Political Commentary

1973 and all that

John Grigg

In Conservative folklore 1973 is beginning to acquire something of the obsessive significance that 1931 has for the Labour !arty. But whereas Labour at least is united In its obsession about 1931, rival interpretations of what happened to the Heath government in 1973 are fatally dividing the Conservatives.

The division is between those who maintain that Mr Heath was the principal author of his own and his party's ruin by wantonly inflating the money supply, and those who argue that he was largely the victim of forces beyond his control. Which of these views is right, or are both in some,degree

wrong?

During the first phase of his Premiership lt4r Heath tried to stimulate economic

growth by cutting taxes, while checking in flation by resisting excessive wage demands Within the public sector. He abstained from government intervention in the economy to

save employers from bankruptcy or workers from rising unemployment. At the same linie he carried through a reform of in(Instrial relations on lines clearly approved bY the electorate.

It was not long before this policy was °king condemned on all sides. The trade anions, fully supported by Labour's` political

tY,ing'. were rampaging against the Industrial tcelations Act and the figure of nearly a flhill10 unemployed. Businessmen, editori alists and many Tory politicians were elaMouring for measures to reflate the economy. But at least prices were under control, with the assistance of a slight drop la world commodity prices during 1970-2. The policy of free collective bargaining as destroyed by the miners' strike in January-February 1972. This brought home t° everybody, including the unions them selves, the devastating potential of new strike methods in vital sectors of the econ clnY, and made some form of prices and incoMes policy inevitable. (Sad to recall, the tsiltrike was authorised by a margin of only ree percentage points in the miners 'allot. If the vote had gone narrowly the ?ther Way, the recent course of events might nave been very different.) avert runaway wage inflation Mr `heath had to abandon or seriously modify t Is general economic strategy. But it is hard et:Ii see what else he could have done in the ,renmstances; and anyway he should have :een able to keep his show on the road, "If cIving roughly in the right direction, but °r the impact of staggeringly bad luck.

ri 1973 the Third World put in a longD7aYed 'wage claim', as a result of which oil erIces increased by 400 per cent, and other °tflthodity prices by 80 per cent, in that single year. No wonder the eminent Cambridge economist, Wynne Godley, tells us that 'price changes were predominantly determined by the rise in world commodity prices .. . and the subsequent wage increases which import prices generated' (The Times, 14 July). If other countries, such as West Germany, suffered less from the price explosion, it was because they had had nothing like the 1972 miners' strike to give their trade unions the power, and the will, to defy their elected governments.

Needless to say, the immediate cause of the Heath government's downfall was the NUM's defiance of Stage Three of the prices and incomes policy. Mr Heath can reasonably claim that he sought no confrontation with the NUM, but rather that the union sought a confrontation with him, forcing him to hold a premature election.

For many months, during which another election was fought and won, the Wilson government aggravated instead of fighting the inflation that was threatening the nation's life. And when Sir Keith Joseph made an unhappily timed speech, between the two elections, suggesting that the Heath government had been wrong to be agitated by the figure of a million unemployed, Labour's predictable reaction was to accuse the Conservatives of wishing to create unemployment.

After Labour's victory on a singularly false prospectus in October 1974, Conservative MPs hastened to get rid of Mr Heath as leader. And Labour was then able to exploit the disunity of the Conservative Party. Mr Healey, in particular—the archinflationist of 1974, suddenly switching to a crusade against inflation—did not scruple to play Tory monetarists off against Mr Heath, while at the same time playing Mr Heath off against Tory opponents of incomes policy.

All this is not to say that Mr Heath had no responsibility for the evil that befell him. He was not, in fact, simply the innocent victim of adverse fate, or of the malice of enemies inside and outside his party. No, he made many mistakes which contributed to his undoing. But it is important to explain that his worst misjudgments were personal rather than political or economic.

One of the worst of all was committed very soon after he became Prime Minister, when he appointed Lord Barber rather than Sir Keith Joseph to succeed lain Macleod as Chancellor of the Exchequer. Sir Keith was slightly senior both in age and Cabinet experience. He was also markedly superior in intellect. Above all, he would have been better at making the Opposition seem cheap.

Lord Barber, as Chancellor, had a defect which is shared by the present Leader of the Opposition. His tone was always naggingly partisan. This, far more than any failure to control the money supply, was what made his tenure of the office on the whole regrettable. For what do they know of partisanship who only partisanship know ?

Sir Keith would not have stood for Selsdonian (or Gladstonian) orthodoxy through thick and thin. As Secretary for Social Services he erred very noticeably the other way. But he would have defended the Government's financial and economic policies with more distinction than Lord Barber defended them, and his air of worried, even tortured, sincerity would have appealed to many floating voters.

As it was, he was excluded not only from the Exchequer but from the economic affairs committee of the Cabinet, and the consequences of that exclusion are still with us. Mr Heath resents Sir Keith's activities during and since 1974, but he should understand that he, earlier, gave Sir Keith grounds for resentment. Though both men may feel that their quarrel is ideological, in fact it is essentially personal.

Mr Heath made other human miscalculations that cost him dear. In his dealings with the NUM in 1973 he failed to see that the key man was Lawrence Daly. not Joseph Gormley, and so may have missed the chance of driving a wedge between Mr Daly and the Communist, Michael McGahey.

In his dealings with colleagues and supporters he was often woundingly tactless and aloof. Though in fact he has more heart than many leaders who have been idolised, he can sometimes appear unfeeling even to friends.

His neglect of back-benchers was specially disastrous. Now that so many MPs on the government side are made ministers—compared with only a handful in the early years of the century—those who are left out need to be handled with great care, because they feel discriminated against and are therefore prone to mutiny and conspiracy.

Harold Macmillan handled them in more senses than one, by keeping them well supplied with baronetcies. knighthoods and miscellaneous gongs. But Mr Heath disdained to use the honours system as an accessory to his own power.

He is a difficult man, but his merits far outweigh his faults. Throughout his career he has shown an independence and originality of mind which his words have never been able to match. Tories, whatever their subjective response to his personality, should appreciate his qualities and broadly defend his record.

In his admirable reply to Mr Healey in the economic debate on 7 July, Sir Geoffrey Howe spoke up for the Heath government. And it was surely no coincidence that Mr Heath made a friendly reference to Sir Geoffrey in his speech the following day.

The fashionable mythology about 1973 may salve the consciences of those who brought Mr Heath down, but it is only of practical benefit to the Labour Party.