This is my third visit to Scotland since becoming Leader of the Party. But, of course, this is the first time I have spoken at a Scottish Party Conference as Leader.
During this successful Conference we have discussed some key issues facing Scotland and Britain, and the conclusions which have been reached will be of immense value to the Shadow Cabinet and the Party's spokesmen in Parliament.
I am afraid Scottish Conservatives at Westminster are very demanding. [end p1]
They don't let us forget for a moment that they think Scotland is the most important part of Britain.
Alick Buchanan-Smith is working flat out to make sure we have policies that Scotland needs. I would simply underline today all that he said in Thursday's, debate on the Government of Scotland. We are committed to a directly elected Assembly.
And George Younger, as well as putting the Scottish Party's point of view, is the next minute arguing the case on defence for Britain as a whole.
It is said that national defence is a Government's first duty—and with George Younger we have little chance of forgetting it. [end p2]
Then there is Teddy Taylor. Now, he is a Party Vice-Chairman and never loses an opportunity of telling me that Glasgow is the best city in Britain.
And Hector Monro. I wouldn't want to meet him on a rugby field. Even on a clear day.
And Hamish Gray, our forthright Energy spokesman, and Malcolm Rifkind, our Devolution expert, are also doing an excellent job.
Such men, backed up by a team of men and women members, ensure that Scotland's voice is heard loud and clear at Westminster. [end p3]
And, talking of the activities of Scottish Members on my Front Bench team, one thing I am not allowed to forget is fishing!
And rightly so.
For this vital industry in Scotland typifies all that is best in enterprise, and deserves all the support we can give it. [end p4]
In normal times this Parliament could last until 1979. But these are not normal times.
Never has a Government been so divided and discredited as this one so early in a Parliament. We the Conservative Party must be ready for whatever may befall.
Meanwhile there are hopeful signs of a Conservative Party revival in Scotland.
We have had some outstanding results in local government bye-elections. [end p5]
There is encouraging news from the constituencies, and dare I say it—even from the opinion polls.
But we have a long way to go yet. We must ensure that those who are sickened with Socialism, who are dismayed at the direction in which Britain is going, join our ranks and not those of other parties.
I hope that there will be no doubts in Scotland about the role which the SNP are playing at Westminster. [end p6]
Like most minority parties, they prosper by being all things to all men and all women in all constituencies.
But in Parliament they are tending more and more to give their support to Socialist measures, either by voting for them, or by conspicuously abstaining.
For example, in the week beginning 28 April we had four major Socialist proposals. [end p7]
First, on Monday, we had the so-named Employment Protection Bill which was described by John Elliot, a leading labour affairs correspondent as ‘a bonanza for the Unions’ and which gives little protection to employment apart from the civil servants who will be required to administer it.
The Nationalists voted with Labour.
On Tuesday we had the Community Land Bill which gives the virtual monopoly of the buying and selling of all development land to local authorities.
The Nationalists didn't vote at all. [end p8]
Late that night we had another Socialist measure concerning the Clydebank affair, a measure which gives the Secretary of State for Scotland powers to honour (I can think of no more inappropriate word) the pre-election deal to bale out the law-breaking Councillors in Clydebank and elsewhere, from the penalties for failing to implement the Housing Finance Act.
Again the Nationalists voted with the Socialist Government to ensure that the substantial penalties should be paid not by the law-breaking Councillors but by the law-abiding ratepayers! [end p9]
On the Wednesday, we had the Nationalisation Bill to allow the Government to take a majority stake in North Sea Oil.
The cost is alarming, and the new B.N.O.C. spells socialism in every sense.
It gives the Corporation far reaching powers which enable them to do virtually everything from running petrol stations to owning fleets of giant tankers.
Again the SNP voted with the Socialist Government. [end p10]
Last Wednesday evening when Parliament debated Clay Cross, the Government came within eight votes of defeat.
Where where the eleven members of the SNP? Their votes could have won a majority for the rule of law—which should be the birthright of every British citizen.
They failed to vote—and thus the cause and the day were last. [end p11]
As Quintin Hailsham stressed on Thursday, Conservative policies are rooted in respect for the law, and every citizen's right to protection from the lawbreakers.
The serious incidence of violent crime and vandalism is fast becoming a social disease. There is no room for soft or permissive policies when faced with violence and vandalism which threatens the safety and security of the law-abiding citizen. [end p12]
A Conservative Government will not hesitate to act to curb violence wherever it occurs.
We are committed to taking steps against those guilty of senseless acts of vandalism. Wherever practical, those guilty will make good the damage they have done, or pay for the havoc they caused.
Nothing eats into the morale of a community more than the wreckers who smash windows, deface buildings or wreck telephone kiosks.
We have been too soft for too long. [end p13]
Your Conference has rightly concentrated, Mr President, on some of the key issues facing Scotland today.
During the debate on local government finance, initiated by John Berridge from Dundee, concern was expressed about the financial problems facing the new local authority regions and districts which took over the reins of responsibility in Scotland this week. As well as the nightmare which could face the ratepayers. [end p14]
It was because of these pressures that during the 1974 election campaigns I made it clear that a Conservative Government would act speedily to reduce household rates and replace them with a fairer form of taxation.
There is no doubt that the rating system is creaking at the joints. There is a limit, which may well have been reached in some areas, on the amount which we can raise from householders through this form of local taxation. At present-day levels, it can be so unjust and unfair. [end p15]
You also discussed Scotland's housing problem.
Some Scottish cities still have slums, which must be demolished, and other areas crying out for redevelopment.
And these are problems which Conservative Governments have always tackled with vigour and energy. [end p16]
We will give every possible encouragement to the growth of owner occupation. This will include granting the right to every local authority tenant to buy his own home.
We will take steps to increase the number of houses for the elderly, a need which has been woefully neglected in the past. [end p17]
But it is impossible to draw up housing plans for Scotland which do not take account of the fact that about two-thirds of Scotland's population live in public rented houses owned by local councils, new town development corporations and the Scottish Special Housing Association.
In many ways, it is some of the local authority housing schemes which have been the most shamefully neglected and deprived areas of housing in Scotland. [end p18]
Especially in the cities where vast areas of tenements and multi-flats have been built with scant regard for amenities and community development.
In a Conservative administration, a Scottish Office Minister will be given special responsibility for these vast areas. [end p19]
Far too often, Socialist councils have taken the view that their responsibilities to council areas were limited to preventing rent reviews.
We stand firmly by a policy of fair rents, with help for those in need, but also for ensuring that council tenants will play a greater part in the management of their own committees.
The debate on education spotlighted yet another example of the vindictiveness of Socialist policy. [end p20]
By freezing and planning to eliminate the grants for grant-aided schools, the Government is dealing a severe blow to successful schools with proven records of achievement.
The result of their policies will be to price these schools out of the pocket of many parents anxious to give the best possible opportunity to their children. [end p21]
Teddy Taylor has the full backing of the Shadow Cabinet in the pledge he gave that we will restore the real value of the grants to these outstanding Scottish schools.
I have reviewed some of the threats that Socialism represents to Scotland, and some of the problems that you have discussed at this great Conference. [end p22]
Now I want to refer to the Common Market. Yesterday you voted by a massive majority to support continued membership.
I understand that Micky Hurst summed up the pro-Market arguments in a magnificent speech. And I hope that you will all follow his example by exhorting the Scottish people to vote ‘Yes’ on June 5th. [end p23]
Though Europe presents us with hope for the future, we cannot claim that remaining to the Community will eradicate Britain's serious economic difficulty. [end p24] Start of press release
Because the most pressing problem of our time remains the conquest of inflation. This time last year, all the Western nations were suffering from it.
We have all had to deal with the oil crisis. Prices were rising fast everywhere. Indeed, Japan and Italy had much more inflation than we did.
Only Germany and America were doing significantly better. In general we seemed to be in much the same straits as our friends and competitors overseas. [end p25]
The country with the big problem then was Italy. The Press was full of gloomy reports about the imminent economic crisis.
The commentators asked patronisingly whether Italian democracy would survive much longer.
The Labour Government's answer to our problems here at home was the Social Contract, and a massive programme of increased public expenditure.
Come the autumn election campaign, leading Ministers made some extraordinary claims about their success. [end p26]
I'm sure some of you have not forgotten what the Harold WilsonPrime Minister said the day before the election:
“Unemployment … is beginning to fall: the balance of payments show a substantial improvement; the pace of inflation and price rises is moderating” … And he went on to say “ … but now we are being inundated with gloom and doom from the Conservative leadership” . (Election Press Conference October 9th 1974).
That was last year
Where do we all stand today?
What has happened to our neighbours? [end p27]
Take Japan, Last year wage inflation was running at 30 per cent. This year settlements are down to half. (For next year, the target is even lower).
Take Italy. Last year there was a trade deficit that looked disastrous. This year a surplus (even when oil is taken into account); and their inflation is now less than ours.
Take France. Last year, she set out to cut her inflation rate to single figures. This year she has already done so. [end p28]
Take Germany. Last year prices scarcely rose any faster at all despite the oil crisis. This year their rate of inflation is already back to where it was before—below 7%;.
Of course these successes have been won at some cost. Business is not as good as it was—but nor is it here. In some countries unemployment has risen. As it is rising here.
But in other countries it is only a temporary phase. Now the main problems have been mastered, those countries can consider steady expansion once again. [end p29]
There was no magic in what they have done, no panaceas. From the start they recognised that unpleasant steps would have to be taken to deal with a difficult situation.
Their Governments made this abundantly clear to their people. They courageously took the necessary actions. They took them in time, and now they are reaping the rewards for their realism and determination.
But what about us? Where does Britain now stand? The short answer is that we have changed places with Italy.
It is to Britain that the journalists now come, following the scent of economic and political decay. [end p30]
On 7 May one distinguished American commentator (Eric Sevareid) spoke of this country— “sleep-walking into a social revolution, one its majority clearly does not want, but does not know how to stop” .
Only a few days before, the Wall Street Journal carried the chilling headline—
“Goodbye Britain, it was nice knowing you” .
That is what our friends are saying. These people are not out to knock Britain.
But they know what has happened elsewhere.
They know that we cannot now blame world conditions. They know that our problems are homemade.
Where other countries have succeeded, we have failed and the responsibility for that failure rests with the present Government. [end p31]
The picture is grim.
The number of men and women without work is rising rapidly month by month, and the Denis HealeyChancellor says the total may reach about a million by the end of the year. Beginning of section checked against ITN Late News, 2230 17 May 1975
We're living beyond our means at home and abroad. [end p32]
Government spending is out of control and well in excess of our capacity to pay in tax, and the moment may well be approaching when our friends abroad decide that our overdraft with them is quite big enough. End of section checked against ITN Late News 2230 17 May 1975.
How can the Harold WilsonPrime Minister reproach others, as he often does, for warning the nation of “gloom and doom” when he himself describes our crisis as the worst since 1931? [end p33]
Much of our trouble today could have been avoided if the Government had faced up to our troubles right from the start, and told the people the truth.
The task would still have been a manageable one last March.
Today, of course, it is immeasurably greater. The choice is plain. The Government can carry on as it is doing now—or, late in the eleventh hour, it can make fundamental changes.
What would that involve? [end p34]
First, public spending.
Just a few days ago, a Edmund DellTreasury Minister had this to say (9th May at Bournemouth) about the battle against inflation.
It is “worsened by the tendency we have shown since the War to commit ourselves in advance to spending not what we have, but what we plan to have if all goes well.”
We could perhaps be forgiven for thinking that such a message came from a government converted to the idea that public expenditure should be limited to what the nation can afford to pay. But look at what they have actually done.
In Labour's first year of office, the Denis HealeyChancellor added £11,000 million to the Government's spending. [end p35]
This year we might have hoped for a more cautious approach.
But no—in this year's Budget the Chancellor increased spending by a further £9,000 millions. That makes a jump of £20,000 million in all.
This vast figure will probably be more than anyone can take in. Think of it as over £350 for every man, woman and child in the country.
(To do the Chancellor credit—not much, mind you, but a little nonetheless—he did also announce some cuts. A trifling £1,000 million. Note, however, that they are for next year, not this).
This extra expenditure has not been financed by higher taxes.
A large and growing part has had to be met by borrowing. In March 1974, Mr. Healey planned to borrow a bit over £2½ billion. Only eight months later—that is in November 1974—it had doubled at £5½ billion. [end p36]
This April, thirteen months later, the true figure turned out to be £7½ billion. For the year to come the borrowing figure will be higher still—a further £9 billion. But of course that's only a Healey figure.
If inflation is to be curbed, this cascade of spending and borrowing must be stopped.
A few days ago, Geoffrey Howe, our Shadow Chancellor, spelt out what cuts should be made.
First, the modest reductions proposed for next year should be put into force now.
Second, there should be a reduction in blanket food and housing subsidies with provision to concentrate help on caring for the poorer and weaker members of our society. [end p37]
As you may have seen from the columns of one newspaper last Sunday, the housing subsidy alone is double what it was just two years ago, and nearly ten times the level of ten years ago (Observer, 11 May, p.11, Col.2).
Third, the Government should bring forward no more schemes for further heavy expenditure.
At times they seem to come at the rate of almost one a day.
On Tuesday 15 April, the Budget called for restraint.
On Thursday 24 April, the Government decided to bring forward very expensive plans for British Leyland amounting to £700 million. The next week the catalogue continued day by day.
On Monday 28 April—the Employment Protection Bill which involved the employment of 700 more civil servants. [end p38]
On Tuesday—the Community Land Bill. 14,000 new administrators, and a cost of £600 million a year when it comes into effect.
On Wednesday—the Petroleum and Submarine Pipeline Bill, which creates a borrowing requirement of £900 million.
On Thursday—the Bill for nationalising the aircraft and shipbuilding industries—A bill of up to £550 million.
On Friday—£750 million more borrowing for British Steel, and unspecified sums for other State firms.
On the following Monday (5 May) the Barbara CastleSecretary of State proposed to eliminate pay beds in hospitals—another £40 million. [end p39]
Common sense tells us we cannot go on like this, but the message has not yet reached the government. [end p40]
Take wages and the Social Contract.
We all know that one of the causes of our inflation is excessive wage increases. The Government says that the Social Contract is the answer. On countless occasions it has claimed that the Contract would master inflation.
Yet it has only made the situation worse.
Wages are now growing at more than double the rate which this Government inherited. The movement of prices is even more frightening. Yesterday's increase of 3.9%; in one month is the worst since records were kept. [end p41]
Suppose the rate since the autumn election were to continue year in, year out. To keep up with prices, a man (with a wife and two children) now earning £3,000 a year today, would need:
£10,700 in five years time;
£38,300 in ten years time; and Nearly £1¾ million by the end of the century. (To say nothing of his pension possibilities). [end p42] Beginning of section checked against ITN Late News 2230 17 May 1975:
The trouble is that the Social Contract is neither contractual nor social. (Applause).
A real contract contains binding agreements between the parties involved. This one doesn't bind anyone. A proper contract lays down precisely what each party should do. This one only obscures and complicates. Indeed it gives wage negotiators so many loopholes to climb through that a guideline can be found to justify almost any wage claim, however large. End of section checked against ITN Late News 2230 17 May 1975
A Social Contract would be based on justice for all, and on the positive consent and commitment of the whole of society. This one involves the Unions alone—the useful, people, in the Harold WilsonPrime Minister's unfortunate words. Its effect is to help the strong to take from the weak.
So it was inevitable from the start that this contract would be unjust. It was inevitable that it would not work.
What then should be put in its place? And what can we, as citizens, do?
As John Nott said in debate—a new accommodation is needed. The press release omits the preceding sentence and instead states: New Wage Guidelines are urgently needed. [end p43]
Our inflation is not just an economic difficulty which can be cured by a financial formula. It goes far too wide for that. It is as much a political problem as an economic problem. The situation calls both for firm political leadership and the active support of all people of goodwill and commonsense. [end p44] Beginning of section checked against BBC Radio News Report 1800 17 May 1975:
Now the people can really see the gravity of unbridled socialist inflation. The commonsense majority must become actively involved and see that their will is the one that prevails. Only then … . (Applause) … only then will we be able to fight inflation successfully. [end p45]
These then are the measures the Government could and should choose to take:
It must cut public spending to a level the nation can afford, and cut it now:
It must revise the wage guidelines of the Social Contract with something which curbs inflation, instead of furthering it. And it must encourage and enable the commonsense majority to tackle militancy at its source. (Applause). End of section checked against BBC Radio News Report 1800 17 May 1975.
There are no easy options. If there were, we should have found them before now.
The people of Britain know this only too well. More and more they are asking how far the Conservative Party is willing to support the Government in this time of crisis.
The answer is that we always have and always will support the Government when they act in the national interest and put country before party. [end p46]
For example, the Harold WilsonPrime Minister is depending on us—not on his own party—in his Common Market policy.
Last week it was the Conservative Party who rescued the Government when its Defence Policy was attacked in Parliament by the Left Wing.
When it came to the vote, Conservative members outnumbered Labour handsomely in the Government Lobby.
For national measures like these, Mr Wilson cannot persuade his own party to vote in strength.
But we must not forget that the Government has an absolute majority over all other parties. Most important, it has a majority of more than 40 over the Conservative Party. [end p47]
So if the Labour Party does not act, it is not because it lacks the power, but because it lacks the realism, the will, the vision and the leadership.
You cannot hide from the truth behind a smoke screen of complacency and inactive optimism.
Since the Government will not spell out to the people where we are and where we are going to, I must do so for them.
In the first 15 years after the war, we only suffered from a modest, creeping inflation. People had confidence in the stability of the currency.
Over the next 15 years or so, we had walking inflation. Although we began to worry seriously about prices, no one expected them to get out of hand.
But in the last 15 months we have moved abruptly from walking inflation to galloping inflation. [end p48]
The nation's confidence in the value of money is being torn to shreds week by week.
The cost of failing to fight inflation is the extinction of private enterprise and ultimately, the end of democracy. End of press release. [end p49]
The Country has never needed the Conservative Party more than it does today.
The Conservative Party—in all parts of the United Kingdom—has always been the Party of realism and reason, the agent of radical and relevant reform.
Scotland and the rest of the United Kingdom look to Scottish Conservatives to play their part in reviving the nation's future. [end p50]
The Labour Party has no wish to face up to the challenge of change. Their instinct is to bind an evolving economy in shackles of State control. To sacrifice the unity of society to the interests of one class.
The SNP wish to abandon not only the United Kingdom but Europe as well.
They are turning their backs on all that was good and outward looking in the old Scotland.
A country which made a real contribution to the world through the genius of her individual, enterprising and frequently emigrant sons.
Perhaps the Scots with their new found prosperity and traditional genius could play a special part by leading the British renaissance?
The strength, pride and success of the British people depend on partnership in our great European adventure. [end p51]
So when the next Election comes (and it may not be long delayed) it is you and I who will, proclaim— “Set the British people free. Set them free. Stand back. And marvel at their achievements” .