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Downing Street Years - Margaret Thatcher [84]

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was inexplicable. If, on the other hand, you thought, as we did, that the way to get industry moving again was above all to get down interest rates, then you had to reduce government borrowing. Far from being deflationary, our budget would have the reverse effect: by cutting government borrowing and over time easing the monetary squeeze, it would allow interest rates and the exchange rate to fall, both of which had created severe difficulties for industry. I doubt that there has ever been a clearer test of two fundamentally different approaches to economic management.

The economists themselves realized that this was so. At the end of March 1981 no fewer than 364 leading members of the profession published a statement taking issue with our policy. Samuel Brittan of the Financial Times defended us, and so did Professor Patrick Minford from Liverpool University, who wrote to The Times answering the 364; I in turn wrote to congratulate him on his brilliant defence of the Government’s approach. We had made our decision: the task now was to hold the political line and, where possible, to win the political argument while waiting for the strategy to work. I was confident that it would.

The dissenters in the Cabinet, meanwhile, had been stunned by the budget when they learnt its contents at the traditional morning Cabinet on budget day. The press was soon full of leaks expressing their fury and frustration. They knew that the budget gave them a political opportunity. Because it departed so radically from post-war economic orthodoxy, even some of our supporters would not wholly believe in the strategy until it started to yield results. That might not be for some time. So it was clear that the Party in the country must be mobilized in support of what we were doing. The forthcoming Central Council of the Conservative Party in Bournemouth provided an opportunity for me to do this. I had decided some time before that I would try not to go to every Central Council because the number of party political occasions I was under pressure to address each year was enormous: there were separate conferences of the English, Scottish and Welsh parties, the Women’s Conference, Local Government Conference and Conferences of Young Conservatives, Conservative Students and Conservative Trade Unionists. However, I soon learnt that Central Council provided an opportunity which I could never afford to miss. Certainly that was true on this occasion. John Hoskyns and I worked late on Friday night and early into Saturday morning on my speech, which I delivered later that day. In it I threw down the challenge:

In the past our people have made sacrifices, only to find at the eleventh hour their government had lost its nerve and the sacrifice had been in vain. It shall not be in vain this time. This Conservative Government, not yet two years in office, will hold fast until the future of our country is assured. I do not greatly care what people say about me: I do greatly care what people think about our country. Let us, then, keep calm and strong, and let us preserve that mutual friendship in which patriotism consists. This is the road I am resolved to follow. This is the path I must go. I ask all who have the spirit — the bold, the steadfast and the young in heart — to stand and join with me as we go forward. For there is no other company in which I would travel.

I got a good reception. For the moment at least, the Party faithful were prepared to take the heat and to back the Government. But that determination might erode over the summer unless the Government stuck together.


THE COAL STRIKE WHICH NEVER WAS

Thankfully, strikes occupied far less of our time during 1981 than they had in 1980, and the number of working days lost due to strike action was only a third of that in the previous year. But two disputes — one in the coal industry, which did not in the end result in a strike, and another in the civil service, which did* — were of great importance, both to budget decisions and to the overall political climate.

A foreigner unaware of the extraordinary

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