Margaret Thatcher: The Authorized Biography (31 page)

Mrs Thatcher’s first ministerial outing in the House of Commons finds her, among other things, arguing about what constitutes an injury in the course of employment (‘Let us take the case of a worker who is going home to lunch when he stops to watch a cricket match and is hit by a cricket ball’).
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In the following week, she clashed with Barbara Castle about whether the ‘guardian’s allowance’ could be used to subsidize voluntary organizations. And she defended – though, according to her memoirs, this was against her private view – the operation of the ‘earnings rule’ which capped the amount of money which widows could earn when receiving a state pension,
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displaying a virtuoso knowledge of the detail involved.

Two reactions to the new young minister were noticeable on the part of Mrs Thatcher’s parliamentary opponents. The first was what would now be considered a sexist appreciation of her charms. Willie Ross, for example, later famous as an anti-monarchist, said during a debate in the Commons, ‘We appreciate the honourable Lady’s statistics, but we do not like her figures – in the plural.’
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She seems to have been happy to play up to this banter. In another debate, again on the subject of the cost of abolishing the earnings rule, Mrs Thatcher declared, perhaps by accident, ‘I have got a really red-hot figure.’ When several Members shouted, ‘Hear, hear,’ she came back: ‘I am very glad that I am not wearing a red dress today. To continue, I have a bang up-to-the-minute figure.’
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The other reaction was a respect for her debating abilities which shaded into exasperation at her lawyerly tendency to argue a case cleverly through the detail without apparent human feeling. Sydney Silverman, the leading opponent of capital punishment, said of her arguments over a group of women known as ‘ten shilling widows’, whose husbands had died before 1948: ‘The honourable Lady has made a case … It is rather an administrative, bureaucratic, actuarial case – some people would call it a third-class insurance company case – but it satisfies her and I am not complaining.’
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Another Labour MP, John Mendelson, summed up her way of presenting her case (against a Labour motion complaining that benefits had not kept up with inflation) in terms which set the pattern for attacks in the future: ‘My impression at the end of the honourable Lady’s speech was that all she had given us was a purely academic performance. It was remarkable that she was capable of making a long speech on the tragic position of many of our old people without making any reference whatsoever to her real experience of how they live.’
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The notion of Margaret Thatcher’s heartlessness was born.

In reply to such attacks, Mrs Thatcher was generally polite, but never
conceded any ground, sometimes fighting back fiercely. ‘The honourable Member will forgive me if occasionally I say “Nonsense” to him,’ she told a frequent adversary, Douglas Houghton. ‘I am sure he will take it in the right spirit. Nevertheless, I meant it.’
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On the famous Night of the Long Knives, 13 July 1962, when Harold Macmillan tried to restore direction to his government by replacing seven out of the twenty-one members of his Cabinet, Mrs Thatcher found herself at the despatch box with a sore throat and without a minister because Boyd-Carpenter had just been promoted. She was full of spirit, however, joking that she would refer hostile comments from the Opposition to her minister ‘when I have one’, and fiercely attacking Michael Foot,
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later to be the least successful Labour leader whom she faced, in the debate on the increased rate of National Assistance, as social security was then known. Foot was a ‘master of the twist’, she said (the dance of that name was just then fashionable), and she sounded a warning, implicitly critical of the policies of the government of which she was a part, that ‘Government expenditure … over the last three years has been taking an increasing proportion of the gross national product. Honourable Members on this side of the House will not take too happily to that.’ Foot’s demands for more spending would make things far, far worse, she said: ‘If we were to take the advice of eminent economists, coupled with the advice of the honourable Member for Ebbw Vale [Foot], we should have a riot and we would have no Army to quell it.’
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Boyd-Carpenter noted that, as well as her capacity to extract ‘the crucial issue’ from ‘a huge file bristling with National Insurance technicalities’, Mrs Thatcher also showed something more important still. ‘I first noted the courage when on the floor of the House of Commons she not only stood up to Richard Crossman
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but, for all his formidable intellectual qualities, scored off him again and again by the quick and adroit use of facts and figures.’
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Crossman himself respected her: ‘She is rather a pal of mine, I got on very well with her when she was at Pensions … She is tough, able and competent …’
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To understand how Mrs Thatcher saw her job and, indeed, how the entire welfare state was constructed, one must study three famous pieces of reform, begun in the Second World War, which dominated political thinking at the time and were accepted to a remarkable degree by the main parties. These were R. A. Butler’s Education Act of 1944, which developed the split system of grammar school and secondary modern; the 1944 White Paper on Employment Policy, heavily influenced by Keynes, which for the first time made it the government’s responsibility to manage the economy in order to maintain ‘a high and stable level of employment’ (soon interpreted as full employment); and the report by the economist William Beveridge, produced for Churchill’s wartime coalition in November 1942, on Social and Allied Services. In the course of her career, Margaret Thatcher was to wrestle unhappily with the first and break almost completely – though she carried it everywhere with her in her handbag – with the second. With the third, however, she never parted company. Beveridge contained what she regarded as a sensible, though in some respects flawed, blueprint for the welfare state. Much less radical in this area than most of her critics supposed, she tried, both as a junior minister and when she came to run the country, to apply Beveridge’s principles to the circumstances which then prevailed. When she became parliamentary secretary at MPNI, ‘The first step was to re-read the original Beveridge Report.’
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Beveridge, who, like Keynes, was a Liberal in politics, sought to provide greater security for British citizens in all the changes and chances of their lives. The state needed to help, he believed, with systems of provision which guarded against ‘the interruption or destruction of earning power’. There should be special provision at times of birth, marriage and death. The great increase in longevity meant that there had to be proper pensions for all. His scheme was, he said, ‘first and foremost, a plan for insurance – of giving in return for contributions benefits up to subsistence level, as of right and without means test, so that individuals may build freely upon it’. The main vehicle was National Insurance, paid through the worker’s weekly ‘stamp’ from his own wages and the employer’s contribution. Its benefits were paid out without regard to means. Recognizing that there would be times when people had run out of cover or not been able to contribute to National Insurance, Beveridge also devised National Assistance to answer this need. It was, naturally, means-tested. In addition, he argued that his plan could not work without the avoidance of mass unemployment (hence the drive for the 1944 White Paper), and without reasonable ‘free’ health care. ‘Medical treatment covering all requirements’, Beveridge wrote, ‘will be provided for all citizens by a national health service organised under the health departments.’ Out of this airy phrase, and meriting only a five-page ‘assumption’
in a 300-page report, one of the most important, difficult and expensive projects of any government ever – the National Health Service – was born.

In planning as he did, Beveridge had a strong, innocent belief in the benign power of the state, but it was certainly not his intention to take away from individuals the incentive to look after themselves and their families, nor from private companies the ability to provide insurance. ‘The State in organising security’, he wrote in his report, ‘should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.’ One of his main reasons for not means-testing National Insurance was to avoid appearing to penalize thrift. ‘Management of one’s income’, he said, ‘is an essential element of a citizen’s freedom’ and it was ‘wrong in principle’ for the state to take the burden off insurance: ‘The insured person should not feel that income from idleness, however caused, can come from a bottomless purse.’ Therefore, when someone did have to be given National Assistance, the ‘provision of an income should be associated with treatment designed to bring the interruption of earnings to an end as soon as possible’.

This was easier said than done, to put it mildly. But successive British governments had set themselves the task of trying to do it, and Mrs Thatcher accepted the essential principles of Beveridge. In fact, more strenuously than most, she sought to apply the spirit of the report – that need be answered, but idleness discouraged and independence not crushed. ‘The Beveridge Report never meant to oust the voluntary principle,’ she said in later years,
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and this was true. Partly through her Methodist background, she knew something about the rise of voluntary associations of self-help in the nineteenth century, of friendly societies and ‘ragged schools’, and she was strongly in favour of such community projects, seeing them as the collective embodiment of the principle of ‘Do as you would be done by’.
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But she also believed that the increasing mobility and mass urbanization of British society had meant that not everything could be done by local knowledge and co-operation. Beveridge, in her view, joined up the dots, or, to use a metaphor more common in the debate, provided a floor but not a ceiling. She was and remained in favour of a basic state pension, and she agreed with Beveridge’s idea that National Insurance should be exactly that, rather than tax by another name. As for the social problems of welfare, ‘The dependency culture’, she remembered in the 1990s, ‘was not thought of then.’
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Her attitude to questions of welfare was never one of pure free-marketry or devil-take-the-hindmost. It was more old fashioned, more influenced by the war, surprisingly confident that government was
fit for the task. She wanted the state to mobilize to help the unfortunate, and always believed that there was no full private substitute for this, but she always feared two things – that the ‘shirkers’ would tend to benefit at the expense of the workers, and that the cost, if not carefully controlled, would produce national ruin.
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Mrs Thatcher’s job at MPNI was to help to make Beveridge work. She had to deal with ‘the difficulties which flowed from the gap between Beveridge’s original conception and the way in which the system – and with it public expectations – had developed’.
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These included the effects of inflation, the low flat rate of the state pension, the punitive effect of the earnings rule and the inevitable clash between the demands of all for higher, non-means-tested benefits and of some for more money in response to particular need. The evidence of Mrs Thatcher’s time at the Ministry of Pensions is that she was aware of these problems but that it was above her pay grade to try to solve them. One of the reasons that she so admired John Boyd-Carpenter
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is that he had addressed some of the more difficult questions in the field since he took up the job in 1955, notably by allowing people with reasonable private pension provision to contract out of the state earnings-related pension scheme and receive a rebate from their NI contributions. But Boyd-Carpenter was promoted out of MPNI less than a year after Mrs Thatcher joined him, and neither of his successors, Niall Macpherson and Richard Wood, had the desire or the political clout to effect further reform. Besides, the government was in political decline from 1962 and so lacked collective will. Mrs Thatcher’s response to these constrictions was to work extremely hard at precise tasks, always bearing in mind that the Ministry had already become the second largest-spending government department (after Defence), and that she had to control costs.

Mrs Thatcher spent three years in post, ending only with the general election of October 1964, and she would have liked to have been promoted before then. But she enjoyed the work, and looked back on it as a positive time in her life. She immediately discovered her natural appetite for administration, and found scope for her combative qualities. Unlike Tory grandees, she received an education in the engine-room of government rather than the officers’ mess, which proved to be to her advantage. She
admired the senior officials with whom she worked, and they admired her too, though, as Clive Bossom, her parliamentary private secretary (PPS)
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in 1961, put it, ‘they did not love her.’ One night, Bossom was with her in the Ministry when she was contemplating a pile of letters presented for her signature. As she read them, she ripped each one at the top of the page. ‘I’m not sending these off,’ she said, ‘they’re double Dutch.’ Bossom also heard the official’s response, out of Mrs Thatcher’s hearing: ‘Bloody woman. Her job is to sign them, not read them.’
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The government machine in which Margaret Thatcher was a minor cog nearly derailed. As early as 1960, inflation and the growth of government spending stoked up the demand for higher wages which produced the ‘pay pause’ for public employees, the first shadow of the incomes policies which were to weaken government after government until 1979. Economic growth started to slow. In March 1962, the Liberals won an astonishing victory at the Orpington by-election, gaining the seat from the Conservatives with a majority of nearly 15,000. On 14 January 1963, General Charles de Gaulle, President of France, finally rejected the British application, painstakingly negotiated by Edward Heath, to join the European Economic Community or, as everyone then called it, the Common Market. And in June of the same year, John Profumo, Minister for War, had to resign after he was discovered to have lied to the House of Commons about his affair with Christine Keeler, a prostitute who was alleged to have been carrying on at the same time with the Soviet naval attaché. Then, as Harold Macmillan’s government started to totter, Macmillan himself fell ill. Stricken with prostate problems, and wrongly advised by a temporary doctor that he could not make a full recovery, Macmillan dramatically resigned on 10 October 1963, just as his party’s annual conference met in Blackpool.