Speeches, etc.

Margaret Thatcher

Speech at Alnwick Castle

Document type: Speeches, interviews, etc.
Venue: Alnwick, Northumberland
Source: Thatcher Archive: CCOPR 698/75
Editorial comments: Embargoed until 1415. MT was speaking at a Conservative fete. A section of the text has been checked against BBC Radio News Report 1800 30 July 1975 (editorial notes in text).
Importance ranking: Major
Word count: 3213
Themes: Arts & entertainment, Conservatism, Economic policy - theory and process, Employment, Industry, General Elections, Monetary policy, Pay, Public spending & borrowing, Taxation, Labour Party & socialism

Every woman knows how important it is that packages should be clearly and truthfully labelled.

But you and I should not be wilfully misled by false claims and bogus bargain offers. If that goes for groceries, it ought to go for political packages too.

That's why I've been applying the principles of the Fair Trading Act to the activities of the Labour Government.

In February last year they re-launched a product called Free Collective Bargaining. Section checked against BBC Radio News Report 1800 30 July 1975 begins

That new product, free collective bargaining, was going to cure all our ills. Mr. Wilson said, and I quote, “this will rescue the nation” . Now that was February, yet by October, it was off the market and in its place came the new product—the Social Contract. Well, you remember the first one had been going to rescue the nation and what was this new product going to do? Mr. Wilson said—guess what?—this will “save the nation.” A case of the same advertisement but a different product. Now, nine months later, the Social Contract is off and there's the new improved miracle answer—the six-pounds-a-week Bill with the secret ingredient. Section checked against BBC Radio News Report ends.

So secret indeed they haven't dared publish the formula. Still the advertisements speak well of it. Harold Wilson 's given it his seal of approval.

He said—yes you've guessed it—this will “save our country” . [end p1]

So far two of their life-saving medicines have only made the illness worse.

Yet we've had the most outrageous claims for each of them—claims which would make a manufacturer liable to prosecution under the Trade Descriptions Act. Remember Mr. Half-Truth Healey? In his election advertising campaign back in September 1974 he reassured the British people—

“I don't believe myself it's necessary for the people as a whole to have their living standards lowered in order to conquer inflation.”

So he promised the British people “We can get through the whole of next year (that's this year) with well under a million unemployed” , and then to round it all up he told every single voter “I have cut the inflation rate I inherited by half” .

So much for Mr. 8½ per cent—that's a pretty typical Socialist mixture:- One part easy answers One part false promises and one part downright untruth.

That's been the basic formula of the Labour Government for the last sixteen months.

Now at long last they've begun to turn to orthodox medicine.

Their new package has some ingredients which could help to cure Britian's ills.

But even now they won't tell us the truth, and that's what all of us want—the truth.

We want no more false promises no more misleading advertisements no more downright dishonesty. [end p2]

The Government's new measures haven't a chance of working unless they come clean and tell us the truth.

We want the truth about unemployment—today out of every thousand workers on Wearside, nearly one hundred have no jobs. There's 6 per cent unemployment on Teesside, nearly 7 on Tyneside.

33,000 school-leavers here in the Northern Region risk starting their working lives this month on the dole.

They want to know the truth—will the Government's package really beat unemployment?

We want to know the truth about wages—is the Government really going to stand firm against the extremists? Or are we going to have special cases every time anyone challenges Mr. Foot?

We want to know the truth about Government expenditure—can we really go on spending £20 billion a year more when we are producing less than in 1973?.

Above all, we want the truth about the Government's intentions.

We want no secret Bills, no private deals.

But an open and honest policy to meet Britain's needs.

That's why we in the Conservative Party have set an example.

We have a clear policy which tackles tough questions and hides none of the real problems.

We believe that there has to be a simultaneous attack on three fronts and that anything less will fail.

First, there has to be a steady and unflinching control of the money supply—to bring it down to a moderate rate of growth. [end p3]

In a barter society there is no inflation because there is no money.

Second, the Government's own spending, which is totally out of control, has to be cut, and cut hard.

There is now no other way of asserting control over it, or of reducing the enormous and inflationary borrowing requirement needed to finance it.

Third, there is a place for an incomes policy. This is not so much a means of reducing inflation. Its purpose is to reduce unemployment, its justification that if it is effective fewer people will lose their jobs than otherwise would.

All these three weapons are needed in the fight against inflation.

So far the Government has concentrated all its energies on the third weapon, incomes policy. It has made some use of monetary policy but it has not tackled Government spending. It has started to grope its way towards a policy but it still has a long way to go.

It has also got to tell the people a good deal more of the truth than it has chosen to do so far.

Until the crisis burst on it, it falsely pretended that there would not be the need for sacrifice, and that the nation as a whole could maintain its standard of living in the short term.

It has stopped pretending that, but it has yet to tell us how far the standard of living must fall.

Another vital topic on which it really must be more frank is the level of unemployment which it expects to see. [end p4]

Only last week the Secretary for Employment, Mr. Foot, was compelled to announce the highest unemployment figures for 35 years. In addition to the many other problems pressing upon our people, there is now the knowledge that a million people are out of work and the certainty that over the coming months that figure will steadily increase.

The pessimists believe it could be one and a half million or more.

The optimists say it may rise to one and a quarter million.

We shall not react to this situation as Mr. Wilson and his colleagues would if they were in Opposition. When unemployment rose in the early days of Mr. Heath 's Administration, it did so partly because of what Mr. Jenkins had done as Chancellor in the previous Government.

There was no restraint or forbearance on the part of the Socialists. They put the blame on us. Then as throughout Mr. Heath's Administration, they played partisan politics, and made as much Party capital as they could out of the unemployment figures.

We do not intend for our part to follow their example. The personal consequences to people and families are too tragic for that.

We recognise that there is a world-wide trading recession and that unemployment has risen in all the countries of the West. Above all we recognise that the supreme enemy of full employment is inflation. Unless that is checked then we shall be talking not of a million unemployed, but of far more, and perhaps of the collapse of much of our industry.

Companies would not have the funds to invest to create new jobs, nor even to pay their present employees. [end p5]

But when every allowance has been made, Mr. Wilson and his colleagues cannot escape scot-free. For sixteen months they did nothing about inflation except to stoke it up. Because of that, they can do nothing about the unemployment now.

Other countries—America, Germany, France—took action against inflation long ago. Now they are free to let their economies expand and bring their unemployment down.

We are not able to do that. The only thing Mr. Wilson's Government did was to make inflation worse. They spent money recklessly and when it ran out they borrowed more.

Now, as we warned they would, the bills are beginning to come in, and the nation is beginning to pay the price for this Government's rake's progress.

The cure for inflation is never pleasant, but it becomes much harsher when the disease has been allowed to flourish unchecked.

In its desperate desire to win the election last October, the Government hid the hard truth from the nation.

It pretended that the Social Contract was a triumphant success. Because it waited such a time before taking action, we are facing a long hard winter of discontent.

Unemployment will be worse than it need have been had the Government acted sooner. The set-back to industry will be worse and the drop in our living standards worse than if Mr. Wilson had faced reality sooner.

That is why it is not too soon to look ahead and ask ourselves: what happens next?

Perhaps the greatest danger is that the Government, having panicked once, will panic again.

As the unemployment figures rise, its resolve to fight inflation may vanish as quickly as it appeared. [end p6]

If at Christmas, or Easter, its determination disappears, and it rushes into panicky short-term measures in a desperate attempt to make the unemployment figures look better than they are, then the fight against inflation will have been lost.

Then prices would rise faster and in the long run unemployment would be much worse.

Conservatives detest unemployment—let there be no doubt about that.

We believe in the creation of wealth, in flourishing business and commerce because that means prosperity for all, and good prospects in the years ahead.

But it is possible to improve the unemployment figures in the short-term by measures which will destroy long-term jobs and destroy long-term prosperity. It does not make sense to pay people to produce goods which nobody wants to buy.

For every job you save in this way you destroy two other jobs elsewhere. Mr. Anthony Wedgwood Benn tried this method when he rewarded the workers at the Meriden motorcycle factory for an illegal sit-in with millions of pounds of public money.

It preserved their jobs for a few months, but now in Norton-Villiers-Triumph's other two factories, which were more efficient and more profitable, workers face the sack. [end p7]

Nor does it make sense to do what Mr. Healey has done and drive foreigners out of this country by imposing spiteful new taxes upon them. He did this last year, and now the British Film Industry, which needs American money to live, is facing destruction.

What does make sense is to think now what changes we should be making to encourage the creation of wealth and the creation of jobs, and to build a society with hope for the future. These things cannot be accomplished overnight. It is alarming that, thanks to the Government's mismanagement, we are moving into a recession when the rest of the advanced countries are beginning to move out of one. But what is still more alarming is how far Socialism has gone in crushing individual effort and suppressing individual initiative. In any sensible society people who create jobs would be regarded as public benefactors. To build up a business, to give employment to other people, that is a worthy aim, and one that society should applaud. In creating wealth for himself the entrepreneur creates incomparably more wealth for other people. That is not the view of the Socialists. They delight in attacking the creators of wealth and therefore the creation of jobs.

Throughout their entire term of office from 1964–70, and even more since February 1974, Mr. Wilson's Ministers have delighted in heaping new tax burdens on individuals and companies. Mr. Healey has put up Income Tax twice; he has raised the higher rates of tax to absurd heights; he has brought in a Capital Transfer Tax which, unless we repeal it, in time, will cripple business and farms. On top of all this, he is threatening a new Wealth Tax. Small wonder that as part of last year's Budget Mr. Healey had to make it harder to emigrate and take one's possessions elsewhere. Small wonder that so many of our best and most creative people are beginning to wonder what future, if any, this country offers them. [end p8]

And small wonder that this country, which once led the world in enterprise and innovation, is losing confidence in itself. Of the nine members of the Common Market, Britain and Italy are coming to be regarded as the two weakest members.

We watch both our former allies and our former enemies outpacing us in their rate of industrial growth, standard of living and quality of their social services.

Conservatives have repeatedly warned about the dangers of this trend.

In many cases the warnings have fallen on deaf ears. Now, as the national crisis of inflation runs its course, the truth of these warnings is about to be brought home to every man, woman and child in the country in the most direct possible way.

When the inflation has been wrung out of our economic system, who is going to create the jobs, secure and good jobs, that a million or more unemployed will need?

It is hard enough for companies endangered by price controls which do not allow them to recover all their costs, and hampered by official interference, to make the new investment needed to protect existing jobs.

With the risks of enterprise so great, and the rewards so small, who is going to take on the task of building up businesses and creating the new jobs we shall need?

As Conservatives we must rebut the notion that only the State is capable of creating full employment for all our people. [end p9]

If that idea ever were to be accepted by the nation, the British people would have taken a giant stride down the path towards the final loss of freedom.

Last year there took place the largest transfer of resources in our history away from productive industry and commerce into public spending.

No wonder there isn't the money for investment.

To rob industry of its resources and force it to turn to the State for help—that is what socialist planning means. They create the lame ducks they claim to assist.

The Conservative approach is a quite different one.

The aspirations of the British people need wealth for their fulfilment.

We need to build up—not to destroy.

The things we want to do, as individuals and as a nation, all cost money.

More wealth is wanted to provide more jobs, a better standard of living for the people, better schools and better hospitals.

But unlike the socialists, we say the wealth must be created before it can be spent.

It is our task to show the nation the path to true prosperity. [end p10]

Let us proclaim the truth, so obvious, so often overlooked, that it is only the latent ability of individuals which can create wealth.

Governments spend the wealth, Governments pay out the social benefits, but the entire public sector rests on the back of wealth-creating private industry.

The more profitable private industry is, the more individuals are encouraged to start up themselves and to take risks, then the more the government itself will be able to do.

These are not arcane truths, hidden from the public view.

You have only to look at the West German experience to see how encouraging private enterprise can bring a whole people prosperity.

We have to find ways of releasing individual effort. We have to make people feel that their enterprise is appreciated, that it is worth making exertions and taking risks.

We must stop taking so much in tax from those who create the wealth that the effort is no longer worth while.

We must stop treating them as if they are enemies of the people to be penalised and scorned. And we must give them the prospect of being able to hand on to their children what they have created.

If we do not, we are in danger of a brain drain such as we have never seen before. Our best and most creative people, whether carpenters or plumbers, craftsmen or scientists, doctors or engineers will not stay here to be harried and abused.

We must also stop harassing businesses large and small. [end p11]

We want to encourage the competition that will make them efficient.

But large businesses need a settled framework within which they can plan ahead and create tomorrow's jobs.

Small businesses need positive encouragement. Given that encouragement they too could make a major contribution to creating employment.

Everywhere one goes at present, one hears small businessmen saying that the government is making it impossible for them to think of expanding.

What folly that this Government should have made them so fearful for the future!

Above all, we must stop treating profit as a dirty word and treat it as a measure of business success.

A company that makes good profits can build up reserves to carry it through bad times. It has the resources to make new products to meet changing times; it offers good job prospects not only now but for the future so that its employees can count on a good income for the future and plan accordingly.

I am convinced that such a change in attitude would be the biggest single contribution that could be made towards faster growth, greater prosperity and fuller employment.

The socialists, who are interested only in creating a state bureaucracy, will cry “unfair” .

But there is nothing unfair about our policy.

If we can create the wealth, then we can afford better public services, and better provision for the unfortunate. [end p12]

Many of our ills at the present time come from the state taking too much from too small a national product.

Give hope for the future.

Get industry growing. Encourage individual effort. Let everyone spend more of their own money.

And though the State will take a smaller percentage, it will still have larger resources in absolute terms.

The socialists are always talking about priorities but they get their priorities hopelessly wrong. They are so obsessed with the distribution of wealth that they forget it has to be created.

We Conservatives know—and we must convince the nation that it is so—that the creation of wealth has to be the first priority.

What is more we know that it is through individual enterprise and the release of individual effort that prosperity comes.

As the socialist path is increasingly seen to have failed, we offer a route that leads towards prosperity.

The greatest Conservative Prime Minister of this century, Winston Churchill, once had as his slogan:-

“Set the people free” .

It is time we revived it. [end p13]

What is more, we know that it is through individual enterprise and the release of individual effort that prosperity comes. The crisis that faces us all forces that stark fact upon us. It is the nature of crisis to make or break a nation. If it overwhelms us so that we flounder about, not knowing what to do, rushing this way and that, hoping for the best, seeking salvation first in one thing then another, hoping always that someone, somewhere, will save us—Then we are doomed. If the crisis brings us to despair of all solutions; to abandon all hope of any real way out; so that we refuse to act because we no longer believe that any action, any proposal, any Party, or any group can offer us salvation—Then, too, we are doomed. But if we take the crisis as an opportunity, face its challenge, and recognise its demands—Then it can release precisely those talents and those resources which we have locked up for too long. It can force us to look to ourselves for our own future: To use every ounce of inventive skill and individual enterprise to overcome our difficulties: To forget the divisions wrought by failure and seek instead the prosperity which comes from success. The crisis which might have destroyed us can awaken instead those very qualities which Britain needs for a new greatness.

At this point of greatest trouble, we can find again the spirit and the strength to throw off the dead years of decline and stride out again to build a Britain—better not just for ourselves but for generations to come.