Chapter 40 Chapter 3 The shackles of the past

My first real public appearance as leader of the Opposition began with a visit to Scotland on Friday 21 February.As soon as I stepped off the plane at Edinburgh Airport, I was greeted with a warm Scottish welcome to the tune of "That's the Way" by a humorous bagpiper.Crowds of people flocked to see me wherever I went.My plans to walk through the center of Edinburgh had to be canceled altogether.In the heart of St James's shopping precinct near Princes Street, where hundreds were expected, 3,000 crowded in, where only six police officers tried in vain to hold them back.Several women fainted, some with tears in their eyes.There was a real danger of tragedy at this time, as the crowds crowded against the shop windows.Walking was out of the question, so I ducked into a jewelry store, where I saw an opal (my birthstone), which I later mounted in a ring.This incident showed the police and myself that from now on, there must be no amateurishness in the logistics of organizing my visits.

I have always had a friendly reception in the Scottish Conservative Party grassroots.The situation of being attacked from both sides seems to have sharpened the fighting spirit of the people here.But more generally, my honeymoon didn't last long, and then the usual political life surged in.Opinion polls also showed the Conservatives leading Labour by 4 percentage points in February, and just a month later Labor was leading by 2 per cent - perhaps not statistically significant, but a wake-up call to that premature complacency .It soon became clear that some powerful figures in the party were starting to cause us trouble. In early April, Harold Macmillan and Ted Heath delivered a speech at the annual meeting of the Young Conservative Party, advocating vigilance against the right turn of the Conservative Party.The European referendum movement has whetted the appetites of coalition advocates by focusing on European issues.All this made it more difficult for me.

My first major appearance in Parliament was in the economic debate on Thursday, May 22, where I clashed with Harold Wilson.On that occasion I was harshly but fairly criticized for failing to convincingly propose an alternative policy for the Conservative Party.The difficulty was that) we were not yet able to come up with a convincing alternative policy.We were then defending the Heath government's flimsy record.Because of this constraint, we have not yet been able to break out of the status quo and propose a suitable set of free market policies as an alternative. For these reasons, my speech at this debate and several speeches on other occasions have not been delivered well.To lead the opposition in established debates, a few outlines (which is what I am good at and like) will not give a wide-ranging speech.Speaking as a frontbench member of Parliament must have a well-prepared speech that can be made available to the press.But such speeches must at the same time be very different from written speeches, which are intended to be addressed to large eager audiences and are only interrupted by applause, and, of course, you can only do so when Parliament has established a considerable authority. Read the speech without being booed or interrupted - a privilege often, but not always, reserved for prime ministers.

At the root of our problems, however, are unresolved policy contradictions.Having Keith Joseph and Angus Maude in charge allows me to be confident that the policymaking process will develop along lines I agree with, but the decisive influence is never theoretical or technical but personal and political factors.No matter how much time we spend debating the rights and wrongs of public spending, income policy, and industrial subsidy policy, some of us in the shadow cabinet (probably a minority) are convinced that free market policies will succeed, while others believe in it as firmly as we do It won't work—or at least only at an unaffordable political and social cost.Plus, we're not discussing these issues in a vacuum.In those years the Labor government put forward a series of economic approaches, each of which forced us to define our positions, align our positions with those opposed to its policies, and sharpen the edges of our party's alternatives.

In March 1975, we discussed an article on policymaking submitted by Keith and Angus.They suggested involving the Backbench Reserve Committee and outside experts who supported us in the effort, and they agreed.The number of policy groups continues to grow, with varying degrees of effectiveness.They are generally chaired by the relevant front-bench speaker.Jeffrey Howe's Economic Reconstruction Group was the main forum for deliberation on economic policy.From time to time, the Shadow Pavilion holds some all-day policy discussions chaired by me personally.The key Shadow Speakers and their respective policy groups produce policy papers upon which the full Shadow approves rather than designs our policy.

Keith and I were advised and advised by the Center for Policy Studies and by a group of outside advisers, particularly on economic issues (Keith also had a number of lunches with policy colleagues in the Shadow Cabinet).On this basis, I also sometimes propose a new policy in a speech or in an interview - which is not always appreciated by my colleagues. The existing decision-making system always makes people feel stretched.But at the time, no matter how well-established our institutions were, they could not solve the fundamental problems on which we needed to make decisions.It turns out that, in the most important sense, the policymaking system "worked": By the time we came to power in May 1979; many of the big problems had been resolved How clearly did the shadow ministers know what their priorities were? Nothing like the beginning of any British government after the Asian War.

The most important policy question is how to deal with inflation. Inflation rose sharply to 26.9 percent in August 1975 before falling, and fell below 10 percent in January 1978.Opinion polls show that inflation is repeatedly the most pressing issue on which the public wants action, yet at the same time it often sees policies to control incomes as the only means of defeating inflation.However, if income is controlled, the problem of unemployment always follows closely.And our main attack from the Labor Party in Europe is that our anti-inflationary policies will lead to higher unemployment. To discuss the causes of inflation and the ways to overcome it will involve the evaluation of the Heath government.If inflation is the result of an increase in the money supply, and it took about 18 months to do so in the form of price increases, then the Conservatives are largely to blame for the high inflation in the first 18 months or so of this Labor government up.But if the cause of high inflation is the excessive wages policy adopted after the failure of the previous Conservative government's income policy and Labor's relinquishment of power to the trade unions, then we have an easier time politically as an opposition party now.While we may not be able to come up with any good solutions yet, at least we can blame everything on the current government.My colleagues who pride themselves on being skeptical of all economic theory will especially agree with this approach.In fact, Alan Walters has long argued that inflation is caused by the loose monetary policy of the Heath government, which I think makes sense.His critical remarks and predictions were first published in June 1972.Keith had distributed this material as background material for a March 1975 Shadow Pavilion discussion.But if I had openly accepted that view then, I would have provoked more trouble for Ted Heath and his supporters.

However, our failure to articulate the overriding importance of monetary policy has facilitated flanking attacks on our income policy.For if increases in wages are what caused inflation, as we argued in our defense of the Heath years, then the question arises: How will this increase be contained if our party is in power?Will we resort to statutory revenue policies?If we do this, we will not only be pushed towards the severe interventionism that I hope to avoid, but we will also be strongly opposed by the unions.Adopt a voluntary income policy?In doing so we would also be at a political disadvantage because Labor has traditional ties to trade unions.And willing to sell socialist policies in order to consolidate their position.Doing so will bring the two together against us.

The Conservative Party Manifesto of October 1974 stated our party's commitment to explore a voluntary policy on prices and incomes, but reserved the point that, if this policy did not work, it would be necessary to go the way of statutory policy.I could only gradually bring the party out of the situation at hand.Two things made my task even harder, wages and prices were skyrocketing to alarming levels, and Ted Heath and Peter, Volcker were putting a lot of social pressure on me to support Labor at all stages Government revenue policy.In an interview with Robin Day in May 1975, I said that wage freezes might be necessary in certain circumstances, but that this was not a prelude to a permanent statutory income policy.Wages have, after all, been growing by about 30% a year since Labor came to power, but I never thought that a wage freeze was more of a transitional role in a strategy to lower inflation, which had to be done with It is based on limiting the money supply and government borrowing.In fact, there are already signs that the government has woken up to the need for austerity. The April 1975 Budget announced a reduction in planned spending levels and a 2p increase in the base rate of income tax - to 35% - in an attempt to reduce a deficit that would grow to £9 billion in 1975-76.

That hasn't stopped the government from adopting the ambitious but deficient Ryder plan to bail out Leyland Motors with £1.4bn of taxpayer money.But no matter how irresponsible the decision, the Conservatives will have the greatest difficulty opposing it.The company is a vital source of income and employment in the West Midlands seats that I must fight to govern.But once resources are used in the unprofitable nationalized car industry, it means that these resources are taken away from successful companies and other taxpayers in the form of taxes or higher interest rates, inflation, etc.Keith Joseph, Michael Heseltine and I have all reacted with a certain irresponsibility in our public statements, but the difference in tone, especially between Keith and Michael, is stark .

If the issue of public spending is one aspect of the bipartisan debate on anti-inflation policy, the issue of union power is another.On this issue, the line-up of the Shadow Cabinet in recent years has been slightly different from that of "free collective bargaining, or voluntary or statutory income policies. Geoffrey Howe has always been a hawk on union issues. position. In our discussions, he began by emphasizing the need to change the balance of power in industrial relations. Indeed, I guess he was idealistic, returning to the framework of the "Industrial Relations Act" he devised Next. Keith Joseph and I agree with him, although I am still wary of over-committing and under-delivering. Jim Pryor and most of the rest of the Shadow Cabinet are on the opposite side of this. But on the issue of income policy, Jeffrey and Jim (supported by Ian Gilmer) strongly advocated forging some national consensus with the unions.Jeffrey's point was that we should try to emulate West Germany's proven success in "coordinated action."Their purpose is to educate both employers and employees about economic realities and to limit wages after reaching some agreement.This in itself does not mean a rejection of monetarism.Unlike Jim and Ian, Geoffrey grew increasingly bitter about it.And this approach does contain serious totalism and centralization of economic decision-making.Keith was vehemently against it, and I didn't like it either. Reggie Maudlin is the most staunch opponent of monetarism and all that it has to offer.The economic theory with which he formulates his ideas adds weight to his views.Reggie is the biggest fan of statutory income policy.As he put it in a dissenting letter to the Shadow Cabinet in May: "There is no doubt that to the purist economists prices simply reflect the symptoms of inflation, while to us politicians they is the real problem because skyrocketing prices are tearing the country apart." With such internal divisions, it's no surprise that there has long been a sense of incoherence in our economic policy. During the economic debate in Parliament on Thursday 22 May, I encountered a series of difficulties.Because of these difficulties, I was unable to propose alternative policy options to government policy.As a result of this incident, I realized that there was an urgent need to clarify my party's position.Further sharp social divisions confirmed this need. In June I expressed my firm reservations about the policy of statutory wage controls when I addressed the Welsh Regional Party conference at Abrist-Wythe.On the same day, Reggie Maudlin spoke at Chessel-Hurst, suggesting that we might support coercive policies.In a speech a few days later, Keith expressed serious doubts about the value of the wage freeze, noting that it would be used to justify refusal to cut public spending and take other economic steps.On the same day, Peter Volcker called for a statutory wage policy - which was refuted by Keith.Keith said bluntly that wage freezes have not worked in the past.It is not surprising that the press then trumpeted the divisions within the Conservative Party.Yet the government is more divided on these issues than we are.This fact is a limited comfort to us. I decided that, if we could not yet agree on one point of view, we must at least agree on a set of calibers that healed the rift.We heard Dennis Healy's statement on July 1 that foreshadowed a Labor Party income policy based on sanctions against employers rather than trade unions, and we immediately called a Shadow Cabinet meeting to discuss what to do.The crucial question is, once it comes to a vote in Parliament, should we support the government, abstain or vote against it.To make the matter even more difficult, the chancellor actually only gave hints of his intentions.To find out whether its policy is voluntary or statutory, it must wait until the white paper it promises is released before it can be confirmed.In addition, we do not want to reject all measures to reduce inflation, even if these measures include statutory income policies. That's when the parliamentary steward informed that at least 30 Conservative MPs had opposed the statutory controls in principle and hoped we would oppose them too.I did my best.Summary analysis) thinks our public approach at this stage must make it clear that the Conservative Party has consistently supported measures it considers to be in the national interest, but the Chancellor's statement is high-minded and low-handed, and he doesn't talk about cutting public spending at all, nor does it touch on Abandon the policy of further nationalization, both of which are directly related to controlling inflation. All around me, I found that conservative views at home strongly opposed the idea that employers must bear the brunt of anti-inflationary measures.Our supporters want us to be tough on Labour, and Bill Shelton reported their concerns to me the next day when the backbench Finance Committee met.While few of us were asked to vote against the government's package across the board, there was a widespread fear that supporting them would mean we endorsed Labor's continuation of socialist policies. Jim Pryor and Keith Joseph debated their opposing views in the shadow cabinet on Monday 7 July.But the key question remains which polling hall our party should go to if we were to vote.So far, it seems the safest option, even the most ignominious, is to abstain.The danger is that this tactic will disappoint both wings of our party's parliamentary group, and that we may split in three directions. Whichever tactic I use, I still need to figure out whether Healy's proposed measures are real steps toward fiscal discipline or just a smokescreen.The day after the Shadow Pavilion discussion I had a working dinner in my room in the House of Commons with Willie, Keith, Geoffrey, Jim and several economists and business experts, including Alan Walter Smith, Brian Griffiths, Gordon Perron and Sam.Bridan, these are all people I interact with on a regular basis and I value their opinions.As Jeffrey said at the beginning of the evening, while we have to look at the whole of this policy package, especially the monetary and financial components, I leave feeling less and less willing to support something that is flimsy and potentially harmful suggestion. A white paper with details was published on Friday, July 11.Unsurprisingly, it's been a mixed bag, with measures such as cash controls that we agree with, but no real accompanying plans to cut public spending.Its core content is to control wage growth in the next year below 6 pounds.One of the most egregious omissions has been the government's refusal to publish a draft plan it says it has drawn up to introduce statutory controls in the event that a voluntary program to limit wage growth fails.When it came time to vote, both the Conservative Party backbenchers and the Shadow Cabinet were in favor of abstaining. At this time, everyone reached a consensus.My own speech at the debate was not particularly spectacular - not surprising given the complex role I had to play, which was probably bad enough, but Ted regretted that we did not support the government and then refused to support us important amendment, which again set me free. If there is one good thing that has been accomplished through this series of hardships, it is that the situation has prompted the Shadow Cabinet to adopt a united line on income policy. Since inflation is to be overcome, all economic policies must be anti-inflationary. direction, especially public spending and monetary policy.Revenues policy may be useful as part of a comprehensive policy package, but it is not a substitute for other policies, nor can much be expected of it.This is not quite novel economic wisdom (not even authentic), but at least it provides a temporary refuge. In any case, it was rightly judged that the government's policy package introduced in July was insufficient to deal with the emerging economic crisis.Inflation hit an all-time high of 26.9 percent that summer. In August we took refuge in Brittany for a holiday canal walk.I have brought a book on British Prime Ministers for holiday reading.I was away when Harold Wilson announced his income policy on TV and begged the people to "give Britain a year" by insisting on the £6 limit.In my absence, Willie Whitelow gave a warm welcome to that nonsense in his reply the following evening.If it were me, I would never be persuaded to do so.