Margaret Thatcher: The Autobiography (33 page)

If public expenditure was one aspect of the debate about counter-inflation policy, trade union power was another. On this matter, the line-up in the Shadow Cabinet over these years was slightly different from that on the question of voluntary/statutory incomes policy versus ‘free collective bargaining’. Geoffrey Howe was the most consistently hawkish on trade unions. Right from the beginning he emphasized in our discussions the need to shift the balance of power in industrial relations: indeed, I suspect that he would ideally have liked to get back to the Industrial Relations Act framework which he had devised. Keith Joseph and I shared that approach, though I remained extremely wary about committing ourselves to more changes than we could deliver. Jim Prior and most of the other Shadow Cabinet members could be found in the opposite camp.

On incomes policy, however, Geoffrey and Jim, supported by Ian Gilmour, were the strongest advocates of some kind of national understanding with the trade unions. Geoffrey’s view was that we should seek to emulate the alleged successes of the West German approach of ‘concerted action’, whose purpose was to educate ‘both sides’ of industry in the realities of the state of the economy and win some kind of consent to limit wages. This did not in itself involve a renunciation of monetarism, to which Geoffrey, in contrast with Jim and Ian, was increasingly committed. But it did involve a large element of corporatism and centralized economic decision-making, to which Keith was fiercely opposed and which I too disliked.

The most convinced opponent of monetarism and all its works was Reggie Maudling who, when he put his mind to it, actually had the grasp of economics to give his arguments weight. Reggie was the most ardently committed to a statutory incomes policy. As he put it in a dissenting paper to the Shadow Cabinet in May: ‘To the economic purist, no doubt, prices are only a symptom of inflation, but to us as politicians they are the real problem, because it is rising prices that are breaking the country in half.’ With such divisions in our midst it is not surprising that for much of the time our economic policies were felt to lack coherence.

The difficulties I had faced in the Economic Debate on Thursday 22 May – when for these reasons I had not been able to present a coherent alternative to government policy – persuaded me of the urgent need to sort out our position. Further public differences confirmed this. In June I spoke to the Welsh Party Conference in Aberystwyth, expressing strong
reservations about statutory wage controls: the same day Reggie Maudling spoke in Chislehurst implying that we might support a statutory policy. A few days later Keith made a speech casting severe doubt on the value of even a wage freeze, suggesting that it would be used as an excuse for not cutting public spending and taking the other necessary economic steps. On the same day Peter Walker called for a statutory pay policy – and was himself rebutted by Keith, who said bluntly that wage freezes did not work. Not surprisingly, Conservative splits figured large in the press. The fact that these divisions were more than replicated on the Government side was of only limited comfort.

I found from my own soundings that Conservative opinion in the country was strongly opposed to employers having to bear the brunt of anti-inflation measures. Our supporters wanted us to be tough on Labour. The following day the Backbench Finance Committee met and Bill Shelton reported to me their concerns. While very few wanted us to vote against the Government’s package outright, there was widespread anxiety lest by supporting it we would also be endorsing a continuation of the socialist programme.

At Shadow Cabinet on Monday 7 July, Jim Prior and Keith Joseph argued their conflicting cases. But the crucial question was still which Division Lobby the Party should enter, if any. By now the safest, if least glorious, course appeared to be to abstain. The risk was that such a tactic would dismay both wings of the Parliamentary Party and we could find ourselves with a three-way split.

Whatever the tactics to employ, I also needed to be clear in my own mind whether the Healey measures were a genuine step towards financial discipline or a smokescreen. So the day after the Shadow Cabinet discussion I had a working supper in my room in the House with Willie, Keith, Geoffrey, Jim and a number of economists and City experts, including people like Alan Walters, Brian Griffiths, Gordon Pepper and Sam Brittan who were in regular touch with me and on whose opinions I set a high value.
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Although we would have to look at the package as a
whole, especially the monetary and fiscal side, as Geoffrey said at the start of the evening, I came away feeling still less inclined to lend support to flimsy and possibly harmful proposals.

The White Paper, containing the details, was published on Friday 11 July. It was, as expected, a curate’s egg, containing measures like cash limits which we approved but not matching these with any real public expenditure cuts. The centrepiece was a £6 limit on pay increases for the coming year. The most astonishing omission was that the Government refused to publish the draft Bill it claimed to have drawn up which would introduce statutory controls if the voluntary limits were ignored. By the time it came to a vote, backbench and Shadow Cabinet opinion favoured abstention and this was now agreed. My own speech in the debate did not go particularly well – unsurprisingly, given the protean case I had to present. That might have been awkward, but Ted bailed me out by regretting that we were not supporting the Government and then refusing to back our critical amendment.

If one good thing came out of these travails, it was that the Shadow Cabinet was pushed towards an agreed line on incomes policy. This was that the conquest of inflation required that all economic policies must be pulling in the same anti-inflationary direction, in particular public spending and monetary policy. An incomes policy might play a useful part as one of a comprehensive package of policies, but was not to be considered as an alternative to the others, and could not be expected to achieve much on its own. While hardly qualifying as an original (or even true) economic insight, this at least provided a temporary refuge.

In any case, the Government’s July package was rightly judged to be insufficient to deal with the looming economic crisis. Inflation that summer reached an all-time high of 26.9 per cent.

We fled to Brittany in August for a holiday canal-cruising. I was still away when Harold Wilson launched the incomes policy in a television broadcast asking people to give ‘a year for Britain’ by sticking to the £6 limit. In my absence, Willie Whitelaw replied the following evening giving this nonsense a rather warmer welcome than I could have been persuaded to do.

In spite of the difficulties I had faced in the months since I became Leader, I approached that autumn’s Party Conference in reasonably good spirits. Ted and his friends seemed likely to continue being as difficult as possible, but my foreign visits had boosted my own standing. The
Government’s economic policy was in ruins. The Conservatives were 23 per cent ahead of Labour, according to a pre-Conference opinion poll. The task at Blackpool was to consolidate all this by showing that I could command the support of the Party in the country.

The Leader’s speech at a Party Conference is quite unlike the Conference speeches of other front-bench spokesmen. It has to cover a sufficiently wide number of subjects to avoid the criticism that one has ‘left out’ some burning issue. Yet each section of the speech has to have a thematic correspondence with all the other sections. Otherwise, you finish up with what I used to call a ‘Christmas tree’, on which pledges and achievements are hung and where each new topic is classically announced by the mind-numbing phrase ‘I now turn to …’

I told my speech writers that I was not going to make just an economic speech. The economy had gone wrong because something else had gone wrong spiritually and philosophically. The economic crisis was a crisis of the spirit of the nation. But when I discussed the kind of draft I wanted with Chris Patten and others from the Research Department, I felt they were just not getting the message I wanted to dispatch. So I sat down over the weekend and wrote out sixty pages of my large handwriting. I found no difficulty: it flowed and flowed. But was it a speech? I was redrafting on Sunday morning when Woodrow Wyatt – a former Labour MP turned entrepreneur, author, sympathizer and close friend – telephoned. I told him what I was doing and he suggested I come round to his house for supper so that he could look at it. The experienced journalist’s eye saw all that I had not. So the two of us began to cut and shape and reorganize. By the time I arrived in Blackpool I had the beginnings of a Conference speech. I also found that Chris Patten and others had written new material. We married the two and a first draft was accordingly produced.

In between receptions and visits to the debates I would go in to see how the speech writers were proceeding. But by Wednesday it was clear to me that none of those working away in my suite was what in the jargon is known as a ‘wordsmith’. We had the structure, the ideas and even the foundations for some good jokes. But we needed someone with a feel for the words
themselves
who could make the whole text flow along. Gordon suggested that the playwright Ronnie Millar, who had drafted material in the past for Ted’s broadcasts, was the man to help. So the whole text was urgently sent to Ronnie to be (what I would always later describe as) ‘Ronniefied’. It came back transformed. More precisely, it came back a speech. Then there was more cutting and retyping throughout Thursday
night. It was about 4.30 on Friday morning when the process was complete and I felt I could turn in for an hour or so’s sleep.

Earlier on Thursday evening, when I was reading through the latest draft, I had been called to the telephone to speak to Willie Whitelaw. Willie told me that Ted had arrived and was staying at the same hotel (the Imperial). His suite was a couple of floors below mine. For several months a number of Ted’s friends had been urging him to bury the hatchet. Willie explained to me that pride was involved in these matters and Ted could not really come and see me. Would I therefore come and see him? I replied that of course I would. Willie said that that was ‘absolutely splendid’ and that he would ring me back to confirm. Meanwhile, I plunged back into the draft. About an hour and a half went by with no telephone call. Since it was now about 10 o’clock, I thought that we must really get on with our ‘reconciliation’. So I rang Willie and asked what was happening. I was told that Ted had had second thoughts. The hatchet would evidently remain unburied.

The climax of the Conservative Conference creates a special electricity at Blackpool. For my part, though I had had almost no sleep, I was confident of my text and resolved to put everything into its delivery.

Reading it through almost twenty years later, there is nothing substantial that I would change – least of all the section about my personal creed and convictions.

I was relieved when, as I got into my speech, I began to be interrupted by applause and cheers. The representatives on the floor were hearing their own opinions expressed from the platform and they responded with great enthusiasm. I picked up some of their excitement in turn. On both
the floor and the platform there was a sense that something new was happening.

But would it play outside the Empress Ballroom? I hoped, and in my heart believed, that the
Daily Mail
’s leader comment on the contents of the speech was correct: ‘If this is “lurching to the right”, as her critics claim, 90 per cent of the population lurched that way long ago.’

By the end of that first year as Leader of the Opposition I felt that I had found my feet. I still had difficulties adjusting to my new role in the House of Commons. But I had established a good rapport with the Party in Parliament and in the country. I was pleased with the way my little team in the office were working together. I only wished the Shadow Cabinet could be persuaded to do likewise.

I reshuffled the pack on 15 January 1976. Reshuffles in Opposition had strong elements of farce. The layout of the Leader of the Opposition’s suite of rooms in the Commons was such that it was almost impossible to manage the entrances and exits of fortunate and unfortunate colleagues with suitable delicacy. Embarrassing encounters were inevitable. But on this occasion there was not too much blood on the carpet.

I was delighted that John Biffen was now prepared to join the Shadow Cabinet as Energy spokesman. He had been perhaps the most eloquent and effective critic on the backbenches at the time of the Heath Government U-turn and I welcomed his presence. And the promotion of Douglas Hurd, one of Ted’s closest aides, to be Party spokesman on Europe, showed that whatever Ted himself might feel, I had no grudges against those who had served him. I made Willie Shadow Home Secretary in place of Ian Gilmour, whom I moved to Defence where he proved an extremely robust and effective Shadow spokesman; if he had limited himself to that, life would have been easier for all concerned.

More important, our occasional victories did not seem to lead anywhere. The Government remained insecurely in place. On Wednesday 11 February (on the first anniversary of my becoming Leader) we won a division on a motion to reduce the Industry Secretary Eric Varley’s salary by £1,000 – a formal means of expressing rejection of policies. Then, in the midst of the sterling crisis of March 1976, the Government was defeated as a result of a left-wing revolt on a vote on its public expenditure plans. As one does on these occasions, I demanded that the Prime Minister should resign. I never imagined that he would. But the following Tuesday Harold Wilson did just that, letting me know of his decision in a note I received just before the announcement was made.