Bang!: A History of Britain in the 1980s (15 page)

Hoskyns and Strauss’s desire to disable trade union power was shared by a pressure group which, although outside the Conservative Party, was admired by Thatcher and
right-wingers generally, if not for its intellectual firepower then at least for its practical vigour. This was the National Association for Freedom – later the Freedom Association (NAFF not
being the ideal acronym). It had been set up by the identical twin brothers Ross and Norris McWhirter, whose admiration for individual endeavour and personal goal-setting manifested itself through
their being the founding editors of the
Guinness Book of Records
and becoming minor celebrities to a generation of 1970s children as the twins whose extraordinary memory enabled them to
answer questions on the BBC show
Record Breakers
. Their organization was particularly concerned with campaigning to end the closed shop, helping and providing legal advice to non-union
employees who had found themselves blacklisted. In 1975, the IRA murdered Ross McWhirter. His offence had been to offer a reward for information leading to the arrest of the IRA terror cell that
had attempted to blow up the Tory MP Hugh Fraser (who had just stood against both Heath and Thatcher for the Conservative leadership) but instead had killed a passing cancer specialist walking his
dog. Norris McWhirter carried on with his brother’s campaigning, the terrorists’ actions proving a better recruiting sergeant for the Freedom Association than for the IRA. While the
legislation the Thatcher government brought in to curb trade union power did not go as far as Strauss, Hoskyns or McWhirter would have wished, with their encouragement it certainly went further
than the Cabinet minister responsible, Jim Prior, thought was prudent. Victory there could be measured by the decade’s end, with the switch of the Freedom Association’s campaigning zeal
from facing down trade union muscle to combating the increasing will to power of the European Union, a process Thatcher had meanwhile done so much to advance. Long before that, her failure to adopt
her Policy Unit’s plans for root and branch reform of the home civil service hastened Hoskyns’s departure, in 1983, while Strauss went off to teach management.

Trouble for Tina

Whether in think tanks or Parliament, the harsh realities of office were a dispiriting experience for those who had drawn up wish-lists for action while in opposition. In
particular it was the industry secretary, Sir Keith Joseph, who floundered when compelled to bring his ideological thinking into line with the practicalities forced upon him by an economy in
decline. In particular, the nationalized industries continued to be a huge drain on resources and demonstrated that while the government might talk the tough language of competition, in reality it
was not ready to put the matter to the test. The
plight of the nationalized British Steel Corporation was a case in point. Between 1975 and 1980, vastly increased state
subsidies (equivalent to £221 for every household in the country) had seemingly muffled rather than stimulated productivity – to the extent that British Steel took double the man-hours
to produce a tonne of steel compared with its main European competitors.
³²
With mounting losses and facing 52,000 planned job cuts, British
Steel’s workers responded by going out on strike for the first three months of 1980. There were no cheap solutions. When the government appointed a new tough chairman in the Scots-American
Ian MacGregor, the short-term costs of restructuring the industry actually involved yet another increase in the state subsidy. The same story unfolded in the nationalized car industry. Michael
Edwardes, the energetic chairman of British Leyland, secured a further £900 million subsidy for the loss-making state-financed car manufacturer. Apart from its Land Rover division, it was
reasonably assumed that no foreign buyer wanted to purchase British Leyland, with its disappointing car sales and dreadful strike record. Even Thatcher was not prepared to sanction the scale of job
losses in the Midlands that withdrawing the subsidies would have involved. ‘No,’ she confirmed, she was not ‘going to chop you off at the stocking tops’.
³³
Hold-ups, handouts – the prime minister at least conjured an arresting image, albeit one that underlined how wretchedly dependent the nationalized
industries were on taxpayer support. It was a lamentable situation in which years of pumping state investment into massive corporations had succeeded only in making them so uncompetitive that they
could not be expected to survive a matter of months unless they were given yet more subsidy in the hope that, this time, they might somehow turn themselves around. For all his talk of slimming down
the state while in opposition, Joseph merely seemed to be writing larger cheques for it once he was in office.

An even greater drubbing was delivered by the miners. In February 1981, the National Coal Board revealed plans to close down some of the most uneconomic pits. With the certainty of a nationwide
strike if the plan was pushed through, Thatcher blinked. There were insufficient stockpiles to keep the power stations going during a protracted disruption. Another three-day week beckoned, with
the country again reduced to candle power. The National Union of Mineworkers (NUM) could then prove as instrumental in bringing down Thatcher as it had with Heath. Faced with this prospect, the
prime minister concluded that a confrontation with the miners could not be won and, therefore, must not be fought. The miners were duly bought off and the subsidizing of uneconomic pits continued.
Privately, Thatcher began drawing up plans so that the next time the NUM threatened to plunge the country into darkness the government would be ready with a contingency plan. For the moment,
though, it was yet another humiliating defeat.

Was anything going right for the Thatcher government? The party of private enterprise was letting thousands of firms go under, unwilling to assist them by lowering interest
rates and encouraging a weaker, more competitive currency for fear that doing so would compromise its money supply strategy. Yet, at the same time, it was prepared to pump vast sums into failing
nationalized companies rather than accept the consequences of open competition. At the annual conference of the CBI, its director general, Sir Terence Beckett, declared he was up for ‘a
bare-knuckle fight’ with the government over its economic policy.
³⁴
Such a level of hostility towards a Tory administration from the
country’s premier business organization was without precedent. There were, nonetheless, three major victories secured during this, the most testing period of the Thatcher government’s
decade in power, that were to prove among its most significant legacies. The first was the passage of the Housing Act 1980 which, in giving local authority tenants the right to buy their council
houses, ensured one of the greatest transfers of property from state to citizens in British history. The passage of legislation aimed at curbing trade union power was also among the most
significant acts of Thatcher’s first term, largely freeing business from the unofficial walkouts, closed shop, all-union agreements and secondary picketing that had been a central feature of
labour relations in the 1970s. The third achievement was the successful control of inflation. An annual rate of 18 per cent in 1980 declined to 8.6 per cent in 1982 and 4.6 per cent in 1983. It had
last been that low in 1968. A seemingly rampant dragon had been, if not slain, then at least tamed – and the spectre that had haunted the 1970s, of Weimar or South American-style inflation
destroying the nation’s savings and potentially bringing down the democratic political system, was averted. Unfortunately, at the time Thatcher remained vulnerable to the charge that the
attack on inflation was conducted with such single-minded ferocity that it had caused the collateral damage of a crippled economy and three million on the dole. The old saw was revived about an
operation being successful although the patient died.

The difficulty of finding a reliable measure of how the money supply really was growing – let alone whether this was the only cause of inflation – compounded the Treasury’s
difficulty in determining whether it was administering the correct dosage of purgatives. To monetarism’s believers, a plunging inflation rate was proof that the medicine was working and
provided encouragement to keep on with it. This attitude only made sceptics even more fearful that the monetarists simply did not know when to ease off and give sickly firms a chance to recover
rather than face another, potentially debilitating, onslaught. Appeals for clemency made no sense to Thatcher, who did not see why the chance of a long-lasting victory over inflation should be
casually thrown away by those who had never believed – or
perhaps understood – the strategy in the first place. Sir Geoffrey Howe coined the uncompromising slogan
in defence of persisting with the current policy, which would come to define the monetarist attitude: ‘There Is No Alternative.’ Shortened to the acronym ‘Tina’, this
obdurate goddess of monetarism naturally attached itself to Thatcher herself.

At the Conservative Party conference in October 1980 the rumblings of dissent abounded. The Leader of the House of Commons, Norman St John Stevas, was heard warning about ‘theoreticians
living in an abstract world’.
³⁵
St John Stevas, at least, was in the habit of separating his personal regard for Maggie from his
imperviousness to ‘Tina’. Other ‘wets’ had reached the point where personalities and policies could no longer be kept apart. Jim Prior looked across at his ‘dry’
colleagues running economic policy and dismissed them contemptuously: ‘None of them had any experience of running a whelk-stall, let alone a decent-sized company.’
³⁶
The parliamentary party as well as the Cabinet were showing increasing signs of being in mutinous mood. On 27 February 1981, Thatcher received a memo from Ian Gow, her
loyal parliamentary private secretary, warning her that ‘there has been a noticeable deterioration in the morale of our backbenchers’.
³⁷
The last date for a general election was still more than three years away, but the opinion polls suggested the prospect of wholesale slaughter. Backbench tetchiness was, however, less likely to
oust the prime minister, or her Chancellor, than a putsch in the Cabinet. The dissidents there had ceased to keep their feelings to themselves, engaging in what Thatcher described as ‘the
indecent obscurity of leaks to the
Guardian
’.
³⁸
She thought she detected in their attitude a contempt that stretched far beyond the
parameters of monetary policy. ‘In the eyes of the “wet” Tory establishment,’ she later unburdened herself, ‘I was not only a woman, but “that woman”,
someone not just of a different sex, but of a different class, a person with an alarming conviction that the values and virtues of middle England should be brought to bear on the problems which the
establishment consensus created.’
³⁹
Speaking the day after the 1981 budget at a lunch for the Young Businessman of the Year (the idea of a
businesswoman had seemingly not yet dawned on the event’s sponsor, the
Guardian
), Thatcher failed to conceal her contempt for those who, despite wanting higher public spending,
criticized the tax rises Howe had felt compelled to introduce. ‘What really gets me,’ she railed, in words that suggested she was talking specifically about her ministerial colleagues,
‘was that they really were saying, “We don’t like the expenditure we have agreed, we are unwilling to raise the tax to pay for it. Let us print the money instead.” The most
immoral path of all. Because what that is saying is let us quietly steal a certain amount from every pound in circulation, let us steal a certain amount from every pound saved in building
societies, in national savings, from every person who has been thrifty.’
⁴⁰

A paper setting out proposals for further spending restraint in 1982 had the Cabinet in uproar. Only Keith Joseph and the prime minister seemed to think it plausible and
further discussion was duly postponed until the autumn. Thus Thatcher went into the summer vacation aware that for her to survive either her Chancellor would have to burn the hair shirt or she
would have to cull the leading dissidents in her Cabinet. She chose the latter. In September 1981, a reshuffle was announced that prised away several of the most persistent ‘wets’ from
their ministerial berths. Sir Ian Gilmour did not take well to being sacked and promptly appeared in front of the television cameras to announce that the government was ‘steering full speed
ahead for the rocks’. It was a bold performance from the ex-Lord Privy Seal, which Thatcher acidly described in her memoirs as resembling ‘a flawless imitation of a man who has resigned
on principle’. In a further twist of the knife, she added that he ‘was to show me the same loyalty from the back benches as he had in government’. Churchill’s son-in-law,
Christopher Soames, took his sacking with moderately more dignity but no less of a sense of social outrage: ‘I got the distinct impression,’ Thatcher recalled, ‘that he felt the
natural order of things was being violated and that he was, in effect, being dismissed by his housemaid.’
⁴¹
Other ‘wet’ casualties
took their fate with better grace. Mark Carlisle was asked to vacate education and Jim Prior was persuaded, against his initial inclinations, to run Northern Ireland. These changes came on top of
the sacking back in January 1981 of Norman St John Stevas. He had been an early supporter of Thatcher personally and his criticisms had usually been coated in fey and genial good humour, speaking
of his boss as ‘the blessed Margaret’ and ‘the Leaderene’. Alas, she was no longer in the mood to be tickled by such whimsy.

It was not just the demotion of the ‘wets’ but the promotion of the ‘dries’ that made the reshuffle significant. In Prior’s seat as secretary of state for
employment now sat Norman Tebbit. The ruddy-faced Tory squire had been replaced by someone with the lean demeanour of a Dickensian poor law commissioner. Hard times were indeed something of which
he had had first-hand experience during his working-class childhood. Educated at a selective state school, Tebbit’s university had been the RAF, where he had flown Vampire jets before
becoming an airline pilot. Never shy about expressing his feelings, he had few doubts that the prime minister was on the right track and that further legislation was necessary to restrain the power
of the trade unions. Lord Thorneycroft, the party chairman, who had admitted to suffering from ‘rising damp’, was replaced by Cecil Parkinson, a rapid promotion from a junior position
at the Department of Trade. The son of railway worker, Parkinson was a grammar-school boy who had won a scholarship to Cambridge. His flirtation there with student socialism was now long behind
him. His loyalty to Thatcher was complete. Others who, if not
necessarily safe in all weathers were at least wax-proofed against wetness, included Norman Fowler, who went to
the Department of Social Security, and Nigel Lawson, who, given the Department of Energy, began the process of privatization.