So a difficult year approached its end. We were behind in the polls and seemed all too willing to behave like a permanent Opposition rather than a potential Government, a failing on which the actual Government readily capitalized. When we successfully defeated the Government’s attempts to impose sanctions on Ford for paying its workers more than the 5 per cent norm in the Commons, the Prime Minister was able to paint a picture of a responsible minority administration being prevented from defending the national interest by Conservative opportunism. And when the following day there was a debate on a Vote of Confidence the Government survived by ten votes — and I made a particularly poor speech.
It was true that we had made some progress towards converting the Party and public opinion in the direction I knew was required. Events too had contributed — the scenes at Grunwick and the failure of the ‘Social Contract’ deal with the unions, particularly. With Labour’s pay policy in ruins, the fact that we were keeping open the option of introducing a pay policy of our own troubled me less than it once had. What mattered far more was that our programme lacked the clear commitment to changes, particularly in trade union law, which I believed were necessary. In that respect, at least, we still had a long way to go.
LABOUR’S NEMESIS
But Labour’s time was running out. Jim Callaghan had been dealt a bad hand by history and Harold Wilson in 1976. Like a brilliant poker player, he had employed skill, gamesmanship and simple bluff to spin out his defeat as long as possible on the chance that an ace or two might suddenly appear from up his sleeve. As 1978 became 1979, however, a succession of deuces tumbled forth. On Tuesday 12 December trade unions representing National Health Service and local authority workers rejected the 5 per cent pay limit and announced that they would strike in the New Year. At the end of December the elements conspired to create more trouble, with heavy snow, gales and floods. On Wednesday 3 January the TGWU called the lorry drivers out on strike in pursuit of a 25 per cent pay rise. Some two million workers faced being laid off. Hospital patients, including terminally ill cancer patients, were denied treatment. Gravediggers went on strike in Liverpool. Refuse piled up in Leicester Square. With Government compliance, trade union shop stewards dispensed permits to allow lorry drivers to transport ‘essential’ goods across picket lines. In short, Britain ground to a halt. What was more damaging even than this to the Labour Government, however, was that it had handed over the running of the country to local committees of trade unionists.
Would we be able to grasp the opportunities this provided? That might depend in part on an operation which had been proceeding in fits and starts, under conditions of the greatest secrecy, since the summer of 1977 and which went under the umbrella title of ‘Stepping Stones’. It was the brainchild of John Hoskyns, an able ex-soldier who had set up one of the first computer software companies, which he had built up and then sold to concentrate on public affairs. John had been in contact with Keith Joseph at the Centre for Policy Studies for some time before we were introduced. Together with his colleague Norman Strauss, he had a refreshingly if sometimes irritatingly undisguised scorn for the ad hoc nature of political decision-making in general and the decision-making of the Shadow Cabinet in particular. The two of them argued that we could never succeed unless we fitted all our policies into a single strategy in which we worked out in advance the order in which actions had to be taken — hence the title. The first time I heard all this I was not very impressed. We met over Sunday lunch at Flood Street and the session ended by my remarking on the fact that they had eaten a whole joint of roast beef and I wasn’t sure what I had gained from it all. Alfred Sherman, who was with us, quipped that next time they would bring sandwiches.
But under different circumstances, when long-term thinking was concerned, I came to appreciate the depth and quality of John Hoskyns’ analysis. Ironically, in the light of events, the paper which he and Norman Strauss prepared in the autumn of 1977, whose title ‘Stepping Stones’ came to apply to the framework of discussions which followed, was about persuasion as much as about policy. Its theme was that union reform was at the centre of what we wanted to do; without it the rest of our programme for national recovery would be blocked. But that programme could only be implemented by a Conservative Government that had won the argument. Winning the next election, even by a large majority, would not be enough if the only basis for it was dissatisfaction with Labour’s performance in office since 1974. Therefore, far from avoiding the union issue — as so many of my colleagues wanted — we should seek to open up debate. Moreover, this debate was not something to fear: the unions were an increasing liability to Labour and correspondingly a political asset to us. With intelligence and courage we could turn on its head the inhibiting and often defeatist talk about ‘confrontation’.
I was warming to this analysis and said as much when (along with Keith Joseph, Angus Maude and Willie Whitelaw) I met its authors over drinks and supper at the House of Commons at the end of November 1977. To follow up the report I set up a Stepping Stones Steering Group which met in January 1978, and proposed that small groups of Shadow Ministers and outsiders with relevant knowledge should plan ways to advance the strategy through speeches, pamphlets, articles and so on. There would also be a ‘Policy Search’ group of some of the more solid Shadows, Keith Joseph, David Howell, Nigel Lawson and Norman Lamont, working alongside John Hoskyns and Norman Strauss, to seek new policy initiatives in line with the overall Stepping Stones theme.
But before this work could begin, sceptical and hostile colleagues had to be faced. I held a meeting of the Leader’s Steering Committee at the end of January at which we argued ourselves to a standstill. Colleagues vied with each other in praising the Stepping Stones paper, but then warning against doing anything to follow it up — a well-known technique of evasion. We should avoid being ‘too insensitive or controversial’ (Francis Pym). We were ‘against appeasement and confrontation but there had to be a third way’ (John Peyton). Peter Thorneycroft, Ian Gilmour and Jim Prior all expressed degrees of doubt. John Davies said frankly that ‘if we told the truth about the unions we should certainly lose the election’.
Chris Patten had submitted a paper to the meeting showing deep suspicion of Stepping Stones. Essentially, Chris favoured what he would doubtless consider a pragmatic rather than an ideological approach to Opposition. But I supported the view of the authors of Stepping Stones that it would take more than tactics to transform Britain. The majority at the meeting grasped at the straw provided by Chris’s paper and expressed a nonsensical desire to unify the Patten-Hoskyns approach, to which I had to bow. Effectively they wanted to kill Stepping Stones, but that I would not allow.
It took a month to get Stepping Stones back on track and even then Chris Patten’s work was to go on ‘in parallel’ and opponents of the whole approach, notably Jim Prior and Ian Gilmour, were in control of several of the most important ‘Theme Teams’. John Hoskyns had hoped to persuade Jim Prior to break new ground on the union question but Jim’s promised Stepping Stones speech, when it finally came, was no advance. Though some useful ideas (and some not so good) emerged from the Policy Search group, the crucial question of pay policy was excluded from its remit and by the end of summer 1978 the whole Stepping Stones initiative seemed to have come to a halt. Nor had it had any impact on manifesto work: had we fought an October general election the manifesto would have included no significant measures on union reform.[56]
What rejuvenated the Stepping Stones initiative was the collapse of the Government’s 5 per cent pay policy that autumn. Immediately after the Labour Conference rejected the policy, Keith Joseph came to see Willie Whitelaw and me, expressing his disappointment that we had not got on further. At various times people had suggested that the only way forward was to shift Jim Prior, but now there was obviously an opportunity to move on without taking such a strong step. Accordingly, I arranged another meeting of the Stepping Stones Steering Group for mid-November.
At this and at a
later meeting, however, Jim was still able to block proposals for a vigorous campaign on the union question that winter. Peter Thorneycroft gave him strong support. Peter had never been a friend of Stepping Stones: at one point he actually suggested that every copy of the Stepping Stones report should be recalled to Central Office and burned. Even though Party opinion had begun to shift in my direction, no amount of discussion between Shadow ministers, advisers and MPs would have sufficed to persuade the Shadow Cabinet of the need to think seriously about trade union reform, had it not been for the industrial chaos of the ‘Winter of Discontent’.
Even then they would require a lead. This was an area in which we had made little or no advance since 1975. As Shadow Employment spokesman, Jim Prior had been well placed to veto the development of new policy on union reform. Although just before Christmas 1978 we managed to persuade him to accept an extension of our policy of providing state funds for unions voluntarily holding secret ballots — we would offer cash to cover the cost of pre-strike ballots as well as union elections — this really amounted to very little. Indeed, to the average voter our policy on secret ballots would have been hard to distinguish from Labour’s: in November 1978 the Prime Minister was offering to legislate on secret ballots if the unions wanted it.
In December Keith Joseph had tried to reopen the question of benefits paid to strikers’ families. I had agreed to the summoning of a new Policy Group to consider this question, but when it met Jim Prior’s opposition had prevented any progress.
I spent Christmas and New Year anxiously and reflectively at Scotney, watching the crisis build up. As it had at Christmas 1974, the bad weather discouraged us from our usual walks, and besides I had plenty to do. I read through the various Policy Group papers on union questions and I had brought down a bulging file of briefing from the press and interested outsiders. I spent many hours studying a textbook on industrial relations law and went back to the original Acts of Parliament, reading through the most important legislation since 1906. Every time I turned on the radio or the television the news was worse. I came back to London determined on one thing: the time had come to toughen our policy on union reform.
There was no difficulty in finding a platform. I had agreed before Christmas to be interviewed on Sunday 14 January by Brian Walden on Weekend World; the date was brought forward a week to 7 January. When I came back to London in the New Year, I saw Alfred Sherman, Gordon Reece and a few other close advisers to continue my briefing. The industrial situation was changing so fast that it was becoming more and more difficult to keep up to date, but over the next few weeks having the very latest facts to hand gave me vital advantages.
On Wednesday 3 January Jim Prior intervened to prevent a change in policy. Interviewed by Robin Day on radio, he firmly rejected compulsory strike ballots (‘not something that you can make compulsory in any way’), rejected legislation on strikers’ benefits, and commented on the closed shop: ‘we want to take this quite quietly… it is better in these matters to play a quiet game rather than to shout too much’. Asked what he thought of recent criticism of the trade union leadership by David Howell and Michael Heseltine, he said: ‘I don’t think they are being fair to trade union leaders who at the moment are trying to give good advice to the rank and file, and the rank and file is quite often rejecting it.’
On Weekend World I struck rather a different note. ‘Every power implies responsibility, every liberty a duty. The unions have [had] tremendous power over the years… [And] this is what the debate has got to be about — how unions use their power. I’m a parliamentarian, I am not in Parliament to enable them to have a licence to inflict harm, damage and injury on others and be immune from the law, and if I see it happening, then I’ve got to take action.’
Although I was careful not to commit us firmly to individual measures before they had received proper consideration, I ran through with Brian Walden a shopping list of possible changes, which naturally moved them higher on the agenda than some of my colleagues really wanted. I reaffirmed Jim Prior’s announcement that we would make funds available for secret ballots before strikes as well as for union elections. But I hinted at compulsion if needed, holding out the possibility of legislation to refuse Social Security benefits unless there had been a strike ballot. I also mentioned the possibility of restricting strikes in essential services, announced that we would subject short-term Social Security benefits to taxation and made the case for a right of appeal to the courts for people excluded from a union, who faced losing their jobs where there was a closed shop.
On television the following day Jim Prior replied to my interview. He said that nothing had been agreed between us on Social Security benefits for strikers and that he was against compulsory secret ballots. Thankfully, others reacted more positively. I had broken ranks. People could see that I was going to fight. Offers of support, information and new ideas began to flow into my office.
Most significantly, I received a request for a meeting from a former Deputy Leader of the Labour Party, Lord George-Brown, who came to my office at the Commons on Wednesday 10 January and who on the following Saturday drove down to Scotney for a further conversation with me. George Brown had more knowledge and experience of the labour movement — that is, the unions as well as the party — than almost any of its current leadership. He had resigned from the party in 1976 (sitting as an independent in the Lords) and had become an increasingly hostile critic of the power of the unions, writing effectively in the press. He told me how the hard Left had risen to positions of influence and power within some of Britain’s most important unions. He showed me that the immunities conferred by legislation since 1906 were being used with a new ruthlessness, and made an unanswerable case for a fundamental change in the law.
The strong support that I received for what I said in my Weekend World interview was in marked contrast to the reaction to Jim Callaghan’s remarks on his arrival back three days later from the Guadeloupe summit. His absence from the country at such a critical time had itself been politically damaging, helping to strengthen the impression that the Government was paralysed in the face of the strikes. The press coverage of the summit itself had not helped him; the sight of the Prime Minister sitting with the other leaders in the Caribbean sun, all casually dressed, was a dangerous contrast to events at home. But the final disaster was the impression he left with the press when he flew into Heathrow. Although he never did use those precise words — ‘Crisis? What Crisis?’ — the myth faithfully represented his attempt to play down the scale of the problem. His image of unflappability and competence was never restored.
I reflected later on why Jim Callaghan, the most canny of politicians, stumbled into such an error. Partly, no doubt, it was tiredness as a result of the transatlantic flight. That taught me a lesson I never forgot: do not make public statements on arriving back in the country after any lengthy absence or long journey. Yet the misjudgement also had deeper roots. Indeed, I always considered it a kind of nemesis. Jim Callaghan had based his whole political career on alliance with the trade union leaders. For him, if not for the country, it had been a winning formula. Now that the unions could no longer be appeased, he had no other policy in his locker. This alone can explain his helpless reaction to the crisis which overwhelmed him. The Government could not even decide whether to declare a State of Emergency. Although I had seen when a member of Ted Heath’s Cabinet that this was likely to be of limited effectiveness, the Government’s alternative of trying to reach voluntary agreement with the trade unions to limit the effects of the picketing was obviously futile.
What should be our next move? Parliament was due to return on Monday 15 January. I wrote to the Prime Minister demanding a full statement and a debate on the industrial situation. We had a slot already arranged for a PPB on Wednesday 17 January and work began on a script.
The preparations I made for my speech in the debate were perhaps the most thorough I had ever made for an appearance in the Commons. I had allowed others to
prepare a text for my speech in the last Confidence debate, a few months before: it had not been a success and I had resolved afterwards that on occasions of such importance I would not do this again. I did not want a written text in any case — I always spoke better from notes. I worked on this speech as if it were a tax brief, amassing my sources, marking them up with coloured pens, and drafting carefully a few pages of handwritten notes which would show me instantly the structure of my speech when I glanced down at them on the despatch box. Front- and backbench colleagues came in to help, some with information about their constituencies, others-particularly Ian Percival and Leon Brittan — to assist on points of law. Sympathetic firms affected by the strikes sent telexes giving their latest news; the CBI was producing a daily briefing; Denis passed on a good deal that he heard; and we all scanned the press.
My original idea had been to make a hard-hitting but essentially conventional speech from the Opposition benches — hammering the Government and demanding that they change course. But at Scotney over the weekend of 13–14 January and on Monday back in London several people urged a different approach. Peter Utley and Peter Thorneycroft sent me suggestions for a speech offering support for the Government if it was prepared to introduce the kind of legislative changes necessary to break the union stranglehold. Ronnie Millar and Chris Patten — working on the PPB script — were urging the same idea.
My own immediate inclination was to avoid offers of cooperation, for several reasons. First, unlike the more coalition-minded of my colleagues, I believed that the job of Oppositions is generally to oppose. We had a fundamentally different approach from that of the Government and our main duty was to explain it and persuade the country of its merits. Secondly, it was dangerous to make an offer of cooperation without having thought through clearly in advance whether we actually wanted it accepted or not. Probably nothing which went to the heart of the problem would — or indeed could — be accepted by Jim Callaghan’s Government. There was, therefore, a risk that in order to make a credible offer of support, we would have to set our sights too low as regards measures of reform. And if the Government then did accept the offer, we would have thrown away, for the time being at least, the opportunity of forcing it out of office. Moreover, reforms in trade union law alone would not suffice to deal with Britain’s underlying economic problems: that would need a much more comprehensive strategy to which the socialists could never agree.
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