No party was returned with an overall majority. The ambiguous situation made it legitimate for Heath to stay in office, and try to form a coalition with the Liberals. Margaret Thatcher vehemently opposed this, saying publicly that her policies would not be transferred to a ‘National Government’. The attempt failed as it was bound to do: even a Liberal/Conservative pact would not have given an overall majority. Heath resigned in March, and Harold Wilson formed his second administration. It was clear this would not last long – in October a second election returned Wilson but with an overall majority of only three.
Edward Heath did not resign as leader of the party. He had now lost three elections out of four, but he did not fall on his sword. On 14 October, the backbench 1922 Committee conveyed their opinion to Heath: that unless he stood down there must be a fresh election. Heath refused to discuss it until after the 1922 executive elections. On 14 November, he agreed to an election after the Committee had revised the rules. The first ballot was held on 4 February 1975. If Heath had resigned at this point, the most likely successor was Willie Whitelaw who had refused to stand against Heath, but Heath refused to stand down. Likely opponents from the right, supported by Margaret Thatcher, were Edward Du Cann and Keith Joseph. Du Cann did not stand for personal reasons. Joseph made it clear that he would stand for the right of the party when the opportunity arose, but, like Whitelaw, the centre and left of the party were bound by loyalty to Heath. Margaret Thatcher supported Joseph. Not only his friend, she also believed in his economic and social portfolio – market freedom. When the Conservatives had lost the second election, and a leadership contest became inevitable, she crossed herself off the list of candidates in order to make space for Joseph. Keith Joseph himself sabotaged his chances. During that summer he had planned to make three speeches outlining the mistakes of the last 30 years and describing the way forward. The third of these, in October at Edgbaston, included references to social class and comments on birth control that seemed to revive issues of eugenics. The uproar following this made it clear to him that he would be unelectable as leader. On the day that he withdrew from the contest, Margaret Thatcher announced her candidacy.
She was now shadowing the Secretary of State for the Environment. Her task was high-profile – to establish a manifesto commitment that would appeal to voters, would not be seen to criticise previous Conservative policy, and was recognisably ‘conservative’. For the first time the ‘right to buy’ for council tenants became part of an election commitment. Despite the looming leadership contest, Margaret Thatcher enjoyed these months. In November, she had been moved to shadow the Treasury. Opposing Labour economic policy found her in her element, and the approaching leadership contest allowed her to hone her campaigning skills. Airey Neave ran her campaign. He was a right-wing Conservative MP who had quarrelled with Heath early in his career. He was also a likeable man with a distinguished war record. Margaret Thatcher came to prize his political support and friendship. He encouraged her to concentrate on the Finance Bill. That way, MPs had the opportunity to see her in action. She would address her core supporters in a committee room at the house from 10.30 p.m. until midnight – afterwards she commented on how good it had felt to talk about things she believed in. She emphasised her conservativeness: that she stood for sound economics, middle-class values, ordinary British people. She wrote a letter to her constituency party focusing on the need to listen to ordinary human beings with ordinary human needs. On 4 February Margaret Thatcher defeated Edward Heath in the first ballot for Tory leader. Heath resigned. There was, of course, a second ballot: Margaret Thatcher’s majority had not been sufficient to avoid that. Now Heath’s allies were free to stand, and Jim Prior, John Peyton and Geoffrey Howe did. Only Howe had any right-wing credentials. On 11 February 1975 Margaret Thatcher was elected leader of the Conservative Party – Leader of the Opposition.
Chapter 4: Thatcher Emerging
The first hours of leadership were a round of engagements. First to meet the press at Westminster Hall, then to Central Office to be greeted by the staff. Denis was at Bill Sheldon’s house in Pimlico for a celebration with friends. Margaret Thatcher had tried to reach him with the news, but the press got there first. Mark learned the news at work, while Carol had to wait until her solicitor’s exam finished. It was late at night before all the family could be together. Margaret Thatcher had kept to a routine with her family: breakfast and as much of the weekend as possible together. Now the twins were grown up, and life would never be the same again.
The morning of 12 February dawned as something of an anti-climax. Margaret Thatcher was now the first woman leader of a major political party in the West, and had won her leadership election fair and square. But she was leader of a deeply-divided party, and she had divided it. Her support came from the backbenchers not from the Shadow Cabinet, who had been loyal to Heath until the end. Nor was Edward Heath going to help heal this division. She called at his home to honour her commitment to invite him into the Shadow Cabinet, but he refused. It was a quick meeting – Heath’s personal private secretary detained her before she left so that the waiting press would not realise how quick. During the following year and at the party conference he ignored any attempt at reconciliation. This behaviour ensured that Shadow Cabinet members who might have gathered behind him to oppose her had no focus. Heath became an outsider within the party.
Traditionally, the Conservative Party rallies to a new leader, and this leader was both in the public eye and possibly more vulnerable because she was a woman. Key elders of the party, Alec Douglas-Home, Lord Hailsham and Peter Carrington, set an example in supporting her. Willie Whitelaw, her nearest rival in the leadership contest, became a loyal deputy. He put aside his own ambitions to lead the party, accepting that at his age the chance would not come again. He is said to have announced her leadership, and his acceptance of defeat, in the same speech and in floods of tears at a dinner that night. He had nothing in common, personally, socially or politically with Mrs Thatcher the grocer’s daughter and found her abruptness and single-mindedness distressing. Nevertheless, he was a conscientious and supportive colleague until his retirement. His support made a great deal of difference in the next years.
Her Shadow Cabinet appointments were designed to reassure. Two members of the existing cabinet stepped down in solidarity with Heath. Robert Carr and Peter Walker were returned to the back benches – although she had got on well with Peter Walker, he was an outspoken critic of Keith Joseph’s right-wing policies and so needed to go. Keith Joseph himself was appointed as her private economic advisor with responsibility for policy and research. The remaining members of the Shadow Cabinet stayed. They were joined by Geoffrey Howe as Shadow Chancellor. Of five new faces only one was a woman, Sally Oppenheim, who took the classic woman’s portfolio of consumer affairs. One was Airey Neave, the only appointment that went to an outright supporter. He was given the post he wanted, Northern Ireland.
The composition of the Shadow Cabinet was a reaction to the circumstances of her leadership, and preceded a struggle for the direction of the party that was to continue during the next four years in opposition. These were tiring and frustrating years for an inexperienced leader. Margaret Thatcher was becoming more and more convinced by right-wing monetarist policies, but in practice, it was clear that the party had to rebuild relationships with the trade unions, and had to retain some ‘middle ground’ credibility. The debate inside the Tory party, and outside in wider society, reflected a change in British politics that went further than ideas about Tories as necessarily right-wing and well-heeled and Labour as being on the side of the workers, into fundamental understandings of freedom and equality.
When Clement Attlee was elected Prime Minister in 1945, he said ‘I will not cease from mental strife, nor shall my sword sleep in my hand, ’Till we have built Jerusalem in England’s Green and Pleasant Land.’ Margaret Thatcher could have used exactly the same lines, but would have meant a very different Jerusalem. To Attlee, and
to succeeding governments after the war, the dream was of a land where each and every individual was equal in the eyes of the government: where there was full employment, and where the state was responsible for the welfare and education of the people. To make this happen, economic theory drew on the work of John Maynard Keynes. Keynesian economic ideas meant that the government supported manufacturing industry either by providing subsidies or by taking control into their own hands through nationalisation. Subsidised or nationalised industries could support wage rises, so that workers could afford to buy the goods made. Keynes believed that this process would form a ‘virtuous circle’, where the amount gained from selling goods was always increasing, and therefore more people could buy goods and more people would be involved in the manufacturing process. The government would be able to support the circle through taxation, and would be responsible for using that taxation to support welfare – including full employment. In this ever-growing economy the government would also provide education and health services that gave free entry to everybody, and so minimised inequalities of class and wealth. In this way, people would be freed from anxiety, fear and the need to compete, and would create a free-thinking, well-educated, hard-working society supporting each other and the government.
These ideas had been tested by changes in British society in the post-war years. World events had altered the economic climate in which governments operated. For instance, the pace of post-war reconstruction had been slowed by the need for American finance through the Marshall Plan, and later industrial expansion had been slowed by the rising price of oil. Britain’s ability to market its goods was threatened by cheaper alternatives made in the Far East. The population was increased by immigrant workers. Reports of life in communist Russia did not inspire confidence in socialism, while American images of free enterprise were exciting. The long-running debate about entry into the Common Market changed the climate in which the Keynesian closed circle could operate. But the biggest challenge came from home. Margaret Thatcher had already warned that Britain was paying itself more than it earned: Throughout the Heath government union pressure for increases in wages was expressed through strikes and unrest. Agreement between governments and workers, without which the Keynesian circle could not function, was breaking down.
Despite the pressure on Keynesian economic measures, prime ministers from Attlee to Wilson had accepted, to a greater or lesser extent, the need for government to be involved in industry, wages and prices. This ‘collectivist’ consensus, supporting bargaining through unions and collective responsibility between workers and government, was perhaps the legacy of the landslide Labour victory in 1945. That had been a vote for a new and different way of arranging society, and equality was fundamental. It was deeply embedded in British thinking. Politically, there was still no real ideological challenge to this basic principle.
Harold Macmillan had announced the first application for Britain to join the EEC in 1961, but this attempt was vetoed by the French President General de Gaulle in 1963. Edward Heath was intimately involved in Britain’s negotiations for membership. In 1971, the House of Commons voted in favour of membership, and Britain joined in 1973. Membership had been confirmed in a referendum called by the Wilson government in 1975. Controversies over Europe were to plague the Conservative Party in the 1990s under Major.
Collectivism or Keynesian were not ideologies or principles that Margaret Thatcher agreed with. Her childhood ethic of hard work and success may have given her grounding in individualism. Certainly Alfred Roberts helped others, but he did not do so by losing or threatening his own position. ‘Charity begins at home’ ensures that what is given is only given after individual and family needs are well catered for. Personally, she was well suited to ideologies that stressed individual gains and individual work. Her first action as Secretary for Education had been to try and slow down the growth of large comprehensive schools. She had a deep distrust of socialists, started by her reading of Hayek at Oxford, made personal by the defeat of her father by socialists in Grantham in 1952, and supported by her visit to Soviet Russia. Her personal views had little outlet in previous years: although Robert Blake describes the Heath manifesto of 1970 as a ‘right wing’ document,1 the actions of the government in office were to continue to support industry and to bargain, where possible, with the unions.
The ideological argument against collectivism was first put forward by Keith Joseph. He spoke about the ‘socialist danger’ of previous governments, including Conservative ones. These ideas were far more in tune with Margaret Thatcher’s instincts, where individual equality and freedom depended not on the actions of the government but in the hard work and enterprise of the individual; where full employment was not a goal but an evil, because it took away the incentive to work hard; where rights to education and housing took away a man’s basic duty to care for himself and his own family; and where the taxation and government spending needed to support welfare arrangements was money the individual should have the right to spend themselves. This alternative drew on the economic ideas of Milton Friedman, and became known as ‘monetarism’. Here, inflation is seen as happening because the government allows the supply of money in the economy to grow by providing subsidies for industry and wage rises. A government’s sole responsibility is to reduce the amount of money in the economy by reducing spending. This action, coupled with valuing individual enterprise and avoiding any form of collectivism, is the foundation of the philosophy that Keith Joseph was speaking about, Margaret Thatcher implemented and which became known as ‘Thatcherism’.
On that morning in 1975, these ideas were new and unpopular. Keith Joseph had begun to move away from collectivism during his time in Heath’s Cabinet, and had been roundly criticised for it. Most of the members of the re-appointed Shadow Cabinet had supported the collectivist policies of the Heath government, and mistrusted both Joseph and Margaret Thatcher. Very few of the new appointments were convinced by monetarist ideas. Indeed, very few of the party as a whole were monetarists – links between traditional right-wing Conservative individualism and Friedman’s economics were neither tried, tested nor accepted. Throughout the following years, this limited the pool from which new Shadow Cabinet members could be selected.
Margaret Thatcher set out to win hearts and minds. The Tory conference was in October, which gave her seven months to establish a hold, though maybe a tenuous one, on her leadership. These were momentous times in the country. The battle for the European Union was raging – February 1975 saw the country vote to remain in the union in a referendum. In July the government brought forward a pay policy. Margaret Thatcher did not shine in debate against Wilson, and was hampered because by no means all the Tory Party or Shadow Cabinet would accept her speaking her true beliefs on this – that pay policies were fundamentally wrong, and helped cause rather than cure rising inflation. In September, she left for a two-week visit to the USA and Canada, but she was back in time for her first Tory conference as leader.
Her conference speech was a critical test. She did not want to make a speech just about economic policy, she wanted to set the foundations of a real philosophical and practical alternative to collectivist thinking. This was absolutely new ground in a mainstream political forum. Monetarist forerunners like Keith Joseph and Enoch Powell had been cast as mavericks, and the message had been lost in reaction to them personally or to other parts of their speeches.
The process of writing this speech was typical of Margaret Thatcher’s style. The first draft came from the Tory party research department. She re-wrote this herself, in her own handwriting. Then it went to Woodrow Wyatt to look at from a journalist’s perspective, and had some more material added by the research department. During the week before conference, it passed through many hands, but by the Wednesday it was, according to Margaret Thatcher, clear to me that none of those working away in my suite was what in the jargon is known as ‘wordsmith’. We had the structure, the ideas and even the foundations for some good jok
es, but we needed someone with a feel for the words themselves who could make the whole text flow along.2
Who could do that effectively? A playwright of course. Ronnie Millar was a successful playwright, with a new play in rehearsal. He endeared himself immediately to Margaret Thatcher – he included some lines from Abraham Lincoln
‘You cannot strengthen the weak by weakening the strong
You cannot bring about prosperity by discouraging thrift.
You cannot help the wage-earner by pulling down the wage-payer.’3
Lines that she had already found and kept on a scrap of paper in her handbag. For the next 15 years no major speech was complete until it had been ‘Ronnified’ – until Ronnie Millar had used his playwright’s ability to speak in her voice, and make that voice audible.
This speech was finished at 4.30 in the morning on Friday, and delivered on Saturday. It contained a passage that Margaret Thatcher describes as her ‘credo’ and quotes in full in her memoirs: Let me give you my vision: A man’s right to work as he will, to spend what he earns, to own property, to have the state as servant and not as master – these are the British inheritance... We must get private enterprise back on the road to recovery – not merely to give people more of their own money to spend as they choose, but to have more money to help the old and the sick and the handicapped... I believe that, just as each of us has an obligation to make the best of his talents, so governments have an obligation to create the framework within which we can do so... We can go on as we have been doing, we can continue down. Or we can stand up and with a decisive act of will we can say ‘Enough’.4
Thatcher Page 5
