The battle of ideas
Thus it was because she had faith that she could afford to be cautious. She was confident that the correct policies would become clear in time so long as she got the direction right. In the meantime she could compromise, bide her time and go along with policies in which, in her heart, she fundamentally disbelieved – as she had been doing, after all, for most of her career – with no fear that she would thereby lose sight of her objective or be blown off course. She felt no contradiction, for example, in telling David Butler and Dennis Kavanagh that she was utterly opposed in principle to the trade union closed shop, but recognised that for the moment she had to live with it. She explained that politics was all about timing. You could kill a good idea by floating it five years ahead of its time, she told them; but two years ahead it could take off. Judging the right moment was the test of ‘real political leadership’.5
To win the battle of ideas Mrs Thatcher recognised that she had first to educate herself. Having come to the leadership so unexpectedly she knew she had an immense amount to learn, not merely to master the whole field of politics and government – where previously she had only had to cover one department at a time – but to equip herself intellectually to seize the opportunity which confronted her. With characteristic application, but remarkable humility, she set about learning what she needed to understand about the theory and practice of the free market and its place in Tory philosophy. She read the books that Keith Joseph and Alfred Sherman told her to read, attended seminars at the Centre for Policy Studies and the IEA, and was not ashamed to sit humbly at the feet of Milton Friedman and Friedrich Hayek when they came to London, absorbing their ideas but transmuting them skilfully into her own practical philosophy.
The main theme of all her speeches in these years was simple. One day very soon – ‘and it will be a day just like any other Thursday’ – the British electorate would face a simple choice between opposed governing philosophies: on the one hand what she loosely labelled socialism, and others would call social democracy, corporatism, Keynesianism or the mixed economy; on the other ‘what socialists call capitalism and I prefer to call the free economy’.6 When a Labour MP interrupted her in the Commons to ask her what she meant by socialism she was at a loss to reply.7 What in fact she meant was Government support for inefficient industries, punitive taxation, regulation of the labour market, price controls – everything that interfered with the functioning of the free economy. She accepted that many of these evils were in practice unavoidable. Even so, there were in principle, as she put it in a speech to the West German Christian Democrats, ‘only two political philosophies, only two ways of governing a country’, however many party labels might be invented to obscure the fact: the Marxist-socialist way, which put the interest of the state first, and the way of freedom, which put people first.8
Moderate Western forms of democratic socialism as practised by the German Social Democrats or the British Labour party she regarded contemptuously as merely watered down versions of Marxism without the courage of Moscow’s convictions. It fitted her political model perfectly that the Labour Party – under the influence of its increasingly dominant left wing – was becoming ever more openly Marxist.True to Hayek, she believed that socialism was a slippery slope – literally the road to serfdom – which would lead inexorably to Communism if the slide was not halted and reversed. Hence she did not, like other Tory leaders in the past, attribute the failures of the Labour Government merely to incompetence or inefficiency, but to fundamental error, which in her more generous moments she could recognise as well-intentioned. Labour Governments, she believed – and Tory ones when they fell into socialist fallacies – inevitably caused inflation, unemployment and stagnation because socialism was by its very nature simply wrong. It was wrong in practice, since self-evidently it did not work: and the reason it did not work was because it was morally wrong. It was essentially immoral and contrary to everything that she believed was best in human nature.
The Right Approach
Meanwhile, despite her determination not to saddle herself with specific commitments, the opposition had to have some policies. In keeping with the strategy of presenting a moderate face to the electorate, and the necessity of keeping the party outwardly united, Mrs Thatcher was content to leave the official process of policy-making in the hands of the Conservative Research Department fed by a network of backbench committees. Some were more active than others, and the process was nothing like so thorough as Heath’s comprehensive policy exercise in 1965 – 70; but Mrs Thatcher was happy to encourage it as a harmless way of keeping her MPs out of mischief.
Meanwhile, the important policy work was being done on a freelance basis by shadow ministers, particularly Geoffrey Howe and his shadow Treasury team. Some of this Mrs Thatcher followed closely; other ideas appear to have been worked up without her direct knowledge. In between there was a lot of thinking, planning and discussion which she was more or less aware of; but very little of this work found its way into her public pronouncements. Though she was evidently persuaded, for instance, that exchange controls should be abolished as soon as possible after winning office, the proposal never appeared in any policy document. Howe, with Nigel Lawson and others, was working on the practicalities of abolition long before the election, but Mrs Thatcher made no commitment, in public or in private. The battle for her approval had to be undertaken from square one the day after she entered Number Ten.
Likewise Howe and Lawson were working on the theory and practice of measuring and controlling the money supply, laying the foundations of what became the Medium Term Financial Strategy, introduced in 1980; and Lord Cockfield, the Tory party’s long-standing taxation expert, was working with Howe on possible tax reforms, above all the proposed switch of emphasis from direct to indirect taxation. In retrospect the biggest dog that scarcely barked before 1979 was privatisation – or, as it was then known, ‘denationalisation’. In his memoirs Lawson insists that he and others all saw privatisation as ‘an essential plank of our policy right from the start’; but he admits that ‘little detailed work [was] done on the subject in Opposition’, on account of ‘Margaret’s understandable fear of frightening the floating voter’.9
Mrs Thatcher’s nervousness of the subject was demonstrated in March 1978 when Howe floated the suggestion that a Tory Government might sell some of the Government holding in British Petroleum. She firmly denied any such intention.10 Soon afterwards, ironically, the Labour Government started selling BP shares as a way of raising money for the Treasury. In 1979 the Tory manifesto promised to ‘offer to sell back to private ownership the recently nationalised aerospace and shipbuilding concerns, giving their employees the opportunity to purchase shares’; to try to sell shares in the National Freight Corporation; and to open up bus services to private operators. Beyond that it promised only that a Tory Government would ‘interfere less’ with the management of the nationalised industries and set them ‘a clearer financial discipline in which to work’.11 For all Mrs Thatcher’s brave talk of reversing socialism, the thrust of Howe and Lawson’s preparatory work in opposition – as it remained for the first three years in government – was on ways of controlling the cost of the public sector, not on fantasies of eliminating it.
Mrs Thatcher actually allowed only one general statement of Conservative policy to be officially published by the party between February 1975 and the 1979 manifesto. This was The Right Approach, a studiously bland document whose sole purpose was to paper over the evident differences in approach between the two wings of the party before the 1976 conference. Launching The Right Approach at Brighton, Mrs Thatcher stated that the party’s first task would be to ‘put our finances in order. We must live within our means.’12 But she was at pains not to make this prescription sound too draconian or harsh. Moreover with memories of the three-day week still vivid, it was imperative that the Tories should be seen to be able to ‘get on’ with the unions.
There was no subject on which Mrs
Thatcher’s public words were at greater variance with her real views. ‘Let me make it absolutely clear’, she promised in 1976, ‘that the next Conservative Government will look forward to discussion and consultation with the trade union movement about the policies that are needed to save our country.’13 In private conversation and off-the-record interviews, by contrast, she made no secret that she regarded the trade-union leaders as full-time Labour politicians who would never have any interest in cooperating with a Tory Government. She left no doubt of her wish to see the overmighty unions confronted; and if she could not in the short term confront them herself, she gave covert support to a variety of ginger groups on the fringe of the Tory party which were not so inhibited. She took a close interest, for instance, in the work of the Institute for the Study of Conflict, founded in 1970 to expose Trotskyist subversion in industry and the Communist links of left-wing Labour MPs; she also gave private encouragement to the National Association for Freedom (later renamed the Freedom Association) founded by Norris McWhirter in 1975.
Yet she remained reluctant to commit herself to the strategy urged on her by John Hoskyns and Norman Strauss in a secret paper entitled Stepping Stones, which argued that everything an incoming Tory Government hoped to do would depend on facing down trade-union opposition. Right up to the end of 1978 the only piece of new legislation she was prepared to sanction was the introduction of postal ballots for union elections. She ruled out legislation on the closed shop, strike ballots or intimidatory picketing, let alone the unions’ legal immunities or the political levy. Had Callaghan gone to the country in October 1978 no trace of Stepping Stones would have found its way into the Tory manifesto. It was only the industrial anarchy of the Labour Government’s last winter which shifted the debate in favour of the Tory hawks and persuaded Mrs Thatcher that it was safe to come off the fence.
Pocket Britannia
In no respect did Mrs Thatcher conduct herself more like a conventional Leader of the Opposition than in her ritual condemnation of Labour’s responsibility for unemployment. From the moment she became leader, the ever-rising rate of unemployment offered the easiest stick with which to beat first Wilson and then Callaghan at Prime Minister’s Questions. From 600,000 in February 1974 the numbers had more than doubled to 1.5 million by 1978. Perhaps no Leader of the Opposition could be expected to resist a sitting target; but there was the most blatant opportunism in the way Mrs Thatcher repeatedly tried to tag Labour ‘the natural party of unemployment’14 and Callaghan ‘the Prime Minister of unemployment’.15 ‘Our policies did not produce unemployment’, she had the nerve to tell the House of Commons in January 1978, ‘whereas his policies have.’16 She contrasted Callaghan’s denial of blame with Heath’s acceptance of responsibility when unemployment touched a million in 1972 – the intolerable figure which more than anything else impelled him to his notorious U-turn.17 When Callaghan and Healey retorted that her monetarist prescription would increase unemployment – as Joseph on occasion candidly admitted – she vehemently denied it. ‘No,’ she insisted on television in October 1976.‘This is nonsense and we must recognise it as nonsense… A very, very small increase would be incurred, nothing like what this government has and is planning to have on present policies.’18 ‘We would have been drummed out of office if we had had this level of unemployment,’ she asserted in a party broadcast the following year.19
As the General Election approached the Tory campaign focused more sharply on jobs than on any other issue, starting with Saatchi & Saatchi’s famous poster in the summer of 1978 featuring a winding dole queue with the caption ‘Labour Isn’t Working’. If not quite a promise, the poster unmistakably suggested that Tory policies would quickly bring the figure down. After two or three years of Conservative Government, however, when the numbers out of work had doubled again to a hitherto unimaginable figure of more than three million, Mrs Thatcher’s glib exploitation of the problem in opposition had begun to look more than a little cynical. The best excuse that can be offered is that she, Joseph and Howe genuinely did not anticipate that their monetarist experiment would coincide with the onset of a world recession. Arguably the pain of an economic shake-out had to be gone through: eventually – after seven years – the figure did begin to fall. But given that the starting point of Joseph’s analysis had been that cutting the dole queues should cease to be the central priority of economic management, a scrupulous Leader of the Opposition would not have made quite so much political capital of unemployment.
Ever since the furore stirred up by Enoch Powell’s ‘River Tiber’ speech in 1968 immigration had been a taboo subject, carefully avoided by the respectable politicians of all parties. Mrs Thatcher had hitherto observed this polite convention; but as an ardent nationalist with a scarcely less mystical view of British identity than Powell himself she shared his concern about the impact of the growing immigrant population. In private she used to sound off about the ‘two Granthams’ worth’ of coloured immigrants she believed were still arriving in Britain each year.20 She believed that continued immigration was something ordinary voters worried about, and that politicians therefore had the right, even a duty, to articulate their worry. But she also had a baser motivation. With the economy picking up in the latter part of 1977, the Tories’ private polls indicated that their most profitable issues were rising crime and other social problems. So it was not a gaffe, but quite deliberate, that when Mrs Thatcher was interviewed on Granada’s World in Action two days after a racial incident in Wolverhampton she chose to speak sympathetically of people’s fear of being ‘swamped by people of a different culture’. Some of her staff tried to dissuade her; but she had determined what she was going to say – without consulting her shadow Home Secretary, Willie Whitelaw – and refused to moderate the emotive word ‘swamped’. ‘We are not in politics to ignore people’s worries,’ she declared, ‘we are in politics to deal with them… If you want good race relations, you have got to allay people’s fears on numbers’, by holding out ‘the prospect of a clear end to immigration’.21
Her words sparked an immediate outcry. In the Commons Labour MPs accused her of stirring up racial prejudice. Callaghan hoped she was not trying to appeal to ‘certain elements in the electorate’, and asked her to explain how she proposed to end immigration, given that all but 750 of the 28,000 admitted in 1977 – actually about one Grantham’s worth – were dependants of those already here.22 Six months later he charged that by speaking as she did she had ‘knowingly aroused the fears of thousands of coloured people living in this country and it will take them a long time to recover their composure’.23 But she hit her intended target. Like Powell in 1968, she received a huge postbag, some 10,000 letters thanking her for speaking out. The Tories gained an immediate boost in the polls, taking them from neck and neck with Labour at 43 – 43 into a clear lead of 48 – 39; and four weeks later they won a by-election at Ilford North, where polls showed that immigration was the key issue in swinging votes.
Yet Tory policy did not change. Whitelaw was furious, and briefly considered resignation. But short of assisted repatriation there was no way the policy could change. The party was already committed to a register of dependants; Mrs Thatcher could hardly reverse Whitelaw’s promise not to break up families. Powell was disappointed that she never referred to the subject again, claiming that ‘a chloroformed gag was immediately clapped over the leader’s mouth’.24 But as he reflected in a later interview: ‘If you’re trying to convey what you feel to the electorate, perhaps you only have to do it once.’25 In one respect Powell was wrong. She did return to the subject, quite unapologetically, in an Observer interview just before the election, when she denied that she had modified her original statement and defiantly repeated it.26
But in another sense Powell was right. Her words did not have to change Tory policy in order to achieve their purpose of signalling her real views to supporters in the country who wanted to believe that she was on their side. It was a trick she often used, even as Prime Minist
er, to suggest that she was not responsible for the lamentable timidity of her colleagues. She did the same thing over capital punishment, losing no opportunity in the run-up to the election to remind radio and television audiences of her long-standing support for hanging murderers. Most of the time she was obliged to keep her true feelings to herself. Her immigration broadcast was one of those vivid moments that helped bring MrsThatcher’s carefully blurred appeal into sharp focus, revealing, both to those who shared her views and those who loathed her, exactly what her fundamental instincts were.
This episode is a good example of the way Mrs Thatcher learned to project herself to the public independently of the party she led, not through specific policies or even in big ideas expressed in major speeches, but by constructing an image of the type of person she was, with attitudes, sympathies and instincts which could be guessed at when they could not prudently be spelled out. She realised the importance of projecting her message through her personality, selling the public a wide repertoire of carefully contrived images. It is ironic that Mrs Thatcher, who actually had an unusually clear ideological programme to put across, was the first leader to be packaged to this extent, beginning a process which, taken ever further by her successors, has practically drained politics of ideological content altogether. It was another measure of her political weakness, however, that she was obliged to hint at attitudes whose implications she could not fully expound; and a measure of her political skill that she was able to do so successfully.
The Iron Lady Page 13