A power behind the throne

Twenty-five years on from Margaret Thatcher’s first government it is difficult to realise that she become leader almost by accident, following the decision of Sir Keith Joseph not to contest the leadership against Edward Heath in February 1975. Until his withdrawal it was assumed that Joseph would be the candidate of the Right of the party, then Thatcher materialised almost out of nowhere and was judged to be a much less formidable candidate. Such are the paradoxes of politics.

Sir Keith was a curious mixture. He was Conservative MP for Leeds North East for over thirty years, but never had a residence in the City. He was an army officer with a distinguished war record but appeared an introverted loner. He displayed intellectual strength and confidence but could be endearingly diffident before an audience of professionals. He was the dedicated ideologist to Mrs Thatcher’s passionate instinctiveness. And, despite a political father and a long career in political life himself, he could display astonishingly naive political judgement.

It is arguable that Thatcherism would not have existed without Keith Joseph who articulated and developed the intellectual basis for monetarism. Mrs Thatcher was an instinctive populist with a need for an ideology, and Keith Joseph’s repudiation of a middle way and of pragmatism, and his exposition of neo-liberal economics arrived at just the right moment. His conversion was evangelically vivid and profound, and he thereafter displayed all the zeal of the convert. With typical candour he went so far as to state that he only became a true Conservative in 1974, even though he had always previously believed himself to be one.

Sir Keith’s early career was in direct contradiction to his later attitudes. He had been a big spender as Social Services Minister under Heath and was described by Richard Crossman as “intelligent, civilized, cultivated”. He was seen by Harold Macmillan as arriving in Parliament “full of goodwill, with a passionate concern about poverty”, gravitating naturally to the “statism” espoused by Macmillan. Joseph’s conversion to monetarism required a repudiation of the past - a task he embraced with considerable relish.

At the heart of Joseph’s new found missionary zeal was the belief that “monetary control is a pre-essential to everything else we need and want to do”, but as Ian Gilmour points out, “for Keith Joseph monetarism was not enough”, he called for a return to the rigours of the free market economy, the control of inflation “not by incomes policies but by firm monetary control and reductions in public spending.” In 1976 he stated that “hitting subsidies to housing, food, make-work, lame ducks” and more, so to reduce taxation and borrowing, “will need strong nerves”, a view which led J K Galbraith, the American economist and diplomat, to comment that he was glad that Britain was testing out this ideology as it was probably the only country with enough resilience and social cohesion to stand the strain. It is doubtful today whether even that vote of confidence was accurate.

By 1975 Keith Joseph had come to regard the “middle way” of traditional Conservatism as a “costly obsession”. He was much influenced by Frederick Hayek’s classic book “The Road to Serfdom”. Hayek had long argued that there was no logical stopping point between mild interventionism and socialism, and Joseph now felt that this explained the apparently inexorable road to statism - and serfdom - which the Conservative party had hitherto tacitly assented to. Why, therefore, choose a middle way between socialism and capitalism when it was capitalism you really wanted?

Perhaps this “fundamentalism” had to be tried. Perhaps Keith Joseph’s belief that economics drives every aspect of life had to be tested, but we have paid a high price to find out that it does not bring a secure, stable and sensitive society. Sometimes it was not even applied according to the market’s own rules. The huge discounts on council house sales were not targeted on those houses on sink estates that were hard to sell but were applied equally to highly desirable properties in good areas which needed no incentive. Thus the possibility of a transfer to better housing became remote for many decent tenants, and a whole generation of sons and daughters of older council tenants received an unnecessary windfall from the state.

As I sat again this week in an immobile train to Leeds, I reflected on the foreseeable disaster of rail privatisation. As I note that almost all charitable work now depends on lottery funds, I know that gambling is a voluntary tax on the poor, not on the rich. As I read of those few at the top making a fortune out of selling water, or gas or electricity, I realise how much more difficult it will be to advocate restraint by those at the bottom. As I note the unpleasant consequences of the eleventh attempt to burgle my house, I ponder on the cold rejection of those vital community values that depend on the human linkages between different individuals and groups in a neighbourhood. The slogan has to be “market where possible, the state where necessary.”

The final irony was that, in the end, it was not economic policy which denied Keith Joseph the Conservative leadership. It was a speech in October 1974 on the “remoralisation of Britain” in which he advocated special provisions for birth control for girls in the lowest socio-economic groups to prevent them breeding. In the words of one Conservative historian, “Sir Keith lacked both the temperament and the tact necessary to lead the Conservative party.” That, by default, was left to Margaret Thatcher.

28 April 2004