The result of the February election had left the Tory party in a sort of limbo. With another election certain within a few months – as soon as Wilson saw an opportunity to increase his precarious majority – there was no early possibility of challenging Heath’s leadership, even if there had been an obvious challenger in waiting. The lesson he drew from the debacle of confrontation with the miners was that the Conservatives must try harder than ever to show themselves moderate and consensual in order to unite the country and win back the votes lost to the Liberals. This was the opposite of what his party critics wanted.
The one area in which Heath saw a need for new policies was housing. He told the Shadow Cabinet that the voters he met wanted ‘some radical and drastic changes in policy aimed particularly at the problems of ordinary people’ – specifically the cost of mortgages and the burden of the rates – ‘which should take priority over rather more abstract principles’.3 The key job of developing and selling these shiny new policies which would form the centrepiece of the party’s appeal at the next election he entrusted to Margaret Thatcher: an indication that he still saw her as an efficient and amenable agent of his will, not as a potential troublemaker.
Shadow Environment Secretary
In fact, up to October 1974 he was not wrong. The job of shadow Environment Secretary was a high-profile opportunity in an area of policy she had always been interested in but had not previously covered. It took her all her time to get on top of it. An Oxford contemporary who had known her in the Department of Education ran into her soon after she had taken it over and found her uncharacteristically harassed, complaining that the wide-ranging DoE empire – taking in transport as well as housing and local government – was too big to master in her usual detail.4 Parliamentary opposition, however, was just a matter of going through the motions – more than ever this summer when the Conservatives had to hold back for fear of precipitating another election before they were ready for it. Mrs Thatcher’s real brief was to come up with the bright new housing policies which Heath wanted to put in the forefront of the party’s next manifesto to win back the middle-class voters who had cost the Tories the February election by defecting to the Liberals. Frankly, what he was seeking was a short-term electoral bribe, but one which could be presented as consistent with the long-standing Conservative philosophy of encouraging home-ownership.
Suppressing her doubts, Mrs Thatcher loyally complied. The package she eventually announced at the end of August comprised three different forms of housing subsidy. First she promised to hold mortgages to a maximum interest rate of 9.5 per cent, to be achieved by varying the tax rate on building societies. Second, council tenants were to be helped to buy their houses at a 33 per cent discount. Third, first-time buyers would be encouraged to save by a direct Government bribe of £1 for every £2 saved. Most significant for the long term, however, was her fourth commitment: a promise to abolish domestic rates.
Here too she was pressured to go further than she wanted. A meeting of party heavyweights – Heath flanked by most of his senior colleagues – ‘bludgeoned’ her into promising abolition of the rates before they had decided what to put in their place. Her August package eventually spoke of replacing the rates with ‘taxes more broadly-based and related to people’s ability to pay’, meanwhile transferring to the Treasury the cost not only of teachers’ pay but of parts of the police and fire services. ‘I felt bruised and resentful’, she wrote in her memoirs, ‘to be bounced again into policies which had not been properly thought out.’ Yet she was still too loyal, or too junior, to refuse. Heath was still the leader, backed by almost the whole of his former Cabinet. In the last resort she was still willing to conform to protect her career. ‘I thought that if I combined caution on the details with as much presentational bravura as I could muster I could make our rates and housing policies into vote-winners for the Party.’5
Mrs Thatcher’s performance over the summer and autumn of 1974 – arguing in private against policies which she would then defend equally passionately in public – demonstrated the maturing of a formidable political skill. By her championing of subsidised mortgages she showed that she possessed not only the good lawyer’s ability to argue a weak case; any self-respecting politician can do that. She also had a preacher’s ability to invest even a poor case with moralistic force: this more than anything else was the secret of her success over the next fifteen years. In the years of her success she boasted of being a ‘conviction politician’, but it should not be forgotten that both words carried equal weight. She had powerful convictions, certainly; but she could be brilliantly insincere too, when the situation required it, and such was her reputation for burning integrity that few could spot the difference. At a number of critical points in her later career it was only this which enabled her to skate on some very thin ice and get away with it.
She was the Tories’ star performer in the October 1974 campaign. She still made only two trips out of London; but largely because her policies were their only new ones, she appeared more than ever before on television and radio, featuring in three of the party’s election broadcasts and three of the morning press conferences, including the final one with Heath. She was coached for her television appearances by Gordon Reece, who began for the first time to get her to relax in front of the camera. With Reece’s help she was judged to have done so well in the Tories’ first broadcast that she was promoted to introduce the second.
Labour was seriously alarmed, but could not make up its mind how to respond. In the event polls soon showed that the public did not believe the Tories’ promises.6 Despite this, however, the high-profile exposure did Mrs Thatcher much more good than harm. It temporarily damaged her credentials with the right, who were dismayed to see her once again betraying her professed beliefs, using public money to distort the market in pursuit of votes. But the sheer feistiness of her performance, and indeed her pragmatism, stood her in good stead when she came to appeal to the whole body of middle-of-the-road MPs just three months later. She had valuably shown herself not as a naive right-winger but as a vigorous vote-getter and a seasoned pro.
In the event, with just 39.2 per cent of the vote (against 35.8 per cent), Labour gained only eighteen seats for an overall majority of four. Mrs Thatcher’s personal majority was cut by another 2,000 (on a lower turnout), but it was still sufficient:
In fact, as events turned out, the national result was probably the best possible for her. An unexpectedly successful rearguard action was creditable enough to enable Heath to dismiss calls that it was time for him to stand down; yet at the same time it was still a defeat, the party’s third in four elections under his leadership, so it only fuelled the gathering consensus that he could not survive much longer. Meanwhile, such a tiny majority was unlikely to sustain Labour in office for a full term – thus offering an unusually fruitful prospect of opposition for whoever succeeded in replacing him.