The Path to Power m-2

by Margaret Thatcher

  Jim Prior, himself, stood rather more easily than I did. For him, I suspect, it was a practical question rather than a moral one: the important thing was to be realistic and accept that the trade unions could not be tamed by law. Any reform would need their cooperation. By contrast, Keith Joseph was an unswerving opponent of what he saw as a breach of human rights resulting from collectivist bullying. Jim’s and Keith’s opposing views, expressed in public statements on the Scarman Report on the Grunwick dispute, brought all this out into the open. I have described earlier the problems this caused me on my American visit.[54] At the time, I thought that Keith’s criticisms of Lord Scarman were too sharp, though the Scarman Report itself was anything but a judicial document and had no legal force. Moreover Jim, not Keith, was the spokesman on these matters. Either I sacked Jim, or I moved him (neither of which I could afford to do), or I had to go along with his approach.

  That was what I did. In retrospect, Jim and I were wrong and Keith was right. What the whole affair demonstrated was that our careful avoidance of any kind of commitment to changing the law on industrial relations, though it might make sense in normal times, would be weak and unsustainable in a crisis. But I took the decision to support Jim in part because, as yet, the climate was still not right to try to harden our policy. Within the Shadow Cabinet the great majority of my colleagues would not have gone along with me. But some time soon the nettle would have to be grasped.

  In reflecting on all this, I came back to the idea of a referendum. On my return from America I knew that I would be pressed hard by Brian Walden, who was making his debut as interviewer on the television programme Weekend World, on what a Conservative Government would do if it were faced with an all-out confrontation with the trade unions. I had to have a convincing answer: and there was not much hope that any amount of discussion within Shadow Cabinet would arrive at one. So on the programme I argued that although such a confrontation was unlikely, yet if such an emergency was reached, then a referendum might be necessary. The suggestion was well received both in the press and — most significantly in the light of the stories of splits and conflicts — got public backing from both wings of the Party. (It helped perhaps that Jim was expecting a rough ride at the Conservative Party Conference over the closed shop.) I set up a Party Committee under Nick Edwards to report on referenda and their possible uses. But, of course, though the suggestion of a referendum bought us vital time, it was not in itself an answer to the problem of trade union power. Assuming that we won a referendum, so demonstrating that the general public backed the Government against the militants, it would still be necessary to frame the measures to reduce trade union power. And so far we had not seriously considered what those measures should be.

  EDGING AWAY FROM INCOMES POLICY

  The argument about trade union power remained linked to that about incomes policies. At this time the Government’s own incomes policy was looking increasingly fragile. No formal policy could be agreed with the unions after the end of the second year of ‘restraint’, though the TUC exhorted its members not to seek more than one increase in the next twelve months and the Chancellor of the Exchequer pleaded for settlements to be below 10 per cent (backed as before with the threat of sanctions against employers who paid more). But, of course, whatever difficulties the Labour Government had in agreeing incomes policy with the trade unions were likely to pale into insignificance by comparison with ours. Unfortunately, we were committed to produce a document on economic policy, including incomes policy, before the 1977 Party Conference. David Howell, an able journalist of monetarist persuasions and also a front-bench spokesman, was the principal draftsman. And Geoffrey Howe, remorselessly seeking some kind of consensus between the conflicting views in his Economic Reconstruction Group, had by now become thoroughly convinced of the merits of German-style ‘concerted action’ within some kind of economic forum.

  I could see trouble coming down the track and I expressed my unease about all of this. Geoffrey tried to convince me of the system’s merits by sending me a paper on how the Germans did it, but I wrote back: ‘This paper frightens me to death even more. We really must avoid some of this terrible jargon. Also we should recognize that the German talking shop works because it consists of Germans.’

  Work on the document continued, but among the front-bench economic spokesmen rather than the Shadow Cabinet. By contrast with the Grunwick/closed shop issue, Keith, who shared my misgivings about the ‘forum’, was prepared to compromise more than I would have done. And in the end, the document appeared under the signatures of Keith, Geoffrey, Jim Prior, David Howell and Angus Maude; it was not formally endorsed by the Shadow Cabinet.

  I never felt much affection for The Right Approach to the Economy. Unlike The Right Approach of 1976, it made little impact either on the outside world or on the policy we would pursue as a Government. I was careful to ensure that ‘concerted action’ — apart from within the limited framework of the NEDC — never saw the light of day.

  So it was that we more or less successfully papered over the policy cracks up to the 1977 Party Conference at Blackpool. The Conference itself taught me an important lesson which Party managers in general find it hard to accept. On the face of it, the Blackpool Conference was a success. Colleagues generally stuck to the agreed lines on controversial issues. Embarrassing splits were avoided. Somewhat in the same spirit was my own speech. It contained many good lines but, for all the spit and polish, it was essentially a rollicking attack on Labour that lacked positive substance. Although the immediate reception was good, it was soon clear that it left the large questions about our policies unanswered; and I was not satisfied with it. My instincts proved correct. Having entered the Conference season several points ahead of Labour in the opinion polls, we finished it running neck and neck. A ‘good’ Conference never avoids rows at the expense of issues.

  In any case, January 1978 saw the spotlight turn back onto just those difficult, important issues which the Party managers considered best avoided. Geoffrey Howe, speaking in Swindon, delivered a sharp and comprehensive attack on the role of trade unions in Britain and was met by a barrage of abuse from the union leaders and scarcely concealed irritation from some colleagues. I agreed with Geoffrey and strongly defended him in public. But I was still basically sticking with the Prior line and so I dissuaded him from making a second such speech, noting on the draft: ‘Geoffrey: this is not your subject. Why go on with it? The press will crucify you for this.’

  Oddly enough, just a few days later I found myself on the receiving end of almost equally sharp criticism. I had determined to use a speech to a conference of Scottish industrialists in Glasgow to break away from the qualification and obfuscation into which I felt we had been manoeuvred over incomes policy. I said:

  The counterpart of the withdrawal of government from interference in prices and profits in the private sector which both we and you want to see, is inevitably the withdrawal of government from interference in wage bargaining. There can be no selective return to personal responsibility.

  This was attacked by, among others, The Economist under the timid headline: ‘Mrs Thatcher Takes the Tories into Dangerous Water’.

  A kind of torpid socialism had become the conventional wisdom of Britain in those years. But as the old order started to break up, it was increasingly difficult for anyone with the responsibility to think ahead to avoid challenging the prevailing orthodoxy. The succession of crises — economic, fiscal and industrial — under Labour constantly invited us to think thoughts and propose policies that deviated from both the conventional wisdom represented by Economist economists and the agreed line represented by Jim Prior — which as it happens usually amounted to the same thing.

  IMMIGRATION

  I was soon to offend against Party political wisdom still more fundamentally. Ever since Enoch Powell’s Birmingham speech in April 1968 it had been the mark of civilized high-mindedness among right-of-centre politicians to avoid speaking about immigration and
race at all, and if that did not prove possible, then to do so in terms borrowed from the left of the political spectrum, relishing the ‘multi-cultural’, ‘multi-racial’ nature of modern British society. This whole approach glossed over the real problems that immigration sometimes caused and dismissed the anxieties of those who were directly affected as ‘racist’. I had never been prepared to go along with it. It seemed both dishonest and snobbish.

  Nothing is more colour-blind than the capitalism in which I placed my faith for Britain’s revival. It was part of my credo that individuals were worthy of respect as individuals, not as members of classes or races; the whole purpose of the political and economic system I favoured was to liberate the talents of those individuals for the benefit of society. I felt no sympathy for rabble rousers, like the National Front, who sought to exploit race. I found it deeply significant that such groups, both now and in the past, were just as much socialist as they were nationalist. All collectivism is always conducive to oppression: it is only the victims who differ.

  At the same time, large-scale New Commonwealth immigration over the years had transformed large areas of Britain in a way which the indigenous population found hard to accept. It is one thing for a well-heeled politician to preach the merits of tolerance on a public platform before returning to a comfortable home in a tranquil road in one of the more respectable suburbs, where house prices ensure him the exclusiveness of apartheid without the stigma. It is quite another for poorer people, who cannot afford to move, to watch their neighbourhoods changing and the value of their house falling. Those in such a situation need to be reassured rather than patronized. Nor, as I knew from talking to immigrants in my own constituency, was it just white families who were deeply worried. Those immigrants who had already come here and wanted to be accepted as full members of the community knew that continuing large-scale immigration would provoke a reaction of which they might be victims. The failure to articulate the sentiments of ordinary people like these had left the way open to the extremists. And, of course, the very success of those extremists was something which the Left in all its varieties could turn to its advantage. No matter how much the socialists mismanaged the economy, cut Britain’s defences or failed to uphold law and order, they were at least able to guarantee a sympathetic hearing by condemning their opponents as bigots. For the Left has never been slow to exploit the problems it creates.

  Policy work on immigration had been proceeding under Willie Whitelaw’s direction for some time by January 1978. But it had not progressed very far — certainly not as far as many of our supporters, vocal at Party Conferences, wished. This was only partly because Willie himself was instinctively liberal-minded on Home Office matters. The problem was that it was very difficult to see what scope existed to cut down on present and potential future immigration.

  Roy Jenkins had changed the immigration rules to allow in male fiances for the purpose of marriage to UK citizens, a provision which had been much abused. Illegal immigration, about whose size one could only speculate, had in effect been encouraged by amnesties. It had become normal practice for those who entered Britain after 1 January 1973 for a ‘temporary’ stay to be accepted later for settlement on removal of the time limit and their dependants also admitted. Work permits were not sufficiently tightly restricted. There was much uncertainty both about the accuracy of the immigration figures and, above all, about the number of potential immigrants and their dependants who had a right to come to Britain. There was, therefore, scope for action in these areas, but that scope was limited. For there were a number of commitments upon which we could not honourably or humanely renege — in particular, to UK passport holders in East Africa and (under the Conservative Government’s 1971 Immigration Act) to the dependants of those immigrants who were ordinarily resident in the UK on 1 January 1973.

  Closing loopholes, tightening up administration and some new controls on primary and secondary immigration — all of these offered opportunities to reduce the inflow. But I knew that the single most important contribution we could make to good race relations was to reduce the uncertainties about the future. It was fear of the unknown rather than the awkwardnesses of the present which threatened danger. Willie Whitelaw shared that basic analysis, which is why he had pledged us at the 1976 Party Conference ‘to follow a policy which is clearly designed to work towards the end of immigration as we have seen it in these post-war years’.

  Although I had not planned any specific announcement on immigration, I was not surprised when I was asked in an interview on World in Action about the subject. I had been giving it a good deal of thought, having indeed expressed myself strongly in other interviews. Nor, for the reasons that I have outlined, did I feel any inhibitions about doing so. I said:

  People are really rather afraid that this country might be rather swamped by people with a different culture… So, if you want good race relations you have got to allay people’s fears on numbers… We do have to hold out the prospect of an end to immigration, except, of course, for compassionate cases. Therefore we have got to look at the numbers who have a right to come in… Everyone who is here must be treated equally under the law and that, I think, is why quite a lot of them too are fearful that their position might be put in jeopardy, or people might be hostile to them, unless we cut down the incoming numbers.

  Even I was taken aback by the reaction to these extremely mild remarks. What it quickly showed was the degree to which politicians had become isolated from people’s real worries. I was denounced as ‘appallingly irresponsible’ by David Steel, the Liberal Party Leader, who later added for good measure that my remarks were ‘really quite wicked’. Denis Healey spoke of my ‘cold-blooded calculation in stirring up the muddy waters of racial prejudice… to spread fear and hatred among peaceful communities’. The Home Secretary, Merlyn Rees, accused me of ‘making respectable racial hatred’. The bishops joined in. Fifteen years later, this reaction to ideas which were later embodied in legislation and are all but universally accepted seems hysterical.

  Even at the time, the reaction in the country, undoubtedly sharpened by the exaggerated rhetoric of critics who imagined they had finally sunk me, was completely different. Before my interview, the opinion polls showed us level-pegging with Labour. Afterwards, they showed the Conservatives with an eleven-point lead. This unintended effect of a spontaneous reply to an interviewer’s question had important political conscquences. Whatever Willie in his heart of hearts and my other colleagues felt about it, it provided a large and welcome boost at an extremely difficult time. It also sharpened up the discussion within Shadow Cabinet of our proposals. Within weeks we had a comprehensive and agreed approach which satisfied all but the diehard advocates of repatriation and which would see us through the general election.[55]

  The whole affair was a demonstration that I must trust my own judgement on crucial matters, rather than necessarily hope to persuade my colleagues in advance; for I could expect that somewhere out in the country there would be a following and perhaps a majority for me.

  THE NON-ELECTION OF 1978

  Quite apart from the immigration issue, 1978 had all the makings of a politically difficult year for the Opposition. As a result of the financial measures introduced under pressure from the IMF, the economic situation improved. In January 1978 inflation fell below 10 per cent for the first time since 1974 and it continued to fall. Unemployment was also falling gradually from its peak in August 1977; although there were sharp increases during the summer of 1978, 1.36 million were registered unemployed by that December, 120,000 fewer than the year before. We succeeded, with support from the Liberals, in forcing a cut of one penny in the basic rate of income tax: but that in itself would probably reduce the gloom about the economy which had played such an important part in Labour’s unpopularity and which had worked to our advantage.

  Our assumption was that Jim Callaghan hoped to coast along on these gradual improvements towards an election in the autumn on a platform of ‘safety
first’. One large obstacle in his way was that the Liberals now recognized that the Lib-Lab Pact had been politically disastrous for them. But their anxiety to bring it to an end was modified by their reluctance to face the electoral consequences of having sustained Labour in power at all. As for the opinion polls, Labour had drawn almost level with us by the summer and though we pulled away from them in August/September, during October and November (after a difficult Conservative Conference) they were around 5 per cent ahead, with the Liberals not even in double figures.

  In these circumstances, I commissioned work on a draft manifesto. It was drawn together by Chris Patten and the Research Department on the basis of Shadow spokesmen’s drafts. When I read it in July I was unimpressed. The large, simple themes had become obscured by lists of costly promises designed to appeal to interest groups. I said that the next draft must put the main emphasis on a few central objectives, like tax cuts and strengthening the country’s internal and external defences. The fulfilment of all other spending pledges was conditional on meeting these pledges first. In truth, I was disagreeably reminded of what little real progress in analysis or policy we had made in Opposition over the last three years. If we continued thinking in these terms, how would we ever manage to turn the country round?