Abstract
Chapter 8 appraises Sir Keith Joseph as the leading proselytiser for ‘The New Conservatism’. Between June 1974 and December 1975, in what came to be called his ‘third crusade’, he tirelessly urged the adoption of an economic policy based on control of the money supply (‘monetarism’) rather than Keynesian deficit-financing, as the most effective means of controlling inflation. It then looks closely at the events which caused him to abandon any hopes he might have had of succeeding Heath as Party leader and introduces the Centre for Policy Studies, set up and used by Joseph as a vehicle for disseminating his ideas more widely.
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Notes
- 1.
D. Edgar, ‘The Free or the Good’ in R. Levitas (ed.), The Ideology of the New Right (Polity Press, Cambridge, 1986), p. 55.
- 2.
K. Joseph, Reversing the Trend (Centre for Policy Studies, London, 1975), p. 66.
- 3.
T. Congdon, Monetarism: An Essay in Definition (Centre for Policy Studies, London, 1978), p. 12.
- 4.
K. Joseph, Stranded on the Middle Ground? (Centre for Policy Studies, London, 1976).
- 5.
M. Halcrow, A Single Mind (Macmillan, London, 1989), p. 98.
- 6.
Some sense of the impact of the first Preston speech can be gained from a comment in the diary of Ronald McIntosh, Director General of the NEDC, for 5 September 1974:
I took Roy [Jenkins] to lunch…We spoke about Keith Joseph, who had made a major and in my view very high-quality speech about the need for a gradual return to ‘sound money’ policies if we are to get inflation under control. Roy said he entirely agreed with Joseph about the destructive effects of inflation and the need to give absolute priority to bringing it under control. (R. McIntosh, Challenge to Democracy (Politico’s, London, 2006), p. 140)
- 7.
Joseph, ‘This Is Not the Time to Be Mealy-Mouthed: Intervention Is Destroying Us’ in Reversing the Trend, pp. 5–10.
- 8.
Joseph, Reversing the Trend, p. 4.
- 9.
Joseph, Reversing the Trend, pp. 6 and 8.
- 10.
N. Vinson and M. Wassall, Why Britain Needs a Social Market Economy (Centre for Policy Studies, London, 1975).
- 11.
‘The concept of the social market was – like other terms of foreign provenance too literally translated – bedevilled with problems. How much was it simply a matter of restating the truth that only a successful market economy can sustain social improvement? How much did it signify a market economy with a high degree of “social protection”, i.e. regulation?’ M. Thatcher, The Path to Power (HarperCollins, London, 1995), p. 253.
- 12.
G. Howe, Foreword to F. Zweig, Germany Through Inflation and Recession: An Object Lesson in Economic Management (Centre for Policy Studies, London, 1976), p. vii.
- 13.
A. Denham and M. Garnett, Keith Joseph (Acumen, Chesham, 2001), p. 241.
- 14.
Though it never received the same degree of attention as Joseph’s Preston speech, Peter Lilley had argued the same case as Joseph was to make in a Bow Group publication three months previously. In Lessons for Power, Lilley had written ‘Conservatives must recognise the Trade Unions do not cause inflation. They may, by pricing workers out of jobs, create unemployment. But it is governments who create inflation, especially if they attempt to reduce unemployment by expanding demand.’ This followed Lilley’s request, in the Bow Group’s Alternative Manifesto published in 1973, for a government pledge ‘to keep monetary expansion from outstripping the growth in the economy’. Lilley was Bow Group chairman between 1973 and 1975 and went on to become Secretary of State for Trade and Industry from 1990 to 1992. J. Barr, The Bow Group (Politico’s, London, 2001), pp. 135–8.
- 15.
Skidelsky also thought the speech significant because of its identification of the ‘full employment commitment as the error from which the whole drift towards ungovernability [had] flowed’. R. Skidelsky (ed.), Thatcherism (Chatto and Windus, London, 1988), p. 14.
- 16.
Thatcher, The Path to Power, p. 255.
- 17.
Joseph, ‘Inflation is Caused by Governments’ in Reversing the Trend, pp. 25–31.
- 18.
Joseph, ‘Inflation Retards Growth’ in Reversing the Trend, p. 34.
- 19.
CPA, Keith Joseph (hereafter KJ) 30/2. No. 13. Speech by Joseph to Editors’ Dinner, Guild of British Newspapers, 11 April 1975.
- 20.
Congdon, Monetarism: An Essay in Definition, p. 1.
- 21.
Congdon, Monetarism: An Essay in Definition, p. 1.
- 22.
Halcrow, Keith Joseph: A Single Mind, p. 71.
- 23.
Thatcher, The Path to Power, p. 255.
- 24.
Congdon, Monetarism: An Essay in Definition, pp. 74 and 75.
- 25.
K. Joseph, Monetarism is Not Enough (Centre for Policy Studies, London, 1976).
- 26.
Joseph ‘compared himself with a prophet come down from the mountains. Indeed, there was an Old Testament ring to his cries of woe from the wilderness as he urged repentance from the wicked ways of socialism and beat his breast in immolation for his own part in the betrayal of the Conservative covenant’. P. Jenkins, Mrs Thatcher’s Revolution: The Ending of the Socialist Era (Jonathan Cape, London, 1987), p. 61.
- 27.
Employment Policy, HMSO, Cmnd 6502, 1944.
- 28.
The starkest argument against the adoption of a policy based on an arbitrarily defined full employment goal was set out by Milton Friedman in his 1967 address to the American Economic Association on ‘The Role of Monetary Policy’. A stable rate of wage increases, explained Friedman, produced ‘the natural rate’ of unemployment, the level at which there is neither excess demand nor supply in the labour market. To attempt, by stimulating demand, to drive unemployment below the natural rate, would result in money wage rises and price inflation. Governments could not, of course, know what the ‘natural rate’ might be at any one time and it was its ‘elusiveness’ which was for Friedman, the ‘true refutation of the demand management approach’. Congdon, Monetarism: An Essay in Definition, pp. 25–6.
- 29.
In which respect, see Wal Hannington, Ten Lean Years (Gollancz, Left Book Club, London, 1940).
- 30.
Joseph, ‘Recovery without Inflation’ in Stranded on the Middle Ground?, p. 52.
- 31.
Joseph, ‘Inflation is Caused by Governments’ in Reversing the Trend, p. 21.
- 32.
CPA KJ 30/2, No. 22. Joseph speech to Young Conservative members of Holborn and St. Pancras South Conservative Association, London, 22 August 1975.
- 33.
Joseph, ‘Inflation: The Climate of Opinion is Changing’ in Stranded on the Middle Ground?, pp. 9–11; Attack on Inflation: A Policy for Survival, A Guide to the Government’s Programme (HMSO, London, 1975).
- 34.
J. Callaghan, Time and Chance (Collins, London, 1987), pp. 426–7.
- 35.
A. Gamble, ‘Economic Policy’ in H. Drucker et al. (eds), Developments in British Politics (Macmillan, London, 1983), p. 140.
- 36.
Joseph, ‘Recovery Without Inflation’ in Stranded on the Middle Ground?, p. 55.
- 37.
P. Addison, The Road to 1945 (Cape, London, 1975), pp. 270–8.
- 38.
Joseph, ‘The Quest for Common Ground’ in Stranded on the Middle Ground?, pp. 20–1.
- 39.
‘I agreed with Keith Joseph that the “centre” ground of politics had moved steadily leftwards, and I attributed this principally to the lack of moral courage of those who prided themselves upon being “moderates”. Time and again, these people had been prepared to compromise and adjust their positions; and, as a result, socialism had continued its onward march through our institutions.’ Thatcher, The Path to Power, pp. 439–40.
‘Fairly typical of the mood around this time was an argument I had with Margaret which did become more ferocious than usual. In the end, I had to say that I was sorry but I had to leave. To add a little salt to the wound, I added that the reason I had to leave was to attend the re-launch of Harold Macmillan’s book The Middle Way. She looked at me and said “Standing in the middle of the road is very dangerous, you get knocked down by traffic from both sides.” Not particularly original, but it was an insight into her outlook.’ J. Prior, A Balance of Power (Hamish Hamilton, London, 1986), p. 106.
- 40.
Joseph, ‘The Quest for Common Ground’ in Stranded on the Middle Ground?, pp. 20–34.
- 41.
S. R. Letwin, The Anatomy of Thatcherism (Fontana, London, 1992), p. 54.
- 42.
The Times, 28 July 1976.
- 43.
CPA KJ 30/2, No. 11. Joseph speech to National Association of Conservative Graduates, Oxford, 14 March 1975.
- 44.
Joseph, ‘Conservatives and the Market’, Reversing the Trend, p. 70.
- 45.
CPA KJ 30/2, No. 17. Joseph speech to Cathcart Conservative Association, Glasgow, 7 May 1975.
- 46.
CPA KJ 30/2, No. 13. Joseph speech to Editors’ Dinner, 11 April 1975.
- 47.
M. Biddis, ‘Thatcher: Concept and Interpretations’ in K. Minogue and M. Biddis (eds), Thatcherism: Personality and Politics (Macmillan Press, Basingstoke, 1987), p. 13.
- 48.
Joseph, Stranded in the Middle Ground?, p. 33.
- 49.
Joseph, Stranded on the Middle Ground?, p. 32.
- 50.
CPA KJ 30/2. No. 13. Joseph speech to Editors’ Dinner, 11 April 1975.
- 51.
Joseph, ‘The Politics of Political Economy’ in Reversing the Trend, pp. 55 and 56.
- 52.
According to Thatcher, speaking later in 1975 and using very similar language, ‘The pursuit of equality [was] a mirage…Those who wanted equality had an “undistinguished combination of envy and what might be called bourgeois guilt”.’ Quoted in C. Moore, Margaret Thatcher: The Authorised Biography. Volume 1. Not for Turning (Allen Lane, London, 2013), p. 316.
- 53.
K. Joseph and J. Sumption, Equality (John Murray, London, 1979), pp. 29 and 30.
- 54.
Joseph and Sumption, Equality, pp. 119–26.
- 55.
CPA KJ 30/2. Joseph speech, Grand Hotel, Birmingham, 19 October 1975.
- 56.
There was history between Joseph and Field. Joseph had attended CPAG meetings since the mid-1960s, some years before Field became director in 1969. Bovis Holdings had provided the organisation with funding, though Joseph himself may not have been a benefactor. One notable speech by Joseph at the time of the Vietnam War had predicted that ‘if one tenth of the moral energy generated by members of Parliament about Vietnam’ was redirected, poverty could be conquered. When, therefore, he became Secretary of State for Social Services in 1970, he was looked on as a likely supporter of CPAG’s campaign for an increase in family allowances which they believed had been promised in the Conservative election manifesto. But when then Chancellor Iain Macleod introduced instead a means-tested Family Income Supplement scheme, with Joseph’s approval, the latter came to be regarded by Field as a broken reed. Denham and Garnett, Keith Joseph, pp. 200–3.
- 57.
‘Tory messiah as social engineer’, The Economist, 26 October 1974, pp. 13–4.
- 58.
S. Ball and A. Seldon (eds), The Conservatives in Opposition Since 1867 (Palgrave Macmillan, Basingstoke, 2005), p. 232.
- 59.
Halcrow, A Single Mind, p. 189.
- 60.
P. Oborne, ‘The Problem of Integrity in Modern Politics’, the 2009 Keith Joseph Memorial Lecture, delivered on 4 March 2009 at the Centre for Policy Studies. http://www.cps.org.uk/events/q/date/2009/03/04/the-2009-keith-joseph-memorial-lecture/.
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Caines, E. (2017). Keith Joseph’s ‘Third Crusade’. In: Heath and Thatcher in Opposition. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-60246-6_8
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