Thatcher And Thatcherism

of what was known as ‘consensus politics’, and advocated most of the

economic policies which later became known as distinctively Thatcherite. He

called for reduced functions by the state, sharp reductions in taxation and

greater incentives for businessmen to chase markets. As they won profits, they

would create new jobs in industry and help to reverse the years of economic

decline. Successful competition within a free market was a much more

effective means of securing full employment than the essentially defensive,

spoiling tactics of an over-powerful and arrogant trade union movement. At a

speech in Preston in September 1974, Joseph argued that a priori government

commitment to full employment was cruelly mistaken. The state could not

guarantee jobs. It could only pay for them on borrowed, or printed, money. In

the longer term, such a policy would destroy the very objective it sought. 8

This frontal assault on the central tenet of Keynesianism – that

governments could ‘manage’ demand in order to secure full employment –

was immensely influential. Above all, following the theories of the so-called

Chicago school of anti-Keynesian economists, F. A. Hayek and Milton

Friedman, he called for strict control of the money supply. 9 Put crudely, Joseph

and the right-wing economists who had influenced him believed that

successive governments had paid for welfare provision by printing money.The 1970s: explanations and origins 7

The consequence was inflation, the rate of which had been increasing. As it

did so, inflation ate away at the value of people’s savings, demoralized and

literally devalued a lifetime of effort. It was also likely to lead to political

instability and social conflict, even in mature democracies. For monetarists,

therefore, inflation was the prime target.

Although Keith Joseph was the most senior, and probably intellectually the

best equipped, advocate of policies which were becoming increasingly

influential within the Conservative Party, he had considerable weaknesses as

a potential leader. Like many who are excited by ideas, he tended to spend

much more time on reflection than on action. He did not always distinguish

well between small print and large. The civil servants with whom he worked,

most of whom admired him enormously, could nevertheless be driven to

distraction both by the delays taken in reaching even straightforward

decisions and by the retrospective hand-wringing which followed complex

ones. Perhaps fatally for his leadership prospects, he did not always

distinguish effectively between the logical conclusion of a closely reasoned

argument and the need to make such conclusions politically attractive or

expedient. He suffered enormous political damage during a speech about

social policy in Edgbaston a week after the October election by suggesting that

those feckless and disorganized folk in the lowest social classes whose high

birth rates were a disproportionate charge on the social services budget should

be directed to practise contraception. Partly because of this gaffe, but mostly

because he was clear-headed enough to realize his own political limitations,

he stood aside when the challenge to Edward Heath’s leadership was launched

in November 1974.

Into the breach stepped Margaret Thatcher. She would not have stood

against Joseph but was now the only cabinet minister prepared to oppose the

Conservative leader. Her performance in the first leadership ballot by Tory

MPs vindicated her decision. She won 130 votes to Heath’s 119 – a more than

respectable performance for a candidate who was relatively untried; it was,

however, short of the 15 per cent lead required for a knock-out victory.

However, a combination of Heath’s stubbornness and the misplaced loyalty

shown to him by William Whitelaw, the standard-bearer of the left-centre,

played into Thatcher’s hand. Much of her support came from MPs who wanted

Heath out far more than they wanted her in. Wits at the time called it the

‘Peasants’ Revolt’, knowing that most of those who voted for her had been

backbenchers vexed by Heath’s high-handed ways and bemused by the shock

of losing two elections in a year. In no sense did their votes represent a

commitment to monetarist policies or, come to that, to the views of the8 The 1970s: explanations and origins

ordinary delegates to Conservative Party conferences. Had Whitelaw, a

classic example of the principled Tory gent, pressed his own claims earlier,

there is little doubt that the centre of the Party would have rallied to him. As it

was, his moment passed. Margaret

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