Margaret Thatcher: The Authorized Biography (64 page)

At root, Mrs Thatcher did not agree with this. Her nature revolted against the notion that trade union leaders should have anything to do with deciding economic policy, or even general levels of wages. She was in principle opposed to the idea that it was the business of government to negotiate pay, except for its direct employees. And since she did not believe that inflation was
caused by wage rises – inflation being, in the monetarist phrase, ‘a disease of money’ – she was quite sure that prices and incomes policies could not cure anything, although she did think they could sometimes be justified on grounds of emergency. Nor did she share Prior’s view that unemployment levels must be kept artificially low at all times. She wanted people to have jobs, of course, but they must be what she called ‘real jobs’, not those created or maintained just to make the figures look good. On the other hand, she shared Prior’s political anxieties. She had seen how the Heath Industrial Relations Act had collapsed, and although she had no temperamental aversion to a fight with the trade union leaders, she had seen what had happened when the Tories picked one which they then lost. She therefore listened to Prior, and other cautious voices, notably Willie Whitelaw’s, while trying all the time to push the argument on.

The process was necessary but painful. In the summer of 1976 Prior produced a paper on employment policy for the Shadow Cabinet. Mrs Thatcher’s copy shows her leaving untouched the more general parts of the argument – ‘we … must convince the public (and as far as possible the unions themselves) that we are not antipathetic towards trade unions and do not seek a major confrontation.’ She becomes tetchy, however, whenever Prior starts to make specific recommendations. When he urges that under Labour’s new employment law employees should be ‘reassured’ that it ‘does
not
mean that they must either join a union or lose their jobs’, Mrs Thatcher scribbles, ‘But it does.’ When Prior floats the idea of a ‘deal’ allowing some secondary picketing in return for limitations on the number of pickets, Mrs Thatcher writes, ‘Why?’
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She was instinctively more attracted to Keith Joseph’s private suggestions, brought together later, at the beginning of 1977, that blame should be laid where blame was due: ‘Trades unions and the Labour Party are the manifestations of the same purposes. Their common aim has become to usurp political and economic power.’ Joseph advocated a programme of educating the public that the medicine required would take ‘at least five years’ and would involve confronting the unions.
⁷⁹

Hating confrontation, but wanting real reform, Geoffrey Howe searched for a middle way. In a paper called ‘Our Attitude towards Pay Policy’, which he submitted to the Leader’s Steering Committee (a more directed and smaller version of the Shadow Cabinet) in the spring of 1977, he said that free collective bargaining, though desirable, was not enough. He warned against believing that rank-and-file trade unionists would oppose their leaders: ‘is there not a great underlying sense of loyalty to the movement? … Clearly no government would wish to have such a powerful influence pitted against its entire economic policy.’
⁸⁰
Howe’s Economic Reconstruction Group duly came up with a paper, drafted by Adam Ridley, which advocated a version
of German ‘Concerted Action’. Using the word ‘consensus’, which was always a red rag to Mrs Thatcher, it sought a ‘united national commitment to sensible policies’. Mrs Thatcher wrote on top of her copy: ‘Please tell Geoffrey Howe and Adam Ridley that I
disagree most strongly
with this paper. We are trying to cut down advisory bodies and requests for statistics – not multiply them.’
⁸¹
Trying to explain, Howe sent her a learned paper by a German economist about how Concerted Action would work. This made matters much worse: ‘This paper frightens me to death
even more
. We really must avoid some of this terrible jargon [for Mrs Thatcher, an attack on ‘jargon’ was often a disguised attack on substance]. Also we should recognise that this German talking shop
works
because
it consists of Germans.’
⁸²

Mrs Thatcher became increasingly cross at the thought that ‘talking shops’ might be the answer to the problems of prices and wage bargaining, and this coloured her approach to
The Right Approach to the Economy
, the document intended to follow up
The Right Approach
, which appeared in time for the party conference of October 1977. Drafts of the document, chiefly from the pen of David Howell, tried to give a role to the National Economic Development Council (NEDC), a corporatist body of the kind Mrs Thatcher detested. It even envisaged a formal link between the NEDC and a parliamentary committee, adding that ‘The West German experience offers some useful lessons.’ Beside this, Mrs Thatcher wrote ‘Why?’, and her copy of the draft had question marks all over it.
⁸³
With her support, Joseph tried to strengthen those sections which dealt with incomes policy. A few days later, a harassed Adam Ridley wrote to her to say that ‘The process of drafting has, I suspect, proved almost impossible.’
⁸⁴
In the end, the lack of final agreement was such a problem that Mrs Thatcher decided that the paper should be published not as a Shadow Cabinet document, but under the names of its authors – Joseph, Prior, Howe and Howell. Its conclusion on incomes policy reflected the agonies – arguing why an incomes policy was a bad thing, but then weakly concluding that ‘some kind of forum is desirable, where the major participants in the economy can sit down calmly together to consider the implications … of the Government’s fiscal and monetary policies.’ In fact, Mrs Thatcher more or less held the line in public, trying to take a stand against mandatory incomes policy, but speaking of not returning to free collective bargaining too suddenly. But she was impatient about the crablike progress of the whole enterprise. ‘I never felt much affection for
The Right Approach to the Economy
,’ she wrote in her memoirs.
⁸⁵

The difference between what Mrs Thatcher felt could be said in public and in private was marked. In her 1977 party conference speech, she avoided concentrating on incomes policy and sought to show how any confrontation with the unions under the Conservatives would be not
unions versus government but unions versus people. In private, though, she was much more explicit. In a handwritten letter to Jack Peel, a right-wing trade unionist, two weeks earlier, she explained why even voluntary incomes policies did not work: ‘Any voluntary guideline divorces employees’ rewards from the success of the enterprise. That cannot be right.’ She went on: ‘We are constantly talking in terms of
restraint
– whereas all my correspondence refers to phrases as “make it worthwhile to work” … Sooner or later we must talk in terms of incentive.’ She admitted the problem that those with the biggest industrial strength got the biggest increases: ‘It has been aggravated in the nationalised industries because of their monopoly position. The irony is that “public ownership” has therefore resulted in sharply rising prices because of bargaining power. It is the power given
by
the people being used
against
the people.’
⁸⁶

The problem of union power also took particularly contentious form in the course of 1977 because of the dispute at Grunwick. The firm, a photographic processing plant in north-west London, had dismissed a number of workers in a dispute the previous year. Some of those dismissed had then joined the APEX trade union which demanded ‘recognition’ from Grunwick, and the reinstatement of the sacked workers. A court upheld the legality of the dismissals, and a secret ballot at Grunwick showed that 80 per cent of those working at the plant did not want to join any union. By the summer of 1977, the dispute had become a cause célèbre with the left, with huge pickets trying to prevent workers and mail going in and out of the plant. The pickets were briefly joined by two supposedly moderate Cabinet ministers, Shirley Williams and Fred Mulley, and the Labour government stood back from condemning the scenes of violence. Although the row was not strictly about union membership, it came to be seen as a battle about the closed shop which, it was expected, APEX would seek to impose on Grunwick if it prevailed. It also brought home to people the street-power of the left – the sense, as with the Saltley coke depot under Heath, that government and police did not have the power or the will to impose order in the face of industrial intimidation.

Mrs Thatcher was shocked by Grunwick, and everyone knew where her sympathies lay. She sent Adam Butler and Barney Hayhoe,
*
an MP close to Jim Prior, to accompany the workers to the plant so that they could accurately report the level of intimidation to her. But it was not in any way due to her that the plant kept in business. The National Association for
Freedom, which the murdered Ross McWhirter had helped set up to counter what it saw as left-wing intimidation, managed to smuggle out Grunwick’s mail which had been illegally blacked by the postmen’s union. The Conservatives, while naturally condemning violence and lawlessness, kept their distance. In part this was because of doubts raised by other industrialists about George Ward, the owner of Grunwick. In his weekly letter to Mrs Thatcher, John Sparrow warned her of strong reaction to press stories that she was personally close to Ward: ‘There would be quite a lot of unhappiness if it were felt that there was a close relationship between you and Mr Ward.’
⁸⁷
Partly this was because Ward’s personal business behaviour was criticized, but the wider reason was that a great many businessmen, particularly those in large companies, were in favour of the closed shop. They told the Conservatives that they found it simpler to negotiate with only one group of people.

This irritated Mrs Thatcher, who considered such people spineless, but it also inclined her to listen more to Jim Prior about the need to go slowly in trying to change trade union law. Indeed, objectively, though not emotionally, she moved closer to the Prior position than to that of Keith Joseph. While she was in the United States for her second visit there as party leader in early September 1977, Lord Scarman’s inquiry into the Grunwick dispute recommended the reinstatement of the dismissed (now APEX) workers. This caused a public disagreement between Prior and Joseph. Joseph condemned Scarman and appeared to call for the outlawing of the closed shop. Mrs Thatcher, at a disadvantage because she was in Washington, was forced to pronounce. She felt she had little choice but to support Prior who was, after all, her party’s spokesman on the subject. ‘We do not like the closed shop,’ she told a press conference hijacked by this subject when she wanted it to be about her meeting with President Jimmy Carter. ‘We do not think it is right. We are against it … But because I do not like it, and think it is against the freedom of the individual, does not necessarily mean that I can pass legislation about it.’
⁸⁸
Her interview on
Weekend World
the following Sunday, the first of many she was to have with Brian Walden, illustrated the delicacy of her situation. Walden began by saying that the Grunwick dispute raised the question ‘If we vote Margaret Thatcher into No. 10 … will we be voting for a disastrous and futile confrontation between the government and the unions?’ Asked about trade union legislation, Mrs Thatcher played it down, saying that it would be ‘Not of the kind that Ted had … It didn’t work.’ The only legislation on the closed shop would be against its ‘worst aspects’. Walden pursued her about what would happen if a Conservative government were again confronted by the miners as in February 1974. Without having squared this with colleagues
in advance, Mrs Thatcher came up with the arresting idea that if – which she claimed was unlikely – agreement could not be reached, the issue could be put to a referendum, on the grounds that ‘all of the people of this country are shareholders in miners’. She quoted her own remarks about the 1975 referendum on remaining in the EEC to argue that this was a legitimate way, for constitutional issues, of ‘letting the people speak’.
⁸⁹
Her line enabled her to reach over the heads of trade union leaders and claim that rank-and-file trade unionists would be on her side. It also enabled her to deflect press attention from the Joseph–Prior disagreements about union reform. But it was no solution to those disagreements and it was, in essence, a different way of asking the ‘Who governs Britain?’ question that had caused the Heath government so much grief. A working group looked into the referendum idea, and Mrs Thatcher later referred to it from time to time, but it never became, in her view or anyone else’s, the answer.

Perhaps burnt by this experience of internal disagreement publicly displayed, Mrs Thatcher became increasingly protective of Jim Prior’s exclusive right to pronounce on trade union matters. At the beginning of January 1978, Geoffrey Howe sent her a draft of a speech which he proposed to make about the unions. Her notes on it are almost the angriest she penned while leader of the Opposition. She disliked both what she saw as his weakness in being too nice to the unions and his unwisdom in trespassing into the subject at all. When Howe wrote, ‘These questions do not involve any special criticism of trade unions,’ Mrs Thatcher wrote, ‘Ha, ha!’ When he said that change should be made ‘step by step’, she wrote ‘Why.’ ‘
Too defensive
,’ she scrawled, ‘– If you can only be defensive – leave it alone!’ ‘Geoffrey – This is
not
your subject. Why go on with it – the press will crucify you for this … It would be better if Jim Prior said these things.’
⁹⁰
Much frustration is contained in her notes – at the hesitations of policy, at the need for those hesitations, at Shadow Cabinet indiscipline, and at the personality of poor Geoffrey Howe himself. His text was not delivered.

The uncomfortableness of the whole subject of the trade unions in the period of opposition comes through very clearly in the diaries and memory of John Hoskyns. Hoskyns, who had no previous association with the Conservative Party, had sold his successful computer company to devote himself to finding some way of rescuing Britain from its economic malaise. He had come on the scene through the agency of Keith Joseph. After a successful first meeting, set up by Joseph, between Hoskyns and Norman Strauss, and Mrs Thatcher, in August 1976, a second, in which they were to offer her their thoughts for her party conference speech, was a disaster. Sitting, with Margaret and Denis, in what Hoskyns described in his diary
as ‘her rather boringly elegant drawing room’ in Flood Street, they tried to give her a speech structure about how ‘change and recovery were possible if people believed it enough to act on that assumption’. ‘She nitpicked Norman’s semantics … defensively holding forth, lecturing us on things we were quite well aware of. I showed slight irritation once & Mr T looked at me, stunned that I shouldn’t be party to the inevitable mild sycophancy which makes her feel she’s so much more remarkable than she is. She is a limited, pedantic bore, with no lateral grasp, very little humour. I may be wrong but that was my view. God help the Tories …’
⁹¹
*
Hoskyns and Strauss persisted, however. Their aim was to get it into Tory heads that the unions had to be confronted in order to bring about the economic changes required. At the same time, they were as aware as anyone that the prospect of confrontation was electorally disastrous, and that a confrontation for which a Conservative government was not prepared would be even worse than no confrontation at all. In a letter to Joseph in June 1977, Hoskyns wrestled with the problem of how to implement the right economic policies. The ‘key question’, he said, was ‘What political innovation is needed to remove the political constraints on government’s freedom to pursue such policies?’
⁹²