THE RENEWAL OF BRITAIN

The Conservatives as a British Party

Britain is a great nation.

The Conservative Party is proud of our national past.

We still acclaim the scientific and technological innovations to which Britain gave birth and which ushered in the industrial and scientific age.

We can look back at the history of our Empire in the confidence that it was not a scourge to other peoples, but contributed to the well-being of mankind.

It brought peace, law and dramatic development to a quarter of the globe.

We have given to the world the English language, which is now close to being to the modern world what Latin was to the ancient.

We know that our literature is a general inspiration.

We rejoice that Britain is still respected in all free countries as the “Mother of Parliaments” and the custodian of the principle of the rule of law.

Unlike the Socialists, our policies have never been merely a local version of an international creed; they have always been and remain British policies, for application within the framework of British institutions, which have evolved slowly since Saxon days.

That slow organic growth has endowed our political life with a special virtue, offering a moral as well as a political example to mankind.

We in our Party are certain that we belong to a “happy breed” , as Shakespeare put it [end p1] in the mouth of John of Gaunt.

The crisis in the Nation

We can still echo, in our time, much else in John of Gaunt's great deathbed speech.

We should, however, read it to the end.

For Gaunt died regretting that this “dear, dear land—dear for her reputation through the world” was

“leas'd out … bound in which shame, with inky blots and rotten parchment … (Britain) that was wont to conquer others (Had) made a shameful conquest of itself” .

In the last few years, British patriots have, once again, had cause, as John of Gaunt did, to feel ashamed of the way that the nation was being directed.

We know that Britain has been in dire straits before, and that she has recovered.

She will recover again.

But that recovery depends on a recognition of just how far we have fallen.

When we took over the Government on 4th May, we found a nation disillusioned and dispirited.

That was, I believe, the inevitable outcome of the Labour Government's socialist approach.

Last Winter, there can have been few in Britain who did not feel, with mounting alarm, that our society was sick—morally, socially and economically.

Children were locked out of school; patients were prevented from having hospital treatment; the old were left unattended in their wheelchairs; the dead were not buried; and flying pickets patrolled the motorways.

Mr. Bill Dunn seemed to express the spirit of January 1979 when he said, of the ambulance men's pay demands, if “lives must be lost, that is the way it must be” .

I do not wish to dwell unnecessarily on the human failings of individuals and of the last Government.

Nevertheless, we should not allow ourselves to lose a vivid memory of what happened, and of the reversion towards barbarism that took place. [end p2]

We ought to look searchingly at the causes of those events, so as to be able to achieve a more authentic, a more humane and a more successful British way of life. If we take the long view of the antecedents of the events of last Winter, we note the dominance in British intellectual and political life, over a generation and more, of collectivist theory.

Theorists of Socialism, like Laski, Tawney and their followers, motivated by a genuine desire for social justice, elevated the State as an instrument of social regeneration.

Simultaneously, Keynes and later various schools of neo-Keynesian economists, exalted the role of Government and humbled the role of the individual in their pursuit of economic stability and prosperity.

The events that we witnessed last winter, mark, I believe, the failure of these collectivist approaches.

The desire to bring about a society which promotes greater human fulfilment is not the monopoly of any one political party.

I acknowledge, readily, the sincerity and generosity of some Socialists.

However, I believe that the Socialist approach is based upon a moral confusion which in practice is profoundly damaging.

The moral fallacy of Socialism is to suppose that conscience can be collectivised.

One sees this fallacy most plainly in Marxist theory.

Marxists are quite unable to say why a proletarian revolution, a hate-filled and violent act of expropriation, should be morally cleansing and lead to a better society.

Their failure in theory has been heavily and tragically underlined by the reality of life in 20th century Marxist states.

But the gentler proponents of Socialism who stop short of subscribing to the full Marxist view of history, are equally unconvincing in their view of human nature.

Experience has shown the practical failure of two fundamental Socialist arguments:

that nationalisation is justified because it makes economic power accountable to the people whose lives it affects; and that State planning can point to better ways forward than can be charted by free enterprise. [end p3]

The Socialists had grossly expanded State intervention in the economy.

They were going so far as to claim that the State should have monopoly rights in the provision of health and education.

It is certainly the duty of Government to do all it can to ensure that effective succour is given to those in need, and this is a Conservative principle as much as a Socialist one.

Where Conservatives part company from Socialists is in the degree of confidence which we can place in the exclusive capacity of a welfare state to relieve suffering and promote well-being.

Charity is a personal quality—the supreme moral quality—according to St Paul, and public compassion, state philanthropy and institutionalised charity can never be enough.

There is no adequate substitute for genuine caring for one another on the part of families, friends and neighbours.

I think that this proposition would be widely accepted.

And yet the collectivist ethos has made individuals excessively prone to rely on the State to provide for the well-being of their neighbours and indeed of themselves.

There cannot be a welfare system in any satisfactory sense which tends, in this way, to break down personal responsibility and the sense of responsibility to family, neighbourhood and community.

The balance has moved too far towards collectivism.

In recent years, it has been quite widely held to be morally wrong for the individual to choose to make his own provision for the education of his children or the health of his family.

Yet if the State usurps or denies the right of the individual to make, where he is able to do so, the important decisions in his life and to provide the essentials for himself and his family, then he is demeaned and diminished as a moral being.

We need, therefore, to achieve a better balance between the spheres of public and private activity. [end p4]

The imbalance that Socialism has brought about is, I believe, part of the explanation for the irresponsibility and the inhumanity displayed by too many people last winter.

The wanton expansion of the State's responsibilities had been accompanied by a great drop in public spirit.

Excessive public spending had (as usual) bred great private discontent.

Meantime, it was widely assumed that no large enterprise could be managed successfully without the help of the State.

Private philanthropy and voluntary organisations were undermined.

Heavy taxation had lowered fiscal morality.

The malignant tumour of the so-called black economy was growing.

We seemed to be losing our moral standards as well as our competence.

Then, partly as a result of high taxation, the idea of work well done had almost been forgotten.

“Try to do any bit of work as well as it can be done for the work's sake” , wrote C.S. Lewis.

But that injunction seemed, in the last few years, to have become little more than a memory.

Foreigners visiting this country shook their heads sadly when they remembered a resolute, industrious and great-hearted Britain which once had seemed to be able to move both “earth and Heaven” .

Our industrial life seemed marked by petty labour disputes which were often both self-destructive and humiliating.

The time spent by works managers upon Trades Union matters of a non-productive nature might be half of their day's work.

That was one reason for the failure of Britain both to gain and to fulfil export orders.

Yet the Trades Union movement was also rent by rivalries.

When its leaders, during the period of the last Government, seemed at their most [end p5] powerful, they were also least effective in representing the true interests of their members.

What did all this mean for our country?

It meant that the 1960s and the early 1970s became the great age of the countries which suffered defeat in the 1939/45 War.

The peoples of Germany and Japan, and also of France, worked together to restore their countries, and then to move ahead.

They did not behave as if the world owed them a living.

In Britain, we spent too much time dividing up the cake and pursuing petty sectional interest.

So although we had won the War, we let other countries win the peace.

For a long time, too, many leaders of the Labour Party refused to recognise the reality of British decline, to which they had contributed more than their fair share.

They seemed blind to the evident truth that, all over the world, capitalism was achieving improvements in living standards and the quality of life, while Socialism was causing economic decay, bureaucracy and, when it took authoritarian or totalitarian forms, cruelty and repression.

Before our eyes, we see the pathetic exodus from Vietnam, where Mothers prefer their children to face the perils of wind and storm in open boats, rather than the slavery imposed by Hanoi.

Our decline has not been only economic.

Our defences have been allowed to fall below danger level.

There has been a failure to mount, let alone to sustain, a real war against crime and against the criminal.

For the first time, in generations, large numbers of people have come to be fearful for their personal safety.

Why we gained power

We won the Election on 3rd May because we pointed out these tragic shortcomings to the electorate.

We believed that we could inspire the renewal of our past faculties and ingenuity. [end p6]

We communicated that belief to the people.

We talked of the need for renewal of our traditional craftsmanship and civic spirit; renewal at every level, and in every profession, of our old vigour and vitality.

The extent of our decline compared with other countries may show up most clearly in economic statistics.

But that does not mean that the remedy lies only in economics.

The economics will come right if the spirit and the determination is there.

The mission of this Government is much more than the promotion of economic progress. It is to renew the spirit and the solidarity of the nation.

To ensure that these assertions lead to action, we need to inspire a new national mood, as much as to carry through legislation.

A new climate of opinion

At the heart of a new mood in the nation must be a recovery of our self-confidence and our self-respect.

Nothing is beyond us. Decline is no inevitable. But nor is progress a law of nature. The ground gained by one generation may be lost by the next.

The foundation of this new confidence has to be individual responsibility.

If people come to believe that the State or their employer or their union owe them a living; and that, in turn, the world owes Britain a living, we shall have no confidence and no future.

It must be quite clear that the responsibility is on each of us to make the full use of our talents and to care for our families.

It must be clear, too, that we have a responsibility to our country to make Britain respected and successful in the world.

The economic counterpart of these personal and national responsibilities is the working of the market economy in a free society.

I am sure that there is wide acceptance in Britain, going far beyond the supporters of our Party, that production and distribution in our economy is best operated through free competition. [end p7]

A basic function of Government is to ensure that this market remains in being.

The Government must be responsible, too, for ensuring the maintenance of social cohesion through the support of established customs and traditions.

Governments can animate industry but they should not seek indefinitely to sustain it.

Governments can purify the stagnant and corrupt parts of an economy and correct irregularities in the market, but they should not seek to regulate the market itself.

Governments may provide certain goods or services which cannot easily be supplied competitively, but they should accept that one of their essential tasks is to define their limitations and those of the State. [end p8]

Conservatives must work to make the idea of society so defined and so inspired as attractive as once it used to be and as it still is in other more successful nations.

We need, for example, to create a mood where it is everywhere thought morally right for as many people as possible to acquire capital; not only because of the beneficial economic consequences, but because the possession of even a little capital encourages the virtues of self-reliance and responsibility, as well as assisting a spirit of freedom and independence.

Some may suggest that Britain, though economically in decline, is leading the way to some kind of post-industrial life. Well, there were few signs last winter that Britain had any unique capacity for growing poor gracefully.

“Zero growth” , too, would probably mean that those in the prime of their working lives would have to accept cuts in their living standards in order to maintain the present level of assistance to the old, the poor and the sick. Pre-occupation with “zero growth” it seems to us, is little more than a fashionable self-indulgence on the part of people who are already well off, or who are still young enough to be without responsibilities. [end p9]

The economy, the Budget and the Trade Unions

The actions of Government have to sustain and foster the new mood of greater freedom with greater responsibility.

After two months in office, let me give you some examples of steps we have taken already to achieve this.

We have begun to make it much easier for Council tenants to buy their homes and thus change their status from dependence on the Council to independent property—owning citizens. This will help to realise the wish of one of the most humane of 19th century Conservatives, Lord Shaftesbury, who believed that ideally every citizen should own his own house.

We have prevented a further slide in education standards, by halting the undesired destruction of Grammar Schools.

We have begun the business of refurbishing the good name of Britain abroad. We are beginning to ensure that our nation makes a more worthy contribution to the defence of the West by increasing the pay of the Armed Forces and modernising military equipment. And we are showing the European Community that we intend to fight Britain's corner as well as or better than any Government, while remaining constructive members of the Community.

The Budget

Then, in Geoffrey Howe 's first Budget, we took a major step towards restoring freedom of choice and a sense of responsibility.

Inflation

We see it as a first duty of responsible Government to re-establish sound money and to squeeze inflation out of the system. So the Budget set a framework of firm monetary discipline and control of the money supply. That meant a limit on public borrowing and strict control over public expenditure. I am afraid, it also meant high interest rates for a time, until the measures we have introduced take effect.

This framework of Government financial responsibility needs to be matched by private sector responsibility. [end p10]

Each helps and underpins the other. In particular, employers and Trade Unions need to understand that this Government will not print money to bail them out if they make irresponsible pay settlements. Higher pay needs to be matched by higher output. If it is not, it will lead only to higher unemployment and higher prices.

One of the great curses of inflation is that the whole nation spends more of its time wrestling with the changing value of money and arguing about the distribution of incomes and wealth, than it devotes to productive effort and creative management. In industry, in commerce, in house-keeping, inflation means more and more uncertainty; uncertainty about investment, about saving, about incomes, about the timing of spending.

In this climate, it is easy to have a grievance, and tempting to try to steel a march on others.

There is no sound foundation for steady expansion unless the country is winning the fight against inflation. That is why the Budget had to do two things. It cut public expenditure and it cut the slice the Government was taking from everyone's pay packet. Too much tax makes people feel poorer and tempts them to make bigger pay claims, especially at a time of low growth. High public expenditure tempts Governments to print money, rather than impose high tax. Both these things—high public expenditure and high tax—can therefore lead to inflation.

That is why the Budget set out to restore meaning to money, to restore financial responsibility to Government and to give more freedom of choice to the individual.

Direct Tax

The Budget cut income tax in three ways. First, we raised the thresholds so as to take 1.3 million people out of tax altogether. Second, we cut the basic rate of income tax from 33p to 30p in the Pound. Together with the improved personal allowances, this gives benefit to millions of taxpayers, and it reduces tax on every extra pound earned. It is an encouragement to effort. And the Chancellor made it clear that our long-term aim was to reduce the basic rate to 25%;. [end p11]

Thirdly, by reducing the top rate of tax on earned income to 60%;, we began to restore to the industrious and to the inventive the encouragement they need to work and to create work for others. Nations depend for their health, economically, culturally and psychologically upon the achievements of a comparatively small number of talented and determined people, as well as on the support of a skilled and devoted majority. It was not possible for many of these talented people to believe that we valued them and what they could do for our nation, when we maintained penal tax rates, decade after decade, in order to please those who seemed to be motivated mainly by envy. We have given a new sign of appreciation to talent and brought our top tax rates into line with those of other major countries.

Meanwhile, the switch from direct to indirect taxation in the Budget increases freedom of choice. It is also consistent with our view of the importance of the market. We leave people with more of their own incomes and levy more tax on spending. And a smaller reliance on income tax means a smaller advantage to the tax-dodging black economy, and is therefore fairer to income tax payers, who abide by the rules.

I must make it clear that this Budget provides no justification whatever for higher pay claims. On the contrary, taking account of the income tax reductions as well as the indirect tax increases, a family on average earnings will be better off over the period between the Budget and the end of the financial year. They will be paying about £2.75 a week more for what they buy (3¾%; on the R.P.I.) because VAT has gone up. But they will have about £4 a week more to spend (equal to 5½%; on the R.P.I.) because of the income tax reductions.

It would be quite wrong, therefore, to base pay claims on the full RPI increase without giving credit for the increased net take-home pay. [end p12]

So in this Budget we have:-

—cut back the amount Government takes from the pay packet;

—enlarged freedom of choice and signalled encouragement to effort and talent;

—given incentives to raise living standards;

—more than off-set the increase in VAT by increased take-home pay.

We have done this in spite of major inherited problems. These included inflation already increasing before the election; a sharply rising public deficit; several large post-dated cheques for public sector pay; output of goods actually 4%; below the level of 1973; and less than ten months of the financial year in which to correct the situation and to implement reductions in public expenditure.

Since the Election we have been examining all other possible measures which we might take in order to accelerate our national revival. During the next year, we will introduce new measures designed, specifically, to encourage effort and enterprise.

We will remove some of the regulations and red-tape which have accumulated to such an extent that some who might otherwise have been working to create wealth and employment gave up in despair. But though leadership can inspire, no Government, by itself, can supply the vital spark which has been removed from this nation. The ideas which will make for better lives for everyone in ten years' time are now in the minds of countless individuals. Many such ideas are locked up there for the moment. If we can create the right national mood, those ideas will flourish.

The Trade Union Movement

I believe it is entirely in the interest of the Trade Union movement to play a major part in this national revival and to put all their great weight behind better national economic performance. Like all of us, their members stand to gain from a stronger, more efficient, more united Britain. We all stand to lose from tactics which make Britain weaker. [end p13]

It is because part of the Trade Union movement seems to have lost sight of this, that the movement has become unpopular with the Electorate, and has lost much of its old moral authority. If some Unions continue to act as an engine of inflation, and a drag on improvements in industrial efficiency, they will go on alienating themselves from the people, including those whom they represent.

They will go on losing authority—and looking more and more old-fashioned to unions in other more successful countries.

We know that the Trade Unions as a whole do not want inflation. But sometimes the few set the pace with claims which bear no relation to increased output. Then the many feel obliged to follow the few and the whole process leads to higher unemployment and inflation.

It is a patent contradiction for any who take a leading part in this exercise to urge the Government to treat pensioners more generously when it is the inflation which they have helped to create that diminishes the value of the pensioners' money.

To claim a social conscience in these circumstances can fairly be described as humbug.

I do not believe that this is the approach of the majority of the Trade Union leaders, still less of their rank and file members. I believe they can respond to the opportunity of free but responsible pay bargaining which we offer and intend to pursue. It is greatly in Britain's and in their interest that they should do so.

The philosophical tide

In our actions to renew the vitality and strength of our nation, we are sustained by the knowledge that we ride on the crest of a philosophical tide, which we know to be flowing with us.

The new generation of British patriots knows, that in emphasising anew the decisive importance of the rule of law and in re-defining the proper boundaries of the state, they are acting within a western world where those ideas are, once more, becoming imperative. [end p14]

Everywhere there is a crisis of Socialism. Everywhere a confirmation that capitalism produces freedom and prosperity. Everywhere there is a demand, we sense, for firm and traditional Government.

Conclusions

My theme here has, as it were, four heads. The first is articulated by the word “opportunity” —opportunity for individuals to develop all their talents to the full, and so benefit themselves and others.

The second is expressed by the word “choice” . Individuals must be able to make up their own minds for themselves, as to the kind of lives which they wish to live. People must be free to choose, if they wish, between wisdom and folly. We are, after all, very different in our skills, temperament, capacity for decision, and capacity for courage.

The third theme is summed up in the word “strength” . We need to be strong enough to protect our people from wreckers at home and enemies abroad, and also to protect our citizens against crime. Weakness leads to ruin. We must be strong enough to insist that the institutions of our nation are refurbished so that we can pass to those who come after us the treasures which we have inherited from those who have gone before.

My fourth theme is expressed well by the word “renewal” . Here we know that the restoration of the confidence of a great nation is a massive task. We do not shrink from it. It will not be given to this generation of our countrymen to create a great Empire. But it is given to us to demand an end to decline and to make a stand against what Churchill described as the “long dismal drawling tides of drift and surrender, of wrong measurements and feeble impulses” . Though less powerful than once we were, we have friends in every quarter of the globe, who will rejoice at our recovery, welcome the revival of our influence, and benefit from the message and from the example of our renewal.

Our recovery will give to all the free world a new hope and a new optimism. It will be not only Conservatives and not only British people who will then feel able to say with Tennyson:- [end p15]

“We sailed wherever ship could sail, We founded many a mighty state, Pray God our greatness may not fail, Through craven fears of being great.”