Margaret Thatcher: The Autobiography

At about this time I also made the acquaintance of a polished and amusing former television producer called Gordon Reece, who was advising the Party on television appearances and who had, it seemed to me, an almost uncanny insight into that medium. In fact, by the eve of the October 1974 general election I had made a significant number of contacts with those on whom I would come to rely heavily during my years as Party Leader.

Keith delivered a further speech in Preston on Thursday 5 September. After some early inconclusive discussion in Shadow Cabinet of Keith’s various ideas, Ted had refused the general economic re-evaluation and discussion which Keith wanted. Keith decided that he was not prepared to be either stifled or ignored, and gave notice that he was intending to make a major speech on economic policy. Ted and most of our colleagues were desperate to prevent this. Geoffrey Howe and I were accordingly dispatched to try to persuade Keith not to go ahead, or at least to tone down what he intended to say. In any case, Keith showed me an early draft. It was one of the most powerful and persuasive analyses I have ever read. I made no suggestions for changes. Nor, as far as I know, did Geoffrey. The Preston speech must still be considered as one of the very few which have fundamentally affected a political generation’s way of thinking.

It began with the sombre statement: ‘Inflation is threatening to destroy our society.’ At most times this would have seemed hyperbole, but at this time, with inflation at 17 per cent and rising, people were obsessed with its impact on their lives. That only made more explosive Keith’s admission that successive governments bore the responsibility for allowing it to get such a grip. He rejected the idea embraced by the Shadow Cabinet that inflation had been ‘imported’ and was the result of rocketing world prices. In fact, it was the result of excessive growth of the money supply. Explaining as he did that there was a time lag of ‘many months, or even as much as a year or two’ between loose monetary policy and rising inflation, he also implicitly – and accurately – blamed the Heath Government for the inflation which was now beginning to take off and which would rise to even more ruinous levels the following year. He also rejected the use of incomes policy as a means of containing it. The analysis was subtle, detailed and devastating.

Keith then put his finger on the fundamental reason why we had embarked on our disastrous U-turns – fear of unemployment. It had been when registered unemployment rose to one million that the Heath Government’s nerve broke. But Keith explained that the unemployment statistics concealed as much as they revealed because they included ‘frictional unemployment’ – that is, people who were temporarily out of work moving between jobs – and a large number of people who were more or less unemployable for one reason or another. Similarly, there was a large amount of fraudulent unemployment, people who were drawing benefit while earning. In fact, noted Keith, the real problem had been labour shortages, not surpluses. He said that we should be prepared to admit that control of the money supply to beat inflation would temporarily risk some increase in unemployment. But if we wanted to bring down inflation (which itself destroyed jobs, though this was an argument to which Keith and I would subsequently have to return on many occasions), monetary growth had to be curbed. Keith did not argue that if we got the money supply right, everything else would be right. He specifically said that this was not his view. But if we did not achieve monetary control, we would never be able to achieve any of our other economic objectives.

The Preston speech was, of course, highly embarrassing for Ted and the Party establishment. Some still hoped that a combination of dire warnings about socialism, hints of a National Government and our new policies on mortgages and the rates would see us squeak back into office – an illusion fostered by the fact that on the very day of Keith’s speech an opinion poll showed us two points ahead of Labour. The Preston speech blew this strategy out of the water, for it was clear that the kind of reassessment Keith was advocating was highly unlikely to occur if the Conservatives returned to government with Ted Heath as Prime Minister. Keith himself discreetly decided to spend more time at the CPS in Wilfred Street than at Westminster, where some of his colleagues were furious. For my part, I did not think that there was any serious chance of our winning the election. In the short term I was determined to fight as hard as I could for the policies it was now my responsibility to defend. In the longer term I was convinced that we must turn the Party around towards Keith’s way of thinking, preferably under Keith’s leadership.

The Conservative Party manifesto was published early, on Tuesday 10 September – about a week before the election was announced – because of a leak to the press. I was taken by surprise by a question on it when I was opening the Chelsea Antiques Fair. The release of the manifesto in this way was not a good start to the campaign, particularly because we had so little new to say.

I had never had so much exposure to the media as in this campaign. The Labour Party recognized that our housing and rates proposals were just about the only attractive ones in our manifesto, and consequently they set out to rubbish them as soon as possible. On Tuesday 24 September Tony Crosland described them as ‘a pack of lies’. (This was the same press conference at which Denis Healey made his notorious claim that inflation was running at 8.4 per cent, calculating the figure on a three-month basis when the annual rate was in fact 17 per cent.) I immediately issued a statement rebutting the accusation, and in order to keep the argument going, for it would highlight our policies, I said at Finchley that evening that the cut in mortgage rates would be among the first actions of a new Conservative Government. Then, in pursuit of the same goal, and having consulted Ted and Robert Carr, the Shadow Chancellor, I announced at the morning press conference at Central Office on Friday that the mortgage rate reduction would occur ‘by Christmas’ if we won. The main morning papers led with the story the following day – ‘Santa Thatcher’ – and it was generally said that we had taken the initiative for the first time during the campaign. On the following Monday I described this on a Party Election Broadcast as a ‘firm, unshakeable promise’. And the brute political fact was that, despite my reservations about the wisdom of the pledge, we would have had to honour it at almost any cost.

It was at this point that the way in which I was presenting our housing and rates policies first began to run up against the general approach Ted wanted to take in the campaign. At his insistence I had made the policies I was offering as hard and specific as possible. But the manifesto, particularly in the opening section, deliberately conveyed the impression that the Conservatives might consider some kind of National Government and would therefore be flexible on the policies we were putting forward.

At the Conservative press conference on Friday 2 October Ted stressed his willingness as Prime Minister to bring non-Conservatives into a government of ‘all the talents’. This tension between firm pledges and implied flexibilities was in danger of making nonsense of our campaign and dividing Shadow ministers.

On Thursday I continued when campaigning in the London areas with the vigorous defence of our housing policies and combined this with attacks on ‘creeping socialism’ through municipalization. In the evening I was asked to come and see Ted at Wilton Street. His advisers had apparently been urging him to actually start talking about the possibility of a Coalition Government. Because I was known to be firmly against this for both strategic and tactical reasons, and because I was due to appear on the radio programme Any Questions in Southampton the following evening, I had been called in to have the new line spelt out to me. Ted said that he was now prepared to call for a Government of National Unity which, apparently, ‘the people’ wanted. I was extremely angry. He had himself, after all, insisted on making the housing and rates policies I had been advocating as specific as possible: now, at almost the end of the campaign, he was effectively discarding the pledges in the manifesto because that seemed to offer a better chance of his returning to Downing Street.

Why he imagined that he himself would be a Coalition Government’s likely Leader quite escaped me. Ted at this time was a divisive figure, and although he had somehow convinced himself that he represented the ‘consensus’, this accorded with neither his record, nor his temperament, nor indeed other people’s estimation. For myself, I was not going to retreat from the policies which at his insistence I had been advocating. I went away highly disgruntled.

The last few days of the campaign were dominated by all the awkward questions which talk of coalitions brings. But I stuck to my own brief, repeating the manifesto pledges sitting alongside Ted Heath at the last Conservative press conference on Tuesday 7 October. The general election result two days later suggested that in spite of the natural desire of electors to give the minority Labour Government a chance to govern effectively, there was still a good deal of distrust of them. Labour finished up with an overall majority of three, which was unlikely to see them through a full term. But the Conservative result – 277 seats compared with Labour’s 319 – though it might have been worse, was hardly any kind of endorsement for our approach.

Though my majority fell a little in Finchley, I was thought to have had a good campaign. Talk of my even possibly becoming Leader of the Party, a subject which had already excited some journalists a great deal more than it convinced me, started to grow. I felt sorry for Ted Heath personally. He had his music and a small circle of friends, but politics was his life. That year, moreover, he had suffered a series of personal blows. His yacht, Morning Cloud, had sunk and his godson had been among those lost. The election defeat was a further blow.

Nonetheless, I had no doubt that Ted now ought to go. He had lost three elections out of four. He himself could not change and he was too defensive of his own past record to see that a fundamental change of policies was needed. So my reluctance to confirm suggestions that I might myself become Leader had little to do with keeping Ted in his present position. It had everything to do with seeing Keith take over from him. Indeed, by the weekend I had virtually become Keith’s informal campaign manager. Accordingly I discouraged speculation about my own prospects.

Then, on Saturday 19 October, Keith spoke at Edgbaston in Birmingham. It was not intended as part of the series of major speeches designed to alter the thinking of the Conservative Party, and perhaps for this reason had not been widely circulated among Keith’s friends and advisers: certainly, I had no inkling of the text. The Edgbaston speech is generally reckoned to have destroyed Keith’s leadership chances. It was the section containing the assertion that ‘the balance of our population, our human stock, is threatened’, and going on to lament the high and rising proportion of children being born to mothers ‘least fitted to bring children into the world’, having been ‘pregnant in adolescence in social classes 4 and 5’, which did the damage. Ironically, the most incendiary phrases came not from Keith’s own mouth, but from passages taken from an article by two left-wing sociologists published by the Child Poverty Action Group. This distinction, however, was lost upon the bishops, novelists, academics, socialist politicians and commentators who rushed to denounce Keith as a mad eugenicist.

The speech was due to be given on Saturday night, and so the text was issued in advance with an embargo for media use. But the Evening Standard broke the embargo and launched a fierce attack on Keith, distorting what he said. I read its version on Waterloo Station and my heart sank. Afterwards Keith himself did not help his cause by constantly explaining, qualifying and apologizing.

Doubtless as a result of all this, Ted felt a good deal more secure. He even told us in Shadow Cabinet the following Tuesday that the election campaign had been ‘quite a good containment exercise and that the mechanics had worked well’. A strange unreality pervaded our discussions. Everyone except Ted knew that the main political problem was the fact that he was still Leader.

Ted was now locked in a bitter battle with the 1922 Executive. In reply to their demands for a leadership contest – and indeed for reform of the leadership election procedure – he disputed their legitimacy as representatives of the backbenches on the grounds that they had been elected during the previous Parliament and must themselves first face re-election by Tory MPs. Ted and his advisers hoped that they might be able to have his opponents thrown off the Executive and replaced by figures more amenable to him. As part of a somewhat belated attempt to win over backbenchers, Ted also proposed that extra front-bench spokesmen should be appointed from among them and that officers of the Parliamentary Committees might speak from the front bench on some occasions. It was also widely rumoured that there would shortly be a reshuffle of the Shadow Cabinet.

Not for the first time, I found the press more optimistic about my prospects than I was. The Sunday Express and the Observer on 3 November ran stories that I was to be appointed Shadow Chancellor. This was a nice thought and I would have loved the job; but I regarded it as extremely unlikely that Ted would give it to me. That was more or less confirmed by stories in the Financial Times and the Daily Mirror on the Monday that said that I would get a top economic job, but not the Shadow Chancellorship. And so indeed it turned out. I was appointed Robert Carr’s deputy with special responsibility for the Finance Bill and also made a member of the Steering Committee. Some of my friends were annoyed that I had not received a more important portfolio. But I knew from the years when I worked under Iain Macleod on the Finance Bill that this was a position in which I could make the most of my talents. What neither Ted nor I knew was just how important that would be over the next three months. The reshuffle as a whole demonstrated something of the weakness of Ted’s political standing. Edward du Cann refused to join the Shadow Cabinet, which was therefore no more attractive to the right of the Party, some of whom at least Ted needed to win over. Tim Raison and Nicholas Scott who did come in were more or less on the left and, though able, not people who carried great political weight.

The re-election of all the members of the 1922 Executive, including Edward du Cann, on the day of the reshuffle – Thursday 7 November – was bad news for Ted. A leadership contest could no longer be avoided. He wrote to Edward saying that he was now willing to discuss changes to the procedure for electing the Party Leader. From now on it was probably in Ted’s interest to have the election over as soon as possible, before any alternative candidate could put together an effective campaign.

At this time I started to attend the Economic Dining Group which Nick Ridley had formed in 1972 and which largely consisted of sound money men like John Biffen, Jock Bruce-Gardyne, John Nott and others. Above all, I buried myself in the details of my new brief. It was a challenging time to take it up, for on Tuesday 12 November Denis Healey introduced one of his quarterly budgets. It was a panic reaction to the rapidly growing problems of industry and consisted of cuts in business taxation to the tune of £775 million (£495 million of new business taxes having been imposed only six months before) and some curbs on subsidies to nationalized industries. Ted’s reply – in which, against the background of an audible gasp from Tory backbenchers, he criticized the Chancellor for allowing nationalized industry prices to rise towards market levels – did him no good at all.

My chance came the following Thursday when I spoke for the Opposition in the Budget Debate. I had done my homework and I set about contrasting the Labour Government’s past statements with its present actions. Some of the speech was quite technical and detailed, as it had to be. But it was my answers to the interruptions that had the backbenchers roaring support. I was directly answering Harold Lever (without whom Labour would have been still more economically inept) when he interrupted early in my speech to put me right on views I had attributed to him. Amid a good deal of merriment, not least from Harold Lever himself, a shrewd businessman from a wealthy family, I replied: ‘I always felt that I could never rival him [Lever] at the Treasury because there are four ways of acquiring money. To make it. To earn it. To marry it. And to borrow it. He seems to have experience of all four.’

At another point I was interrupted by a pompously irate Denis Healey when I quoted the Sunday Telegraph which reported him as saying: ‘I never save. If I get any money I go out and buy something for the house.’ Denis Healey was most indignant, so I was pleased to concede the point, saying (in reference to the fact that like other socialist politicians he had his own country house): ‘I am delighted that we have got on record the fact that the Chancellor is a jolly good saver. I know that he believes in buying houses in good Tory areas.’

No one has ever claimed that House of Commons repartee must be subtle in order to be effective. This performance boosted the shaky morale of the Parliamentary Party and with it my reputation.

Meanwhile, Alec Douglas-Home, now returned to the Lords as Lord Home, had agreed to chair a review of the procedure for the leadership election. On Wednesday 20 November I received a note from Geoffrey Finsberg, a neighbouring MP and friend, which said: ‘If you contest the leadership you will almost certainly win – for my part I hope you will stand and I will do all I can to help.’ But I still could not see any likelihood of this happening. It seemed to me that for all of the brouhaha caused by his Edgbaston speech Keith must be our candidate.

The following afternoon I was working in my room in the House, briefing myself on the Finance Bill, when the telephone rang. It was Keith to check I was there because he had something he wanted to come along and tell me. As soon as he entered, I could see it was serious. He told me: ‘I am sorry, I just can’t run. Ever since I made that speech the press have been outside the house. They have been merciless. Helen [his wife] can’t take it and I have decided that I just can’t stand.’

His mind was quite made up. I was on the edge of despair. We just could not abandon the Party and the country to Ted’s brand of politics. I heard myself saying: ‘Look, Keith, if you’re not going to stand, I will, because someone who represents our viewpoint has to stand.’

There was nothing more to say. My mind was already a whirl. I had no idea of my chances. I knew nothing about leadership campaigns. I just tried to put the whole thing to the back of my mind for the moment and concentrate on the Finance Bill. Somehow or other the news got out and I started to receive telephone calls and notes of support from MP friends. Late that night I went back to Flood Street and told Denis of my intention.

‘You must be out of your mind,’ he said. ‘You haven’t got a hope.’ He had a point. But I never had any doubt that he would support me all the way.

The following day Fergus Montgomery, my PPS, telephoned me, and I told him that Keith was not going to stand but that I would. I wondered how best to break the news to Ted. Fergus thought I should see him personally.

I arranged to see Ted on Monday 25 November. He was at his desk in his room at the House. I need not have worried about hurting his feelings. I went in and said: ‘I must tell you that I have decided to stand for the leadership.’ He looked at me coldly, turned his back, shrugged his shoulders and said: ‘If you must.’ I slipped out of the room.

Monday was, therefore, the first day I had to face the press as a declared contender for the Tory leadership. I was glad to be able to rely on the help and advice of Gordon Reece, who had now become a friend and who sat in on some of my early press interviews, which went quite well. It was, of course, still the fact that I was a woman that was the main topic of interest.

Ted’s coterie and, I believe, at least one Central Office figure had, in any case, alighted on something which they hoped would destroy me as effectively as had happened to Keith. In the interview I had given to Pre-Retirement Choice more than two months before I had given what I considered to be practical advice to elderly people trying to make ends meet in circumstances where food prices were rising sharply. I said that it made sense to stock up on tinned food. This was precisely the sort of advice I myself had been given as a girl. Any good housewife shops around and buys several items at a time when prices are low, rather than dashing out at the last minute to buy the same thing at a greater cost.

To my horror the press on Wednesday 27 November was full of stories of my ‘hoarding’ food. Someone had clearly used this obscure interview in order to portray me as mean, selfish and above all ‘bourgeois’. In its way it was cleverly done. It allowed the desired caricature to be brought out to the full. It played to the snobbery of the Conservative Party, because the unspoken implication was that this was all that could be expected of a grocer’s daughter. It reminded the public of all that had been said and written about me as the ‘milk snatcher’ at Education.

A veritable circus of indignation was now staged. Pressure groups were prompted to complain. A deputation of housewives was said to be travelling from Birmingham to urge me to give them the tins. Food chemists gave their views about the consequences of keeping tinned food too long in the larder. Martin Redmayne, the former Chief Whip, reliable Party establishment figure and now Deputy Chairman of Harrods, appeared on television to say that ‘any sort of inducement to panic buying was … against the public interest’ – although Lord Redmayne’s larder probably contained something more enticing than a few tins of salmon and corned beef. There was nothing for it but to invite the cameramen in and have them check the contents of my Flood Street larder and cupboards. This may have convinced some of the Tory hierarchy that my and my family’s tastes and standards were not at all what should be expected from someone who aspired to lead their party. But it certainly showed that the ‘hoarding’ allegation was malicious nonsense.

Finally, in order to keep the dying story alive my opponents went too far. On Friday 29 November I was in John Cope’s South Gloucestershire constituency when my secretary, Alison Ward, telephoned to say that the radio was now broadcasting that I had been seen in a shop on the Finchley Road buying up large quantities of sugar. (There was a sugar shortage at the time.) Alison had already checked and discovered that in fact no such shop existed. It was a straightforward lie. A firm denial prevented its circulation in the press and marked the effective end of this surreal campaign.

At the time, however, I was bitterly upset by it. Sometimes I was near to tears. Sometimes I was shaking with anger. But as I told Bill Shelton, the MP for Streatham and a friend: ‘I saw how they destroyed Keith. Well, they’re not going to destroy me.’

What had happened made me all the more determined to throw my hat into the ring. But there was also much talk of Edward du Cann’s putting himself forward as a candidate. As Chairman of the 1922 Committee – and a man – he might reasonably be expected to command more support than me.

One of Edward du Cann’s chief supporters, Airey Neave, the MP for Abingdon and a colleague of Edward’s on the 1922 Executive, was someone I knew quite well. As barristers we had shared the same Chambers, and he had been a neighbour at Westminster Gardens.

Airey was a man of contrasts. His manner was quiet yet entirely self-assured. As a writer and a war hero who escaped from Colditz there was an air of romance about him. He had seen much more of the world than most MPs, and suffered a good deal too. He had the benefit, in Diana, of a marvellous political wife. He had briefly been a junior minister in the late 1950s but had to resign because of ill-health, and I understand Ted had unfeelingly told him that that was the end of his career. It was difficult to pin down Airey’s politics. I did not consider him, ideologically, a man of the right. He probably did not look at the world in those terms. We got on well and I was conscious of mutual respect, but we were not yet the close friends we were to become.

Airey had come to see me shortly after my decision to stand was known. He hoped to persuade Edward du Cann to stand, but Edward himself remained undecided. Excluded by Ted from high office, he had devoted himself to a City career he was now reluctant to give up.

A new factor that weakened Ted and strengthened his potential rivals was the announcement of the Home Committee’s conclusions on Tuesday 7 December. There would be annual elections for the Tory Leader, challengers needed only a proposer and a seconder to put themselves forward, and the majority required to win on the first ballot was significantly increased to 50 per cent plus 15 per cent of those eligible to vote. It was in effect an incentive to challengers, since it meant that a Leader in difficulties needed to retain the confidence of a super-majority of those voting.

Still, Christmas at Lamberhurst that year was less festive than on some other occasions.

On Wednesday 15 January Edward du Cann made it publicly known that he would not run for the leadership. The way was therefore open for me. It was now vitally necessary to have an effective campaign team.

That same afternoon I was leading for the Opposition on the Committee Stage of the Finance Bill. Fergus had just learned that he would have to go on a parliamentary visit to South Africa, though he still thought (wrongly as it turned out) that he would be back in time for the leadership first ballot. He therefore asked Bill Shelton, when they met in the Division Lobby, to run my campaign in his absence, and Bill agreed. I was delighted when Bill told me, for I knew he was loyal and would be a skilful campaigner. Then, as I learned later, in the course of a subsequent vote Airey approached Bill and said: ‘You know that I have been running Edward du Cann’s campaign? Edward is withdrawing. If we could come to some agreement I will bring Edward’s troops behind Margaret.’ In fact, the ‘agreement’ simply consisted of Airey taking over the running of my campaign with Bill assisting him.

When I began to make suggestions to Airey about people to contact, he told me firmly not to bother about any of that, to leave it to him and to concentrate on my work on the Finance Bill. This was good advice, not least because both in the upstairs Committee Room and on the floor of the Chamber I had every opportunity to show my paces. It was, after all, the members of the Parliamentary Conservative Party who would ultimately make the decision about the Conservative leadership, and they were just as likely to be impressed by what I said in debate as by anything else. The campaign team began as a small group of about half a dozen, though it swelled rapidly and by the second ballot had become almost too large, consisting of as many as forty or fifty. Canvassing was done with great precision, and MPs might be approached several times by different people in order to verify their allegiances. Airey and his colleagues knew that there was no short cut to this process, and day after day it went on, with Bill Shelton crossing off names and keeping the tally.

Meanwhile, dealings with the media were suddenly becoming important. In these Gordon Reece was invaluable.

In fact, the attitude towards my candidature was tangibly changing. I spoke on Tuesday 21 January to a lunch in St Stephen’s Tavern of the Guinea Club, consisting of leading national and provincial newspaper journalists. By this time as a result of the soundings Airey had taken I was actually beginning to feel that I was in with a chance. I said to them wryly at one point: ‘You know, I really think you should begin to take me seriously.’ By the weekend articles had begun to appear reappraising my campaign in a different light.

Nor were my prospects harmed by another exchange in the Commons the following day with the ever-obliging Denis Healey. In bitter but obscure vein he described me as the ‘La Pasionaria of privilege’. I jotted down a reply and delivered it a few moments later with relish: ‘Some Chancellors are microeconomic. Some Chancellors are fiscal. This one is just plain cheap.’ The Tory benches loved it.

With just a week to go, Airey, Keith and Bill came round to Flood Street on Sunday 26 January to discuss the latest position. The number of pledges – mine at around 120 and Ted’s less than eighty – looked far too optimistic. People would need to be revisited and their intentions re-examined. Presumably the Heath campaign, in which Peter Walker and Ted’s PPSs Tim Kitson and Ken Baker were the main figures, was receiving equally or even more optimistic information; but they made the mistake of believing it. In marked contrast to Airey’s public demeanour, they were loudly predicting a large victory on the first ballot.