Thatcher (6 page)

While Margaret Thatcher was working towards her priorities in education, the Heath government was in increasing trouble. Their mandate had been based on a programme to regenerate the economy. They wanted to reduce government support for industry, but in 1971 they nationalised Rolls Royce. Margaret Thatcher was broadly in favour despite her antipathy towards nationalisation: here, defence needs took priority. By 1972 though, the government had passed a statute taking legal powers to control all increases in pay, prices and dividends. This U-turn, in Margaret Thatcher's eyes, was unforgivable, although none of her public statements in 1972 would have given that impression. In her memoirs she identifies three events which
together tried the Government's resolve and found it wanting
:
²⁰
the miners' strike, the financial problems of Upper Clyde Shipbuilders and the unemployment total reaching one million. The miners' strike ended when Heath conceded to the miners' demands, but the price was increasing wage control. To Margaret Thatcher this was ‘Danegeld', a ransom forced on the country because the government had not been well enough prepared to withstand industrial unrest. The Clyde shipbuilders had their subsidy restored. Unemployment, in Margaret Thatcher's view, was a direct result of Roy Jenkins' tight fiscal policies of 1969–70, and would soon peak and begin to fall. But the Heath government was a collective. When the full story of this cabinet is released it will be clearer to what extent Margaret Thatcher argued. What is known is that Edward Heath called a snap general election in February 1974. The Yom Kippur War the previous October had raised oil prices. The coal miners were on strike, and without oil or coal Britain was working on power for only three days a week. People were cold, the days were dark. Shops were lighted by candles and gas lights, industry was shutting down. Heath called the election to get a public mandate to deal firmly with the miners, but with only three weeks for campaigning this election was disastrous for the Conservatives.

No party was returned with an overall majority. The ambiguous situation made it legitimate for Heath to stay in office, and try to form a coalition with the Liberals. Margaret Thatcher vehemently opposed this, saying publicly that her policies would not be transferred to a ‘National Government'. The attempt failed as it was bound to do: even a Liberal/Conservative pact would not have given an overall majority. Heath resigned in March, and Harold Wilson formed his second administration. It was clear this would not last long – in October a second election returned Wilson but with an overall majority of only three.

Edward Heath did not resign as leader of the party. He had now lost three elections out of four, but he did not fall on his sword. On 14 October, the backbench 1922 Committee conveyed their opinion to Heath: that unless he stood down there must be a fresh election. Heath refused to discuss it until after the 1922 executive elections. On 14 November, he agreed to an election after the Committee had revised the rules. The first ballot was held on 4 February 1975. If Heath had resigned at this point, the most likely successor was Willie Whitelaw who had refused to stand against Heath, but Heath refused to stand down. Likely opponents from the right, supported by Margaret Thatcher, were Edward Du Cann and Keith Joseph. Du Cann did not stand for personal reasons. Joseph made it clear that he would stand for the right of the party when the opportunity arose, but, like Whitelaw, the centre and left of the party were bound by loyalty to Heath. Margaret Thatcher supported Joseph. Not only his friend, she also believed in his economic and social portfolio – market freedom. When the Conservatives had lost the second election, and a leadership contest became inevitable, she crossed herself off the list of candidates in order to make space for Joseph. Keith Joseph himself sabotaged his chances. During that summer he had planned to make three speeches outlining the mistakes of the last 30 years and describing the way forward. The third of these, in October at Edgbaston, included references to social class and comments on birth control that seemed to revive issues of eugenics. The uproar following this made it clear to him that he would be unelectable as leader. On the day that he withdrew from the contest, Margaret Thatcher announced her candidacy.

She was now shadowing the Secretary of State for the Environment. Her task was high-profile – to establish a manifesto commitment that would appeal to voters, would not be seen to criticise previous Conservative policy, and was recognisably ‘conservative'. For the first time the ‘right to buy' for council tenants became part of an election commitment. Despite the looming leadership contest, Margaret Thatcher enjoyed these months. In November, she had been moved to shadow the Treasury. Opposing Labour economic policy found her in her element, and the approaching leadership contest allowed her to hone her campaigning skills. Airey Neave ran her campaign. He was a right-wing Conservative MP who had quarrelled with Heath early in his career. He was also a likeable man with a distinguished war record. Margaret Thatcher came to prize his political support and friendship. He encouraged her to concentrate on the Finance Bill. That way, MPs had the opportunity to see her in action. She would address her core supporters in a committee room at the house from 10.30 p.m. until midnight – afterwards she commented on how good it had felt to talk about things she believed in. She emphasised her
conservativeness
: that she stood for sound economics, middle-class values, ordinary British people. She wrote a letter to her constituency party focusing on the need to listen to ordinary human beings with ordinary human needs. On 4 February Margaret Thatcher defeated Edward Heath in the first ballot for Tory leader. Heath resigned. There was, of course, a second ballot: Margaret Thatcher's majority had not been sufficient to avoid that. Now Heath's allies were free to stand, and Jim Prior, John Peyton and Geoffrey Howe did. Only Howe had any right-wing credentials. On 11 February 1975 Margaret Thatcher was elected leader of the Conservative Party – Leader of the Opposition.

The first hours of leadership were a round of engagements. First to meet the press at Westminster Hall, then to Central Office to be greeted by the staff. Denis was at Bill Sheldon's house in Pimlico for a celebration with friends. Margaret Thatcher had tried to reach him with the news, but the press got there first. Mark learned the news at work, while Carol had to wait until her solicitor's exam finished. It was late at night before all the family could be together. Margaret Thatcher had kept to a routine with her family: breakfast and as much of the weekend as possible together. Now the twins were grown up, and life would never be the same again.

The morning of 12 February dawned as something of an anti-climax. Margaret Thatcher was now the first woman leader of a major political party in the West, and had won her leadership election fair and square. But she was leader of a deeply-divided party, and she had divided it. Her support came from the backbenchers not from the Shadow Cabinet, who had been loyal to Heath until the end. Nor was Edward Heath going to help heal this division. She called at his home to honour her commitment to invite him into the Shadow Cabinet, but he refused. It was a quick meeting – Heath's personal private secretary detained her before she left so that the waiting press would not realise how quick. During the following year and at the party conference he ignored any attempt at reconciliation. This behaviour ensured that Shadow Cabinet members who might have gathered behind him to oppose her had no focus. Heath became an outsider within the party.

Traditionally, the Conservative Party rallies to a new leader, and this leader was both in the public eye and possibly more vulnerable because she was a woman. Key elders of the party, Alec Douglas-Home, Lord Hailsham and Peter Carrington, set an example in supporting her. Willie Whitelaw, her nearest rival in the leadership contest, became a loyal deputy. He put aside his own ambitions to lead the party, accepting that at his age the chance would not come again. He is said to have announced her leadership, and his acceptance of defeat, in the same speech and in floods of tears at a dinner that night. He had nothing in common, personally, socially or politically with Mrs Thatcher the grocer's daughter and found her abruptness and single-mindedness distressing. Nevertheless, he was a conscientious and supportive colleague until his retirement. His support made a great deal of difference in the next years.

Her Shadow Cabinet appointments were designed to reassure. Two members of the existing cabinet stepped down in solidarity with Heath. Robert Carr and Peter Walker were returned to the back benches – although she had got on well with Peter Walker, he was an outspoken critic of Keith Joseph's right-wing policies and so needed to go. Keith Joseph himself was appointed as her private economic advisor with responsibility for policy and research. The remaining members of the Shadow Cabinet stayed. They were joined by Geoffrey Howe as Shadow Chancellor. Of five new faces only one was a woman, Sally Oppenheim, who took the classic woman's portfolio of consumer affairs. One was Airey Neave, the only appointment that went to an outright supporter. He was given the post he wanted, Northern Ireland.

The composition of the Shadow Cabinet was a reaction to the circumstances of her leadership, and preceded a struggle for the direction of the party that was to continue during the next four years in opposition. These were tiring and frustrating years for an inexperienced leader. Margaret Thatcher was becoming more and more convinced by right-wing monetarist policies, but in practice, it was clear that the party had to rebuild relationships with the trade unions, and had to retain some ‘middle ground' credibility. The debate inside the Tory party, and outside in wider society, reflected a change in British politics that went further than ideas about Tories as necessarily right-wing and well-heeled and Labour as being on the side of the workers, into fundamental understandings of freedom and equality.

When Clement Attlee was elected Prime Minister in 1945, he said ‘I will not cease from mental strife, nor shall my sword sleep in my hand, 'Till we have built Jerusalem in England's Green and Pleasant Land.' Margaret Thatcher could have used exactly the same lines, but would have meant a very different Jerusalem. To Attlee, and to succeeding governments after the war, the dream was of a land where each and every individual was equal in the eyes of the government: where there was full employment, and where the state was responsible for the welfare and education of the people. To make this happen, economic theory drew on the work of John Maynard Keynes. Keynesian economic ideas meant that the government supported manufacturing industry either by providing subsidies or by taking control into their own hands through nationalisation. Subsidised or nationalised industries could support wage rises, so that workers could afford to buy the goods made. Keynes believed that this process would form a ‘virtuous circle', where the amount gained from selling goods was always increasing, and therefore more people could buy goods and more people would be involved in the manufacturing process. The government would be able to support the circle through taxation, and would be responsible for using that taxation to support welfare – including full employment. In this ever-growing economy the government would also provide education and health services that gave free entry to everybody, and so minimised inequalities of class and wealth. In this way, people would be freed from anxiety, fear and the need to compete, and would create a free-thinking, well-educated, hard-working society supporting each other and the government.

These ideas had been tested by changes in British society in the post-war years. World events had altered the economic climate in which governments operated. For instance, the pace of post-war reconstruction had been slowed by the need for American finance through the Marshall Plan, and later industrial expansion had been slowed by the rising price of oil. Britain's ability to market its goods was threatened by cheaper alternatives made in the Far East. The population was increased by immigrant workers. Reports of life in communist Russia did not inspire confidence in socialism, while American images of free enterprise were exciting. The long-running debate about entry into the Common Market changed the climate in which the Keynesian closed circle could operate. But the biggest challenge came from home. Margaret Thatcher had already warned that Britain was paying itself more than it earned: Throughout the Heath government union pressure for increases in wages was expressed through strikes and unrest. Agreement between governments and workers, without which the Keynesian circle could not function, was breaking down.

Despite the pressure on Keynesian economic measures, prime ministers from Attlee to Wilson had accepted, to a greater or lesser extent, the need for government to be involved in industry, wages and prices. This ‘collectivist' consensus, supporting bargaining through unions and collective responsibility between workers and government, was perhaps the legacy of the landslide Labour victory in 1945. That had been a vote for a new and different way of arranging society, and equality was fundamental. It was deeply embedded in British thinking. Politically, there was still no real ideological challenge to this basic principle.

Collectivism or Keynesian were not ideologies or principles that Margaret Thatcher agreed with. Her childhood ethic of hard work and success may have given her grounding in individualism. Certainly Alfred Roberts helped others, but he did not do so by losing or threatening his own position. ‘Charity begins at home' ensures that what is given is only given after individual and family needs are well catered for. Personally, she was well suited to ideologies that stressed individual gains and individual work. Her first action as Secretary for Education had been to try and slow down the growth of large comprehensive schools. She had a deep distrust of socialists, started by her reading of Hayek at Oxford, made personal by the defeat of her father by socialists in Grantham in 1952, and supported by her visit to Soviet Russia. Her personal views had little outlet in previous years: although Robert Blake describes the Heath manifesto of 1970 as a ‘right wing' document,
¹
the actions of the government in office were to continue to support industry and to bargain, where possible, with the unions.