It was Keith Joseph who persuaded me to change my mind. By now Keith was a friend, not just a senior colleague whom I liked. We worked together, though with him very much as the senior partner, on pensions policy in 1964—65. Like everyone else who came to know him, I was deeply impressed by the quality of his mind and the depth of his compassion. Keith had gone into politics for the same reason that many on the left had done so — he wanted to improve the lot of ordinary people, particularly those he saw living deprived, stunted, unfulfilled lives. Many jokes would be made — and the best of them by Keith himself — about the way in which he changed his mind and reversed his policies on matters ranging from housing to health to social benefits. But the common thread was his relentless search for the right answer to the practical problems of human suffering. So I took him very seriously when he telephoned to say that while he knew I was currently intending to vote for Reggie, I should think again. Keith understood Reggie’s weaknesses, and as a long-time colleague in Government and the Shadow Cabinet he had seen these weaknesses at close hand. But it was Ted’s strengths that he wanted to speak about. He summed them up: ‘Ted has a passion to get Britain right.’ And, of course, so did Keith, and so did I.
This was decisive for me. To the disappointment and surprise of Reggie Maudling and his PPS, Neil Marten, I told them that Ted Heath would be getting my vote. Sufficient numbers thought similarly. Ted emerged with a clear majority on the first ballot, Reggie withdrawing to make a second ballot unnecessary.
I was not displeased to be given a different portfolio by the new Leader, exchanging my role as Shadow spokesman on Pensions for that of Housing and Land under my old boss, John Boyd-Carpenter. I would always regard my knowledge of the Social Security system as one of the most important aspects of what turned out to be my training to become Prime Minister. Now that we were in Opposition, however, it was not easy to oppose the large pension and benefit increases which the Labour Government was making: only later would the full financial implications of this spending spree become evident. So it was a relief to me to be moved to Housing and Land, where I was able to set about attacking with a will one of the most ideological socialist measures — the setting-up of the Land Commission, a means of achieving the socialist obsession of nationalizing development gains. It was in this role also that I first became fully acquainted with the complexities and anomalies of the rating system, whose fate seemed destined to be inextricably intertwined with mine.[9] One of my early tasks was to devise and explain to a sceptical Conservative Party Conference how we intended to reform domestic rates by a combination of moving some expenditure onto central government and introducing rate rebates. It was my first Conference speech. At least those who heard it would have appreciated that I grasped the problems. But it would be too much to claim that I offered any very satisfactory solutions. It was only a
AGAINST THE TREASURY
As was widely expected, Harold Wilson called an early snap election at the end of March 1966. The result — a Conservative rout and an overall Labour majority of ninety-seven — was equally expected. We fought an uninspiring campaign on the basis of a flimsy manifesto entitled
I received a further fillip when Ted Heath made me Treasury spokesman on Tax under the Shadow Chancellor, Iain Macleod. There had been some speculation in the press that I would be promoted to the Shadow Cabinet myself. But I was not expecting it. I now know, having read Jim Prior’s memoirs,[10] that I was indeed considered but that Ted, rather presciently, decided against it because if they got me in ‘they would never get [me] out again’.
In any case, I was better placed to make an impact as Treasury spokesman outside the Shadow Cabinet than as something else within it. As a tax lawyer I already knew my way around my new brief. Although I had no formal training in economic theory, I felt naturally at ease with the concepts. I had always had strong convictions about the way in which public money should be handled. As I had found when junior minister responsible for pensions, I was lucky enough to have the sort of mind to grasp technical detail and understand quite complex figuring fairly easily. None of which meant, however, that I could afford to relax. Debating Finance Bills from Opposition, necessarily without the technical assistance available from the civil service, and relying on the help of a few outside experts and colleagues in the House, is immensely demanding.
Luckily, the family’s domestic arrangements permitted me to keep to my rigorous parliamentary schedule. By now, Mark and Carol were away at boarding school. Denis was still very active in business, although in 1965 he had sold the family firm to Castrol, which itself was soon bought by Burmah Oil. We felt that it would now make life much easier for us both to rent a flat in Westminster Gardens, not far from the House of Commons. We also sold our home in Farnborough and bought ‘The Mount’, a mock-Tudor house with a large garden in Lamberhurst, near Tunbridge Wells. One of my very few hobbies is interior decorating, and I now spent most of my free time painting and papering the bedrooms — all eight of them. But even I was defeated by the large hall and staircase and had to bring in the professionals. One reason why we bought the house was to have somewhere in the country for the children when they came back from boarding school in the holidays. But at this age they seemed to prefer staying in London with their friends. So ‘The Mount’ was not as much used as I would have liked. My programme of repairs and redecoration was not wasted, however: in 1972 we sold it, and out of the proceeds bought the house in Flood Street (Chelsea) which would be my home until in 1979 I moved into the flat above 10 Downing Street.
I not only felt well-suited to my new job: it was also an exciting time to begin it. The incoherence and irresponsibility of socialist economic management had become apparent. The optimistic projections of George Brown’s National Plan, published in September 1965, were an albatross to hang around Labour’s neck, as forecasts of economic growth were not met. Labour’s pre-election promises of ‘no severe increases in taxation’ were broken with the announcement in the Budget of May 1966 that a new Selective Employment Tax (SET) would be introduced, in effect a payroll tax falling particularly heavily on service industries: it was a major part of my brief to oppose it. The Labour Government’s reliance on its alleged special relationship with the trade unions to secure voluntary incomes restraint as a means of controlling inflation had already lost credibility with the failure of the Government-TUC joint
In preparing myself for my first major Commons speech in my new role, I got out from the House of Commons Library every Budget speech and Finance Bill since the war and read them. I was thus able to demonstrate to a somewhat bemused Jim Calla-ghan, then Chancellor of the Exchequer, and Jack Diamond, his Chief Secretary, that this was the only Budget which had failed to make even a minor concession in the social services area. Then I sunk my teeth into the SET. It was riddled with absurdities which I took great pleasure in exposing. The attempt to distinguish between manufacturing and service industries, shifting the tax burden onto the second and handing the money back as subsidies to the first, was a demonstrably inefficient, anomaly-ridden procedure. As I put it in the House: ‘Whatever the payroll tax is, it is thoroughly bad administration… I only wish that Gilbert and Sullivan were alive today so that we could have an opera about it.’
Our side of the House liked it. I got a good press, the
He did the same after my speech that autumn to the Party Conference in Blackpool, my first real Conference success. I put a special effort into it — though the nine hours of work I did would have seemed
