Speeches, etc.

Margaret Thatcher

Speech to Hendon North Conservatives

Document type: Speeches, interviews, etc.
Venue: Hendon
Source: Thatcher Archive: CCOPR 719/75
Editorial comments: The press release was embargoed until 1600. A section of the speech has been checked against ITN News at Ten, (editorial notes in text).
Importance ranking: Major
Word count: 2443
Themes: Economic policy - theory and process, Employment, Industry, Monetary policy, Privatized & state industries, Energy, Public spending & borrowing, Housing, Labour Party & socialism, Local government, Local government finance


With much of Britain basking on the beach, this may not be the best time to remind the country that we shall shortly have endured eighteen months of Labour Government. I do not expect the event to be marked by merry celebrations. Indeed, it would be rather like celebrating the arrival of a tax demand. Understandably, most people will not want to be reminded of unpleasant reality as they enjoy a well-earned break from the increasingly arduous task of making ends meet under a Labour Government.

When this Government took office we had already been hit by the oil crisis and the tremendous increase in raw material prices.

The worst had already happened. What we had to do in this country was what other countries were already doing; we had to mark time for a bit. We had to bring our spending into line with what we could earn. We had to produce more to pay the higher bills in the markets of the world. We had to stop consuming more than we could pay for.

The last Conservative Government had already started to cut back. In the autumn of 1973, we announced public expenditure cuts totalling £1,200 million. The decisions were not easy to make, nor popular, but we took them because they were in our longer term interest. [end p1]

Other countries did much the same thing. They tightened their belts—and the result is that, while they have got over the worst of their problems, our problems have got worse. So now we face not so much a world problem as a British problem—brought on by the action and inaction of the Labour Government.

Let us look very briefly at the score card after eighteen months of socialism:

First, prices. Inflation ran at over 26 per cent in the year to June 1975. The Wilson £1 in your pocket of March 1974 is now worth less than 75p. And all this happened at a time when world raw material prices were actually falling. A loss of over 25p in every £1. So prices have gone up under Labour twice as fast as in the last year of the Conservative Government when, unlike now, world prices went up by 70 per cent, and we had to absorb that increase.

Do you remember all those promises that socialism and subsidies would slash inflation? They have been proved wrong by the record: I am happy that Mr. Wilson should be judged on that.

And then consider unemployment. In February 1974, during the three-day week, unemployment stood at 629,000; now it stands at 1,087,000—the highest figure since March 1940—and it will go higher still. Over a thousand people have lost their jobs every day since the last General Election.

There is no room for anything but grave disquiet in setting out those figures. And I will be honest about them. They would have to have gone up for any Government to beat inflation.

But the indictment of Mr. Wilson is this. Unemployment will be much worse than it need have been because of what he and his Government have done. And because of what they have failed to do. [end p2]

Thousands of families will pay the price this winter for the Government's delay in tackling inflation. And for the blows inflicted on industry by their nationalisation programme.

But what is the Government's nationalisation programme? Let's look at it.

FIRST: The Industry Bill, adding £1,000 million to the burden of public spending.

SECOND: The Community Land Bill, initially costing the taxpayer £400 million.

THIRD: The Petroleum and Submarine Pipelines Bill, adding £900 million to public spending.

FOURTH: The Aircraft and Shipbuilding Industries Bill, adding £550 million to public spending.

These are bad enough. But the true measure of the Government's extravagance is even more horrifying.

For by April, 1976, total Government spending will have increased in just two years by nearly £400 for every man, woman and child in the country.

All these measures introduced at a time when inflation is running at 26%; When unemployment is rising at over 1,000 people a day. When Mr Wilson's March 1974 Pound is worth less than 75 pence.

When prices in nationalised industries rose by 42 per cent last year compared with 26 per cent overall. So inflation is weakening the victim that socialism will put to rest.

The victim is private enterprise remorselessly crushed between ever-increasing taxation and an all too rigid ceiling of price controls. [end p3]

The first essential is to restore an atmosphere of confidence in profitable private industry and to abandon The Industry Bill.

The Industry Bill is supposed, modestly, to be about “re-generating British industry” . A splendid aim—but how is it to be achieved?. According to the Government, by extending State control and ownership of industry. That's what the whole apparatus of the Bill is about. It even establishes the NEB National Enterprise Board to buy, for the first time, into profitable manufacturing companies, sometimes without reference to Parliament. This is the first time a Government has taken powers to take over profitable companies.

There was a time, certainly, in the 1940's when Labour politicians and sympathetic economists argued that nationalisation could be justified on economic grounds. Then, in the light of the performance of these industries, some of the faithful had doubts. Today, with the left-wing extremists making all the running, Labour comes back saying that if faith cannot move deficits, it can punish free enterprise for being free and enterprising.

Consider the whole post-war record of Government mismanagement of the nationalised industries. Consider their massive losses. Consider that nationalised industries have enjoyed a State guaranteed monopoly in many areas. The story faithfully told leaves the lamentations of Jeremiah the prophet looking like an exercise in public relations.

But it represents the actual record. I put that record against the fallacies of the Industry Bill. I put that record against the bombast of Ministers which accompanies every new nationalisation plan. [end p4]

Then there is the sheer size of the NEB which will surely defeat any attempt at really effective management or adequate Parliamentary accountability. British Leyland—or should we call it British Wasteland—employing 170,000 men will be just one of the NEB's chicks.

In such circumstances, there is no need to find shortcomings in Mr. Eric Varley. Anyone with less talent than a reincarnated consortium of Henry Ford, Attila the Hun, and Immanuel Kant will fall down on the job. The problem of giant companies is to be solved by creating monster bureaucracies. Some logic! Some solution!

You remember the old Clause 4 which Gaitskell tried to abandon: “The ownership of the means of production, distribution and exchange” . He knew the people did not really want it. But today's left wing, who dominate the Labour Party, are determined to have it. So much so, that the real motive behind the Industry Bill is the political one of resurrecting Clause 4, bringing it to its feet and setting it, slouching, towards Whitehall. [end p5]

Thus making it a reality by taking over as much as possible as fast as possible.

The Bill is not an affable piece of reform. It is the foundation charter of class warriors from the Tribune Group in Parliament, and the Morning Star Group in the unions and constituencies. Fudged or unfudged by the accepted amendments, it is rooted not in a desire to make a success of the mixed economy but in the doctrine of State ownership. Socialists pursue it for its own unprofitable sake. They pursue it for the power which it gives to a political Party, despite the wishes of the people.

The Government's theme seems to be: Socialist failure is better than any kind of free enterprise success.

Nor should anyone be deceived by the innocuous and pleasant sounding title of The Community Land Bill. Another measure of Socialist reaction which is set to cause so much grief. It should more properly be called the Land (Confiscation, Dispossession and Intrusion) Bill. Far from spreading the ownership of land and property amongst the ordinary people, it concentrates ownership in the hands of the State. As Mr. Crosland himself has said: “I have no doubts whatsoever that this will be the single most important—and the single most Socialist—measure to be implemented by this Labour Government” . (4 March 1975)

Under this Bill local Councils will be compelled to buy up all development land. No development will be able to start until the local Council has first bought the land, and then disposed of it to the developer. A recipe for endless delay.

There are at least four practical reasons why this Bill is bad, and why we condemn it.

First, the legislation will make things much more difficult for young married couples wanting to buy a home. Because such homes will become scarcer and dearer. [end p6]

For under this Bill, no trowel touches cement until the local Council has first acquired the land, almost certainly compulsorily, then languidly disposed of it to the builder. Already planning delays are adding anything up to about £500 to the cost of a new home. But instead of cutting these delays, the Labour Government have introduced a Bill which will make things take longer.

They mean to keep housebuyers in a nice tidy queue until the new regulations have been applied in proper form by a quorum of Councillors.

The Bill could affect the security of people's homes and gardens. Anyone who wants to sell their house could find that they would have to sell it to the local council. You can imagine the sort of price that would be paid. For where a local council decided to declare a special notification area anyone wanting to sell a home in that area would have to tell the council. They—the council—would then have four weeks in which to make up their mind whether to insist that the sale was made to them. Four weeks of uncertainty for the hapless seller.

Second, the Bill could well hinder the industrialist who wants to build a factory on land which he already owns, in order to provide more jobs. For before he can do anything, he might have to sell the land to the Local Authority at current use value. He will then have no guarantee that he will be able to lease it back for the purpose of his new works.

What a disincentive to a man who wants to create jobs, which we need in a country where unemployment is rising by over a thousand people a day.

Third, the proposed new law represents a major attack on the personal ownership of property. Under its terms anyone who owns land could have it compulsorily taken over by the Local Council at a knock-down price. Consider the jolly time which the Clay Cross Comrades would have had with these powers. [end p7]

Any objections on the grounds that the acquisition was unnecessary or inexpedient can be disregarded. Local Councils will have a complete monopoly of the buying and selling of land. Under the direction of the Secretary of State, they will be the sole arbiters of what developments may take place.

Fourth, this Bill will make it more difficult to get rid of inflation. As. Mr. Healey admitted, one of the main causes of our present problems is that both the central Government and the local Councils are borrowing far too much money.

But Mr. Crosland will greatly increase the debts of local Councils. For they will have to borrow the money for the purpose of buying up all development land and, in addition, they will have to employ a total of nearly thirteen thousand extra bureaucrats for the purpose of this measure. And this, at a time when the Government itself is asking for the utmost economy in public spending. First the Councils waste your money, then they waste your precious time!

Higher rates will be charged now to cover the cost of building your house later. The Bill is therefore directly contrary to the Chancellor of the Exchequer's announced strategy for combating inflation.

This Bill is both costly and harmful. If it should reach the Statute Book, a Conservative Government is pledged to repeal it. Beginning of section checked against ITN News at Ten, 15 August 1975 [end p8]

Third, another Bill, the Petroleum and Submarines Pipeline Bill—now that doesn't sound very harmful either but that's the Bill to take a major nationalisation interest in North Sea Oil, and many of us would say that it is as well North Sea Oil wasn't nationalised before, because you may remember that every single drop of it was found and is now being brought ashore without a penny of expense to the tax payer, all paid for by private enterprise. And what does this Government do but take up extra public expenditure to nationalise it? Does it start to encourage those who've done such a jolly good job? But says, “No, we're going to nationalise it,” and that will be a very expensive Bill indeed. Some put it at £900 million, others put it as high as £6,000 million, which is three times the price of Concorde. The truth is that all of these nationalisation schemes take precedence in the Government's mind over things like hospitals and schools which have to be postponed yet again because they are saying those nationalisation measures are more important than the other things. End of section checked against ITN News at Ten, 15 August 1975. [end p9]

The Government intends to exempt the BNOC from Petroleum Revenue Tax (paid by oil companies). Thus depriving the Exchequer of yet more oil revenue. And leaving Fred Citizen to pick up the tab at the next Budget.

Thus the British people will be expected to forego the benefits of off-shore oil over the coming four of five years, so that the State can nationalise a 51%; stake of the off-shore oil production. For what? So that the Government controls the industry? It already does so. All the extra controls to be placed on the oil companies will, under the Bill, be exercised directly by the Department of Energy without reference to the BNOC. As we have all, painfully, learned, the Government does not need to own something to control it.

The last of the Nationalisation Bills—the Aircraft and Shipbuilding Industries Bill will cost you five hundred and fifty million pounds.

And in a way it sums up the whole sorry saga because here, as elsewhere, Mr. Wedgewood Benn claimed that the industry was dying.

He forgot to mention that the Aerospace Industry, in 1974, produced a record export performance worth one thousand, five hundred million dollars. Yet Mr. Wedgewood Benn said that the industry could only be revived with your, the taxpayers' money. [end p10]

He claimed that the Government must take control because so much had already been given to the industry.

Yet of the £156 million that has gone to the shipbuilding industry since 1965, £115 million went to shipyards that were already nationalised.

I wonder how much more will have to be given once the whole industry leaves the ever-diminishing profitable sector to enter the deficit game, so hallowed by Socialists.