The Path to Power

Jim Prior, himself, stood rather more easily than I did. For him, I suspect, it was a practical question rather than a moral one: the important thing was to be realistic and accept that the trade unions could not be tamed by law. Any reform would need their cooperation. By contrast, Keith Joseph was an unswerving opponent of what he saw as a breach of human rights resulting from collectivist bullying. Jim’s and Keith’s opposing views, expressed in public statements on the Scarman Report on the Grunwick dispute, brought all this out into the open. I have described earlier the problems this caused me on my American visit.[54] At the time, I thought that Keith’s criticisms of Lord Scarman were too sharp, though the Scarman Report itself was anything but a judicial document and had no legal force. Moreover Jim, not Keith, was the spokesman on these matters. Either I sacked Jim, or I moved him (neither of which I could afford to do), or I had to go along with his approach.

That was what I did. In retrospect, Jim and I were wrong and Keith was right. What the whole affair demonstrated was that our careful avoidance of any kind of commitment to changing the law on industrial relations, though it might make sense in normal times, would be weak and unsustainable in a crisis. But I took the decision to support Jim in part because, as yet, the climate was still not right to try to harden our policy. Within the Shadow Cabinet the great majority of my colleagues would not have gone along with me. But some time soon the nettle would have to be grasped.

In reflecting on all this, I came back to the idea of a referendum. On my return from America I knew that I would be pressed hard by Brian Walden, who was making his debut as interviewer on the television programme Weekend World, on what a Conservative Government would do if it were faced with an all-out confrontation with the trade unions. I had to have a convincing answer: and there was not much hope that any amount of discussion within Shadow Cabinet would arrive at one. So on the programme I argued that although such a confrontation was unlikely, yet if such an emergency was reached, then a referendum might be necessary. The suggestion was well received both in the press and — most significantly in the light of the stories of splits and conflicts — got public backing from both wings of the Party. (It helped perhaps that Jim was expecting a rough ride at the Conservative Party Conference over the closed shop.) I set up a Party Committee under Nick Edwards to report on referenda and their possible uses. But, of course, though the suggestion of a referendum bought us vital time, it was not in itself an answer to the problem of trade union power. Assuming that we won a referendum, so demonstrating that the general public backed the Government against the militants, it would still be necessary to frame the measures to reduce trade union power. And so far we had not seriously considered what those measures should be.

EDGING AWAY FROM INCOMES POLICY

The argument about trade union power remained linked to that about incomes policies. At this time the Government’s own incomes policy was looking increasingly fragile. No formal policy could be agreed with the unions after the end of the second year of ‘restraint’, though the TUC exhorted its members not to seek more than one increase in the next twelve months and the Chancellor of the Exchequer pleaded for settlements to be below 10 per cent (backed as before with the threat of sanctions against employers who paid more). But, of course, whatever difficulties the Labour Government had in agreeing incomes policy with the trade unions were likely to pale into insignificance by comparison with ours. Unfortunately, we were committed to produce a document on economic policy, including incomes policy, before the 1977 Party Conference. David Howell, an able journalist of monetarist persuasions and also a front-bench spokesman, was the principal draftsman. And Geoffrey Howe, remorselessly seeking some kind of consensus between the conflicting views in his Economic Reconstruction Group, had by now become thoroughly convinced of the merits of German-style ‘concerted action’ within some kind of economic forum.

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. The Conference itself taught me an important lesson which Party managers in general find it hard to accept. 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’.

A kind of torpid socialism had become the conventional wisdom of Britain in those years. But as the old order started to break up, it was increasingly difficult for anyone with the responsibility to think ahead to avoid challenging the prevailing orthodoxy. The succession of crises — economic, fiscal and industrial — under Labour constantly invited us to think thoughts and propose policies that deviated from both the conventional wisdom represented by Economist economists and the agreed line represented by Jim Prior — which as it happens usually amounted to the same thing.

IMMIGRATION

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