Heath sends them a message
Patrick Cosgrave
0, n Tuesday September 4 the Prime Minister left London for two speaking engagements in Kent. The first was at the Medway Training Centre in Gillingham — government supported, and designed to retrain workers for new Jobs where he delivered a strongly worded, Civil Service pre-scripted, speech in defence of his economic policy. The second was at a party meeting in Gravesend. Conservative Central Office had already released to the press another strongly worded address on law and °,rder and Northern Ireland. Despite massive defections among Conservative supporters in recent by-elections, and deeply worried —and worrying — mutterings emanating from the grass roots to Smith Square, he was greeted rapturously. Perhaps encouraged by this he, to he surprise of at least some of his advisers, aeParted from his text and launched on another denunciation of his critics, another defence of his own courage in economic policy — a courage, he said, shared by no other government in the last quarter century. In the operative passage of his off-the-cuff exhortation he said:, -rime after time governments have tried to expand thd When we have got to the point where we are now eY have lost their nerve and the timorous voices '!.ave prevailed and they have drawn back. This unle there is going to be no going back. We are going Of assertion was greeted by a relieved roar Minister anplause, A day or two later the Prime Ninister went to Scotland to repeat the message in various places. Among the manifold Points of interest standing out in that week of rItivitY two immediately strike the observer. rst, in a small matter — as, in the general leetion of 1970 in a large matter —Mr Heath
h58 more acute than his advisers in „ "IsPrig what a Tory audience wants to hear.
second and more significant the Prime Minister —there can be no doubt about it has gone on the offensive.
Mr Heath's personal intervention in the conomic argument, which has been simmering for a long time — and coming to the boil *since Mr Powell spoke about expenditure and LaXation at Stockport — appeared to produce an automatic orchestration in political debate. he Sunday papers, for example, started to rePrae off the fence: the Sunday Times, editoIally and through Mr Peter Wilsher, supaPA°rted the Prime Minister's boldness and u fvised him to stick to his gambler's remedy pr the economy; but the Observer came out 'Or monetarist restraint —because the risk was too great.
am not concerned, just now, to suggest
Which of the two economic philosophies on Offer is the correct one in the present cir c,unistances of the nation. I am concerned only 41) exPlain, and place in historical perspective, e —to me at any rate —fascinating political argUrnents the Prime Minister is starting to deploy, Mr Heath has often explained his new economic rationale; but what wins elections is a rhetorical and emotional —or even moral — ,„..,..apPeal. That aspect of his case may, I suspect. 'cape analysis. To take a minor example, he aid at Gravesend, "If this Government were . e° fail, I put it to the whole country: how ,auld any British businessman, how could any ritish firm, have any confidence in the iuteren r And he added: "This is my mess_age." The monetarists and the Powellites
uould. of course, reply that if a smash came a Year from now, then loss of confidence in the
future would be much greater, because the fall would be .from a higher ledge. No matter: the battle on is for the political soul of the nation. What people believe is, in the immediate future, at least as important as the longer term facts. And the British, as they suggested in the 1970 election, are susceptible to an appeal to virility and daring —it is one of the best things about them —such as Mr Heath is now launching. Nobody should underestimate the capacity of will-power: the Prime Minister and the country have deep reservoirs of that commodity, almost independent, as it sometimes is, of policies. That mutual possession implies the answering chord in their relationship, one which could not have been evoked, one would have thought, by a politician so lacking in the graces and charms we have taken for granted in our leaders. But what reason lies behind the current exercise of will? The operative passage — I repeat, and this ti gig ,with my italics — is: "Time after time g6Vernments have tried to expand and when we have got to the point where we are now they have lost their nerve."
Have they, though? The particular comparison with the past which the Prime Minister has in mind appears to be with the Tory government of Sir Alec Douglas-Home. (Though it is worth remembering that, while this Government has already spent very large sums of public money sums without precedent —the Home Government, in its brief life, in the main merely made,commitments for the future.) Mr Maudling, who was Chancellor at that time, and who is currently a sort of unofficial trumpeter for the administration, made the point more precisely in the Sunday Express:
People are inclined to say that all governments in the past at this stage have lost their nerve. This is certainly not true of the Conservative Government in 1964. We kept our nerve but we lost the elec• tion, and the incoming Labour Government lost their their nerve rapidly, openly, and in a calamitous way. We know how foolish and unnecessary their panic was, The differences between Mr Maudling and Mr Heath on precisely how many governments lost their nerves, even if they are only differences of emphasis, will not escape the vigilant reader. However, there is only a vestigial —
and that a reasonable special pleading on Mr Maudling's part. Labour, led by an overebullient Prime Minister, and an inexperienced and bungling Chancellor —did lose their nerve in the Autumn and Winter of 1964. As the Bank of England Quarterly Bulletin of the period reveals, losses across the exchanges in the first few months of the new administration amounted to about £800m —or the total of the Maudling deficit on the balance of payments; and those losses were due, not to anything as grand as the introduction of Socialist policies, but to panic. It makes Labour poor critics of the present Government: but the point is not that. The point is that Sir Alec Douglas-Home and Mr Maudling —not to mention Mr Heath, Secretary of State for the Regions and President of the Board of Trade, and one of the big spenders —had not reached anything like the peak of deficit financing reached in September' 1973: they would not have done so until some time in 1965. And that was the only post-war government that could for a moment be imagined to have reached what Mr Heath and Mr Maudling alike refer to as "this stage."
1963-1964 is the only possible comparison to the gigantic effort going on now. Mr Macmillan's timid little export effort after 1959 hardly counts, and none of the others really tried. Further, there are many differences between any 'then' and now. Mr Maudling mentioned the rise in worldeommodityprices — now to go up further with the revaluation of the currencies of Australia and New Zealand. It is a factor, but not a great one. The two big differences are our membership of the EEC and the fact that the pound is floating. Of the EEC it has to be said, and cannot be denied, that we are paying money out across the exchanges and raising commodity prices in response to the Brussels rules, while our new export markets are — as Mr Walker recently said — mainly in new areas of the world, especially Latin America. On the currency it is surely and again undeniably — the case that Mr Heath did not just adopt a floating policy: he was forced into it to avoid another sterling crisis.
Now, many sane judges thought that to float was the right policy, and still think so. Mr Heath took the policy on board because — in spite of his statement at the time that Mr Wilson need not have devalued when he did — he, like most other Tories, thought that sticking to the prevailing exchange rate by the Labour government was its undoing. This suggests the way he looks at history. He looks at it in terms of indidivual moments, rather than as a sequence. When he talks about "time after time" in the history of. post-war British governments he does not mean time after time: he means, like Mr Maudling, the missed opportunity of 1964. Like most other Tories, he is still scared by that defeat, so it was natural that, after an opposition fling with the right wing policies of those who felt that the nation's economic problems got worse with government after government because of an accumulation of wrong policies, and that a change of policy was the right thing to attempt, he has returned to the theory of missed chances, based on the experience of 1964. The experiment is as yet unproven. No government — here his continuity is right — has risked so much. No government risking so much could have a better leader, for no postwar leader has had so much will power. But Mr Heath is encouraged to go on because he is a man who makes his intellectual constructions in terms of the future— what might be— rather than of the whole past; and that makes him rare indeed.
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