I also wanted to move Michael Heseltine out of Industry and replace him with John Biffen. When not overreacting, Michael was an effective scourge of the Government, and he was certainly passionately interested in his brief at Industry. The trouble was that his outlook was completely different from mine, and from anything recognizably Conservative. For example, in January 1976 he made a speech criticizing Labour ministers for failing to meet sufficiently often ‘to agree and develop an industrial strategy for this nation’. His real criticism seemed to be that the Labour Party intervened in industry and picked losers whereas he would intervene and pick winners. The notion that the state did not and could not know who would win or lose, and that in intervening to back its own judgement with taxpayers’ money it was impoverishing the economy as a whole, seemed never to have occurred to him. Again, however, when I asked Michael to leave Industry and go to Environment, he said that he preferred not to. I sent my PPS, John Stanley, who knew him well, off to negotiate, and Michael reluctantly agreed to make way for John Biffen on the understanding that he would not have to be Secretary of State for the Environment once we were in power. That settled, the rest of the changes could now go ahead. I asked John Davies to take over from Reggie on Foreign Affairs, where until illness tragically struck him down, he worked hard and effectively.
It was important to have an energetic and effective front-bench team because there seemed a growing likelihood that we might soon be asked to become a government. On Wednesday 15 December Denis Healey introduced a further mini-Budget. He announced deep cuts in public spending and borrowing, and targets for the money supply (though expressed in terms of domestic credit expansion), as part of the deal agreed with the IMF. It was, in fact, a monetarist approach of the sort which Keith Joseph and I believed in, and it outflanked on the right those members of my own Shadow Cabinet who were still clinging to the outdated nostrums of Keynesian demand management. True to the tactic of not opposing measures necessary to deal with the crisis, we abstained in the vote on the measures. The IMF-imposed package was a turning point, for under the new financial discipline the economy began to recover. But in party political terms this was a mixed blessing. On the one hand, discontent with the Government’s economic stewardship would diminish and support was likely to swing back towards Labour. On the other, we could now argue that socialism as an economic doctrine was totally discredited and that even the socialists were having to accept that reality was Conservative. The precise electoral implications of all that would have to be seen.
The political uncertainty made everyone jittery. The Government no longer had an overall majority. No one knew how members of the smaller parties might vote on any particular issue. It was frustrating enough even for those of us who were kept informed of the changing parliamentary arithmetic by the Whips. But it was all but incomprehensible to Conservative supporters in the country, who could not understand why we were unable to inflict a fatal defeat and bring about a general election. In fact, on Tuesday 22 February 1977 the Government was defeated on a guillotine on the Scotland and Wales Bill. The end of any immediate hope of achieving devolution in Scotland and Wales caused the Scottish and Welsh Nationalists to withdraw their support from the Government. A new parliamentary crisis — one in which the Government had ceased to have even a working majority — was upon us.
TOWARDS LIB-LABBERY
Before describing the outcome of that crisis, it is necessary to trace something of the background to the arguments about devolution, which would resurface with a vengeance later. For the devolution issue — at least until the final dénouement in March 1979– had brought almost as much grief to the Conservative Party as it had to Labour.
Ted had originally committed the Conservatives to devolution at the Scottish Party Conference in May 1968, following a surge in support for the Scottish Nationalist Party (SNP) — a short-lived surge, as it turned out. Ted’s ‘Perth Declaration’ came as a shock to most Conservatives, including those in Scotland. I was never happy with the policy and there was little enthusiasm for it among English Tories generally. But Ted pressed on. He set up a Party Committee under Alec Douglas-Home to draft a detailed plan. Alec’s proposals were agreed at the Scottish Party Conference on the eve of the 1970 general election, finding their way into the manifesto. (There was no commitment for devolution in Wales.) In office between 1970–74 the devolution commitment was, however, quietly dropped. Although the Kilbrandon Royal Commission on the Constitution, which proposed an elaborate devolution scheme, reported in October 1973, our February manifesto just committed the Party to study it. Labour on the other hand committed itself to legislate.
After the general election, Ted became convinced that the Party should offer devolution to Scotland as a way of winning back lost support and appointed Alick Buchanan-Smith as Shadow Scottish Secretary with a brief to do so. At the Scottish Party Conference in May, Ted resurrected our devolution policy, promising a Scottish Development Fund financed by North Sea oil and going beyond the Home proposals in finance. This was the policy upon which we fought the October 1974 election — which, notwithstanding what was proposed on devolution, saw our support in Scotland diminish further. Indeed, for the first time ever we finished in third place in the popular vote.
Anxieties about the way in which the Party had been bounced into the new policy had never been far below the surface. There was in particular a small group of Scottish Tory MPs, including my old friend Bettie Harvie-Anderson, who began to make their views known with increasing vigour after October 1974. They saw the proposal for a Scottish Assembly as one which would threaten the Union, not consolidate it. They also saw no reason to go along with Labour Party policy, let alone try to outbid it. The Scottish party itself was deeply split, with the critics of devolution representing much grassroots opinion pitted against the left-leaning Scottish party leadership of people like Alick Buchanan-Smith, Malcolm Rifkind and George Younger.
This was the situation which I inherited as Leader. Ted had impaled the Party on an extremely painful hook from which it would be my unenviable task to set it free. As an instinctive Unionist, I disliked the devolution commitment. But I realized that so much capital had by now been invested in it that I could not change the policy immediately. Had I done so, there would have been resignations which I simply could not afford. For the moment I would have to live with the commitment.
I asked Willie Whitelaw to chair a devolution policy group. In the Shadow Cabinet we duly discussed Willie’s proposals for a directly elected Assembly and agreed them, though without committing ourselves one way or the other to proportional representation.[42] Many of the Tory devolutionists wanted PR, fearing a future SNP victory in Scotland under the first-past-the-post electoral system and not being averse perhaps to the prospect of coalition politics, north or south of the border. On this I would not budge.
At the Scottish Party Conference in Dundee in May 1975 I repeated the commitment to a directly elected Assembly as briefly as I decently could. Talking to people at the Conference brought home more clearly than ever the fact that there were some Scottish Tories who bitterly disagreed with their leaders about the whole question. My unease grew — and so did that of other people. During the summer, English Tory MPs began to express doubts about Scottish devolution, partly because of its implications for the Union but also on sound tactical grounds. Scotland would be vastly over-represented in the Westminster Parliament if it had an Assembly as well as its present (somewhat generous) quota of MPs. Moreover, Labour was itself hopelessly divided over devolution, and it was clear that the tactical balance of advantage had swung away from proclaiming its virtues towards using it as an issue on which to embarrass the Government. I held a series of meetings with backbenchers. Their worries both echoed and increased mine. By the end of 1975 opinion on the backbenches was strongly against devolution. At the same time Alick Buchanan-Smith and Malcolm Rifkind, getting ever more out of touch, were flirting with the idea of a separate Scottish executive. That went yet further beyond the Home proposals and took us well into Labour territory.
42
For Wales there would be no such Assembly, but rather a Welsh Select Committee, a strengthened Welsh (advisory) Council, and Welsh spending would be financed by block grant.