Dartford should have been surprised that when the chance offered she left her male rivals at the post.
Yet it was still an unpredictable combination of other factors which created her opportunity. First, she benefited from an intellectual revolution – or counter-revolution – in Tory thinking which had been building over the previous ten years but which was suddenly brought to a head by the shock of electoral defeat, creating the opening for a radical change of direction. This was a development in which she played very little part, yet one which reflected her most deeply held convictions, so that she had no difficulty taking advantage of it. At the same time a fortuitous pattern of personal circumstances ruled out of contention virtually all the other candidates who might, a year earlier, have hoped to harness this opportunity to their own careers.
The revolution in Tory thinking had two strands – economic and political. On the one hand there was a sudden revival of interest in the free-market economic ideas quietly propagated for years on the margins of serious politics by the Institute of Economic Affairs but largely derided by the conventional wisdom in both Whitehall and the universities. Throughout the 1960s the fact that the only prominent politician to preach the beauty of the unfettered market was Enoch Powell was enough to tar the message with the taint of crazed fanaticism.
From the middle of 1972 onwards, however, the Government’s U-turns in economic policy had begun to make converts for the Powellite critique. Treasury mandarins attached little importance to the money supply. But in Fleet Street an influential group of economic journalists led by Samuel Brittan on the
At the same time there was among ordinary Tories in the country a more generalised mood of mounting frustration at the failure of successive Conservative Governments to halt or reverse what seemed a relentless one-way slide to socialism. Not only in the management of the economy but in almost every sphere of domestic and foreign policy – immigration, comprehensive schools, trade unions, Northern Ireland, Rhodesia – Heath had appeared almost deliberately to affront the party’s traditional supporters while appeasing their tribal enemies. Strikes, crime, revolting students, pornography, terrorism, inflation eating away at their savings – all stoked a rising anger that the country was going to the dogs while the Tory Government was not resisting but rather speeding the process. By the time Heath lost the February 1974 election an ugly mood had built up in the Tory party which lacked only heavyweight leadership to weld together the two elements – the political backlash and the economic analysis – to form a potent combination which ultimately became known as Thatcherism.
The unlikely catalyst was Keith Joseph – hitherto no one’s idea of a rebel or a populist, but a former Cabinet Minister of long experience and unimpeachable integrity who was almost uniquely qualified to lend intellectual rigour to political revolt. He subsequently described how he had thought he had been a Conservative for the past thirty years, but now realised that he had been a ‘statist’ all along, bewitched by the delusive power of government.2 Having seen the light, he set out with a religious fervour rare in high-level politics to atone for his past sins by bringing the Tory party – and ultimately the country – to a realisation of the true faith.
Mrs Thatcher by contrast never pretended to be a thinker. She was a politician, and – unlike Joseph – an intensely practical and ambitious one. It is not the job of politicians to have original ideas, or even necessarily to understand them. Professional economists like Peter Jay used to sneer that Mrs Thatcher never really understood monetarism. But she did not need to. It was enough that she saw its importance; she possessed – as Joseph did not – the much more important and rare ability to simplify complex ideas and mobilise support for them. No intellectual herself, she was nevertheless unusual among politicians in acknowledging the importance of ideas. She had always believed that politics should be a battle between fundamentally opposed philosophies; it was a characteristic of her leadership that she systematically used intellectuals and academics – those whom she thought were on her side – to underpin her policies and furnish her with arguments and intellectual ammunition. As Prime Minister she developed an informal think-tank of her favourite academics to advise her.
The result of the February election had left the Tory party in a sort of limbo. With another election certain within a few months – as soon as Wilson saw an opportunity to increase his precarious majority – there was no early possibility of challenging Heath’s leadership, even if there had been an obvious challenger in waiting. The lesson he drew from the debacle of confrontation with the miners was that the Conservatives must try harder than ever to show themselves moderate and consensual in order to unite the country and win back the votes lost to the Liberals. This was the opposite of what his party critics wanted.
The one area in which Heath saw a need for new policies was housing. He told the Shadow Cabinet that the voters he met wanted ‘some radical and drastic changes in policy aimed particularly at the problems of ordinary people’ – specifically the cost of mortgages and the burden of the rates – ‘which should take priority over rather more abstract principles’.3 The key job of developing and selling these shiny new policies which would form the centrepiece of the party’s appeal at the next election he entrusted to Margaret Thatcher: an indication that he still saw her as an efficient and amenable agent of his will, not as a potential troublemaker.
Shadow Environment Secretary
In fact, up to October 1974 he was not wrong. The job of shadow Environment Secretary was a high-profile opportunity in an area of policy she had always been interested in but had not previously covered. It took her all her time to get on top of it. An Oxford contemporary who had known her in the Department of Education ran into her soon after she had taken it over and found her uncharacteristically harassed, complaining that the wide- ranging DoE empire – taking in transport as well as housing and local government – was too big to master in her usual detail.4 Parliamentary opposition, however, was just a matter of going through the motions – more than ever this summer when the Conservatives had to hold back for fear of precipitating another election before they were ready for it. Mrs Thatcher’s real brief was to come up with the bright new housing policies which Heath wanted to put in the forefront of the party’s next manifesto to win back the middle-class voters who had cost the Tories the February election by defecting to the Liberals. Frankly, what he was seeking was a short-term electoral bribe, but one which could be presented as consistent with the long-standing Conservative philosophy of encouraging home-ownership.
Suppressing her doubts, Mrs Thatcher loyally complied. The package she eventually announced at the end of August comprised three different forms of housing subsidy. First she promised to hold mortgages to a maximum interest rate of 9.5 per cent, to be achieved by varying the tax rate on building societies. Second, council tenants were to be helped to buy their houses at a 33 per cent discount. Third, first-time buyers would be encouraged to save by a direct Government bribe of ?1 for every ?2 saved. Most significant for the long term, however, was her fourth commitment: a promise to abolish domestic rates.
Here too she was pressured to go further than she wanted. A meeting of party heavyweights – Heath flanked by most of his senior colleagues – ‘bludgeoned’ her into promising abolition of the rates before they had decided what to put in their place. Her August package eventually spoke of replacing the rates with ‘taxes more broadly-based and related to people’s ability to pay’, meanwhile transferring to the Treasury the cost not only of teachers’ pay but of parts of the police and fire services. ‘I felt bruised and resentful’, she wrote in her memoirs, ‘to be bounced again into policies which had not been properly thought out.’ Yet she was still too loyal, or too junior, to refuse. Heath was still the leader, backed by almost the whole of his former Cabinet. In the last resort she was still willing to conform to protect her career. ‘I thought that if I combined caution on the details with as much presentational bravura as I could muster I could make our rates and housing policies into vote-winners for the Party.’5
Mrs Thatcher’s performance over the summer and autumn of 1974 – arguing in private against policies which she would then defend equally passionately in public – demonstrated the maturing of a formidable political skill. By her championing of subsidised mortgages she showed that she possessed not only the good lawyer’s ability to argue a weak case; any self-respecting politician can do that. She also had a preacher’s ability to invest even a poor case with moralistic force: this more than anything else was the secret of her success over the next fifteen years. In the years of her success she boasted of being a ‘conviction politician’, but it should not be
