The Path to Power m-2

by Margaret Thatcher

  More encouraging, however, was the change which had come over the Party’s publicity. Gordon Reece had returned to become Director of Publicity at Central Office. It was through Gordon that Tim Bell and Saatchi & Saatchi were made responsible for the Party’s advertising. This was a significant departure in our political communications. But I needed no persuading that it was right to obtain the best professionals in their field to put across our message. There was no question of the advertising agency devising what that message was, of course. But politicians should resist the temptation to consider themselves experts in fields where they have no experience. I would frequently reject suggestions for advertising on grounds of taste or sense, but I left the creative work to them. From the first, I found Tim Bell, the Saatchi executive who handled our account, easy to work with: like Gordon, he had a feel for politics and a sense of fun. When I first met Tim I laid down the basis on which we would always cooperate, saying: ‘Politicians usually have a lot of toes and you must be frightfully careful not to tread on them. I, however, have no toes — and you will tell me the truth.’ Of course, I was not always so self-restrained in practice.

  Saatchis put new life into the tired format of Party Political Broadcasts. There were the inevitable accusations of frivolity or over-simplification. But PPBs should not be judged on the basis of the comments of the Party faithful, but rather by whether the casual, unpolitical viewer actually chooses to watch them, rather than turning to another channel, and whether he gains a sympathetic impression. On this score, the change was a great improvement.

  Most significant, however — and even more important than the work done for the 1979 general election campaign itself — was the ‘Labour Isn’t Working’ poster campaign in the summer of 1978. Tim, Gordon and Ronnie Millar came down to Scotney on a Saturday in June 1978 to get my agreement for a campaign on this theme. Again, it would break new ground. Unemployment, which would be depicted both by the wording and by a picture of a dole queue, though it had risen to almost 1.5 million, was traditionally a ‘Labour issue’. That is to say, it was a topic which we would not normally make a campaign priority because, like the Welfare State, it was one where the Labour Party was generally regarded as stronger than us. The poster would also break with the notion that in party propaganda you should not mention your opponent directly. Saatchis, however, understood — and convinced me — that political advertising of the sort proposed could ignore such considerations. It was designed to undermine confidence in our political opponents, and so it should limit itself to a simple, negative message.

  Generally, Governments do well during the summer recess because the political temperature drops. The planned campaign would keep it high and doubtless provoke strong reactions. So after much discussion I agreed that the campaign should go ahead.

  As expected, it evoked a response. Denis Healey launched a bombardment. But the more it was condemned by the Labour Party, the greater publicity it got. Simply in order to explain what the controversy was about, the newspapers had to print pictures of the poster, thus multiplying the effect. So successful was it that a further series was developed on other topics, on each of which Labour was ‘not working’. Partly as a result of all this, we came through to the autumn of 1978 in better political shape than might have been expected — and in August-September we were strengthening. That in turn may have been of some significance, insofar as it affected the Prime Minister’s decision on whether to call an election.

  Only Jim Callaghan can say precisely why he did not call a general election that autumn. Certainly, I expected that he would, particularly after his speech to the TUC Conference which ended improbably with him bursting into song: ‘There was I, waiting at the church…’ — a teasing refusal to tell them what he was going to do. Then, just two days later, on Thursday 7 September while I was on a visit to Birmingham, the news was telephoned through to me from Downing Street that in the Prime Ministerial broadcast that evening, which we knew was booked, Jim Callaghan would announce that there would not in fact be an election.

  The advance warning was given in confidence, which I respected. In fact, we did not even inform the Central Office team. It was an odd feeling, knowing as I did that there would be no immediate campaign, yet receiving the excited good wishes of supporters unaware of this fact. At one factory, opposite a skill training centre I was visiting, the workforce turned out, waving and shouting ‘Good luck, Maggie.’ I had to complete my schedule as stoically and inscrutably as possible, while considering the right response.

  I shared the general sense of anti-climax which the Prime Minister’s announcement caused. But I knew that others, who had been working night and day to place the Party on a war footing in what had every sign of being a closely contested struggle, would feel the let-down even more. Later that night I telephoned through to Tim Bell to see how he and Gordon Reece had taken it. In fact, the two of them had restored their spirits over champagne in a West End restaurant and I had clearly woken Tim from the sleep of the just. I was asking where I could find Gordon when suddenly he said, ‘My God, I’ve been burgled.’ And so he had. He had managed to get to bed without noticing.

  I gave my reactions the following evening in the slot given to the Leader of the Opposition to reply to a Prime Ministerial broadcast. Ironically, in the light of what subsequently happened, the Prime Minister had sought to justify his refusal to seek a new mandate by arguing that a general election would do nothing to make the situation easier in the forthcoming winter. I replied:

  Well, some of us look further ahead than this winter. We don’t believe that Britain has to grind on in bottom gear. The longer he puts things off, the worse they will become, and the worse they become the longer it will take to put them right. But I believe they can be put right, once we’ve a government that has confidence. The confidence of the people and confidence in the people. A government with authority at home, and with authority abroad.

  Would we have won a general election in the autumn of 1978? I believe that we might have scraped in with a small overall majority. But it would only have needed one or two mistakes in our campaign to have lost. And even if we had just won, what would have happened next? The Labour Government’s pay policy was now clearly coming apart. The TUC had voted against a renewal of the Social Contract — and the following month’s Labour Party Conference would vote to reject all pay restraint — so even that fig leaf would be removed. A strike of Ford car workers already looked impossible to settle within the Government’s 5 per cent ‘pay norm’. The distortions and frustrations of several years of prices and incomes policy were unwinding, as they had under the Heath Government, amid bitterness and upheaval.

  If we had been faced with that over the winter of 1978/79 it might have broken us, as it finally broke the Labour Government. First, I would have had to insist that all the talk about ‘norms’ and ‘limits’ should be dropped immediately. For reasons I shall explain, that would have been very unpopular and perhaps unacceptable to most of the Shadow Cabinet. Secondly, even had we tried to use cash limits in the public sector and market disciplines in the private sector, rather than some kind of pay policy, there would have been a high risk of damaging strikes. Rather than giving us a mandate to curb trade union power, as they would in the following year, these would probably only have confirmed in the public mind the impression left by the three-day week in 1974 that Conservative Governments meant provoking and losing confrontations with the trade unions. Appalling as the scenes of the winter of 1978/79 turned out to be, without them and without their exposure of the true nature of socialism, it would have been far more difficult to achieve what was done in the 1980s.

  But in any case, we could afford to wait. Although I cannot claim to have foreseen what followed, I was convinced that the Labour Party’s basic approach was unsustainable. In exchange for agreement with the trade union leaders on pay limits, the Labour Government had pursued policies which extended state control of the economy, reduced the scope for indi
vidual enterprise and increased trade union power. At some point such a strategy would collapse. The trade union leaders and the left of the Labour Party would find their power so strengthened that they would no longer have an interest in delivering pay restraint. Nor would union members respond to calls for sacrifice in pursuit of policies that had plainly failed. The effects of socialist policies on the overall performance of the economy would be that Britain would lag further and further behind its competitors on productivity and living standards. Beyond a certain point this could no longer be concealed from the general public — nor from the foreign-exchange markets and foreign investors. Assuming that the basic structures of a free political and economic system were still operating, socialism must then break down. And that, of course, is exactly what happened that winter.

  SPLITS AND REBELLIONS

  The Conservative Party Conference at Brighton was always likely to be difficult. Most of those present had expected that it would never take place because of the supposedly imminent general election campaign and felt cheated of that victory. The opinion polls showed us falling behind Labour. Above all, the controversy over the Government’s rapidly disintegrating pay policy focused even more attention on our approach, and that was itself threatened with disintegration.

  A couple of weeks before the Conference Jim Prior had unwisely made remarks in a radio interview which seemed to offer Conservative backing for the Government’s 5 per cent policy, and not only made clear his support for the principle of a statutory incomes policy but actually revealed that he thought a Conservative Government would be forced to introduce one: ‘I think that may well happen under certain circumstances.’ In my own interviews, I tried to shift the emphasis back towards the link between pay, profits and output and away from norms. Although I made it clear that I was not supporting the Ford strike, I equally blamed the Government’s 5 per cent pay norm for what was happening and said that a statutory policy was not a practical possibility. I was widely interpreted as having called for a return to free collective bargaining, an interpretation I did not seek to deny.

  Ted Heath now intervened on the other side. Speaking in the Conference economic debate, while I watched from the platform, he warned of the risks of dogmatism and said of the Government’s 5 per cent policy: ‘It is not yet clear to what extent it has broken down. But if it has broken down, there is nothing here for gloating, nothing for joy. We should grieve for our country.’ Geoffrey Howe made a strong closing speech, handling Ted’s intervention with aplomb and saying that a future Conservative Government would return to ‘realistic, responsible collective bargaining, free from government interference’. But later that evening Ted appeared on television and went further. He warned that ‘free collective bargaining produces massive inflation’, and when asked if the Conservative Party should support the Government’s pay policy at a general election, he replied: ‘If the Prime Minister says he is going to the country and expresses the view that we cannot have another roaring inflation or another free-for-all, I would say I agree with that.’

  This was a thinly veiled threat. An open split between the two of us during the general election would cause enormous damage. The question of Ted’s role during an election had long worried the Party, and Peter Thorneycroft had met him quietly to discuss his plans earlier in the year. Humphrey Atkins had also received messages from several MPs close to Ted who told him that he was proving amenable to an approach to help. Arrangements were made to liaise with his office during the campaign. Ted’s intervention had blown all that out of the water.

  Moreover, in substance Ted’s view seemed to me entirely misconceived. There was no point in backing a policy which was beyond repair, even if it had been beneficial (which, in anything except the very short term, it was not). Moreover, although opposition to centrally imposed pay policies meant that we would find ourselves with strange bedfellows, including the more extreme trade union militants, the revolt against centralization and egalitarianism was basically healthy. As Conservatives, we should not frown on people being well rewarded for using sharp wits or strong arms to produce what the customer wanted. Of course, when such an approach was described, even by those allegedly on our own side, as being opportunist — and when it was accompanied by open disagreements as now between Shadow Ministers like Jim Prior and Keith Joseph — it was difficult to have the analysis taken seriously. But in fact it was an essential part of my political strategy to appeal directly to those who had not traditionally voted Conservative, but who now wanted more opportunities for themselves and their families. So I addressed much of my Conference speech directly to trade unionists.

  You want higher wages, better pensions, shorter hours, more government spending, more investment, more — more — more — more. But where is this ‘more’ to come from? There is no more. There can be, but there will not be, unless we all produce it. You can no more separate pay from output than you can separate two blades of a pair of scissors and still have a sharp cutting edge. And here, let me say plainly to trade union leaders, you are often your own worst enemies. Why isn’t there more? Because too often restrictive practices rob you of the one thing you have to sell — your productivity.

  Restrictive practices are encrusted like barnacles on our industrial life. They have been there for almost a century. They were designed to protect you from being exploited, but they have become the chief obstacle to your prosperity… I understand your fears. You’re afraid that producing more goods with fewer people will mean fewer jobs, and those fears are naturally stronger at a time of high unemployment. But you’re wrong. The right way to attack unemployment is to produce more goods more cheaply, and then more people can afford to buy them…

  We shall do all that a government can to rebuild a free and prosperous Britain. We believe in realistic, responsible, collective bargaining, free from government interference. Labour does not. We believe in encouraging competition, free enterprise, and profits in firms large and small. Labour does not. We believe in making substantial cuts in the tax on your pay packet. Labour does not. We will create conditions in which the value of the money you earn and the money you save can be protected.

  Over the next six months this strategy would be successful. But in the short term it was a liability, because the Party was not united on it and because opinion polls suggested that the public wanted us to support the Government against the unions. And not surprisingly we found ourselves at the end of the Conference season five and a half percentage points behind the Labour Party.

  The removal of the prospect of an immediate election, after everyone’s nerves had been screwed up to fight one, led to a breakdown in the ordinary disciplines in both parties. In the Labour Party this focused on economics. With us, it boiled over on Rhodesia, first at the Party Conference and then in the House of Commons.

  Within the Shadow Cabinet it was Peter Carrington who argued most strongly against accepting an amendment in the Rhodesian debate at the Party Conference which would commit us to lifting sanctions. Peter’s line was that although sanctions were largely futile, in the eyes of the Patriotic Front lifting them would constitute de facto recognition of the so-called ‘internal settlement’ earlier that year, by which Ian Smith had brought into the Rhodesian Government moderate black parties whose claim to represent the black majority was questioned. Peter argued that it would put us in an extremely weak position in trying to bring together the various parties to the Rhodesian dispute when we had already taken sides in this way. John Davies, who had to defend this contorted and unpopular line, did so in a rambling speech in which he was thrown by loud heckling. He looked exhausted and I could see when he sat down that he was in great distress, rubbing his head. I leaned across and asked him what was wrong: he told me that he had a splitting headache and had not slept for three days. I did not like the sound of this and told him that he must immediately go back to London to have a brain scan. He protested at first but finally agreed, being taken back in my car. There it was discovered
that he had a malignant brain tumour, from which tragically he died a few months later.

  Events at the debate at the Conference fuelled feeling within the Parliamentary Party. Reggie Maudling was one of a formidable team of backbenchers opposed to the Shadow Cabinet line of abstaining on the Commons order renewing sanctions. I did not like this line overmuch myself and, other things being equal, would have joined them in the ‘No’ lobby. But it was better to have a full-scale backbench revolt than to lose members of the Shadow Cabinet at this delicate juncture. In the end 114 Conservatives rebelled against the whip, including two junior spokesmen who accordingly left the front bench — the largest Conservative rebellion since 1945.

  A few days later I reshuffled the Shadow Cabinet — moving in Francis Pym to replace John Davies, bringing back John Biffen to take responsibility for small businesses, and appointing Mark Carlisle to replace Norman St John-Stevas at Education, with Norman becoming Shadow Leader of the House. With an election so close at hand, I kept the various factions more or less in place.

  I also did a little before the end of the year to still the embarrassing arguments about pay policy. When we failed to win the Berwick and East Lothian by-election in late October several backbench friends publicly blamed Ted Heath’s Blackpool intervention. I went on ITN and — with perhaps an excess of charity — exonerated him. And in the weeks following the Conference I temporarily bowed to the clamourings of a group of colleagues led by Peter Thorneycroft who urged me to reaffirm the line we had taken on pay policy in The Right Approach to the Economy. I spoke to this effect at Paddington in the week before Christmas.