by Andy Beckett
Yet, in one sense, her readiness to ignore the IEA as a Cabinet minister was a sign not of weakness but of strength. By the early seventies, with her strong, unflappable voice and finishing-school posture, her immense private determination and ability to be disarmingly flirtatious, with what her speechwriter Ronald Millar called ‘her senior girl-scout freshness’ in a political world made up of increasingly tired, older men, Margaret Thatcher was already much more than a vehicle for the ideas of economists and think-tank geniuses. She was a political original, with her own ideas about when to listen to the theorists and when to follow her instincts. At one IEA lunch before she became Conservative leader, Harris told her grandly: ‘Our aim is to create a new consensus about the market.’ Thatcher shot back: ‘Consensus? Don’t use that word!’
With the collapse and humiliation of the Heath government in February 1974, the political climate was favourable again to less consensual forms of Toryism, and the ex-education secretary had time on her hands. ‘I renewed my reading of the seminal works of liberal economics and conservative thought,’ she writes. ‘I also regularly attended lunches at the Institute of Economic Affairs where Ralph Harris, Arthur Seldon … [and] all those who had been right when we in Government had gone so badly wrong … were busy marking out a new path for Britain.’
Over the summer, she also became more formally involved with a new free-market think tank, as vice-chair of the Centre for Policy Studies (CPS). As with the IEA, there was a faintly cloak-and-dagger element to the CPS’s activities, starting with its deliberately anodyne name. Founded by Keith Joseph with Heath’s permission, its official purpose was to investigate how capitalism worked in continental Europe, and particularly in Germany, where more long-term business thinking and better cooperation between employers and trade unions than in Britain was producing enviable economic results.
In practice, the CPS did nothing of the sort. Instead, it became the base for the next stage of the British right-wing counter-revolution. While the IEA worked to change the intellectual status quo, the CPS took on a more practical role: to come up with radical policies that would get the Conservatives into government and enable them to change the country once they got there. In many ways, the task of the CPS was as forbidding as that of its predecessor. For the first year of the think tank’s existence, Heath was still party leader. He and most Tories continued to dismiss the free marketeers as Victorian throwbacks and intellectual lightweights. ‘When Keith [Joseph] made his first big free-market speech in 1974,’ Peter Walker told me, ‘I said to him, “What are you going to do about the velocity of money?”, and there was a glazed look in Keith’s face.’
Even after Thatcher became leader, moreover, it was by no means guaranteed that the Conservatives as a whole – let alone enough voters to elect a government – would learn to love the Austrian School. The CPS would need political operators with keen minds and sharp elbows. In the Tory politics of the mid-to-late seventies, there were few people, besides Thatcher herself, with a greater abundance of those qualities than Alfred Sherman.
A middle-aged woman with a stern expression answered the door at Sherman’s Kensington apartment. ‘You know that Sir Alfred is very unwell,’ she said. It was a dim summer morning in 2006, and the hallway of his mansion-block flat was heavy with paintings. When the woman finished speaking, a deep silence came from the surrounding rooms. She showed me into the largest. It had leather sofas, a huge modernist glass table with a reading light in curved chrome, Japanese prints on the walls and a view of London rooftops. In a chair facing away from the bay window was an old man in boxer shorts and a half-buttoned shirt. His head was back and his eyes were closed, and his skin was like parchment wrapping bones. As I approached, the eyes opened to slits and, in a dry wheeze of a voice, hard to place except for a very faint East End rasp, Alfred Sherman told me to sit down.
There was no small talk. ‘The Conservative Party in the seventies was unimpressive,’ he said in answer to my first question, keeping his head tilted right back. ‘The whole point about being a Conservative was that you didn’t question. Margaret’s shadow cabinet – the last thing they wanted was change.’ What about Keith Joseph? ‘Keith was all over the place. He wanted change, but he was frightened of change. And he didn’t want to annoy his friends.’ And Geoffrey Howe? ‘Geoffrey swum with the tide.’ Sherman took a long breath. Was there no one in the seventies that he considered an ally? ‘No one. The IEA were in a narrow compass. And they were slightly jealous of me.’ Surely he had intellectual allies? ‘[Milton] Friedman was a good economist. Hayek. That was all.’ And Thatcher herself? Suddenly there was almost a smile on Sherman’s thin lips. ‘She came from Grantham with her mind made up. She brought Grantham with her. I doubt whether she ever read Hayek.’ Could any conclusions be drawn from her rise? The smile turned to disdain: ‘It was chance.’
Sherman’s own rise to prominence as the effective head of the CPS and Thatcher’s most important adviser in the mid-and late seventies was a political journey that made hers seem straightforward. He had been born in the East End in 1919. His parents were poor Russian Jewish immigrants, his father a Labour councillor. Alfred – precocious, always certain in his opinions – joined the Communist Party as a teenager. ‘As a communist, I learned to think big,’ he wrote in his memoirs, ‘to believe that, aligned with the forces of history, a handful of people of sufficient faith could move mountains.’ When the Spanish Civil War broke out, he went to fight for the Republicans and became a machine-gunner. His faith in communism survived the Republican defeat, the Second World War, and even a post-war period as an economics student at the LSE, yet it started to unravel when he visited Yugoslavia in the late forties. ‘Communism as religion-substitute’, he wrote later, with typically barbed terseness, ‘has the disadvantage of susceptibility to judgement by results.’
The same could be said of free-market economics. Nevertheless, it became Sherman’s new creed in the fifties. First in Israel and then back in Britain, he established a successful dual career as a freelance political adviser and polemical journalist, in particular for the Daily Telegraph. In the late sixties, he met Keith Joseph. Joseph was already becoming a free marketeer, but Sherman sharpened up his rhetoric and his thinking. ‘I was able to “turn” him,’ writes Sherman, revealingly slipping into the language of double agents and espionage. When Heath’s government fell in February 1974, Sherman felt that Joseph’s moment had come. For six months, the two intense men met and talked, conceived of the CPS and worked on Joseph’s increasingly high-profile speeches. Also present and influential at some of the meetings was the iconoclastic right-wing British economist Alan Walters. He argued that one of the major causes of the country’s rising inflation was the readiness of the Heath government and its post-war predecessors to simply print more money when in economic difficulties. Instead, he said, the money supply should be closely controlled, an economic philosophy that was beginning to become known as monetarism. Another intermittent guest at the gatherings was Margaret Thatcher. At this stage, she was publicly backing Joseph for the Tory leadership rather than standing herself. But, characteristically, she was eager to learn. And like any ambitious politician, she was keeping her options open.
During this period, Sherman hoped that a series of carefully staged attacks by Joseph on the post-war consensus, the first by such a senior Conservative, would transform the national economic debate and attract attention and funds to the CPS. Over the summer, Joseph’s melodramatic rejection of Keynesianism – ‘thirty years of good intentions; thirty years of disappointments’ – and sudden announcement of his conversion to monetarism began to do just that. Then came his ‘eugenics’ speech. Sherman had helped draft it, but with reservations about the Pandora’s box Joseph seemed intent on opening. Joseph’s failure to cope with the speech’s repercussions convinced Sherman he could not become Conservative leader, let alone prime minister. ‘It was obvious he didn’t have it,’ Sherman told me, a sudden hiss of contempt in his v
oice, lolling back in his chair like some predator eyeing a weak and doomed animal. ‘Not tough enough.’
In fact, the two of them remained close collaborators at the CPS, but Sherman transferred his primary loyalties to Thatcher. He did not know her well: they had not met until 1974. Yet even before then he had been impressed by ‘the force of her beliefs’, as he put it in his memoirs, and had been telling prominent Tories he knew that she had a chance of succeeding Heath as party leader. ‘Margaret grasped opportunities when they arose,’ Sherman said to me. ‘She never worried and looked backward.’ Thatcher identified in him a similar aggression and originality: ‘Alfred had his own kind of brilliance,’ she wrote. ‘He brought his convert’s zeal … his breadth of reading and his skills as a ruthless polemicist … The force and clarity of his mind, and his complete disregard for other people’s feelings or opinion of him …’ During her leadership campign, he informally advised her and lobbied for her behind the scenes at the Daily Telegraph. Afterwards, he assumed a larger role. ‘I put the words into her mouth,’ he told me. In his memoirs, Sherman offered a little more humility and detail: ‘During her first two years as Leader … Mrs Thatcher made over a dozen speeches outlining her philosophy and policy prescriptions. We worked on these speeches day and night, particularly of an evening and weekend at her home in Flood Street, Chelsea …’
The Thatchers had bought their broad, almost gardenless terraced house just off the King’s Road in west London in 1972. After her election as leader in 1975, it would prove increasingly useful to her as a private base and public symbol. Appropriately for a politician keen to associate herself with a particular version of ‘middle-class values’, the house looked prosperous but not grand or pretentious. Instead of the draughty sash windows and vulnerable Georgian stucco favoured by the capital’s swelling left-inclined professional classes, Flood Street was solid to the point of blandness: a squat early-twentieth-century facade, almost characterless clean brickwork, roses in the small paved front yard. It could have been in a Surrey commuter town rather than still-gentrifying and bohemian Chelsea, with Malcolm McLaren and the Sex Pistols plotting a revolution of their own a little further along the King’s Road. One evening in the late seventies, Kingsley Amis, then moving firmly and publicly rightwards in his politics, was invited to dinner, along with the right-wing historian Robert Conquest and a right-wing sociologist:
No. 19 Flood Street is one of those neat little joints between the King’s Road and the Chelsea Embankment, comfortable … and decorated in a boldly unadventurous style … I was rather overcome with the occasion and the fairly close propinquity of Mrs T … very much a new face to me as to most people, too much so to take in a lot about the fare except that it was properly unimaginative, and, as regards drink, ample enough. The hostess wore one of those outfits that seem to have more detail in them than is common, with, I particularly remember, finely embroidered gold-and-scarlet collarand cuffs to her blouse … [She was] one of the best-looking women I had ever met and for her age … remarkable.
Sherman’s encounters with the Tory leader at Flood Street were more focused but had the same backdrop of old-fashioned domesticity. ‘Every phrase, every word’, he wrote later, ‘had to earn her approval (in contrast to Keith Joseph, who often accepted and delivered speeches after a cursory reading). In addition, she fed us, sometimes preparing the food in the kitchen while talking to us around the dining room table.’ On these evenings and weekends, Sherman was often accompanied by Thatcher’s parliamentary private secretaries John Stanley and Adam Butler. But he was the dominant influence on her: he gave her one-on-one lectures, he wrote her fierce memos, and he could type faster than anyone else when deadlines and late-night exhaustion beckoned.
However, like most rising opposition leaders, Thatcher had a huge and promiscuous hunger for advisers and lieutenants. Besides the Flood Street regulars, there was Joseph, still a mentor and the free marketeers’ John the Baptist figure. There was Geoffrey Howe, whom she appointed shadow chancellor, and who had been a monetarist and a foe of over-mighty trade unions for at least as long as her. There was Norman Strauss, a marketing man from Unilever, who was almost as abrasive and clever as Sherman and advised Thatcher to be a confrontational ‘conviction’ politician. There was John Hoskyns, sometimes Strauss’s collaborator, who had built up a pioneering computer business, developed an interest in cybernetics, the study of complex systems, and drawn up a giant diagram of the workings of the British economy, which concluded that the unions were the central problem. There were also Harris and Seldon, who had long been coming to similar conclusions at the IEA. There were all the less well-known pamphleteers and speechwriters at that think tank and the CPS. There were the growing number of noisy free-market converts working at British newspapers, such as Samuel Brittan, the senior Financial Times columnist, and William Rees-Mogg, the editor of The Times. There was the continuing lineage of right-wing professors at the LSE. There was Milton Friedman, their more famous American counterpart and early monetarist, who won the Nobel Prize for Economics in 1976 and was part of the now-thriving international network of right-wing economists that had grown out of the Austrian School. And finally, there was Hayek himself, who had jointly won the same prize in 1974 and who, like Friedman, was a regular presence at the IEA and CPS and at the court of Thatcher itself.
Naturally, not all these people agreed with each other or uncritically supported the Tory leader. Some, such as Brittan, were libertarians and anxious about her apparent lack of interest in non-economic freedoms. Some, such as Strauss and Hoskyns, came from nonpolitical backgrounds. Some, such as Howe, were privately appalled at the methods employed by the likes of Sherman: ‘too zealous’, wrote Howe in his autobiography. ‘Good ideas all too often lost their charm.’ And, of course, the natural competitiveness of politics and the sheer number of courtiers – by 1979, the Conservatives had ninety-six concurrent ‘policy groups’ – generated its own tensions and contradictions. Some of these would linger unresolved in Tory politics well after the seventies were over.
Yet, from the mid-seventies on, there was unmistakably a new mood in British right-wing politics: a new set of ideas and a new determination. ‘Something had to be done,’ said Sherman from his armchair, still wheezing but his diction, as always, clear, hard-edged. ‘Britain had a ruling class that was no longer capable of ruling. The whole system, the trade unions, the civil service – third-raters.’ For a few seconds, he lifted his head and leaned forward. ‘You are put on this earth to do something, and you do it.’ Then he picked up a dented old radio from a nearby table and switched on Radio 4 for the midday news. ‘I think we’ve had enough,’ he said. Four weeks later, he was dead.
Whether the abrasive new mood of the British Right matched the mood of the country was another question, and it was one to which the Flood Street and IEA radicals had so far devoted little attention. ‘I didn’t take much notice of opinion polls,’ Ralph Harris told me. ‘Didn’t look at how the public were living.’ He and his allies, like most revolutionaries, were in the business of leading, not following.
Yet there were some encouraging signs, if they cared to look. ‘Liberal baiting by 1976 had become a major hobby,’ wrote Peter York in Style Wars, his account of changing tastes and attitudes among fashionable Londoners during the seventies. ‘You only had to talk about a social worker or an ethnic print dress … to get a laugh. Styles got really tight and aggressive, all the big floppy shambolic post-hippy styles started to disappear from 1975 on … [And] the Conservative radicals were sounding really sharp.’ York expanded on these observations when I met him. ‘People were fascinated by the Thatcher thing,’ he said. ‘She seemed to be confident, had shiny surfaces. People were very interested in the idea that Thatcher was a good business. She seemed to know about modern spin.’ At the same time, Britain’s sixties-derived hippy and liberal cultures were seen as both obsolete and suffocatingly ubiquitous: ‘In Britain in the mid-seventies, mass hippiedom was all around. Yet
the hippies and the liberals appeared to come from another age. A lot of people during the seventies absolutely lost sight of what the [sixties] struggle had originally been about.’
This impatience with the status quo and interest in the new Tory alternative to it was not confined to the cultural and nightclub elite York mixed with. At the February 1974 election, the Sun, until then a Labour paper, did not back a party: ‘We’re Sick of the Ted and Harold Show’. During the seventies, almost all the national newspapers were afflicted by bad industrial relations and the high rate of inflation – the price of newsprint, for example, doubled between 1970 and 1975. Consciously or unconsciously, these problems most likely contributed to the apocalyptic tone of much of their British news and comment. The Sun was a particularly troubled paper. Although its circulation and influence were growing rapidly, it had some of the worst facilities for staff and some of the most frequent union-orchestrated stoppages. Readers responded to incomplete or lost editions with letters to the paper full of fury towards unions in general. The editor Larry Lamb, once left-of-centre like his daily, became a committed anti-union campaigner. Margaret Thatcher, a few years earlier the Sun’s ‘Most Unpopular Woman in Britain’, would by the late seventies regularly come into the paper’s offices to have a whisky with him after the first edition had been sent to the printers. The Tory leader would be at her most flirtatious and deferential. In return, Lamb provided her with advice about how to promote herself in the tabloids, and coverage so favourable that the Sun’s owner Rupert Murdoch, mindful of the paper’s many remaining Labour readers, would phone Lamb and ask him: ‘Are you still pushing that bloody woman?’