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. 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’.
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 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 that 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 neighbourhood changing and the value of their house falling.
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 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.
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 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. 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 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 consequences. Whatever Willie in his heart of hearts and my other colleagues felt about it, it provided a large and welcome boost at an extremely diff
icult 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.*
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.
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?
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. Politicians should resist the temptation to consider themselves experts in fields where they have no experience.
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, 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 Jim Callaghan would announce that there would not in fact be an election.
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.
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.
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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 individual 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.
Margaret Thatcher: The Autobiography Page 30
