropolitan Police Commissioner. They decided that the ranks of arm-linked police officers, backed up by some mounted policemen, could hold the line There were to be no water cannon, no jeeps.

I had asked to be there, as Minister of State for Higher Education “They are my people”, I told Jim. It was a sunny morning, and I remember him saying he was going to walk down to the Embankment to see how the organisation of the demonstration was going. The disgust of many members of his own party at this was to damage Jim’s reputation for years to come.Yet he was far from being a reactionary Home Secretary. In the 1960s a new generation of students in the US was inspired by the civil rights movement in the South A few years later, they were inflamed by the war in Vietnam Their anger spread to Europe. The anti-Vietnam demonstrations culminated in a huge protest directed at the American Embassy in October 1968. The climate was one of fear, fear not just of disorder but of anarchy. Shopkeepers boarded up their shops, and the capital was abandoned by tourists and citizens alike.In the embattled Home Office,there was a kind of war room, with closed-circuit television cameras showing each section of the demonstration, so that the Commissioner of the Metropolitan Police, Sir Robert Marks, and the Home Secretary could make decisions on how to contain serious trouble instantaneously.

So he embarked on the most intensive and exhaustive debate of any Cabinet of modern times No one could complain that he or she had not been heard Jim’s chairmanship was brilliant. In the end, he not only held his Cabinet together, he got them to agree on a compromise which, after some tense stand-offs, the IMF accepted.The outcome of the IMF cuts, £1bn in two succeeding years, proved much less damaging than expected The switch in market confidence was dramatic. The market’s lack of confidence in a Labour government had dogged its leaders for years, but won neither the understanding nor the sympathy of its supporters. Jim had provided a dazzling example of cabinet government at its best; but he had done nothing to satisfy the wider Labour movement.In the Home Office, his second great department of state, Callaghan found himself in an environment that suited him better. He had no strong desire to follow the radical approach of his predecessor, Roy Jenkins, but he did manage to get a race relations Bill on the statute book.

He was convinced that the racial tension built up by substantial inward immigration from the Commonwealth, and inflamed by the speeches of Enoch Powell, could only be contained by strict controls over non-white immigration.He was not a racialist His record as spokesman on the colonies attested to that But he was a politician, and he resonated to public unease. Already thousands of East African Asians were fleeing Kenya, threatened by President Kenyatta’s programme of Africanisation. Their right to settle in Britain had been guaranteed under the independence agreement. There was much fear in Britain that thousands of East African Asians might suddenly arrive.Jim Callaghan rushed a Commonwealth Immigration Bill on to the statute book within a week, removing the right of East African Asians to settle in Britain. The state of the economy was to stalk Callaghan’s political career relentlessly. The announcement of the 1967 devaluation had been the worst day of his life. Nearly 10 years later, he was again faced with a desperate economic situation and an overvalued pound.In 1973, oil prices had been massively increased by Opec.