Bang!: A History of Britain in the 1980s (8 page)

At the campaign’s outset, on 30 March, a bomb exploded under the car of Airey Neave, the shadow secretary of state for Northern Ireland, as it pulled out of the House of Commons car park.
An IRA splinter group, the INLA, claimed responsibility. Neave, a Colditz escapee, had been Thatcher’s campaign manager for the Tory leadership in 1975. His murder brought both cross-party
condemnation and the fear that the election campaign might be marred by bombings and assassination attempts. Instead, the five weeks passed without further serious incident, although Callaghan was
dogged by hecklers from a group calling itself (without evident irony) Socialist Unity, who tried to break up the Labour leader’s speaking engagements by chanting ‘Troops out of
Northern Ireland’.

The handling of Ulster’s Troubles was one of the few areas in which Labour and the Conservatives were in close agreement. Although on some other issues the difference was only a matter of
degree: the Tories promised not to cut NHS spending, focusing instead on reversing their opponents’ discouragement of private health provision; both parties were committed to keeping British
forces in NATO, although only the Tories promised significant increases in the defence budget. Labour’s preparedness to nationalize more companies was kept imprecise, with merely a pledge to
keep ‘using public ownership to sustain and create new jobs’. The Tories restricted their privatization crusade to those industries most recently nationalized – shipbuilding and
aerospace – and the National Freight Corporation. The big industries and utilities – coal, steel, telephones, gas, etc. – would remain in state ownership. There would be no
dramatic dismantling of the mixed economy. While a subsequent generation came to see 1979 as marking the end of the post-war consensus, voters at the time actually perceived the main parties to be
closer than during the heyday of ‘Butskellism’: in 1955, 74 per cent of those polled by Gallup believed there were important differences between the main parties; in 1979, only 54 per
cent did so.
¹⁸

The ideological chasm might have been broader but for the fact that the Labour leader kept tight reins on what went into his party’s manifesto, while
the Conservative
leader had much less input into what went into hers. Callaghan’s insistence that nothing became an election pledge unless he agreed with it ensured that proposals to nationalize one or more
of the big four banks or to give up the nuclear deterrent were dropped. Overcoming fellow members of a drafting committee that included Michael Foot and Tony Benn necessarily involved some
brinkmanship on the prime minister’s part, and it was perhaps surprising that the one issue over which he threatened to resign if it were included was a commitment to abolish the House of
Lords.
¹⁹
The Economist
duly pronounced the resulting manifesto,
The Labour Way Is the Better Way
, ‘as moderate as any on which
the Labour Party has campaigned during its 79 years’ existence’.
²⁰

If Labour’s manifesto was driven by its party’s right wing, the content of the Tory manifesto was cast by its left wing – in the guise of its drafters from the Conservative
Research Department, Adam Ridley and, particularly, the up-and-coming young voice of Heathite moderation, Chris Patten. Even Mrs Thatcher’s introductory message was prepared for her by Sir
Ian Gilmour, who was not remotely from her wing of the party. Mostly absent was the authentic, uncompromising voice of the leader herself. Nevertheless, even if Thatcher had been left unchecked to
write the whole manifesto, it might be mistaken to imagine that it would have been as radical as the monetarist and free-market think tanks would have wished. For all her talk of being a conviction
politician, she could be remarkably cautious if she felt the circumstances were not propitious. As Nigel Lawson later wrote of the Tories’ preparations for government, ‘little detailed
work had been done’ on privatization policy, because of ‘Margaret’s understandable fear of frightening the floating voter’.
²¹
It was sometimes the manifesto’s omissions that showed where Thatcher’s influence on policy had been greatest: her predecessor’s support for Scottish
devolution was ditched, and there was no flirtation with proportional representation – despite the feeling of many within her shadow Cabinet that proportional representation and European
integration might be the only mechanisms available to curtail a future radically left-wing government. To Margaret Thatcher, the thought of office being dependent upon the sufferance of David Steel
did not appeal.

For all the efforts of James Callaghan and Chris Patten to remove the ideology from election issues, there were five battlegrounds on which Labour and the Conservatives offered very clear
choices over what would become of Britain in the eighties. These were housing and education policy, trade union power, how to control inflation, and the level of taxation.

In 1979, a third of Britain’s housing stock was owned and maintained by local councils. This represented an all-time high which Labour promised to supplement by building more council
flats, seeing the further extension of council estates as the answer to the nation’s needs. In stark contrast, the
Tories believed the future lay with home ownership and
promised that local authority tenants would have the right to buy their own council houses. This was to give impetus to one of the most important shifts of the 1980s, the vast increase in home
ownership, bringing with it a revolution in the nation’s attitude to borrowing and personal finance.

On education policy, the two parties were also polls apart. Labour pledged to wipe out the last remaining grammar schools with the single sentence: ‘Universal comprehensive education,
which is central to our policy, must be completed in the 1980s.’ But it was not just the few examples of selection in the state sector that the party had in its sights. ‘Independent
schools still represent a major obstacle to equality of opportunity. Labour’s aim is to end, as soon as possible, fee-paying in such schools’ and to abolish their ‘remaining
public subsidies and public support’. There was thus a genuine prospect that the long tradition of private education was about to end in Britain. The future for such institutions looked bleak
even if the legislation to make them illegal did not get through Parliament and the courts, since without the retention of charitable status their fees would place all but the most well endowed
beyond the reach of their main clientele, the middle classes, whose available resources were, in any case, feeling the squeeze from an 83 per cent top rate of income tax. Only a few of the great
public schools might have survived, perhaps by relocating abroad – rather in the manner of the Jesuit academies that had once decamped across the English Channel to avoid seventeenth-century
religious persecution. To those who saw private education as one of the most divisive props of the British class system, the expectation that they might soon be axed presented a thrilling
opportunity to improve the life chances of the many. To their defenders, however, it seemed the state was about to destroy what was reputedly one of the world’s most rigorous education
systems, ending choice in the free market just as it had crushed selection in the maintained sector. Here, then, was to be a modern version of the dissolution of the monasteries – somewhat
ironically given that the Henrician dissolution had created some of the public schools in the first place. For the independents as for the grammar schools, only a Conservative victory promised
salvation, or at least a stay of execution.

In contrast to the ancient academies, Labour intended to leave the traditional institutions at the heart of its own movement unreformed. Despite the fact that the Winter of Discontent had pushed
trade unions to the forefront of debate, unions received little mention in the Labour manifesto, except in the emphasis placed upon their central role in helping to curb inflation. So sensitive was
the fragile truce brokered by the TUC that the government simply could not afford to risk it with some ill-timed criticism. The best that Callaghan could hope for was that the union leaders would
keep their financial dues flowing into Labour’s coffers without rocking the boat while the
election campaign was in the balance. Most had the sense to toe the official
line. A few remained resolutely off-message: Sid Weighell, general secretary of the National Union of Railwaymen, spoke hopefully of messing up a future Tory government’s appeal for wage
restraint: ‘I don’t see how we can talk to Mrs Thatcher . . . I will say to the lads, come on, get your snouts in the trough.’
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While such comments helped the Conservatives make their case that union militancy needed muzzling, the potentially disastrous consequences of attempting to do so fostered fears that a Tory
victory was far from a recipe for industrial peace. So concerned were the Conservatives on this front (and still bruised from the drubbing the unions had given Heath’s administration) that
had the general election been called in 1978, they would have avoided firm commitments to curb union power. This was the cautious message the consensus-minded shadow employment secretary, Jim
Prior, had successfully pressed upon his leader. It was only the severity of the Winter of Discontent that made such appeasement incredible. Thus the manifesto included pledges to restrict
secondary picketing (where picket lines were manned by union members not actually employed by the company where there was a strike). In an attempt to make the unions more democratic, public money
would be offered to encourage their use of secret ballots instead of the existing habit of open voting by a show of hands. There would also be help for those victimized by the closed shop (where no
worker could be employed by a company unless they were a member of the recognized union), with measures taken to prevent its further spread where it was not overwhelmingly endorsed by the
workforce. But there was no promise to end the closed shop. Here again, Thatcher was persuaded to proceed with caution, despite her instinct for action.

Prices had doubled during Labour’s term in office and it was on how best to curb inflation that Labour and the Conservatives most clearly demonstrated their contrasting views over whether
Britain needed a more or less interventionist state. Labour announced that it aimed to cut inflation to 5 per cent. This would be achieved not just by continuing to work with and involve the unions
in setting pay policy norms, but also by giving the Price Commission greater statutory powers forcibly to cut prices where, in its judgement, they were higher than they ought to be. The
Conservatives did not conceal their belief that relying on the opinions of a price-fixing committee to curb inflation was nonsense. They would scrap the Price Commission. As for wages, what pay the
private sector set for its employees was its own affair – it was not for the state to determine. The Treasury should set targets for the money supply, rather than income norms, for ‘to
master inflation, proper monetary discipline is essential, with publicly stated targets for the rate of growth of the money supply’.
²³
This
was not entirely
the great dividing line that many on both sides made it out to be. Albeit with mixed results, the Labour government had also been actively pursuing monetary
targets since 1976, while being coy about trumpeting the fact too publicly. What was different was the centrality the Tories gave to monetary discipline. Even here, though, there was caution. The
CBI still supported an incomes policy and it was not until after the Winter of Discontent that the Conservatives ceased being ambiguous about whether they would persevere with the policy in
government. This was a victory for Thatcher, who saw incomes policies not only as a means whereby the unions would always have a lever on economic policy, but as a mechanism that focused national
attention away from the indicator that really mattered. As she told an audience in March 1979: ‘Only when we stop being obsessed with pay and start being obsessed with productivity are we
going to prosper.’
²⁴
Focusing on the money supply would prove an alternative obsession. But part of its appeal was that it came part and
parcel with reducing the size of the state: public spending would be cut, as would government borrowing and taxes.

Taxation was the last of the five main battlegrounds dividing the parties, and the one on which the Conservatives believed they were on the strongest ground. While Labour skated over their
fiscal intentions, its manifesto was nevertheless not embarrassed about proclaiming that ‘The Labour Party’s priority is to build a democratic socialist society in Britain’
– which was presumably not going to be achieved by giving taxpayers a slice of their money back. Indeed, Callaghan went into the election promising a new burden on top of the already
historically record-breaking level of income tax. This came in the shape of an annual wealth tax on those who had more than £150,000 squirreled away. The very idea was naturally anathema to
the Tories, who announced they would cut the top rate of income tax to the European average (which was at the time around 60 per cent). They also undertook to raise the threshold at which those on
low incomes paid tax. But there was a sting in the shape of a switch from taxing income to taxing spending. As Labour pointed out, increasing VAT would both be inflationary and would
disproportionately affect those on lower wages, for whom the shopping bill consumed a relatively larger share of their income.

MORI’s private polling, commissioned by Labour, showed that the Conservatives led on every policy issue except the National Health Service and industrial peace. On the two issues cited as
the most important by respondents – taxation and law and order – the Tory lead over Labour was 30 per cent.
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This was especially
important because cutting taxes was the centrepiece of the Conservative campaign. Yet the apparent support for tax cuts was far less clear-cut when the question was balanced by eliciting
respondents’ views on retaining the existing level of welfare provision. Opinion surveys by Gallup suggested that those believing tax cuts should be
enforced even at the
expense of front-line public services slid from 34 to 30 per cent during the course of the campaign.
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