Speech to the Fraser Institute (“The New World Order”)

Margaret Thatcher Foundation -

THE NEW WORLD ORDER

[ Michael   Walker] Mr. Chairman,  [ Alan   Walters] Alan, ladies and gentlemen. First may I wish you a very happy 20th anniversary of The Fraser Institute. I’m delighted to be here to spend it with you, and to honour the great work which you have done. The Fraser Institute is very similar to the Institute of Economic Affairs in London, which had a tremendous influence on the whole of economic and political thought in Britain. Second, I’m delighted that  Alan   Walters of your Editorial Board was here to share it with us. He was my economic adviser, and we wouldn’t have got it right without him. When he mentions that 364 economists were against him, they didn’t matter at all; it was the half-dozen led by  Alan   who were with us who prevailed.

I find, as I have been interviewed in Canada, in the few brief hours I’ve been here this time, that all commentators seem to regard one as something of a phenomenon because one set out in politics with convictions. They don’t quite understand that. They say “Well, here we have pragmatism.” To this I say, if you are embarking on a great voyage across the oceans, you have to have some stars to steer by, and the stars have to be constant. It’s no good steering by shooting stars. So, yes, I had convictions.

I would have liked to have read to them a favourite quote, but I hadn’t got the quote with me, but I’ve got it now. It’s a quote of a French 19th century politician, who said: “There go my people. I must find out where they are going so that I can lead them.”

Well we didn’t start that way. We knew where we were going, we knew the reason why, and we were prepared to persevere until the policies showed good results.

The other thing that I find, is that your commentators are all sold on the idea that politics is the art of the possible. Now my friends, if you take that view in any sphere of life, you will soon lower your sights as to what is possible.[fo 1]

The task that I had ahead of me was enormous, because Britain in 1979 was a country not only in decline but whose people had accepted decline. The task upon which I embarked was to say, politics is the art of making the impossible happen. And that is precisely what we did. I would like in the time available to consider just three examples of making the impossible happen.

I’m going to start off with the economic side of politics. You must get your economics and the enterprise right. For, if you do not, first you’ll have no standing in international affairs, and secondly no one else will listen to you at all. So we knew we had to get the economy right. We had to do four things pretty well immediately.

First, we had to get the rate of income tax down. When I took over, the top rate of income tax on earnings was 83 percent, and the standard rate was 33 percent—that was much too high. I believed in incentives, and so in the first budget that had to come down immediately and we had to pick up the lost revenue by indirect taxes. Nevertheless, with the extra incentive, people right through the whole piece began to work with more will when there was something to work for. When they knew full well that the lion’s share of the earnings would go to them, to enable them to look after themselves and their families and their future standard of living.

Next, we were all tied up with far too many regulations. Even my own party had been prone to enact more regulations. You couldn’t determine your prices; there was a Prices Commission. You couldn’t determine your incomes; there was an Incomes Commission to determine what was the norm for increase in wages, regardless of the performance of the country, of the company. You couldn’t, in fact, determine your dividend, and you couldn’t get the amount of foreign exchange that you wanted. You couldn’t develop your factories where you wanted to because there were Development Certificates.

All of these things went in our very first budget, which was three weeks after we’d taken over. And even some of my best friends said, “Oh come off it, don’t you think you’re going a bit fast?” I tell you that because it is surprising how socialism penetrates even good Conservatives sometimes.

Well now those were the first two things, but that wasn’t the end. We had to tackle trade union law. The trade unions had virtually taken over Britain. It had been strike after[fo 2] strike after strike. And gradually I noticed that the trade unions began to understand that although any one of them could attempt to bring Britain to a halt, none of them could protect their own members from the ravages of another trade union. There lay my hope and in the belief I had that most people would far rather go on working, doing a decent day’s work for a decent day’s pay, given the chance, than they would come out on strike.

I had a great deal of opposition in changing Trade Union Law. Opposition which was often based on the idea that one shouldn’t do anything very radical. That I shouldn’t upset things. Well I took the view that the trade unions had upset enough, and I really had to cope with what they had done and to change things so that we wouldn’t have to continue to just cope. And so, we in fact brought forward four different pieces of legislation, one after another, which altered the whole balance of trade union law, as between employer and union, and also altered the whole balance between the ordinary member of the Union and the Trade Union boss. You know we had got to the position where any trade union could make bankrupt any employer, even though their own members had no quarrel with that employer. I don’t know what your own labour law provides, but we found ours to be intolerable and destructive for ordinary workers who were the alleged beneficiaries of these laws.

So after the changes, the ordinary member of a trade union could decide by ballot, secret ballot, whether they went on strike, and the officials had to be elected by secret ballot. We stopped the closed shop. It gave the trade union bosses far too much power. And in the end we brought in a law that a trade union’s funds could be sequestered by order of the Court, if the trade unions did not obey the law. Now that took us until about 1985. We actually got the coal strike, to which  Alan   has referred, in 1984. You now know that we won it. I had to live through it every day for a year; every day had to decide the tactics. We decided right at the beginning that the task of the police, as we reminded them, because they’re independent, was not merely to keep the peace in saying, “Look, don’t try to go to work through the picket lines at a colliery, there’ll be demonstrations, it’ll make it difficult.” They had in mind keeping the peace, in that sense.

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