U-turns
Mrs Thatcher’s wider role as a member of the Heath Government subsequently came to embarrass her. Not only did she pursue policies in her own department which she later repudiated, and fail to promote others which in retrospect she wished she had embraced more vigorously; she also conspicuously failed to dissent from economic policies which she soon came to regard as disastrously flawed and which, she now implied, she had instinctively known to be wrong all along. For someone who would later make so much of being a ‘conviction politician’ this was a singularly unheroic performance, which she and her biographers had to expend much effort trying to explain or deny.
The Government notoriously made two major U-turns in economic policy, both in 1972. First, in response to rising unemployment – which in January 1972 passed the symbolic and at that time politically intolerable figure of one million – Heath reversed the policy of not bailing out ‘lame ducks’ on which he had fought the 1970 election and started to throw money indiscriminately at industry in a successful (but inflationary) effort to stimulate the economy into rapid growth. Second, when inflation rocketed – as a result partly of sharp increases in the price of imported commodities (copper, rubber, zinc and other raw materials) even before the 1973 oil price shock, but also, it was almost universally believed, of excessive domestic wage increases – the Government abandoned its apparently principled rejection of incomes policy and introduced, from November 1972, an increasingly complex system of statutory wage and price control. Both policies commanded wide support on the Conservative benches and in the press. A handful of eccentric monetarists warned that the Government was itself fuelling the very inflation it was attempting to cure; while a rather larger number of more traditional right-wingers were disturbed by the socialistic overtones of the Government’s increasing interference in the economy. But in the short term both policies appeared to be working: the economy boomed, unemployment fell and inflation was contained. Until the double blow of the oil crisis and the miners’ strike at the end of 1973 the Government seemed to be surmounting its problems with a good chance of re-election in the autumn of 1974 or spring of 1975.
There is little evidence that Mrs Thatcher offered any serious objection to either U-turn. Indeed, she positively supported what many regarded as the forerunner of the later reversals, the nationalisation of the aircraft division of Rolls-Royce in 1971. It is true that a report in The Times in 1972 named her as one of a number of Cabinet Ministers who ‘frankly confess their uneasiness about the socialist implications’ of the Government’s new industrial strategy; but that was all.22 She stoutly defended prices and income control as ‘absolutely necessary’.23 Cabinets did not leak so freely in those days, nor did ministers brief the press with their private views. Mrs Thatcher uttered no public indication of dissent, unless there was a coded message in her speech to the party conference in October, when she declared pointedly that ‘I believe it is right for any Government to honour the terms of its manifesto. That is precisely what we are doing in education.’24
The third major issue of the Heath Government on which Mrs Thatcher expressed no contrary view at the time was Britain’s entry into the European Community. Heath’s achievement in persuading President Pompidou to lift de Gaulle’s veto, negotiating acceptable terms, winning a substantial bipartisan majority in the House of Commons and forcing the enabling legislation through against the determined opposition of a section of his own party, finally joining the Community on 1 January 1973, was the one unquestioned success of his ill-fated Government. Despite her later change of heart, Mrs Thatcher was firmly and conventionally supportive of the European project throughout, as she had been since Macmillan first launched it in 1961.
She had no reservations, either, about supporting the Government in its stand against the miners. While she condemned the miners’ leaders and attacked Communist influence in the NUM, she insisted that the Government’s offer to the miners – in the range of 13 – 16 per cent – was ‘generous’ and argued that the Government had ‘kept faith with the miners’ when it could have switched to other energy sources. She appealed to the miners in turn to vote against a strike. At the same time she pointed out that North Sea gas and oil would soon give the Government alternatives to both coal and imported oil. ‘The prospects are enormous.’25 In the prevailing mood of almost apocalyptic gloom, this was an unusually optimistic message.
On 4 February 1974, however, the miners voted overwhelmingly to step up their action, and Heath finally bowed to the clamour for an election, though still seeking a settlement of the dispute by referring the miners’ claim to the Pay Board while the election was in progress. He was honourably determined not to fight a confrontational campaign against the miners, even though that would almost certainly have given him his best chance of winning. Mrs Thatcher in all her published and reported statements loyally followed her leader’s line.
Boundary changes meant that she could no longer take her seat for granted. Moreover, she had a potential problem with the Jewish vote as a result of Heath’s even-handed policy of refusing to supply Israel with military parts, or even allow American planes to supply Israel from British airfields, during the Yom Kippur war. This issue allied Mrs Thatcher with Keith Joseph, the only Jewish member of the Cabinet. Together they protested, but Heath and Alec Douglas-Home were determined to avert an Arab oil embargo by maintaining strict neutrality. She met the Finchley branch of the Anglo-Israel Friendship League to assure them that she opposed the Government’s policy.26 This was the most difficult period in her long and close relationship with her Jewish constituents; but her position was not seriously threatened.
This was an election the Tories confidently expected to win. Indeed, one reason Heath fought such a poor campaign was that he was afraid of winning too heavily. In the event he failed to polarise the country sufficiently. By referring the miners’ dispute to the Pay Board the Government seemed to call into question the point of having an election at all. Labour was still in disarray over Europe and beginning to be torn apart by the new hard left: Wilson did not expect to win any more than Heath expected to lose. In these circumstances the electorate called a plague on both their houses and turned in unprecedented numbers to the Liberals.
Out of office
Mrs Thatcher was still perfectly safe in Finchley. As usual the Liberal hype could achieve only so much. On a reduced poll (and revised boundaries) her vote was 7,000 down, the Liberals nearly 4,000 votes up, but Labour still held on to second place. Her majority was nearly halved but the two opposition parties cancelled each other out.
Nationally it was a different story. The Liberals won an unprecedented six million votes, nearly 20 per cent of the poll. They were rewarded with just fourteen seats, but their advance fatally damaged the Tories, helping Labour to scrape a narrow majority – 301 seats to 297 – despite winning a slightly lower share of the poll – 37.1 per cent against 37.9 per cent. Heath held a last Cabinet before being driven to the Palace to resign. It was by all accounts a bleak occasion: he was determined that it was not the end of his Government, merely a temporary interruption, so there were no thanks, tributes or recriminations. Only one minister felt she could not let the moment pass without a word of valediction. It was Margaret Thatcher who insisted on speaking ‘in emotional terms of the wonderful experience of team loyalty that she felt she had shared since 1970’.27