Speeches, Interviews & Other Statements

Complete list of 8,000+ Thatcher statements & texts of many of them

1966 Oct 31 Mo
Margaret Thatcher

Article on Parliament and Money Matters

Document type: Speeches, interviews, etc.
Source: Thatcher Archive: typescript
Editorial comments: Place of publication uncertain. Assigned to 31 October by the editors; probably written after the 1966 Party Conference. Correspondence in the Thatcher Archive shows that MT had promised an article to the Southampton University Conservative Association magazine (Shades of Blue) but the magazine itself has not been traced.
Importance ranking: Major
Word count: 1014
Themes: Parliament, Conservative Party (history), Economy (general discussions), Industry, Monetary policy, Pay, Taxation, Labour Party & socialism


There has been much criticism recently of the atmosphere that prevails in the House of Commons at Question Time and during debates. We ought to take this criticism seriously for some of it is justified. For a considerable time now, it has seemed to me that our debates have become out of touch with the practical realities of the situation; they have become more of a propaganda exercise than an informal and serious discussion of the relebant facts and policies. The greatest Parliament in the world should be more than a good debating chamber; it should crystallise the issues and formulate workable policies which are designed to deal with our problems; which do not jeopardise our long-term position.

Prices and Incomes.

The Prices and Incomes Act showed Parliament in one of its worst guises. First—it contains powers of compulsion far beyond any that should ever have been taken. The Act gives the Government power to make it a criminal offence to KEEP an AGREEMENT even though both parties to the agreement made it in good faith and want to honour it. This is a complete travesty of everything which has made this country great and upon which [end p1] our trading reputation has been built. It used to be a civil offence to break a contract; this Government has taken powers to make it a criminal offence to keep it. Given a free vote, I do not believe that such a measure would have got through the House. The Government should have been told by their own back-benchers as well as ours, that they could not have those powers and that no true democratic government would ever have sought them in peace-time. Instead, what happened? The Leader of the House (R. H. Crossman) in a speech at Coventry on 9th September, said of the July measures of which this was one, “were not a last ditch defence of Government policy, but a last minute dash for freedom, a break through into new patterns of industrial relations …   .” Surely the time will soon come when the electors will see through this two-voiced talk.

Second—one of the schedules to the Act, Schedule 2, sets out the criteria which must be applied by the Prices and Incomes Board to determine any question referred to it. On the day that the Bill received the Royal Assent, the Government by Order removed the whole of that schedule and substituted a different [end p2] one. Thus, old Schedule 2 which had been discussed at great length in the Committee Stage by Members on both sides of the House, never came into effect. The new one had not been subjected to Parliamentary scrutiny. This makes a mockery of the legislature-making process.

Thirdly—the Act gives the Minister completely arbitrary powers. He can choose which increases shall be permitted and which shall not; which agreements shall be honoured and which it shall be an offence to honour. It is still perfectly legal for anyone to ask for more pay and for an employer to offer more pay. If, however, the Minister (a) hears of, and (b) disagrees with the increase, he can make an order which would make it an offence to go ahead with it. This system introduces such a degree of arbitrariness into our law as seriously to undermine the rule of law.

Such far-reaching and fundamental powers could only be justified if there were overwhelming arguments for them. But in this case there are no such arguments. In a speech at the Hague five days after the famous July measures were announced, the James CallaghanChancellor of the Exchequer said that the other measures in the deflationary package would be enough to work and that the [end p3] freeze was a “bonus on top of it all” !

The Crisis—Whose Fault Now?

As the present Government has now been in power for more than two years, it should now be clear to everyone that its Ministers and no one else, are responsible for our present financial troubles. Other economic crises there have certainly been, but none has lasted as long as this. Mr. R. A. Butler, when he was Chancellor of the Exchequer, had to deal with some difficult financial problems when he took over from a Labour Government. He found that the balance of payments deficit was running at the rate of £800 million a year; that in the previous six months the fold reserves had gone down by £500 million. But the position was worse for him in 1951 than for Callaghan in 1964, for he found stocks were low, whereas in 1964 they were high, indeed, stocking up had been part of the reason for the deficit. He had no large private overseas assets to boast about because they had yet to be built up. It took 13 years of Tory government to do this. But in spite of this, more serious situation, within two years the balance of payments was in credit and we had had an incentive budget reducing taxation all round. The present [end p4] Government could have done the same but it lacked both the ability and the will to do so. It was more concerned with making propaganda than with solving problems.

Again, Selwyn Lloyd had economic troubles to weather. Like the present Chancellor he too borrowed from the International Monetary Fund, raised the bank rate to 7%; and propounded an incomes policy. But unlike Mr. Callaghan, within a year he had repaid every penny he owed; reduced the Bank Rate to 4½%; and without laking dictatorial powers, had made our labour costs more competitive.

The Right Approach.

The approach of the two major parties has always been different. We believe in making it worthwhile for people to better themselves by taxation incentives. If a person has great ability then (1) we need him here, and (2) he deserves great rewards. There is no point in inducing a guilt complex in people because they have done well and it shows in their bank balance. Further, politicians should realise their own limitations. Many of them have neither the knowledge or the ability to tell exporters how to export; steel producers how to rund the steel industry; industrialists how in what they [end p5] should invest. A large dose of modesty is required by the Harold WilsonPrime Minister and we should then get less coercion and better results.