Downing Street Years - Margaret Thatcher [18]
At that first informal Cabinet we began the painful but necessary process of shrinking down the public sector after years in which it was assumed that it should grow at the expense of the private sector. So we imposed an immediate freeze on all civil service recruitment, though this would later be modified and specific targets for reduction set. We started a review of the controls imposed by central on local government, though here, too, we would in due course be forced down the path of applying still tougher, financial controls, as the inability or refusal of local councils to run services efficiently became increasingly apparent.
Pay and prices were an immediate concern, as they continued to be throughout those economically troubled early years. Professor Hugh Clegg’s Commission on Pay Comparability had been appointed by the Labour Government as a respectable means of bribing public sector workers not to strike with postdated cheques due to be presented after the election. The Clegg Commission was a major headache, and the pain became steadily more acute as the cheques fell due.*
As regards pay bargaining in the nationalized industries, we decided that the responsible ministers should stand back from the process as far as possible. Our strategy would be to apply the necessary financial discipline and then let the management and unions directly involved make their own decisions. But that would require progress in complementary areas — competition, privatization and trade union reform — before it was to show results.
There would also have to be a fundamental overhaul of the way in which prices were controlled by such interventionist measures as the Price Commission, government pressure, and subsidy. We were under no illusion: price rises were a symptom of underlying inflation, not a cause of it. Inflation was a monetary phenomenon which it would require monetary discipline to curb. Artificially holding down increases merely reduced investment and undermined profits — both already far too low for the country’s economic health — while spreading a ‘cost plus’ mentality through British industry.
At both Cabinets, I concluded by emphasizing the need for collective responsibility and confidentiality between ministers. I said I had no intention of keeping a diary of Cabinet discussions and I hoped that others would follow my example. Inconvenient as that may be for the authors of memoirs, it is the only satisfactory rule for government. But I had to repeat this warning against leaks many times.
We were still in the first week of government, but we had to decide the content of the first Queen’s Speech. This was largely the task of ‘QL’,* the Cabinet committee chaired by Willie Whitelaw, which was responsible for making recommendations to the Cabinet on legislation for inclusion in the Queen’s Speech. We were fortunate that our manifesto commitments had been so clear; the Queen’s Speech almost wrote itself.
In all this activity of government-making and policy-setting, however, I knew I could not afford to neglect the back-benchers. After twenty years in the House of Commons, through six Parliaments, I had seen how suddenly trouble could arise and the business of the House be put in jeopardy. So on Tuesday evening, before Parliament assembled the following day, I had invited the Chairman and Officers of the 1922 Committee for a talk, to celebrate our victory and discuss the work of the coming parliamentary