I do not know if this minority Labour Government, voted into office by less than 30 per cent of the nation, ever truly spoke for Britain. But if it ever did, it certainly doesn't today.
This is a land still alive with energy and enterprise—but energy suppressed, enterprise stifled. Is there any objective observer with experience of the British people who seriously questions this?
Among the countries of the European community, ours is the best endowed with natural resources. Our people have great skills and immense creative talent. There is a longing to put these national assets to good use, to show the world—and serve the world. We should be at the forefront in the community of nations. But where are we under Labour? Balefully bringing up the rear. Today, our status as a second-class country is all but confirmed.
As the old year moves to its end and the new year offers the traditional hope of a new beginning, there are one or two things that I would like to stress, so that the Conservative position cannot be misunderstood.
We Conservatives are clear where we stand. We share the deep concern of our people about the inflation which has taken place particularly under Labour. We regard its reduction as our first priority. We agree with the Government's aim; we do not agree with its methods. In particular, we do not agree with the rigid, fixed 5 per cent guide-line—a policy no sooner announced by the Labour Government than denounced by the Labour Party. We felt from the start it would be an expensive and destructive exercise. That is exactly what it has turned out to be. [end p1]
Mr. Callaghan and those who supported him (now, I notice, diminished in number) are stuck with a policy for which no preparations had been made, about which no real discussions had taken place and whose implications no one had thought through. It is a policy that suffers from the one defect that in politics is always fatal. It doesn't work. Indeed, it can be deeply damaging, causing strikes and, as we saw at Fords, settlements higher than would otherwise have been agreed.
Attempts were made to enforce this ill-conceived policy by sanctions: sanctions which were applied on the whim of a Minister, wholly unauthorised by Parliament.
Last week saw Labour's moment of truth. On Wednesday the Government was defeated—twice. Thanks to our persistence, the policy of Arbitrary Sanctions was condemned and, according to the Prime Minister, has now been abandoned.
So much for Labour's disastrous handling of the economy. What is the Conservative alternative?
Our policy on incomes was set out more than a year ago in our published paper “The Right Approach to the Economy” . It remains our policy today.
Of course, any policy on pay is meaningless unless it is part of a wider approach. By which I mean it must be taken together with restraint on Government spending, restraint on Government borrowing, less taxes upon earnings, more incentives, strict control of the money supply; and above all, productivity—genuine, not bogus productivity.
We live in a complex world, a world too complex and too varied to be treated in terms of fixed, inflexible percentages. Short-term solutions that lead only to long-term anomalies are no solutions at all.
The fact is that years of Socialist measures have driven this country down to a point where it is hard to justify any increase in wages based on the production we actually achieve. Unless we are to sink even further, our policies must be as much concerned with wealth creation as they are with wage restraint. [end p2]
This is something that Labour can never seem to grasp. Perhaps the coming election will concentrate their minds. This nation will be looking for the Party that will start our people firmly back on the road to prosperity, not choosing between rival liquidators for a near bankrupt concern.
The Conservative Party lays no claim to easy answers or overnight solutions. What it does lay claim to is what Labour has totally lacked, a proper balance between restraint on the one hand and incentive on the other.
Let me remind you of the main features of our approach: 1. Strict control by the Government of the rate of growth of the money supply. 2. Firm management of government expenditure, to reduce the burden on the economy and leave more in the pockets of the people. 3. Lower taxes on earnings, on capital and on savings. 4. The removal of needless and frustrating restrictions on business expansion, so that new firms are encouraged to grow, to provide new work, new jobs. 5. Recognition in both public and private sectors of the need for varied rates of pay with increases which reflect supply and demand, skill, effort, experience, risk and the employers' capacity to pay. 6. Open discussion—and explanation—between Government, employers, unions and all interested parties, so that people know what is happening and why. It must be made clear that a solvent nation like a solvent business can operate only within certain inescapable financial constraints.
That was the policy that we spelt out over a year ago. It was right then; it is right today.
It sets out the essential economic requirements for the recovery of Britain. Equally essential to national recovery is a responsible trade union movement. [end p3]
Trade unions are historic institutions. They have many achievements to their credit. We Conservatives count millions of trade unionists among our political supporters and an increasing number among the active workers for our cause. It is neither our purpose nor our interest to damage these institutions or their members.
However, there is no disguising the damage that some trade union practices and some trade union policies and some trade union leaders are doing to the nation—including many of their own members.
The truth is that this country has one of the worst records in industrial production in the Western world. And the balance of power in normal wage bargaining has been tipped dramatically away from management towards the Unions. These two facts are not unconnected.
These trade union trends may have their origins in the past, but they have been given an almighty push by legislation passed by this Labour Government. Power and responsibility no longer march together.
All this cannot be quickly or easily changed. In the past both Parties have tried. Neither has succeeded. As the situation has worsened, so the reputation and standing of the trade unions has declined. Today, union power is feared, sometimes even by union members. There is grave public distrust about their willingness to bargain responsibly. It is as much in the interests of the unions themselves as of the public that a start should be made towards finding a remedy for these problems which are daily becoming more pressing.
We intend to make that start.
The Labour Party is financially dependent on the unions. We are not. Neither the Unions, nor business, nor any other powerful vested interest has a special or privileged position in our National Executive or our Party Conference. [end p4]
When we are in Office we will not introduce legislation designed to strengthen militant trade union extremists at the expense of the majority of trade unionists. We will not impose upon management the sort of participation deliberately designed to weaken still further its authority. We shall need all the leadership responsible management can provide.
We will look at recent trade union legislation, in the light of experience, to see what amendments are needed. For example, we are deeply concerned at some aspects of the closed shop, particularly in cases where it can take a man's job away from him without compensation. We are also considering ways to extend the secret ballot, so that what a member of a union genuinely feels about a course of action taken in his name, he can freely but privately express.
These things we will do but we are well aware that many trade union leaders are conducting negotiations every day in this country with a complete sense of responsibility and a proper regard for the interest of the firms in which they work and of the future welfare of their own members. We will consult together in the knowledge that there are prizes to be won, not only by the public but by the unions themselves, if sensible reform can be achieved.
That will be the calm and undramatic approach of the next Conservative Government.
Society is not changed by laws alone; far too many have recently been enacted. It also needs a change in public opinion. As it sees Labour's policies collapse, public opinion is, I believe, moving to our way of thinking. Beginning of section checked against BBC Radio News Report 1800 18 December 1978
We shall invite the Unions to join with us in building the new and prosperous Britain we all want. We shall not “bash” the Unions. Neither shall we bow to them. [end p5]
Higher wages—real wages, not just paper money—must come not from holding the country to ransom but from raising productivity and reducing restrictive practices.
In the long run, unions can only prosper when the nation prospers—and vice versa. As the song about love and marriage pointed out: “This I tell, you, Brother, you can't have one without the other.” End of section checked against BBC Radio News Report 1800 18 December 1978
Once they are convinced of this simple truth, the unions can regain the confidence and trust of the public and a whole new social climate can be created.
Under a Conservative Government this will go hand in hand with a new economic climate—a climate of opportunity and enterprise. Less tax, less regulation, more flexibility, more freedom.
These will be our guidelines. “Free for all” —No. “Freedom under the law for all” —Yes.
“Set the people free!” , cried Churchill in 1951. He did—and for thirteen years under Conservative Government, the nation and the unions prospered.
Once more we say, “Set the people free!” And once more, come the new Conservative year, we shall do just that.