So why, three decades on, should the Government's 14-19 strategy still need to insist that work-related learning is an entitlement for all? And why the need to back it with statutory force?
While there was some interest in the subject before Callaghan's speech, English schooling had largely moved away from its ancient vocational roots.
Medieval universities were highly "relevant" - training people to run the country - and grammar schools grew to provide the necessary linguistic skills. But by the 19th century, universities had become upper-class finishing schools, more for ornament than use.
At the bottom of the social scale, schooling grew in spite of the needs of industry. Voluntary societies were out to recruit the young to their own brand of Christianity, while social reformers aimed to protect children from exploitation. Governments found it easier to subsidise the voluntary sector rather than get involvedin a debate about what school was really for.
But 20th century concerns about Britain's competitiveness after the Second World War and the loss of the empire triggered new interest in how to educate the workforce.
By the 1970s, private industry and the Manpower Services Commission (MSC) were funding initiatives to improve links between industry and education, such as Young Enterprise and Project Trident. The biggest project was the Technical and Vocational Education Initiative (TVEI). Launched in 1982 by Margaret Thatcher, it worked with local authorities and schools to develop work experience opportunities, industrial understanding and generic skills across the curriculum.
For teachers it meant money, and the chance to discuss where the curriculum was going. Jack Peffers, now European development officer at the University of London's Institute of Education, but then teaching in Brent, remembers the excitement. "The Department for Trade and Industry education unit put money into work experience and teacher placements - companies such as BP got involved. The DTI, the Department for Employment and the DES (Department for Education and Science, as it then was) all had a remit for this kind of work; they all gave money."
But Callaghan's "secret garden" of the curriculum had become something of an experimental jungle.
Raising the leaving age forced schools and local education authorities to find courses for young people about to go into work. Secondary modern schools were allowed access to the GCE exams that replaced School Certificate in 1951 and were also using BTEC courses and the RSA qualifications, but many schools also devised their own programmes without public exams. When the Certificate of Secondary Education was introduced in 1965, they soon adapted it locally.
TVEI was able to build on strong traditions of local innovation, but the proliferation of ideas was also a weakness. In his 1996 study "Constructing Vocational Education: from TVEI to GNVQ" David Yeomans of the University of Leeds school of education commented: "In retrospect TVEI produced a lot of turbulence, some excitement and some excellent practice but its lasting impact in curricular terms has been rather limited."
And issues of work-related learning soon became swamped in the storm of the Great Debate. Were schools out of control? Were comprehensives undermining standards? Was anybody actually learning anything? In the midst of the controversy, the Conservative government decided to get a grip; central government would control the curriculum, and the Secretary of State for Education would decide which qualifications would be allowed in schools.
Many qualifications disappeared, replaced by the new General Certificate of Secondary Education (GCSE) in 1986.
The 1988 Education Reform Act laid down the national curriculum. Although economic awareness was a cross-curricular theme, teachers retreated into their subject bases, struggling to implement the 10-subject curriculum. For many, the rationalisation went too far. Mike Connolly, work-related learning adviser for Hertfordshire, remembers, "If we go back to the high point in the 1980s before GCSE there were too many syllabuses and it was becoming a nightmare. We needed to get a hold on that, but we lost all the Pitman's and RSA as well. And the Certificate of Extended Education and the Certificate of Pre-Vocational Education - they were attempts to get youngsters to stay on in education."
And the recession led the Government to cut spending. It was "death to the schools-industry movement when the DTI gave up the education spending", says Jack Peffers. "The education business partnerships (under the Training and Enterprise Councils) took over work-related learning from the LEAs and focused what was done down to a very few things in the national curriculum.
The creativity disappeared."
Work experience programmes survived but work-related learning for all was in the doldrums in the 1990s. The General National Vocational Qualification (GNVQ) went national in 1993, but as a separate track alongside academic courses.
"For the past 25 years, we've been round and round this particular buoy," says Professor Prue Huddleston, director of Warwick University's Centre for Education and Industry. "Look at the current Increased Flexibility Programme and many elements there look like TVEI revisited."
The present government's policy of allowing the national curriculum to become more flexible and to make work-related learning a universal entitlement has been widely welcomed. But there is a strong feeling that we have been here before.
KEY DATES IN FOCUSING SCHOOLS ON THE WORLD OF WORK
1944 Butler Education Act provides secondary education for all
1947 School-leaving age is raised to 15
1951 School Certificate replaced by General Certificate of Education (GCE), available at 15
1963 Newsom Report recommends a more relevant curriculum for the average and less able; Young Enterprise started by Sir Walter Saloman
1965 Certificate of Secondary Education (CSE) starts
1972 Raising of school-leaving age (Rosla) to 16; Manpower Services Commission introduces Project Trident
1977 Schools Council Industry Project begins
1982 Manpower Services Commission starts TVEI, emphasising flexible learning and work experience
1986 Introduction of General Certificate of Secondary Education (GCSE)
1988 Education Reform Act creates a centrally controlled national curriculum and performance tables
1992 Education business partnerships, run by training and enterprise councils to co-ordinate education-industry links
1993 General National Vocational Qualification (GNVQ) available nationally
1998 Schools allowed to disapply parts of national curriculum to permit extended work-related learning for some students at key stage 4
2002 Increased Flexibility Programme to support extended work-related learning at key stage 4
2004 Work-related learning to be compulsory for all in key stage 4