Peasants Revolt: One, the Right
The underlying political story of the middle and later seventies would not, however, be played out mainly in Parliament. It is the story of how, across the quivering body of a profoundly sick country, two new rival forces emerged to fight for the future. The first came from the right.
In the middle of June 1974, something unusual had happened. A politician said sorry. He did not say sorry for something in his personal life, an error of judgement or even a failed policy. He said sorry for Everything. He said sorry for what had happened to Britain since 1945, and his party’s role in that, and his role in that party. The serial apologist was a haggard, anguished-looking man. The son of a rich London businessman, he had risen to become housing and then health minister, and had been until then a conventional-looking Tory. Under Macmillan he had ordered the smashing down of old terraces for new tower blocks. Under Heath he had spent heavily on a bigger bureaucracy for the NHS and higher social security levels. Now Sir Keith Joseph was quite literally wringing his hands and rolling his eyes with mortification. There had been thirty years of interventions, good intentions and disappointments, thirty years of socialism under both Labour and the Tories: ‘I must take my blame for following too many of the fashions.’
Joseph’s conversion to free-market, small-state economics had the force of a religious experience. Crucial to it would be controlling the amount of money in the economy to keep out inflation, which meant squeezing how much was borrowed and spent by the State. He had joined the Tories in the early fifties but had not been a Conservative, he said: ‘I had thought that I was a Conservative but now I see that I was not really one at all.’ This kind of thinking would lead within five years to the Thatcher revolution, and the wholesale rejection of the Heath years, taking the economic ideas of intellectuals who featured earlier in this history right into the centre of British public life. Other fellow travellers were professors, Americans or a few Powellite Tories outside the mainstream of the party. But Joseph was different, a former cabinet minister with close and direct experience of government. With his Centre for Policy Studies, he was the rain-maker, the storm-bringer, the Old Testament prophet denouncing his tribe.
Joseph argued that Britain by the mid-seventies had a fundamental choice to make between a socialist siege economy or a breakaway into proper liberal capitalism – in effect, Benn or Joseph. He could not have formed his ideas without the libertarian and monetarist thinkers of the fifties and sixties, men we met earlier. During the Tories’ years in opposition from 1964 to 1970 he had educated himself in free-market economics and was soon using as his speechwriter the violently spoken, irrepressible Alfred Sherman, an East End boy from a left-wing family who had fought as a machine-gunner in the Spanish Civil War before swinging right round later and becoming an insistent right-wing critic of the British way. It was well said of Sherman that by the fifties his enthusiasm for the free market ‘put him as much on the fringes of Macmillan’s Britain as Communism had put him on the edge of politics in Neville Chamberlain’s Britain’. But to Sherman’s disappointment, when Joseph returned to office in 1970 as Secretary for Health and Social Security, his radicalism went into hiding again, he forgot his enthusiasm for introducing more private money into health, and Sherman took to describing him dismissively as ‘a good man fallen among civil servants’.
But the defeat of 1974 had shaken Joseph. With other monetarists he began a thorough rethink of the Heath years, culminating in a shadow cabinet post-mortem, when they argued that the early radicalism of 1970-1 had been right, and the subsequent U-turn a disaster. Heath blankly refused to listen, or at any rate to heed, the attack. Heath’s haughty assessment in his autobiography was that Joseph ‘had resumed a friendship with a person called Alfred Sherman, a former communist, and undergone what he liked to call “a conversion” as a result…[this] failed to cut any ice with the great majority of his colleagues, though we did them the courtesy of listening.’ In fact, many Tories were beginning to listen. With Joseph were Geoffrey Howe and the quiet, watchful figure of Margaret Thatcher. Early on, Howe warned, ‘I am not at all sure about Margaret. Many of her economic prejudices are certainly sound. But she is inclined to be rather too dogmatic for my liking on sensitive matters like education and might actually retard the case by simplification.’ There were other new radicals, such as the Powellite Tory MP John Biffen, the young economics writer Nigel Lawson and a crowd of journalists and academics.
Here was an intellectual analysis, hard and uncompromising, which excited a generation of new recruits to the party, while it repelled Tories of the comfortable Macmillan persuasion. Macmillan himself said of Joseph that he was ‘the only boring Jew I’ve ever known’ and later there would be much snide muttering about the men Thatcher learned from and worked with – Hayek, Sherman, Joseph, Lawson and Friedman. The truth was that Jews were prominent in intellectual thinking on the right, as on the left, bringing opposite lessons to Britain from the disasters of continental Europe. A serious commitment to ideas and old-fashioned attitudes to education gave them their unique influence in politics. Thatcher was open to the ideas, ready to listen, unprejudiced; many traditional Tories were not.
In the winter of 1974-5 after Heath had lost his second successive election, there was no such thing as ‘Thatcherism’. She was expressing her public support for the policies of consensus, whatever her developing inner feelings. She backed intervention in the housing market and had queried council house sales. There was no sign that she would become leader. Heath was anyway stubbornly determined to stay on. He insisted his supporters, who included most of the well-known Tories of the day, back him. Polls suggested 70 per cent of Conservative voters wanted him to stay. Yet there was deep dissatisfaction on the Tory benches in Parliament. A City slicker, Sir Edward du Cann, who chaired the backbenchers’ 1922 Committee, began to take soundings about challenging Heath. He was backed by the war hero, Tory MP and arch-intriguer, Airey Neave, but Neave soon pulled out. Joseph stepped up to the plate before making a catastrophically ill-judged and offensive speech in which he seemed to suggest that working-class women were having too many babies and should be stopped because they were degrading the gene pool. This finished the man Private Eye was already calling the ‘mad monk’. So who could the right find as a candidate?
If Heath had realized that two successive election defeats meant he really had to go, and had he allowed other Tory moderates to prepare campaigns to replace him, Mrs Thatcher would have had no chance. Had Joseph not made a disaster of a speech, she would have been committed to backing him, and so would not have stood herself. Had du Cann stood, the brilliant campaign manager Neave would not have worked for her. Many Tory MPs were persuaded by him to vote for her because she had no chance, as a way of easing out Heath. Then more ‘serious’ candidates could stand. It was a brilliant ruse. On 4 February 1975, she shocked everyone by defeating Heath in the first ballot by 130 votes to 119. She then went on to beat the also-rans easily. A current of right-wing free-market thinking that had been gurgling almost unnoticed underground since the fifties would break ground in spectacular fashion, changing Britain for ever. ‘Josephism’ became ‘Thatcherism’. Few of the Tory MPs in what was called ‘the peasants’ revolt’ realized quite where their new leader would take them. For the next few years, supercilious smirks and patronizing remarks from Wilson and then the new Prime Minister, James Callaghan, would be her lot. And then she would show them.