The Iron Lady

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