The brief and turbulent life of modernising conservatism 1847180094, 9781847180094

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The Brief and Turbulent Life of Modernising Conservatism

The Brief and Turbulent Life of Modernising Conservatism

By

Stuart Mitchell

CAMBRIDGE SCHOLARS PRESS

The Brief and Turbulent Life of Modernising Conservatism, by Stuart Mitchell This book first published 2006 by Cambridge Scholars Press 15 Angerton Gardens, Newcastle, NE5 2JA, UK British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Copyright © 2006 by Stuart Mitchell All rights for this book reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. ISBN 1-84718-009-4

To my wife

TABLE OF CONTENTS Acknowledgments .............................................................................................. x Chapter One Introduction: The Development of Modernising Conservatism .................1 What is ‘Modernising Conservatism’? ............................................................ 1 Actors and Institutions .................................................................................... 6 The Context of Conservative Rule. ............................................................... 10 Thematic Strands........................................................................................... 14 Chapter Two Prelude to Modernisation ...................................................................17 Tories and the State. ...................................................................................... 17 Resale price maintenance and the ‘small man’. ............................................ 23 Europe and Empire........................................................................................ 32 Chapter Three The Shaping of Modernisation ............................................................37 Statecraft in extremis. .................................................................................... 37 Problems of Macroeconomic Policy I: Deflation v. Expansion. ................... 39 Problems of Macroeconomic Policy II: The Expansionist Dilemma. .......... 46 The Conversion to Modernisation. ................................................................ 53 Chapter Four ‘Modernise with Macmillan’ ...............................................................77

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Growth Pains................................................................................................. 77 Premonitions of Mortality. ............................................................................ 82 Rpm and the New Approach. ........................................................................ 85 The Policy Comes Apart. .............................................................................. 90 Modernising Alone...................................................................................... 102 Chapter Five Threats and Promises: The Conservatives under Douglas-Home ...........111 The Problem of Home. ................................................................................ 111 Price Maintenance and the Impact of Heath................................................ 116 The Last Ditch............................................................................................. 121 Chapter Six The Birth of Uncertainty: Reaction in the Country ..............................135 Anxiety in the Ranks. .................................................................................. 135 Common Market Difficulties. ..................................................................... 143 The Rpm Conundrum.................................................................................. 147 Modernisation Rejected?............................................................................. 151 Chapter Seven The Crucible of Modernisation: The General Election of 1964 ..............158 Fashioning the Manifesto. ........................................................................... 158 The Campaign’s Course. ............................................................................. 165 The Effect of Rpm’s Elimination. ............................................................... 172 Ramifications. ............................................................................................. 174

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Chapter Eight Conclusion: Reflections and Legacy. ..................................................177 Reflections on ‘Modernising Conservatism’............................................... 177 Legacy. ........................................................................................................ 180 Notes .............................................................................................184 Bibliography ...................................................................................229

ACKNOWLEDGMENTS I have received a great deal of help from others in the completion of this project, all of whom deserve mention. For sparing time to answer my doubtless irksome questions, I would like to thank Lord Roll, Lord Deedes, and two other participants in the events that are described in the book who have quite reasonably requested to remain anonymous. At various times, several historians offered helpful comments on sections of the manuscript. My thanks, therefore, go to Bill Purdue, Bernard Waites, Mark Garnett, Keith Middlemas, Richard Grayson, Anthony Seldon, Jeremy Black, and Peter Hennessy. I would like to show my appreciation for the many helpful members of staff at the several archives and organisations at which I undertook a large part of this research. In particular, I owe a debt of gratitude to Colin Harris at the Bodleian Library; Angela Bass at NOP; Kim O’Mahony at the Consumers’ Association; and Briony Hudson at the Royal Pharmaceutical Society. Jane Swann deserves great credit too for the research assistance she provided. Finally, I have to thank my wife, Tracy, for her astonishing patience and fulsome encouragement, and my parents, family, and friends who, in one way or another, supported me in completing this book. Any errors and misjudgements in what follows, of course, remain my own responsibility. I would also like to offer thanks to the following for permissions to publish long extracts from papers held at various repositories: Crown copyright material in the National Archives is reproduced by permission of the Controller of Her Majesty’s Stationery Office. Material held at the Conservative Party Archive at the Bodleian Library, Oxford, is reproduced with the permission of Mr. Sheridan Westlake at Conservative Party Campaign Headquarters. Excerpts from the Selwyn Lloyd papers held at the Churchill Archives Centre in Cambridge appear courtesy of Mr. Anthony Shone. Excerpts from the R. A. Butler papers held at Trinity College in Cambridge are reproduced by courtesy of the Master and Fellows of Trinity College, Cambridge. Stuart Mitchell March 2006

CHAPTER ONE INTRODUCTION: THE DEVELOPMENT OF MODERNISING CONSERVATISM

What is ‘Modernising Conservatism’? Political labels are often thorny. Conservatism is difficult to conceptualise, ‘modernising’ Conservatism potentially more so. To start with, the phrase sounds like an oxymoron. To assume that the Conservative in the trade of active politics has no business promoting modernisation is, though, to abstract him or her from reality. The Tory outlook, as Stuart Ball and Ian Holliday have pointed out, always “reflects its times and circumstances”–indeed this may help to explain the Conservative Party’s enduring electoral appeal in the United Kingdom.1 In one sense, the Party has continuously, since Peel, housed adherents of some form of ‘modernisation’, though that modernisation has been constantly reflective of prevailing political and economic conventions.2 Under Disraeli’s tutelage in the mid-nineteenth century, the Party first accepted free trade and industrialisation as necessary for national economic well being, then sought to temper their wilder injustices through moderate social reform. In this, the Party adopted a form of modernisation–recognising imminent change and legislating for it before the deluge came.3 Similarly, the Thatcher Governments’ rediscovery of Manchester Liberalism’s panaceas in the 1970s can be seen as an attempt to modernise the economy by revitalising private enterprise and demolishing those primitive trade union practices which hampered the proper working of the labour market.4 And since its 1997 election defeat the Party has again become divided between ‘modernising’ and ‘traditionalist’ factions: a cleavage that is by no means unquestionably healed, even with the election of the ‘moderniser’ David Cameron as leader. The Tory programme introduced in the early 1960s differs considerably from these three examples, however, largely because it accepted a more étatiste system within which economic decisionmaking could take place. In other words, though modernisation has stalked through Conservative Party history as an intermittent and recurring theme, the

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Introduction

means to achieve it have varied considerably, according to what was politically acceptable at the time. Visions of how ‘end state’ rejuvenated Britain might appear have also, inevitably, changed with successive Conservative Governments, but the common thread of an economically dynamic, socially stable nation unites them all. Here we concentrate, though, upon a single distinct manifestation of Tory modernisation: that pursued by the administrations of Harold Macmillan and Sir Alec Douglas-Home. Although acknowledgement of Britain’s deep-rooted industrial inefficiencies provided one catalyst to its emergence, the programme fostered under Macmillan’s stewardship was not purely economic; instead, it encompassed far-reaching commitments in several policy areas. It might be said to extend to cover three major but overlapping realms of government activity: economic regeneration, foreign policy, and social improvement. Projects as diverse as the first cost/benefit analysis of Empire and the expansion of UK higher education can be legitimately gathered within its compass.5 Except tangentially, social legislation is not examined extensively in this book–partly because a recent survey by Mark Jarvis has covered the topic admirably–whilst those interested in foreign policy matters such as decolonisation and the Cold War are well catered for by a reliable stream of scholarly offerings.6 Here the narrative’s focus is upon the first category: domestic economic revival through industrial policy. Two skeins in particular thread through the narrative, stitching together its disparate parts: the Government’s approaches to the European Economic Community (EEC) that were cruelly arrested by General de Gaulle in 1963 and the elimination of resale price maintenance (rpm). However, since it is neither possible to describe modernisation in a synoptic fashion nor the rationale of its often feisty opponents by examining economic policy alone, from time to time we dip into other areas to demonstrate its magnitude and impact. The Tory programme pursued in this period could be described easily as merely a cluster of policies that were linked only by the rhetorical device of modernisation. And there is truth in this, but it is only partial. Certainly, many policies that came later to be gathered within the rubric of modernisation had their origins in discrete areas.7 Undoubtedly, plans surfaced more quickly in some areas than in others, giving the whole a sense of being inchoate and patchy.8 But one would hardly expect Tories to arrive in power like Socialists, brandishing a defined action programme to cover all areas of national life. As chapters four and six in particular demonstrate, the difficulty in selling modernisation to an often reluctant, at times overtly hostile, Conservative Party necessitated revealing its aspects in a gradual and cautious manner. Similarly, the Government discovered that it was not viable to execute policy transformations without, at minimum, the support of major institutional players, such as the Federation of British Industries (FBI) or the Trade Unions Congress

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(TUC). Political Scientists, most recently and persuasively Hugh Pemberton, have labelled this problem of British post-war politics ‘governance’.9 The older ‘Westminster model’ of government, in which all power rests in the central state–especially with cabinet–as a description of the real political system has been reckoned increasingly inaccurate the further distant from the war years one travels. Even in the 1950s, Britain’s polity had become fragmented and government action was hemmed in by a host of vested interests, not least trade unions, business, and competing civil service departments.10 Rather than being centrally imposed, policy change and legislation not infrequently materialised from a process of bartering and persuasion that sometimes trundled on for years: a scenario observed distinctly in the case of rpm’s abolition. Once these limitations are acknowledged, modernising Conservatism emerges as something more than a cortège of vaguely linked measures. In the discussion that follows, it figures not only as a rhetorical theme, but also, and more significantly, as both an attempt to maintain state legitimacy and social harmony during a period in which such blessings were being assailed by considerable cultural and social change, and as a domestic statecraft strategy designed, foremost, to secure the perpetuation of the Conservative Party in power. The White Paper on Employment Policy of May 1944 is of importance here. Not because its publication induced universal welcome, nor because it provided a clear-sighted plan to secure a “high and stable level of employment”: it did neither.11 Rather because, through its steady accretion of the trappings of national myth, it became the core of the post-war settlement; to which, for the first twenty-five years after the Second World War at least, both Labour and Conservative administrations showed obeisance.12 Within each major party, the belief was deep-seated that any serious divergence from the White Paper’s essentials would furnish not only electoral disaster, but also social discord. Thus, grudgingly or willingly, upon re-election in 1951 the Conservatives were bound to work within its strictures. These implied that the delivery of key ‘goods’ (principally full employment, trade liberalisation, welfare, stable prices, and a balance of payments surplus) would be guaranteed by the state, or at least that state policy would be consistently directed towards securing these objectives. In fact, the White Paper neither promised full employment, nor placed entire responsibility for its achievement upon the state, but the public mind easily elided such bothersome caveats amongst all the New Jerusalem hubbub of the mid-1940s. Littering much ministerial discussion throughout the thirteen years of Tory rule were suggestions that to maintain power the 1944 agreement needed constant nurturing. A letter from David Eccles to Selwyn Lloyd in 1962 provides a typical example. In it, Eccles argued that: “if inflation is not to be kept at bay except on Paish lines… then the Tory Party is out for a long time… To my mind Paish and an incomes policy are incompatible.”13 Whether a

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Introduction

deflationary approach like Paish’s would have resulted in electoral disintegration remains conjecture, but what is undeniable is that attempts to press policies notionally detrimental to the maintenance of full employment was sternly resisted by Conservative top brass.14 As we shall see in the third chapter, this was dramatically demonstrated in January 1958 with enforced resignations of the Chancellor and his two junior Treasury ministers. Until roughly 1959, in any case, it seemed to most in the Government that the post-war settlement’s central objectives were being achieved without resort to severe measures. What, then, altered the Government’s approach from one of gentle demand management of the economy and moderate reform elsewhere to one that explicitly espoused radical modernisation? Two developments–one positive, the other negative– provide the answer. From January 1957 through to the Conservatives’ election victory in the autumn of 1959, the political atmosphere was clouded with fallout from Eden’s failed Suez campaign. In that aftermath, it was not at all clear that the Party would win the next election. To give itself a chance, it was essential that the Government concentrated for a time on ‘home front’ subsistence level objectives, or a ‘minimalist’ statecraft strategy that aimed to restore an image of governing competence. Realistically, this meant the avoidance of foreign policy adventurism, the re-establishment of good transatlantic relations, the avoidance of crisis and conflict at home, and continued adherence to the post-war compact. Despite that Suez had battered the country’s self-esteem, it certainly did not mean ditching the language of national greatness, nor assaulting vested interests in an attempt to ‘update’ Britain. Even had the Macmillan administration desired to launch itself onto the tide of modernity, this was not electorally viable. Though Butler dipped a toe or two tentatively into the waters of social reform, little was done to address industrial defects.15 But the 1959 election victory freed the Government from such shackles and enabled the abandonment of subsistence statecraft. Of course, this alone need not have initiated a modernisation strategy. What nudged the executive in that direction was the recognition that although 1944 covenant had been sustainable for the first few years of Conservative rule, its objectives were becoming increasingly difficult to deliver. Behind this was the failure of the three corporate interests–Labour, Industry, and Finance–to deliver on their side of the political ‘contract’ that had been implied by the White Paper, but which was often conveniently overlooked by these actors. This had assumed that the unions would voluntarily rein in their memberships and not press for absurd wage increases outside the bounds of productivity increases, manufacturers would modernise plant and working practices, and the financial sector would provide adequate investment capital. All three had steadily reneged on this commitment.16 Not only had these functional interests proved truculent, their control over key economic resources, when combined with the weakness of

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the central state, had handed them remarkable power to thwart government initiatives.17 As examined in chapter two, the creation of the 1956 Restrictive Trade Practices Act (RTPA), the first legislative attempt to tackle the rpm problem, provided potent illustration of this. In turn, this meant that the habitual reliance on neo-Keynesian demand management to deliver the core elements of the settlement was insufficient by 1960. Mingling with this central governing problem and providing its oxygen was the cognisance of relative British decline that had been so painfully illuminated, but, it should be noted, not created by the failure of the Suez operation.18 Economically, this was pointed up by the British economy’s underperformance in contrast to economic growth in the Common Market and frequent balance of payments’ crises. Regardless of whether Britain was truly in economic or international decline in the post-war period, and there seems little end to that dispute, the sensation of it saturated the polity.19 The longevity of this truth, and the manner in which it influenced the reflexes of even the most sanguine politicians, has lately been scrupulously and, for the most part, accurately delineated by Jim Tomlinson.20 But the years either side of the general election saw this sense of degeneration percolate–through press, media, and popular culture–downwards to the public, engendering a scepticism about the state’s ability to sustain British economic potency and global ‘greatness’.21 This cynicism fused with the increasing sophistication and regularity of opinion polls in the late 1950s to exacerbate the problem that had been inaugurated by the 1918 wave of enfranchisement (earlier, arguably): the enlightenment of an uncomprehending and volatile electorate as to the difficulties of government.22 The archetypes of censure were a number of fault-finding books by authors such as Anthony Sampson and Michael Shanks. Each posed awkward questions about the UK’s straitened circumstances. In his 1961 work, The Stagnant Society, Shanks asked Britons: “What sort of island do we want to be? A lotus island of easy tolerant ways and ... genteel poverty? Or the tough, dynamic race we have been in the past ... ready to accept growing pains as the price of growth?”23 Of course, Macmillan’s Government hoped that their answer would be the latter. The questions that Shanks and his kind asked in public had been broached privately by ministers and civil servants for some years. By 1960, the Treasury was conducting a substantial policy reappraisal predicated upon the realisation that higher economic growth could not be achieved without supply-side reforms.24 (Indeed, since faster and more sustained growth was the most important goal of industrial adjustment, it might be more accurate to refer to growth-though-modernisation instead of simply modernisation.) This is not to suggest that the Government adhered to a mono-causal explanation for relative decline: in fact, it had to hack its way through a thicket of competing arguments. These varied from imperial over-stretch to an idea of an ‘aristocratic’ political

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Introduction

culture which impeded the development of a modernised state and economy.25 The analysis developed under the Macmillan administration took into account a diversity of causes, though not always, due to the pressures of government, explicitly. To try to educate a largely obtuse party and nation (and especially those institutional actors that possessed the nascent power to disrupt policy goals) to the realities of decline and to seek to remedy that decay by a significant shift in the practice of government was a central feature of the modernising statecraft strategy. This was a colossal undertaking, considerably more comprehensive than that of Macmillan’s two immediate predecessors, so it is hardly surprising that, in its entirety, it was never realised.26 But for Conservative modernisers the strategy was imperative, if only to maintain the Party in power.27

Actors and Institutions It would be misleading to dignify (or damn) modernising Conservatism by labelling it a doctrine, still less an ideology or philosophy. But all strategies need principles and beliefs to underpin them, and early 1960s’ Conservatism is no exception. Its emergence rested upon the precondition of a certain cast of mind, possessed by Macmillan and shared by most of his progressive entourage. This mindset and its associated policy preferences have been given a variety of labels over time: ‘Tory socialism’ and ‘Stocktonian’ are well known, for instance.28 Despite that recent critics like David Seawright have endeavoured to show that term’s origin is itself a lot slipperier than current usage assumes, most typically Macmillan’s stewardship is tagged as a type of ‘One Nation Toryism’.29 What that amounted to in the period discussed here was a willingness to utilise the state to foster the major objectives of the 1944 political settlement. George Hutchinson, Macmillan’s press adviser, later distinguished his chief’s personal policy aspirations as: [T]o update industry by encouraging capital investment while simultaneously expanding public services; a desire to liberate both the individual and the corporation from the enervating, dispiriting effects of excessive taxation while nevertheless extending the powers of the State; and a determination to raise the general standard of living not only appreciably but rapidly.30

If nothing else, this demonstrates the PM’s proclivity for grandly ambitious projects. Nonetheless, October 1959’s election success at least gifted Macmillan the opportunity to indulge some of those inclinations, including a reprise of his ideas on the state-sponsorship of industrial co-operation that had been advanced originally in The Middle Way.31 Many historians have characterised this approach, accurately, as ‘statist’, but that single-word portrait fails to capture an

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important qualification: that the state’s muscle should be employed judiciously and appropriately. This brand of modernising Conservatism was not the milky, dewy-eyed, spendthrift creed that some later commentators have been wont to portray.32 Instead, whilst the Government would endeavour to guarantee full employment and the main pillars of the post-war accord, in some areas it would intervene to correct market imbalances and to stimulate productivity. The chill wind of competition for some; for others, a warm zephyr. Macmillan christened this “creative dirigisme”, and there seem few better concise definitions.33 The state was to be a tool to effect a transformation of Britain, not a cash cow for the pitiable and hopeless. Hence, as chapter five argues, the abolition of resale price maintenance in 1964 was not an inexplicable proto-Thatcherite deviation from Macmillanite modernisation, instead it was fully in harmony with it. If this was the outlook, it is worth asking who, other than Macmillan, partook of it? To begin with, in 1957, it was by no means mutual amongst the Cabinet: as demonstrated by the ministerial resignations of Lord Salisbury and Peter Thorneycroft in the administration’s first year. As chapters three and four illustrate, however, a goodly number of modernisers–notably Reggie Maudling, Edward Heath, and Iain Macleod–were inserted into positions of prominence, creating over time a modernising circle with the Premier at its hub. This is not to say that the development of a clique which inhabited the same mental universe as the Premier necessarily brought concord in detailed matters of policy, as, for instance, the Government’s negotiations with the European ‘Six’ revealed. Nevertheless, between 1959 and 1962, modernisers came to dominate the Cabinet. The corollary of these manoeuvres was the simultaneous advance of a reformist agenda that included the move towards tripartite indicative planning and the disengagement from imperial commitments. All the same, despite their prominence politicians were only one set of players. Other figures and groups perform an important role in this story; without some of them, it is scarcely possible to imagine Tory modernisation ever taking wing. Private secretaries such as Tim Bligh were often the first sources of advice and encouragement, a burden carried also by their Cabinet Office brethren.34 Indeed, civil servants often provided crucial propulsion behind modernising measures. Particularly noteworthy was Sir Frank Lee, Permanent Secretary at the Exchequer from 1960, who convinced the normally ascetic folk at Great George Street to support (or, at least, not to impede) much of the modernisation package–including industrial planning and the abolition of rpm. Such achievements should not be taken lightly, since, according to Lord Roll, whose extensive civil service career included a substantial term within the Exchequer’s walls, “the Treasury was at that time very conscious of its own power and position… and if you look at the amount of legislation that was dependent on Treasury say-so… their power was enormous… If they wanted to

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Introduction

prevent…[a proposal going ahead], they often could.”35 Pro-modernisation voices from outside of the polity, too, were frequently influential. Amongst others, the Oxford economist and celebrated expansionist, Roy Harrod, and the leader of the European Movement, Lord Gladwyn, make cameo appearances here. From the Party itself, the indispensable engine of modernising ideas was the Conservative Research Department (CRD), the strategic influence of which is examined closely in chapters six and seven. Whilst a little further out in orbit, the faultlessly heterodox Bow Group did much intellectual spadework on ‘progressive’ issues such as decolonisation and the EEC.36 Thus, modernisation drew its sustenance from a wide and eclectic variety of actors. But it was also challenged and constrained by a crowd of interested parties no less diverse. High politics may create a fascinating narrative, but its power to illuminate the workings of government is limited: other quarters must also be investigated. For instance, the importance of the institutional constellation within which all governments are compelled to operate is difficult to underestimate. The ability of the state’s supposed partners in the wartime covenant to frustrate policy objectives was substantial, if not complete. It was within this context of institutional friction that the economic strategy had to be implemented. The role of finance capital receives little attention in this book, for two reasons. Firstly, it stood pointedly aloof from government attempts to shape a tripartite convocation around the core institution of the National Economic Development Council (NEDC).37 Second, and more prosaically, its operations did not much disturb the realm of industrial and competition policy directly, except perhaps in that the City may have irresponsibly egged on the trend towards greater numbers of mergers.38 However, the peak organisations of labour and industry (particularly the TUC and the FBI) come frequently under the microscope. For its success, Tory modernisation relied heavily upon the willing acquiescence of the big ‘corporate’ interests. For example, their opposition to the Labour Party’s early attempts to legislate against price rings allowed them to go unmolested until 1956. Likewise, when these bodies made their slow turn towards an acceptance of economic growth through modernisation it enabled policy departures such as the Government’s 1961 Common Market discussions to go ahead more freely. Alongside the big beasts, however, sat other functional interests that were no less part of the institutional jungle. The representatives of small commercial interests such as the National Chamber of Trade (NCT) possessed insufficient economic power to wreck industrial policy, but they could still stir political trouble for the Government, as they proved emphatically during 1964’s rpm debates.39 Hence although some commentators have castigated the Tories’ modernisation policies as offering “too little, too late”, such modish headlines seem to obscure the real constraints operating upon government policy.40 Given

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these, it could be as easily remarked that it was surprising how much of the modernising strategy was executed. This was especially so because the Conservative Party was itself far from united beneath the banner of modernity. Historically, those in the Party who have advocated, at different times and in varying forms, a modernising agenda have been consistently opposed by those holding that such programmes were destructive of the web of tradition upon the defence of which some Conservatives considered was based the Party’s rationale.41 Ewen Green has demonstrated admirably that, as early as 1955, these antagonists had begun candidly to denounce some of the leadership’s policies as retreats from the authentic Tory faith; from late 1961, with modernisation in full flood, their attacks became angrier and more sustained.42 Others in the Party resisted policy change on the more calculated grounds that such designs were hostile to the organisation’s electoral prospects, possibly to the whole idea of unbroken electoral hegemony.43 Classic distinctions between left and right are of limited use in determining the position of individuals on particular aspects of modernisation. For instance, figures such as Peter Walker and R.A. Butler (both clearly positioned on the Party’s centre-left), despite their support for most other modernising initiatives, initially opposed Britain’s Common Market application, which was considered almost an defining credo for modernisers like Macmillan and Heath.44 Instead, the book differentiates between ‘traditionalists’ and ‘modernisers’, though this cleavage should not be assumed to correspond to more contemporary usages. Nor should each category be seen as hermetic. Often, though not inevitably, members of the former were of the Party’s right; similarly, the latter group was not concomitant with the Conservative left, although most of its prominent members were drawn from that tendency. But, whatever the problems of conceptualising the Party’s fault lines, what will become clear is that internal hostility to modernisation was uncompromising. Indeed it exhibited every sign of strengthening as the strategy unfolded. As Keith Middlemas has observed, the growth policy was difficult enough to realise against institutional resistance, without “divisions running right through the Conservative Party [that] retarded the implementation of any general project.”45 In chapters six and seven this phenomenon is described more forensically. Before outlining the chronological framework within which modernising Conservatism took shape, however, we should say a word about DouglasHome’s administration. Whilst the sinews of modernisation stood out clearly under Macmillan’s leadership, even after the collapse of European negotiations in January 1963, the man who followed him into Downing Street was not immediately recognisable as a modernist. In general, he was more acceptable to traditionalist Conservatives–leading the Party more from the right of centre than any of his three immediate predecessors and more obviously preoccupied with

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Introduction

the maintenance of a traditional global role for Britain than had appeared Macmillan.46 Douglas-Home probably possessed a more fundamental understanding of the obstacles to modernisation than did his predecessor. In a statement of personal beliefs, prepared over Christmas 1963, he reaffirmed his rural roots in his remark that “people who live close to nature act by instinct reinforced by deduction. They are natural conservatives–slow thinkers but sound.” He also repudiated the idea that Conservatism could, or should, be based upon materialism: “In the truth about anything–economics to sport–there is an element of self-discipline and unselfishness and therefore sacrifice.”47 This implicit alignment with a sense of noblesse oblige and rejection of ‘affluence’ displayed something more in common with the label ‘traditionalist’ used in this study than with the ‘reformist’ incline to Macmillan’s version of modernisation.48 Even had Sir Alec been instinctively in sympathy with the Cabinet modernisers, he posed a problem for Conservative strategists, since a true blueblood was fantastically ill suited to be modernisation’s clarion.49 And yet, modernisation did not shrivel under his rule; in truth, quite the reverse, as chapter five explains. Largely this was due to the dominance of the Cabinet’s modernising faction, particularly Reginald Maudling at the Exchequer and Edward Heath at the Board of Trade, and Home’s somewhat nineteenth-century preference for genuinely collegiate decision-making. In consequence, he was generally unwilling to overrule his ministers on grounds of political calculation. Though this meant that the troupe of modernists was able to advance an agenda in which the Government remained wedded to economic growth and the elimination of restrictive practices, it meant also that those concerned with moral continence (a typically traditionalist concern) were able to squeeze some minor measures onto the statute book.50 Alec Home’s premiership thus developed some Janus-faced qualities that were to have deleterious consequences for the Conservatives’ election tactics.

The Context of Conservative Rule. The Conservatives had been returned to government in the general election of 1951 on the broad promise of ‘Setting the People Free’. Although the campaign’s rhetoric had been largely ‘neo-liberal’–pledging the removal of the Attlee Government’s micro-economic controls and the return to a macroeconomic strategy which would embody a modified form of the liberal economic values that had been in eclipse since the early years of the century– there was no ostensible departure from the ‘consensus’ laid down in the war’s closing years.51 As John Turner has remarked, the neo-liberal rhetoric was fashioned chiefly to mollify party activists, but the reality of policy was that it

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worked in the grain of the welfare reforms introduced by the previous administration.52 Though the main areas which fell under the consensual system, including education, full employment, social services, the health service, were neither weakened nor, to any great extent, hived off into the private sector by the thirteen Conservative years following the 1951 victory, the methods of achieving long-standing goals altered somewhat.53 More emphasis was placed upon macro-economic management, less on planning (although Labour had itself been moving away from micro-economic controls as active policy instruments from late 1947), whilst Butler at the Treasury engaged in determined expansion in the pursuit of affluence–at least after the defeat of the ‘ROBOT’ project in 1952. Then again, the promised ‘bonfire of controls’ was a relatively small pyre, and some more innovative areas of policy, such as proposals for Development Councils which were initially suggested in the Party’s Industrial Charter discussions, were vetoed by Churchill.54 Seemingly, the stimulus which had most effect on the twilight Churchill administration was the desire for a quiet life; hardly astonishing given the slim Tory majority in the Commons and Churchill’s natural desire to reprise his wartime successes with a government moulded explicitly to reflect a moderate, socially inclusive version of the national interest. As one recent author has put it: “Attlee’s patriotic socialists gave way to Churchill’s social patriots”.55 This goes far to explain the Government’s compliant stance towards trade unions and cartels, its sacrifice of capital investment programmes to the extensive house-building schedule, and the slow rate at which ministers proceeded with the denationalisation of steel and road haulage.56 Whether the first few years of Conservative government can legitimately be called ‘neo-liberal’ is extremely doubtful, except in the sense that planning was bypassed as an instrument of industrial policy, especially as the phrase has now become strongly associated with the ‘New Right’ of the last three decades. (In what follows, the term is employed primarily to describe the prescriptions of the Party’s free market faction; any deviations from that usage are signalled.) Indeed, although some elements of classical liberalism were reintroduced which modified the prevailing neo-Keynesian bent to policy, as early as 1952 several leading Tories were unhappy with Butler’s lack of progress towards a laissez-faire economy.57 There is a case to be made for the failure of Churchill’s and Eden’s Governments to tackle deep-seated structural impediments in the British economy–though, as Anthony Seldon has argued, given the contorted roots of these problems, efforts to do so would probably have had only a marginal effect.58 Nonetheless, as chapter two outlines, the Government did very little to cultivate industry connections and, aside from the passage of the 1953 Monopolies and Restrictive Practices Commission Act (a modest adjustment, at best), until 1955 displayed practically no interest in confronting the great jumble

12

Introduction

of restrictive practices on both sides of industry.59 Indolence contributed, arguably, to the difficulties which beset the Macmillan Government’s later years and impelled a shift towards indicative planning as a device to stimulate economic growth. In effect, the process of industrial policy generation was frozen for the first three years of Churchill’s Government. Little or nothing was done about the problems of wage claims (beyond Monckton’s exhortatory approach to the TUC), slackening of productivity, capital investment, and poor management. Equally, the Foreign Office was allowed to restrict debate on the merits of joining the European Coal & Steel Community and later the EEC.60 In part, this was caused by the necessity of carving for the Conservatives a distinct political position which would distinguish them both from their Labour opponents and, perhaps more importantly, from the 1930s’ National Government; equally, it suggests an executive that was, at least until 1955, far from convinced that its period of rule would last long.61 Unfortunately, though the Tories managed to recover something of their image as custodians of social harmony and economic prosperity, this was at the expense of a long-term strategy for Britain’s future. The result was the tangle of problems which, by the end of the 1950s, was considerably less remediable than in 1951–and which finally prompted the inauguration of the modernist strategy. However, upon entering Downing Street, even if the ramifications of his two predecessors’ supposed lassitude had been clear (and they were not yet unambiguously so), it was not possible for Macmillan to initiate a modernising strategy. The period between the Suez debacle and the 1959 election has already been referred to as one of subsistence level statecraft in which the restoration of an image of governing competence and the continuing delivery of 1944’s consensual policy objectives were the regime’s two overriding priorities. Overt antagonism towards any interest group, including the Tory masses in the country, would have contravened electoral logic. Thus Macmillan preferred to accept, for example, the loss of his Treasury Ministers in January 1958, than to risk having the electorate choke down their deflationary medicine.62 For similar reasons, it was of no practical use waving the realities of imperial over-stretch or industrial archaism under Tory noses. Nonetheless, some hint of the Government’s possible future direction was revealed in the creation between 1957 and 1961 of a large number of enquiries into an assortment of social and economic questions. These were designed to underpin a rolling programme of legislation. Surveys were commissioned to examine, amongst other things: railways, rural transport, ports, urban traffic, consumer protection, local government, secondary education, universities, the police, company law, the monetary system’s workings, broadcasting, the press, Sunday observance, and civil scientific research. In short: to explore many of the great strands in the web of civil society.

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With the worrisome problems of electoral calculation magnificently demolished by October 1959’s ballot, the Government’s temperamental preferences began to be exposed. Within four months, for example, Macmillan was ringing down the curtain on the African colonies. A move that has been described by critics as either “making a shining virtue out of unwelcome necessity” or simply making explicit the British state’s long standing wish to junk the empire.63 This departure was swiftly followed by others. For the reader tired of the innumerable ‘turning points’ in other accounts of the Tory Party’s term of office, he or she will find this study, for the most part, refreshingly free of them. The argument here is that the modernist strategy grew and was revealed by its authors incrementally. However, if there was a fulcrum in its development then the summer of 1961 marks it, at least publicly. This was when the Government made explicit its commitment to growth-throughmodernisation by announcing its pursuit of negotiations on entry to the Common Market and pledging itself to tripartite indicative planning.64 Such undertakings did not go uncriticised at the time, particularly by some elements in the Party’s grassroots, although the volume of criticism tended to increase with accumulation of hindsight. A later Conservative Premier, for instance, was to denounce the adoption of tripartism as yielding to the “collectivist” diagnosis and solution, although she managed to exact her revenge by first religiously sidelining the NEDC and later eradicating it altogether.65 This attitude, although far from universal, was by no means uncommon within Tory ranks in the 1960s, as chapter six illustrates. Moreover, the initiation of talks on industrial planning and the EEC coincided with a downturn in the Tories’ fortunes in the opinion polls; although the immediate catalyst for this was rather the introduction of a public sector wage freeze by the then Chancellor, Selwyn Lloyd. Unfortunately, much of this decline was directly attributable to a revolt of habitual middle class Tory voters, who considered that the Government had neglected basic tenets of Conservatism and had surrendered too readily to a hotchpotch of social liberals, trade unions, and progressives. Thus, as later chapters try to show, modernisation had to be carried through in a climate that cramped further the Government’s freedom to manoeuvre and which heightened the electoral risks of the new statecraft. A sequence of mishaps beset modernisation between 1961 and the end of Macmillan’s tenure in Downing Street. Some, like the wounding loss of the Orpington by-election in March 1962, were illustrative of the domestic froth whipped up by the strategy; whilst others, most importantly France’s veto of the EEC application, were externally caused. 1963 brought general misfortune down upon the modernisation scheme. The publication of the Beeching report on the British railway network’s rationalisation came hard behind de Gaulle’s veto in February. It gave rise to extensive Tory opposition based, in part, upon

14

Introduction

objections to the ‘country’ party’s apparent disregard for the security of rural economies.66 Then, in the following month, the Profumo scandal broke around the heads of Ministers, stymieing the process of policy gestation and inhibiting public debate on modernisation, as more venal matters flooded the British press.67 Yet the modernising policy did not wither entirely as the brickbats rattled down. Instead, as leadership passed from Harold Macmillan to Sir Alec Home, the issue of price maintenance in particular was to demonstrate that it was very much still in bloom.

Thematic Strands Whilst not neglectful of other areas of industrial modernisation, this study’s narrative is given coherence by two case studies: the Government negotiations over Common Market membership and the abolition of the system by which some manufacturers fixed the prices of their goods in shops–usually known as rpm.68 These have not been chosen arbitrarily. Rather, each has been picked out because of its emblematic value for traditionalists and reformers alike. Whilst planning, industrial training, and most other accoutrements of modernisation attracted criticism, it was these two ventures that witnessed the most sustained and bitter internal party opposition of the 1959-64 parliament. Indeed, 1964’s Resale Prices Bill caused the largest Conservative backbench rebellion on a major issue since the Second World War. Another advantage in these choices is that discussion of modernising Conservatism is not halted at the point of Macmillan’s departure from the premiership. Though modernisation may have been his design initially, in time its standard was borne increasingly by ‘progressive’ Tories like Maudling and Heath. (And it is no accident that both the European enterprise and the demise of price maintenance were driven forward by the latter.) Thus the 1963-64 Douglas-Home period appears in this book not as some trivial postscript to the Tories’ thirteen years of power, but as continuing the solid contours of the modernising programme initiated by Sir Alec’s predecessor. Andrew Gamble has characterised the movement towards EEC membership on the Government’s part as “the greatest ideological transformation in the party’s history.”69 Implicitly, it entailed the abandonment of Empire and Commonwealth as the economic sources of British power. For a party schooled in the veracity of such notions, the European departure could hardly fail to spawn considerable hostility from its rank-and-file. Disraeli had sculpted the membership into imperialists at precisely the time when the Party was refashioning itself to charm a mass electorate.70 Sixty years on, Tories could not escape the Empire: it was in their blood. Though Joseph Chamberlain’s 1903

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call to erect a system of imperial preference and create a Council of Empire may have sounded less fiercely in the post-war age, still it had its adherents, as successive conferences throughout the early 1950s demonstrated.71 Though the leadership never desired to take that route (at least after 1945), nevertheless–and presumably with one eye on grassroots’ reaction–the public pronouncements of Conservative chieftains routinely stressed the importance of Commonwealth and Empire, although by 1959 the latter term was rarely used.72 For modernisers, however, the liquidation of defunct imperial commitments was essential and it was only the question of what economic arrangements should replace them that was difficult.73 By late 1961, albeit largely due to the lack of alternatives, entry to the EEC had become the chosen solution and was thereafter quickly transformed into the flagship of modernisation: the deus ex machina that would refresh Tory statecraft and propel the Party to a fourth successive election victory.74 Traditionalist and moderniser were (or should have been) at irreconcilable odds on the issue. It may have been that the sole reason internal party warfare did not erupt was that the Government was prudent enough to avoid any impression that it would enter the Community regardless of safeguards for Commonwealth interests.75 Nevertheless, the issue still bore vast potential to disrupt the Party, as later chapters endeavour to prove. Rpm’s abolition might seem like relatively small beer by contrast. But, though the system was hardly an essential ideological building block in the manner of the Commonwealth, it was a powerful totem for traditionalists. For the ‘man of modest means’ it represented economic security and a guarantee of livelihood in the face of competition from big business. Like the Party’s ingrained attachment to Empire, it was understood as part of an implied settlement older than the 1944 one. This rested upon the Conservativedominated National Government’s eschewal of ‘wasteful’ competition and its acceptance of an ordered and tempered capitalism that embraced the utility of cartels and oligopolistic practices in providing guaranteed markets and protecting jobs.76 Of course, these preferences had long been present in a certain type of Tory approach–that which had despised the supposed avarice of laissezfaire capitalism–but in the lean 1930s they reached their apotheosis.77 Within an electorate not so very far divorced from that period of privation, even with the buffer of the ‘good war’ in between, the fear of its return was almost ubiquitous. Hardly surprising, then, that when the Government embarked upon rpm’s abolition, its defenders conjured up all the many ghosts of devil-take-thehindmost, jungle capitalism. In contrast, after October 1963, it was imperative for reformist ministers like Edward Heath to demonstrate that Alec Home’s accession to the premiership had not halted modernisation. As the newly revitalised Labour Party flaunted its technocratic credentials, the Conservatives, in Heath’s eyes, needed to show that the Opposition did not have a monopoly on

16

Introduction

such ideas. Legislation to eliminate rpm offered testimony to the Government’s modernising sincerity, plus it appeared to give certain proof that the Tories were as concerned about the interests of that shrewd, modern, clamorous creature, the consumer, as they were about those of the producer. Furthermore, abolition had long been a cherished goal for many in the modernising clique, given its potential to ease the stickiness in the labour market and unleash price competition in the distributive industries.78 Such deep-seated opposing perspectives led in 1964 to perhaps the clearest, and certainly the most furious, internal division between traditionalist and moderniser in the period. Given the tumult that surrounded rpm, it is far from astonishing to find both former ministers’ memoirs and the contemplations of recent historians suggesting that the issue lost the Conservative Party the 1964 general election.79 The validity of these claims is assessed in chapter seven. Nearly every aspect of modernising Conservatism damaged a potential or real Tory constituency (this was, certainly, one of the reasons why the strategy was so electorally hazardous), but whilst, for instance, Beeching’s railway axe might fall unevenly across the country, both the EEC application and the attack on rpm challenged deep-set Tory myths and generated enormous controversy throughout the nation. Nonetheless, when the Tories returned to office in October 1951, modernising Conservatism was some way off; indeed if the Party held a collective view of the state’s proper role, it was somewhat murky. How the attitudes of latter-day Churchillian Tories were transformed into those of the Macmillanite modernisers is the subject of the next two chapters.

CHAPTER TWO PRELUDE TO MODERNISATION

Tories and the State. Until at least the 1990s, the standard narrative that mapped the Tory Party’s approach to the state went approximately along the following lines. Conservatives apparently swung towards a limited state, laissez-faire approach to social and economic issues in the 1920s, and this position led to the Party’s gratuitously uncaring attitude towards the problems of unemployment and the decline of manufacturing industry in the depression years. The effect of the Second World War and defeat by Labour in 1945 was a substantial revision in Tory policy. A Damascene conversion occurred: the Party embraced full employment, a welfare state, and some of the apparatus of collectivism that had been erected by the Attlee administration. Only then were Tories able to discard their inter-war image of ‘nastiness’ and adapt themselves to the consensus created by the war and the Labour Party. This new, state-friendly Conservatism was to last until the mid-1970s, when it was systematically razed by the arrival of Margaret Thatcher and her neo-liberal entourage. The sketch is crudely drawn, perhaps even verging on caricature, but it is not inaccurate as a representation of the broad outlines of a surprisingly resilient myth. Smooth and straightforward as this narrative is, it remains astonishingly simplistic. One of the problems was that for a great many years after 1945 the volume of Tory historiography was exceedingly slender. The pattern of the narrative, and its tenacity, can be partially explained by the great advantage it gave to the competing attempts of economic liberals on one hand and ‘statist’ Tories on the other to provide a clear explanation of the party’s development that fitted their own doctrinal preferences. It permitted each camp to characterise the periods in which the opposing ideological strand of Conservatism was in the ascendant as episodes of relative failure or mismanagement.1 Similarly, the conventional description’s longevity was sustained by the left’s extensive use of

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Chapter Two

parts of it as a propaganda weapon–especially the potent image of the ‘hungry 1930s’.2 Thankfully, recent historians have attempted to bring some shade to the picture.3 The first hole in the mantle is that Tories were not nearly so obsessed with free markets and the minimal state in the 1930s as has sometimes been assumed. In the last ten years, a consensus of sorts has emerged amongst historians that the National Government employed state intervention quite extensively to try to alleviate the Slump’s most baleful effects.4 Not only did it endeavour to keep money cheap, but also it created a number of public corporations and marketing boards to stimulate industrial efficiency. More controversially, some have even gone so far as to say that the Government’s encouragement of protection, market concentration, and restrictive practices–mergers, cartels, resale price maintenance, tariffs, and monopoly–can be characterised as an attempt to create an orderly ‘managed’ economy that would be better able to compete internationally whilst protecting jobs at home.5 Arguably the British economy’s sluggish response to these measures was more to do with its long-term structural defects, rather than the plain neglect of which Conservatives were accused. In this case, it may be helpful to differentiate between Tory rhetoric on the dangers of an intrusive state and how the Party actually behaved in office. The former was motivated principally by anti-Socialism. To Conservatives, the Labour Party threatened on a number of plains: some of its members were avowedly internationalist; its fiscal policy seemed confiscatory; but, above all, it had replaced the Liberals as the main electoral threat to Tory hegemony.6 In the inter-war years, with a supposedly volatile and poorly educated mass electorate now in place, it was politically necessary for the Tories to portray Labour policy as endangering civil liberties and enterprise. In practice, the National Government behaved most unlike laissez-faire liberals. It is better to observe that Tory attitudes towards the state in the 1930s were by no means identical throughout the Party. Similarly, in the 1940s, the Conservatives did not suddenly and uninhibitedly embrace economic dirigisme. Those who urged greater industrial intervention were dependably confronted by the Party’s free market faction during the war and throughout the next decade.7 Certainly, by 1945 most Conservatives had accepted the wartime initiatives that were to go to make up the post-war social compact: particularly the essentials of the Beveridge Report and the White Paper on Employment Policy. Though these were recognised generally as the bounty duly won by the working classes by their wartime efforts even here we must add a caveat that demonstrates the Party’s ambiguity towards the state. Over the Beveridge Report, the Conservatives were at first deeply split. Churchill only consented reluctantly to its publication, and then solely on the basis that although it could be accepted in principle, no legislation could be put through

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whilst the war was being fought.8 This was a compromise. On one hand, the Chancellor, Kingsley Wood, spoke for the Party’s economic liberals by warning that the report’s implementation would involve severe tax rises and extension of state powers.9 On the other, in February 1943 forty-five MPs from the freshly established Tory Reform Committee requested the immediate creation of a Ministry for Social Security, to begin work on the legislation that Beveridge’s proposals would require.10 In the end, the sole initiative that entered the statute book before the war’s end was the Family Allowances Act, but Tory divisions presaged future conflict over the state’s role. The same might be said of the employment paper that emerged in May 1944. The document supposedly inaugurated the fabled cross-party acknowledgement that one of any government’s responsibilities was the maintenance of full employment. Had this been the reality, we might wonder why the Party’s laissez faire faction did not attack the paper more vigorously. But in truth, the piece pledged nothing that Conservatives, on the whole, could not live with. The document promised merely that government would endeavour to sustain a “high and stable level of employment” and would resort to deficit financing only to fend off recession.11 It emphatically did not specify the introduction of micro-planning machinery or physical controls to reach this goal. Indeed, the abstemious economists at the Treasury, such as Lionel Robbins, had been careful to insert plenty of caveats into the script to show that high and stable employment was dependent on many factors, not simply government’s willingness to intervene.12 Most tellingly, the compact recognised the state’s diminishing ability to secure macro-economic goals alone. Thus the institutions of industry, labour, and finance were to act with moderation and to help actively in the pursuit of sustainable employment– moderation that arguably they failed to exercise over the next thirty years.13 Most Tories did not recoil from the document; it was later, as its sentiments became progressively mangled in the public mind, that a commitment to what was a relatively modest aim became a vow to uphold full employment. The Conservatives entered the 1945 election with no clear position on the role of the state in economic management; indeed against the mighty programme envisaged by Labour its policies seemed ill-developed all round. This was only partly due to internal party disagreements–more significant was the determination of Churchill to eschew policy work until the war had been won.14 Although the manifesto demonstrated that the principles of Beveridge and the Employment White Paper had been accepted by the leader at least, the last third of the manifesto sounded a potentially shriller note on the requirement to reintroduce free enterprise.15 On the bones of the Tory prospectus there was little meat, however; whilst Churchill’s heralding of the merits of “go and push” doubtless confirmed the electorate’s bad memories, so egregiously stoked by Labour, of supposed Conservative failures in the 1930s.16 Labour’s com-

20

Chapter Two

prehensive election victory cracked open the fissures that had been meticulously ignored during the election campaign. Propelled into opposition, the Conservatives had ample time to debate the level of interventionism they were prepared to accept. From their defeat, leading Conservatives drew one conclusion above all. No matter how inaccurate it was, the image of the uncaring inter-war Tories must be erased in the public mind.17 If not with Churchill’s lead, then at least with his indulgence, progressive Conservatives like Butler began to refurbish the Party’s appearance–in the process creating what became known as the ‘New Conservatism’.18 Though free market Tories cavilled, from 1946 until 1950 a set of policies were developed that led the Party towards a limited accommodation with the social transformation that was being effected by Labour.19 First and most notable of the statements produced was the Industrial Charter of 1947, which was seen by many commentators and indeed some in the Party itself as a leftward shift, especially on nationalised industry.20 The Daily Express cartoonist Leslie Illingworth satirised it with an image of Butler, Eden, and Churchill conducting a 1860s’ style raid on the bathing outfits of Liberal luminaries Clement Davies and Lady Violet Bonham-Carter.21 And certainly there was something of the Liberal Party about the document. For instance, it outlined a Workers’ Charter, suggested that government and industry could work jointly to create an “national budget”, and accepted that core functions of some industries, such as coal, should remain in the public sector.22 It is at least arguable that the Charter represented a turn towards the Christian Democrat ethos emerging at the time on the continent.23 R.A. Butler, the Charter’s coarchitect, described its purpose as “first and foremost an assurance that, in the interests of efficiency, full employment and social security, modern Conservatism would maintain strong central guidance over the operation of the economy.”24 However, to see it as mere acquiescence to interventionism would be mistaken. David Willetts has contended that, with its espousal of the language of enterprise, the Charter represented “the Party’s final abandonment of protectionism and [a] shift to a greater stress on the free market than at any point in the previous fifty years.”25 Although Willetts’ periodisation is overimaginative, there is a morsel of truth in his assertion. The Charter’s authors had to pay suitable respect to the neo-liberals in Conservative ranks: so the principle of reducing state expenditure to fund tax cuts was prominent, as was the pledge to free industry from unnecessary controls.26 There was even an ill-digested reference to the quantity theory of money.27 But despite its genuflection in parts to the language of free enterprise, the Charter did not fully abandon the nostrums of the 1930s. It maintained a solid commitment to Imperial tariff preferences, whilst its suggestions on monopolies and restrictive practices were considerably meeker than those that the Labour Government was simultaneously trying to

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introduce.28 Additionally, some of the policies that later became bound up in the post-1959 modernisation spurt–such as contracts of employment and industrial training–were also presaged in its pages.29 So the Charter neither pointed unambiguously towards a rapprochement with the state, nor indicated that a Conservative administration would unleash unchecked capitalism. Rather it reflected the Party’s ongoing argument about where to draw the line between dirigisme and the free market. At the Party’s 1947 conference, a motion accepting the Charter as the basis of Conservative economic policy was approved with only three dissenting votes. Ostensibly, this was a mortifying defeat for Tories of laissez-faire stamp, though the likelihood is that many dissenters sat on their hands once they had estimated the assembly’s mood.30 For Harold Macmillan, such demonstrations of support sorted Tory wheat from Manchester Liberal chaff. It was “those elements… which followed consciously or unconsciously the Whig or older Liberal tradition [that] were opposed to the new Conservatism. The true Tories accepted it with growing enthusiasm.”31 (Unfortunately, the expression ‘Whig’ has diminished in explanatory power: it is used generally as a term of abuse by each tendency towards the other.32) Naturally, this was one of Macmillan’s detours into retrospective exaggeration occasionally exhibited in his memoirs. It allowed him both to imply a straight line of policy development from his Middle Way, through the Industrial Charter, to the programme of modernising Conservatism that was elaborated in his premiership, and to paint himself as the one of the main curators of the ‘true’ Tory heritage. Nonetheless, he had the guts of the issue right. The problem for the Party was that the electorate was not listening. In September 1947, the CRD had commissioned Mass Observation (MO) to run a survey on public reactions to the Charter. For the ‘new’ Conservatives the results were miserably disappointing. Despite considerable press coverage, not only did barely 20% of respondents know what it was, only one quarter of those could provide detail on its content.33 Even when shown the document ‘blind’, few participants could recognise it as a Conservative publication, and a significant proportion believed it to be Socialist or Communist.34 “It is difficult not to come to the conclusion,” asserted MO’s report, “that to most people… a Conservative industrial policy is not yet in any way a living idea.”35 If the Charter made no significant dent in public consciousness, then, what did start to pull voters back towards the Opposition? The answer is not entirely straightforward. Recovery almost certainly was little related to detailed proposals, but stimulated in part by Labour’s shortcomings and the Tory response to them. As the Government’s austerity measures bit harder on the general public, the Tories responded by developing potent symbolism of their own to counter Labour’s depression rhetoric. One segment of this embryonic myth was the menace of economic controls that had been highlighted in the

22

Chapter Two

Industrial Charter; another was the accusation of economic mismanagement that became especially piquant after the groundnuts scheme flop.36 But the third salient was perhaps the most important: the extension of rationing in peacetime, especially the trimming of meat rations in 1951, led to substantial public discontent and was exploited ruthlessly in Conservative propaganda.37 Such images remained particularly powerful throughout the 1950s, as ‘the consumer’ began to emerge as a new political creature. The Tories thus began to develop a novel political discourse, wherein “the housewife, the consumer, and the marketplace [were combined] into a coherent political strategy.”38 During the thirteen years of Conservative rule this outlook was to become somewhat troublesome in respect of resale price maintenance, as we shall see shortly. The revival of Toryism in the post-war period was assisted too by a growing cluster of pressure groups that, whilst not officially connected to the Party, began to peddle agendas sympathetic to it–or, at least, antipathetic to Socialism. The British Housewives’ League, Aims of Industry, and the Vermin Club (to mention some more infamous names), though advancing a Conservatism that was principally “reactive and issue-specific”, served to keep populist issues such as rationing and business restrictions in the public eye.39 At the centre, the Party was reluctant to give official sanction to these bodies–an attitude it reprised in the mid-fifties when confronted by the Middle Class Alliance–but it was nonetheless thankful for the additional publicity.40 At the same time, genuine party groups such as ‘One Nation’ raised the profile of Tory concerns by demonstrating that intellectual debate was not the exclusive territory of Labour. The group’s first booklet–published by the Conservative Political Centre (CPC)–certainly stimulated admiring glances from those who desired a more interventionist form of Toryism.41 But again, even this publication did not regurgitate neat collectivism. For whilst One Nation trumpeted the Conservatives’ acceptance of the welfare state and even countenanced the possibility of its extension, this was counter-balanced by some sections that were clearly plucked from other traditions of party thought.42 In particular, it insisted on the importance of generating more market competition in order to produce the wealth necessary to sustain the welfare state. Indeed, fast-forwarding to 1954, when the Tory Party was back in power, the group’s second pamphlet went further, maintaining that not enough had been done to promote this competitive system since 1951.43 Nonetheless, the One Nation set made a decent fist of resolving the tensions in Tory philosophy over the state’s proper role. Over time, and not always by the most direct of routes, the Conservatives’ rhetoric filtered through to the public. The next significant party publication was The Right Road for Britain, a more detailed set of policy pledges which served as the basis for the 1950 manifesto. Though this seemed to shift slightly to the

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right on industrial policy, it nonetheless vouchsafed full employment and accepted practically all the apparel of the welfare state.44 For the public, the Party managed to keep this double-sided message consistent from 1947 until its election victory. A message repeated often enough usually sticks: by 1951 enough of the electorate was convinced of the Tories’ sincerity to return them to power. One thing that is essential is to step outside contemporary frames of historical reference to acknowledge that the Party’s rhetorical consistency about ‘rolling back’ the state was a product of the Thatcher years; in the early post-war period, such language at its extreme was confined to the fringes of the Party. Nevertheless, Tories did not speak with one voice on industrial interventionism and party literature like the Industrial Charter and The Right Road for Britain was necessarily a compromise. Rather than Conservatives casually accepting the benignity of state power, post-war discussions can sometimes appear to the historian be facing in two directions at once. These tensions were not removed by the election victory of 1951. Instead, they infused internal party debates throughout the next thirty years and recurred especially at times when Tory Governments appeared to make significant policy alterations, such as those that ushered in the modernisation programme. One of the first areas in which they made themselves felt was on the matter of industrial restrictive practices.

Resale price maintenance and the ‘small man’. Rpm, or vertical price-fixing, whilst not entirely alien in Britain’s century of industrialisation, did not blossom until cartelisation began to take root at the opening of the twentieth century.45 Observed first in the market for books around 1890, the system was operated both collectively and individually.46 In the first instance, a group of manufacturers–through a trade association–stipulated retail prices at which their goods were to be sold. Sanctions against shopkeepers who refused to sell at the fixed price included stop lists and fines; these were generally enforced in private trade courts.47 This variety of retail policing was, in strict terms, a ‘price ring’, though in the post-1945 period the term was sometimes indiscriminately applied to all price maintenance. Individual rpm obtained where a single manufacturer operated the same system, without the regulatory machinery provided by a trade association. Although its origins are still a matter of dispute, rpm had become widespread by the inter-war years.48 By 1939, it covered at least 32% of consumer expenditure, and had inspired its own lobbying group, the Fair Trading Congress (FTC), dedicated to its preservation.49 Most importantly, it was during these indigent years that rpm acquired its emblematic status amongst shopkeepers. Riding on widespread assumptions of cartelisation’s social utility in times of

24

Chapter Two

want, rpm was seen to protect jobs and ensure a guaranteed minimum profit for small retailers.50 Throughout the decade, trade associations diligently presented this argument both to state officials and to their members and to state officials.51 For Conservatives especially, this assumption retained resonance in the first post-war decade, when they feared anything that might invoke the phantoms of 1930s’ privation.52 The Labour Party was slightly less susceptible to this assessment. Returning to office in 1945, it quickly showed considerable interest in the problems of retailing and distribution. The demands of wartime economic management had pointed up deficiencies in this area; in an environment where every sector of the economy was open to scrutiny vertical price-fixing was no more immune than any other restrictive practice.53 Though it had been the Liberal Party that was first in the post-war period to emphasise rpm’s defects, the Government–urged on by the Co-operative movement–was not slow to jump the bandwagon.54 In 1947, the Lloyd Jacob Committee was commissioned to examine the scope of price maintenance. Two years later it reported contemptuously on the system of collective rpm, arguing that since all parties were committed to full employment any claim that the practice was necessary to moderate the effects of recession no longer held true.55 The Committee recommended legislation to abolish price rings, although it acknowledged that there was still value in individual rpm, since indiscriminate discounting of well-known brands might damage their standing.56 Such action would have resounded well with government moves to promote competition under the Monopolies Act of 1948. Given these new antitrust clothes, Harold Wilson, then President of the Board of Trade, decided to be bolder even than Lloyd Jacob’s recommendations. Despite trepidation from some fellow ministers and probable opposition from a variety of powerful institutions, including the TUC and the FBI, he drew up a White Paper proposing elimination of all forms of price maintenance.57 Unluckily, by the time of its publication in June 1951 the notorious Cabinet spat over dental and ophthalmic charges had led to Wilson’s self-confinement to the backbenches.58 Responsibility for the policy thus fell to Sir Hartley Shawcross, the trenchant barrister who had led Britain’s case at the Nuremberg trial. Shortly after his arrival at the Board, Shawcross had received a delegation from the Fair Price Defence Committee (FPDC), as the FTC had renamed itself. If he had believed that opposition to abolition would be muted he was quickly set right. One delegate voiced small traders’ opposition both violently and pithily. Any proposal to eliminate individual rpm, he claimed: [Would be] an attack, definite and deliberate, on the small traders of the country… The big fellows will… take low profits and pass dividends in order to smash my people: the small men. I am amazed if that is the position you condone.59

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A week later Shawcross expressed intense reservations in Cabinet at the bequest of a commitment that would excite hostility “from manufacturers, shopkeepers, and possibly trade unions”. The Cabinet was convinced; the White Paper would only be published with the heavy caveat that no legislation was guaranteed in the following parliamentary session.60 By the autumn, the Labour Government had fallen. Sir Hartley’s unease was prescient. On the approach to October’s election, the Conservative leadership was being harried by the Party’s rank-and-file to retain rpm. Tory MPs had been vigorously targeted by the FPDC whilst out of government.61 In consequence, backbench hostility to rpm’s repeal had progressively hardened between 1949 and 1951.62 Equally, elements in the Tory grassroots were potentially mutinous. Unusually for such a supposedly inconsequential topic, three motions deploring Labour’s proposed abolition had been submitted to the National Union for 1951’s autumn conference.63 The higher strata of the party were sufficiently vexed by the possibility of embarrassing rebellion at conference that the policy document (which eventually became the manifesto’s basis) that was due to be discussed there was phrased in soothingly neutral terms. On the other hand, the Swinton committee, a subdivision of the Advisory Committee on Policy (ACP) charged with co-ordination of the conference agenda, had agreed that “any collective arrangements… must come under public scrutiny.”64 The man destined for the Treasury, Rab Butler, had in fact gone further–announcing that “monopolies, [price] rings and rigging of prices at a high level must and will be countered.”65 But protestations are not policies. In respect of rpm, these were scarce. The Industrial Charter had indicated that price agreements ought to be treated in the same fashion as monopolies, but election manifestos for both 1950 and 1951 mentioned restraints on trade only in the most general of terms.66 Though the unshackling of competition had been a recurrent feature of the Party’s post-1945 vocabulary, residual fear of the pre-war Slump led Tories to be less than fullhearted in applying such logic to restrictive practices. (By contemporary historians, the ‘dread of the 1930s’ is regularly seen as leading to the tender approach towards the trade unions pursued by the peacetime Churchill administration, but it is less noted that it conditioned attitudes towards groups such as small shopkeepers.) The advice of Conservative Central Office (CCO) to election candidates on rpm betrayed not only the long-standing preference for market concentration as an extra guarantee against unemployment, but also the Party’s relentless avoidance of anything that might carry the trace of inter-war callousness: On principle the Conservative Party is opposed to monopolies and restrictive practices whether practised by capital or labour… But it does not follow that all practices which involve some restriction are bad… If the result of a trade practice

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Chapter Two or agreement is to maintain full and stable employment in an industry… the practice may be of benefit all round… [In the case of] price maintenance, the practice is… widespread and to disrupt the whole system suddenly would cause great dislocation and probably unemployment…67

Such an attitude has been criticised by some recent Conservative historians as forfeiting a chance to restore Britain’s economy through a purgative dose of free market liberalism, combined with a stout attack upon trade union restrictionism. Chief amongst these was the late Alan Clark, who believed that this stance demonstrated the Party’s neurosis “that it could now only preserve its power by a level of self-abasement that entailed, in effect, a discarding of its real identity.”68 It would be easy enough to dismiss Clark’s argument as the gloss of hindsight applied with a Thatcherite brush, but many grassroots members in the 1950s felt that their leadership had fled the banner of Toryism and sought vigorously to resist their desertion.69 Prominent amongst these was the FPDC’s cherished ‘small man’, often a major figure in the local constituency association. On the other hand, ‘progressive’ Tories such as Ian Gilmour have sought to defend Churchill’s peacetime ministry as embodying the virtues of ‘One Nation’ Toryism; an administration which bred a peaceable country easily enjoying an historically unmatched level of social concord.70 There is little doubt that this is exactly the manner in which the most of the Party’s élite conceived their approach at the time. Naturally, as John Charmley has mordantly observed, these antagonistic positions are also “instruments in the contemporary struggle for the soul of the Tory Party”; both claiming to find the ‘real’ Conservative essence in those periods in which their respective camps led the Party.71 But this grassroots versus grandees controversy is no invention of the 1990s, rather it is reflective of the ceaseless dispute over party identity and the state’s proper role that we observed above. Whether one labels the temporary victory of the ‘progressive’ tendency in the first two decades after the Second World War a craven surrender or sensible and humane politics, we cannot doubt that latitude was restricted for a government elected with fewer votes nationally than Labour and possessed of a majority of only seventeen seats. This militated against early introduction of anti-rpm legislation. The Government’s dilemma was how to remain in power when all signs suggested the early return of a Labour administration.72 Its solution was to leave the neo-liberal language of freer markets and consumer choice in the sphere of rhetoric, and instead to work within the post-war settlement whilst elevating the political goal of social harmony above all others.73 As one Conservative MP put it: “It is no use our harping on freedom and opportunity. It makes a very limited appeal to a nation which is security minded.”74 Price maintenance was recognised amongst the grassroots as one part of those economic arrangements which ensured that security. It was

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unsurprising, then, when the incoming Board President, Peter Thorneycroft, interred the issue beneath a further state investigation, this time in the hands of the MC. Not for any love for the ‘small man’ was this action undertaken, but instead because of the administration’s paucity of industrial policy and its own fragility.75 A misapprehension needs to be dispelled here. In the 1940s, many small traders backed calls for economic freedom. Later, they were also amongst those that criticised the Government for moving too slowly in this direction. This implied agreement with the free marketeers’ argument that Britain’s economy was suffering from a dearth of competition; yet rpm, the shopkeeper’s credo, was one of the obstacles inhibiting its advance. Were small retailers either selfish nimbyists, wishing the icy wind of competition to blow upon everyone but themselves, or addle-pated individuals unable to comprehend their own argument? Most were not. Rather, we should acknowledge that there was yet another layer of complexity in Tory arguments over the state’s economic role. Demands to ‘free the economy’ were not always viewed as synonymous with appeals for more competition. What some party members sought instead was the non-interference of government in industry. If the economy’s supply side was coagulated with the sludge of restrictive practices, it was not the state’s job to do anything about it. Similarly, the MC was regularly berated by this tendency as “hampering and harassing” the normal operation of business.76 Recognition of such sensitivities played its part in determining the character of the Restrictive Trade Practices Act in 1956. Anthony Eden had finally replaced Churchill as Prime Minister in April 1955, and the following month’s general election had delivered a considerably safer Commons’ majority for the Tories. Early in his premiership, Eden had made it clear that in order to keep intact the 1944 concord on employment, inflation would have to be countered as a matter of urgency. Though principally what he had in mind was the moderation of trade unions’ wage demands and voluntary limitation of price increases on industry’s part, the elimination of price agreements could also help to neutralise inflation.77 (This line of thinking led also to the exhortatory and largely ineffective sequel to 1944’s compact, a White Paper entitled The Economic Implications of Full Employment which was released in March 1956.78) Even before Eden became PM, in Churchill’s twilight months, rpm had begun to rise up the political agenda. After several lurid press reports had exposed the harsh treatment meted out to price-cutters in trade association courts, the Prime Minister himself had taken an interest.79 Churchill warned Thorneycroft in January 1955 that his department had become “very complacent” about monopolies and price rings. “It is important,” rumbled the old warrior, “to show that the Government are deeply concerned with this

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continuing fall in the purchasing power of money. The rise in prices is our Achilles’ heel.”80 In reply, Thorneycroft counselled caution, hiding behind the skirts of the MC’s investigation into collective discrimination, which had not yet reported.81 However, it was clear that the issue could not be ducked indefinitely; it awaited only more propitious circumstances for its confrontation. By June these had fallen into place. In May, the Board had learnt that the MC’s report was likely to condemn collective rpm, and this emboldened its President to challenge the wreckers of competition.82 His Cabinet paper of 4th June argued for far greater resolution in defending the MC.83 Not that ministers received this particularly well. Some were concerned not only that industry circles would resist a beefed up antimonopoly policy, but also that removing restrictive practices would eradicate a valuable insurance device against unemployment.84 More disappointments were to come. The Commission split over the prohibition of collective rpm: four of its number produced a minority report that advocated instead the registration of all collectively run schemes, and their investigation case-by-case.85 Early reaction to these twin reports amongst Conservative backbenchers suggested that the FPDC’s cultivation of this constituency, which had been stepped up in the first months of 1955, had been moderately successful.86 A meeting of the backbench Trade and Industry Committee raised a number of hostile comments towards the majority report. For instance, there was wide endorsement of Aubrey Jones’ view that although competition was necessary, there was equal need for order, “as the history of the 1930s had shown.” He did not believe that “the conditions of the ‘thirties were necessarily past for ever and there would never be a need for stability.”87 An oft-repeated mantra, of course, but no less powerful for that. Peter Thorneycroft may well have wanted to go further over rpm, but was constrained both within the executive and outside.88 Instead, he endeavoured to negotiate a compromise between the two reports’ conclusions.89 He announced to the House that he would act against collective price enforcement, but would leave untouched the practice of individual retail price fixing, which had “a powerful body of support, including consumers” behind it. Moreover, he would introduce a civil procedure to weed out deleterious practices, as he had disliked the “odour of criminality” that had pervaded the majority report’s inferences.90 The President thus succeeded in placating potential backbench critics–from his own side only one shot was launched across his bow. This came from William Shepherd, who trusted that the legislation was not a piece of artifice designed surreptitiously to abolish all price maintenance, since individual rpm at least “clearly and positively fulfilled the public interest.”91 Between July 1955 and the appearance of the Restrictive Practices Bill in February 1956, the compromise implied by Thorneycroft’s Commons’ statement was hammered out in a protracted series of negotiations. Needless to say, the

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Bill was not formulated simply to attack rpm. Part I of the legislation adhered to the minority MC report’s recommendations. It made restrictive trading arrangements subject to compulsory registration and subsequent investigation by a newly created Restrictive Trade Practices Court (RTPC), which could order their abandonment if they were found to operate against the public interest.92 Price maintenance was dealt with the Bill’s second section. This made illegal its most obnoxious aspects–commercial boycotts, private trade courts, and price ‘rings’–in other words, all the apparatus of collectively enforced rpm. The final part amended the Monopolies Acts of 1948 and 1953, trimming the MC’s membership to ten and limiting its activities to those concerned with monopolies of scale. The legislation attracted considerable controversy and was subject to exhausting discussions that involved the executive, backbenchers, Whitehall officials, trade associations and peak institutions of labour and industry. Parts II and III in particular bred wide dispute. With respect to the future of the MC, the Board acknowledged that establishing the RTPC as an alternative contraption to deal with restrictive practices would lessen the Commission’s legitimate purview. Its quandary was, then, what type of investigations it should carry out. Having first promoted a stronger MC in April, Thorneycroft’s views had made a remarkable journey by October. By this time, after some careful nudging from industry groups, he was advocating outright abolition of the Commission. He argued, somewhat naïvely, that this “would make it possible to take the whole field of monopolies and restrictive practices out of politics.”93 This new stance was, however, challenged from within his own department, notably by the Board’s Permanent Secretary, Sir Frank Lee. Officials reasoned that dismissing the MC would not de-politicise the idea of monopoly, since although “the economic case against monopolies is less strong than against restrictive agreements, failure to deal with them at all would be attacked politically.”94 Far from wanting the Commission shut down, many civil servants believed that any diminution in its size would backfire and, prophetically, would lead within a few years to pressure to build it up again.95 Although the mandarinate successfully forced Thorneycroft to drop the idea, it was unable to persuade the President that an undiminished Commission freed from tackling restrictive practices could tackle the mischiefs of monopoly more effectively. Instead, the Board was left with the watery compromise on the face of the Bill. In truth, the MC was a casualty of the decade’s common notion that monopolies tended to improve British economic performance, since they brought about the economies of scale necessary to bear the cost of high risk research and development activities.96 Collective rpm and the other accoutrements of cartelisation were, however, a different matter.

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It was the legislation’s second portion that caused the biggest rumpus. In the negotiation process, the TUC maintained its support for individual price maintenance, but sided with the MC’s majority report on collective rpm schemes.97 Conversely, the majority report was robustly opposed by the FBI, the NUM, and the Association of British Chambers of Commerce (ABCC). Whilst industry groups accepted that collective enforcement had an ugly side, they argued that without some collective sanctions smaller manufacturers would be at a grave disadvantage, since they would be deterred from maintaining prices by “the prospect of a multiplicity of actions and by the complications and expense of court proceedings.”98 These anxieties were echoed at executive level in the views of the Attorney General, Reginald Manningham-Buller. He asserted: “it really is no use supporting individual price maintenance and at the same time destroying all methods of enforcement. The present methods, collective boycott, etc., are highly unpopular but it cannot be denied that they are effective… I fail to see why the dishonest trader should be free to go round the whole circle of suppliers of his goods.”99 As with the third part of the legislation, these opinions were robustly withstood by Whitehall officials. Sir Robert Hall, Economic Adviser to the Government, lamented industry’s attitude, claiming that British manufacturers’ guiding principles were “quite different from the doctrine that competition is good and restrictions on it are bad. It goes back to the middle ages when order was regarded as of much more importance than progress.”100 An accusation he could have launched with equal justice against a large proportion of the Tory Party. Hall also offered some damning words on the ManninghamBuller prospectus, claiming that if his view prevailed the only thing abolished would be the private court, whilst collective boycotts would be “brought back with a vengeance.”101 Thorneycroft listened to the official view on this count. He was able to persuade the Cabinet Committee charged with framing rpm legislation that to sanction the collective boycott would be “repugnant” and ‘”retrograde”.102 Nonetheless, though the majority report’s recommendations were largely followed in respect of the range of permissible sanctions against price-cutters, there was some late dilution after backbench agitation. Collective enforcement of individual price maintenance was made a registrable practice, rather than illegal outright. The Lord Chancellor even gave candid support to trade associations who wished to “assist individual manufacturers to enforce their resale price conditions”.103 Thus, despite brave attempts to widen the Bill’s scope, there remained ample scope for the play of collective trade association will in the policing of prices. As to individual price maintenance, that had lain outside of the terms of reference for the MC’s investigation, although the majority report had left the door to its abolition slightly ajar by observing that “whatever its advantages… [individual rpm] restricts the ability of distributors to compete with one another

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in price. It therefore restricts the freedom of the consumer to choose between methods of distribution.”104 Nonetheless, despite the preferences of Lee and his Board officials, it was never likely that Thorneycroft would challenge his own backbenches openly by extending the sphere of abolition. Quite the reverse, in fact, as, to calm the Tory Party’s nerves, the legislation had incorporated section twenty-five; this gave explicit legal backing to price-fixing when individually enforced.105 This was considerable dispensation for the price-fixers; proof of the success that could be achieved through an intense campaign of lobbying by a well-connected pressure group.106 For an effective competition policy, alas, this attempt to suborn Conservative opposition proved a major obstacle to its future development–as, for small traders, section twenty-five became the warranty that guaranteed their livelihoods in the face of large retail competition. By the time the Commons saw the Bill, all the significant battles over the legislation had been fought out and its main sinews were fully formed. Nevertheless, this did not prevent over 300 amendments being tabled, many of them concerned with the width of the gateways through which restrictive practices might escape the RTPC’s censure.107 Thorneycroft himself added almost 100 amendments to the Bill and accepted over fifty of those from the House.108 When the RTPA finally passed in June, it appeared emaciated and frail in the light of the recommendations that had initially inspired it. But it at least represented a start in modernisation of the distribution sector. Those political historians who have paid any attention to the RTPA, and they are few, have tended to look askance at the project. “Not so much toothless as equipped with an ill fitting set of ineffective dentures,” was Correlli Barnett’s sarcastic verdict, for example.109 Recent research has also sustained the Labour Party’s view at the time, that the Act represented “a charter for big business”.110 Unquestionably, the Act’s provisions reflected many of large manufacturers’ desiderata–weakening the apparatus that had sustained cartelisation, for instance, meant that take-overs became both less complex and more attractive. It did little to confront oligopolistic behaviour such as price leadership, yet put pressure on small firms that had relied upon trade agreements to harbour them from competitive strains, thus reinforcing the growing trend towards industrial concentration.111 Neither did it greatly develop the “virtues of free enterprise– initiative, adaptability and risk-taking”, that Thorneycroft had hoped it would secure, although its lack of success was perhaps due to an over-optimistic (but understandable) assessment of the bountiful effect that economies of scale would have on innovation and research.112 Sizeable caveats should be added here, however. The Act was far from an undiluted source of pleasure for industry; in fact the FBI’s leadership was taxed greatly by a large slice of its membership which wanted the Federation to oppose the legislation root and branch.113 The organisation’s executive resisted demands for a propaganda crusade against the

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Bill, establishing instead a campaign that sponsored substantial amendment in the Commons. But that it had to wrestle to maintain a middle course between outright support and implacable opposition did not suggest that all of industry gleaned what it desired from the legislation (and incidentally demonstrated that peak organisations were themselves not as strong as they outwardly seemed).114 Similarly, although pruned, the MC stayed in place and retained considerable authority to investigate the excrescences of monopoly. Perhaps most importantly, by shifting the burden of proof onto the practitioners of trading restrictions, the Act led almost immediately to the abandonment of many market rigging practices, and to the attenuation of predatory techniques of acquisition and merger.115 Given the restraints on policy making in this virgin area, it is difficult to visualise anything very much stronger getting through Parliament in 1956. It should not be construed that the 1956 action against rpm was an early form of the type of modernising Conservatism that was described in the first chapter. Thorneycroft did not share the cast of mind which has been ascribed to the later genesis of Macmillan’s programme. Though it glossed over its inconsistencies, his defence of the legislation was couched very much in the ‘neo-liberal’ language of the early 1950s, rather than in terms that implied a state led strategy to promote economic growth and reconstruction. The Act demonstrated the arch tensions in Tory economic ideology that Jim Tomlinson has characterised as arising from the executive’s perceived necessity to promote both “liberty” and “order”.116 Nevertheless, the fact of the RTPA suggested that, however grudgingly, the Tory Party did see the necessity for some sort of competition policy and this, alongside Thorneycroft’s insistence that the proposals should not be taken as the last word on the matter, helped to prepare the political ground for Heath’s later attempts at industrial modernisation.117 What also becomes apparent from this discussion is the passion with which rpm’s guardians were ready to defend the practice and the extent to which their cause had established sturdy roots on the backbenches of the Conservative Party. Of equal importance is its demonstration of ‘governance’, in other words, the copious restraints on government action. These factors were to have critical influence over the form of the modernising programme that was developed under the Macmillan and Douglas-Home premierships.

Europe and Empire. Imperial commitments may not, at first glance, appear to be closely related to concerns about the health of the domestic British economy. However, the idea of Empire was in truth closely integrated into the patterns of thought that we have observed above. The ordered markets of inter-war Britain were entangled with

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colonial bonds in two ways. First, in a practical sense, British manufacturers in the post-war environment exhibited “a structural attachment to relatively secure… slow growth export markets, many of them in former Empire countries or the sterling area.”118 Assiduously supported by the FBI, this inclination was rationalised by the argument that post-war recovery relied fundamentally upon maintaining continuity with pre-war domestic and overseas markets. British firms appeared very vulnerable to “American-dominated open competition”, against which Imperial preference and established markets provided an invaluable shield.119 This hangover from the 1930s was once again interleaved with the promises of the 1944 contract, so that these mature markets were seen in both industry and government circles as more likely to preserve employment and hold back any return to depression conditions.120 Less prosaically, maintaining the bloom on the Imperial flower was essential especially for Conservatives. Disraeli’s Party of Empire could not lightly distance itself from one of its defining articles of faith. Furthermore, from 1932 its standard ‘kith and kin’ rhetoric had been augmented by another layer of conviction. The National Government’s introduction of preferential tariffs occasioned the legend that Britain’s economic virility was bound inseparably to the maintenance of her colonies.121 Even after the Second World War, there remained still a powerful minority in Tory ranks that would have gladly snapped up full Imperial preference on Joseph Chamberlain’s original lines had it ever been offered.122 And the bald facts were in their favour: in the first fifteen postwar years, most of Britain’s overseas investment went into Commonwealth nations, as did the majority of her exports, and many of her essential imports emanated from there.123 Many ‘New Conservatives’ wanted to unpick the political threads of Empire, but very few desired to break economic ties. In any case, to reassure grassroots Tories the Party’s leadership could only modify its vocabulary slowly. At the 1949 conference, for instance, a policy statement on the Empire may have held up the prospect of colonies evolving into independent dominion states, but it did not budge on the obligations of economy and defence that knitted the Commonwealth together.124 And Churchill’s somewhat naïve, but demotically powerful, ‘Three Circles’ rhetoric–in which Britain would act as the broker of an international partnership between her Commonwealth, Western Europe, and the USA–helped to nourish the Party’s belief that great power status could be sustained by conserving the Empire.125 Churchill had engaged in some curious disquisitions advocating a “United States of Europe” whilst in opposition, but, after all, it was safe to do so whilst Ernest Bevin–hardly a flag bearer for European unity–was ensconced at the Foreign Office. Such dalliances allowed him to continue to pose as the universal statesman, rising above narrow partisan politics to pass comment upon the whole vista of the post-war world. In any case, it seems likely that Britain’s wartime

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leader conceived of the project only in abstract terms, rather than in the concrete fashion elaborated by the Schuman Plan.126 Back in office, the Conservative Party found that the dust of Empire lay so thick on its boots that it could not be brushed off easily. So the Tories tended to adhere to the status quo: they neither embraced European projects nor sought to broaden existing economic or political arrangements with the Commonwealth. This approach persisted throughout their first four years in power. When Eden succeeded Churchill as PM in 1955, the Party was still hoping the European venture would come to nothing. The hope was misplaced. Grown out of the Schuman Plan, the European Coal and Steel Community (ECSC) had been created–without the UK–in 1950. This early promise of ongoing European national integration had, however, been quickly disappointed. During the summer of 1954, proposals for the creation of a European Defence Community (EDC) had beached on the defiance of the French Assembly. Understandably, it seemed to British political élites that movement on the European project was likely to be becalmed for a considerable stretch.127 They misjudged. Stirred by the Benelux countries, the ECSC Six agreed to meet at Messina in June 1955 to discuss the possible creation of a ‘Common Market’. Britain remained nonchalant about the prospects for the talks’ success. Even Europhiles like the British Ambassador to Paris, Gladwyn Jebb, believed that Messina would achieve little.128 The Government did not bother even to send an observer.129 It was somewhat of a shock to UK high political opinion, then, when the Messina powers emerged with a commitment to construct a customs union between them. Still the Eden Government was not interested in joining with what would have necessarily been a supranational body. The Government seemed to believe that the twin props of British foreign policy–the Commonwealth and the ‘special relationship’ with the USA–made such engagement superfluous.130 Much of this commitment can be pinned down to Eden’s personal preferences, although the tenderness of industry opinion and grassroots Tory sentiments on Empire also weighed in the matter.131 Whatever its foundation, the position did not accord with reality. Privately, the Commonwealth Office was already of the opinion that the Empire was completely dead, and its replacement could not be fashioned into an effective economic bloc.132 Neither was the ‘special relationship’ any longer quite so special: the Americans made it known unequivocally that if there was to be a European customs union then they wanted the UK to be part of it.133 But until the spring of 1956, the British Government assumed that, like the EDC, the negotiations between the ECSC partners would either founder eventually or could be derailed.134 When it realised belatedly that the Messina framework was durable, a scramble started to devise a method by which the UK could share in

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the Common Market bounty without destroying politically indispensable Commonwealth associations. In consequence, Harold Macmillan and Peter Thorneycroft pressed a blueprint called ‘Plan G’. This was designed to weld the countries of Western Europe into an industrial free trade area (which would have also preserved Commonwealth privileges in agricultural produce), thus avoiding the establishment of the sort of “managed market” upon which the six countries of the European Community seemed intent. ‘Plan G’, which appeared in July 1956, a year after Messina and at the dawn of the Suez ordeal, had the advantage of commanding the support of the Foreign Office and the Empire wing of the Conservative Party, both of which were worried about the political repercussions of a Common Market as an extension of the ECSC.135 Unfortunately, although the plan was broadly acceptable to the notoriously sceptical Eden, the French Government declined to countenance the idea. Possibly this was in vengeance for Britain’s refusal to participate in the EDC four years earlier, though recent research by Richard Griffiths has suggested that the French viewed the plan as a malicious attempt to disrupt ratification of the Rome Treaty.136 However, Peter Catterall, the editor of Macmillan’s diaries, has argued that, far from attempting to destroy the outcome of the Messina negotiations–as the French feared at the time, and as some later historians have continued to claim–Macmillan’s attitude towards Europe was always utterly consistent. He favoured looser free trade arrangements, a less federal institutional structure for the Community, and a knitting together of Commonwealth and European interests into a huge market that would match or exceed that available to the Americans behind their tariff wall.137 This thinking was demonstrated in ‘Plan G’ and, later, in the creation of the European Free Trade Association (EFTA). The Plan was not an attempt to impede the EEC, but to find a way in which Britain could be associated with it economically, without having to sign up to the prescriptive political arrangements implied by the Messina powers’ strategy. Nonetheless, the Six’s questioning of the sincerity of British motives was, in due course, to have a significant impact on the prospects for success for the Macmillan Government’s later attempt to accede to the Common Market. The two memoranda in which Macmillan and Thorneycroft advanced ‘Plan G’ stressed the danger, economically, of Britain being liable to “forfeit an influence over commercial policy in Europe and be left only with the remnants of Imperial preference”.138 The vocabulary employed was important. Not only did acknowledgement of relative economic decline pervade the document, but also the Empire was clearly to play just a small part in its reversal.139 In pushing the plan, Macmillan and Thorneycroft also began to open up debate at the Party’s uppermost level on the relationship between international competition and industrial modernisation.140 These themes were to reappear in a more

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sharply drawn form four years later. One of the defining elements of the developments that later came to be gathered under the rubric of modernisation was, then, in place prior even to Macmillan’s occupancy of Downing Street. After July 1956, domestic economic issues were pushed into the shadow of brooding international storms. The Suez conflict, which is (at best) of only marginal interest here, dominated national politics from the late summer through to Eden’s resignation in January 1957–and its consequences were to ripple out over a longer period still. Amongst its casualties was ‘Plan G’, decision on which was deferred three times by the Cabinet whilst the Egyptian escapade was being played out. By the time the Government had agreed it as the basis for negotiation with the Six on November 20th the Messina powers had shut the door against British involvement by their decision to incorporate agriculture into their customs union.141 However, the Cabinet’s belated acceptance of the plan in principle was not without meaning. It represented the first unambiguous admission by the Conservative élite that British industry could not indefinitely prosper behind the stack of Empire preferences.142 In doing so it helped–like the RTPA–to establish the basis for the modernising rush that was to come. But it was to be 1960 before competition in the economy, or its absence, again came under the lens of government.

CHAPTER THREE THE SHAPING OF MODERNISATION

Statecraft in extremis. Perhaps Harold Macmillan’s biggest achievement in party political terms was to turn around the Conservatives’ electoral position in the aftermath of Suez. Few, and not even the new Prime Minister, if his remark to the Queen that the Government that he formed in January 1957 “might not last six weeks” can be taken as more than deliberate masquerade, believed that the Conservative Party could secure an election-winning position from the obloquy that followed the misadventure in Egypt.1 In retrospect, it is possible to see the Conservative Party’s dire position as being more illusory than real, a media-concocted crisis which bore little resemblance to the views of the public as a whole. Whilst public sentiment was not fully behind the Eden Government’s policy in Egypt, contemporary opinion polls indicated that it was the issue’s handling, rather than the stance taken by the Government, which had alienated the electorate.2 Nonetheless, in the fevered atmosphere of Westminster the Party felt itself to be under attack, and the lack of self-confidence (as well as its perhaps inevitable electoral fallout) which grew from this fear was the genuine problem facing Macmillan in his first days as Prime Minister. His soothing of the Party’s nerves in the critical months at the beginning of 1957 was one of his most notable achievements, capped only by his engineering of a resounding Tory victory at the general election three years later. Conditioned by his period at the Exchequer, in which he had followed a rigid disinflationary strategy that mirrored the programme of the Bank of England, much of the press assumed that Macmillan would lead from the Party’s right.3 For instance, The Times’ leader admonished the new Premier to remember that the Party had “no future electorally” if its course did not remain “progressive”. Furthermore, though the essential accomplishments of the age–“full employment, social services, [and] industrial understanding”–were not threatened by No.10’s latest occupant, “the old guard of the Party [would] be encouraged and

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fortified [by the appointment].” Such die-hards had to be “constantly rebuffed and rebutted” since, paradoxically, the Macmillan administration would succeed only if it remained “Butlerite”.4 The press need not have worried; the new PM quickly became expert in frustrating the hopes that the right wing had placed in him. The rift between Britain and the United States which had been occasioned by Suez was quickly repaired, helped not least by the Prime Minister’s wartime friendship with Eisenhower, leaving Macmillan to concentrate on the reconstruction of the Party’s reputation on the domestic front. His first Cabinet was assembled in judicious manner, with few, save perhaps Butler in his Home Office appointment, being in a position to complain about the allocation of jobs. In the light of continuing speculation about the administration’s tenuous security, it was a finely balanced team which was not without its talents. The retention of Selwyn Lloyd at the Foreign Office despite his supposedly atrocious performance during the Suez crisis was widely acknowledged as the only conspicuous flaw.5 Macmillan was in no position to be bold, however. Indeed, the whole period from 1957 until October 1959 was symbolised by a strategy that was termed in the first chapter ‘minimalist statecraft’. In other words, it was geared towards the pursuit of domestic stability and limited policy goals that would ensure the reconstruction of Tory morale and, in due course, success at the polls. This is not to say that the first Macmillan term was nothing more than steady management, merely that more problematic aspects of policy went largely unaddressed. Even the resignation from government ranks of Lord Salisbury in March, over Britain’s acquiescence to Archbishop Makarios’ return to Cyprus, although it made the Government appear temporarily more vulnerable and freed a vocal opponent of decolonisation from the shackles of collective Cabinet responsibility, did not disconcert Macmillan unduly. In fact, privately, Macmillan seemed pleased that Salisbury–whom he considered a serial resigner–had gone over a relatively minor issue.6 Moreover, once the Government had survived the Commons’ Suez debate of 15th and 16th May, in which fourteen Conservative backbenchers abstained (relatively few, considering that the leadership had expected a far higher figure, which might have put the administration in danger of collapse), the Egyptian spectre slowly disappeared from press headlines; the Government had passed its nadir.7 After the debate, the PM was sufficiently confident to write to his old friend John Wyndham to invite him to join his Downing Street team of private secretaries: During the last few months I have hesitated whether I would venture to write to you about the chance of your being willing to rejoin the old firm… The fact is that I did not really think my administration could last more than a few weeks; but we seem now to have got over quite a number of jumps in this Grand National

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course… with the same jockey up and the Cecil colours fallen, I am plucking up my courage…8

Macmillan’s pleasure in a swipe at the recently departed Lord Salisbury (especially as Lady Dorothy Macmillan was a Cavendish) was self-evident. The real significance of the letter, though, was in the fact that it was sent at all. The Prime Minister had begun to garner confidence in the durability of his administration. We must nonetheless be cautious on this point. Growing confidence at the Government’s top levels neither meant that the problems of Suez’s aftermath had disappeared, nor that ministers were suddenly in a position in which their freedom to manoeuvre was greatly enhanced. Though the immediate crisis had faded, and with it the threat of sudden government collapse, the congeries of problems that the Middle Eastern fiasco had piled onto the Conservative Party was to take a considerable length of time to disentangle.

Problems of Macroeconomic Policy I: Deflation v. Expansion. After five months in which his main, if not sole, objective had been simple survival, Macmillan was able to turn to the prospect of a general election, and the production of a winning package of policies. Arguably, the new Prime Minister had chosen Peter Thorneycroft to succeed him at the Treasury to continue the policy of mild deflation which he had endeavoured to inaugurate under Eden.9 Yet Thorneycroft manufactured, in his April budget, what Macmillan described (oddly, in the light of subsequent events) as “the giveaway”.10 Pitched at the disgruntled middle classes in the wake of Suez, it was a relatively temperate expansionary package. Admittedly, its £100 million reduction in taxes came on top of a half point interest rate cut earlier in the year; even so, a bank rate of 5% was a genuinely high figure in the context of the postwar period. More importantly, the effect of the broadly deflationary measures introduced by Butler in October 1955 and Macmillan’s own cuts in the Civil Estimates the following year was still being felt in the economy. Hence Thorneycroft’s adjustments were no more than prudent tweaking: not enough in themselves to provoke an unprecedented increase in domestic demand. Indeed, Robert Hall, now Head of the Economic Section at the Treasury, confessed to his diary: “I do not feel much doubt that this is quite an austere budget on any of the standards of the last 10 years.”11 The budget’s political effect was felt above its economic one. The press, despite some grumbling from the usual suspects about a “rich man’s budget”, received the measures with restrained approval.12 If anything, the criticisms from the serious media were rather that the Chancellor’s assortment of devices had not been expansionary enough. The Economist’s leader, for example, com-

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plained that investment allowances had not been restored and that the Capital Issues Committee had been given too much power to restrict credit by physical means.13 Largely, though, the budget helped to restore confidence in the Government’s managerial abilities. The main skirmishes over economic policy, which finally set the Tories on an expansionist path, were yet to come. In the autumn of 1957 a potential sterling crisis developed. When the House rose on 2nd August 1957, it was revealed that gold and dollar reserves had fallen by $14 million in July. The Government’s refusal to countenance sterling’s floatation–as proposed by Enoch Powell (Financial Secretary to the Treasury (FST)) alone amongst the Government–cost the Bank of England some $400 million in the next month, as it struggled to defend the value of the pound.14 In the event, the threat to sterling’s value was probably short-term, largely caused by speculative movements in ‘hot money’, but it did prompt the Treasury, at the Bank’s insistence, to raise interest rates to 7%, which seemed to terminate the pound’s predicament.15 The course of the crisis is of less interest than the bout of economic reassessment amongst Treasury Ministers that accompanied it. Faster price rises throughout the summer had begun to spread unease. Most acutely, this was felt by the two junior Ministers at the Exchequer. Nigel Birch, the Economic Secretary to the Treasury (EST), in particular had begun frequently to suggest that “the Government was bound to lose the next election and that their own supporters were furious with them because of the continued rise in prices, the power and arrogance of Trade Unions, and the inability of the Government to do anything.”16 Birch’s solution might have seemed a rather archaic one in the context of 1950s’ demand management culture: he argued that to temper inflationary pressures and defend the pound it was necessary to restrict the money supply. Although Tories had toyed with the quantity theory of money in the 1940s, they had refused to adhere to it since returning to power in 1951. Nonetheless, the theory was enjoying a voguish period amongst financial experts. Amongst its protagonists were influential journalists Oscar Hobson, the News Chronicle’s City Editor, and George Schwartz of the Sunday Times; whilst high-profile economists Frank Paish, Lionel Robbins, and D.H. Robertson were also in the tough money camp. In this atmosphere, Thorneycroft had been repositioning his views. The man whom Samuel Brittan disparagingly called ‘Thorneycroft Mark I’ had issued a rejoinder to deflationists in his April budget speech: “To slash production, to drive down investment, to push up unemployment to a level at which… we have manufactured our own depression, is to say the least a high price to pay for stability.”17 His successor, the ultracontinent ‘Thorneycroft Mark II’, thought differently. “Politically an increase in unemployment [is] preferable to the fall of the pound… [to this end] the main object must be to limit the supply of money,” he fervently informed the Bank of

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England’s Deputy Governor when they met in September.18 By contrast, Treasury mandarins were more circumspect. Whilst, temperamentally, the Second Secretary at Great George Street, Leslie Rowan, favoured action on the money supply, rather more importantly, both Roger Makins (the Permanent Secretary) and Robert Hall remained unconvinced that yet another dollop of deflation would be advantageous. But by August the Chancellor had practically ceased to take any advice from officials. He preferred, when sterling came under pressure, to call Lionel Robbins back from the continent to advise on protecting the pound.19 Predictably, Robbins urged the deflationary approach. Nevertheless, if between April and September No.11’s occupant had been bewitched by the leading lights of monetary constriction, No.10’s was more ambivalent. Macmillan had discarded his curious apprehension at the budget. Now he had become increasingly influenced by the Oxford economist and zealot for growth, Sir Roy Harrod. Between 1957 and 1963 Harrod took upon himself the onerous task of writing to the PM, sometimes twice a week, to plug economic expansion. This often caused exasperation amongst Macmillan’s officials, but as one of the few independent sources of economic advice available to the Prime Minister, and one whose instincts dovetailed neatly with the Premier’s own, Macmillan was frequently prepared to listen to Harrod’s advice.20 As potential Conservative candidate for a marginal seat in Norfolk, Harrod’s interest in the economy’s condition was not merely academic. Moreover, not surprisingly, his estimate of the approach necessary to secure the Conservatives a third term in power was somewhat at odds with that of Birch. “I am sure you are told that the cost of living is the most vital point for voters,” he remarked to Macmillan in mid-August, “I do not doubt its importance. But I believe that more important for the middle of the way voter, the small man, is the state of trade. Nothing will gain you votes like fully buoyant trade.”21 Seizing upon this, Macmillan minuted his Chancellor in a tone more characteristic of his later years as PM: “I have been worried for some time about the failure of production to rise… It would be very gratifying if, after all, we found that stimulants and not sedatives were the right remedy.”22 Unfortunately for the expansionist faction, Thorneycroft, by now fully inducted into the deflationary clique, considered that sedatives were exactly what the economy required. A few days later, after meeting with the Chancellor, Macmillan seemingly felt the same. In his Cabinet memorandum of September 1st , he supported the Birch prognosis above that of Harrod: The Government, gravely shaken by Suez, has just managed to maintain equilibrium over the past seven or eight months… Nevertheless, the Conservative Party cannot approach the next election with any confidence… [inflation has] injured people disproportionately represented in the Party organisation in the constituencies…

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Moreover, the PM had, though perhaps with some reluctance, been converted by restrictionist arguments. Hence a squeeze on the total volume of money was essential; this would, he alleged, dampen wage cost inflation and give a margin of slack in the economy. He now believed, apparently, that 2 or 3% unemployment would have “negligible”political effects. Despite this apparent accord with the Treasury team’s analysis, however, Macmillan was careful to drop a little analgesic into the document. So that the policy should neither be seen as an attempt to force a show-down with the unions, the leaders of which had “been very moderate in exploiting their economic opportunities”, nor the excuse for major cuts in state expenditure, as there was “nothing very substantial to be squeezed out” in the public sector.23 This can be seen as Macmillan’s naturally good Cabinet management, though it was as likely to be his instinctive predisposition peeking through the text. The importance of this paper for the discussions here is manifold. Firstly, it represented an intimation that full employment would be abandoned as the primary goal of macroeconomic policy. Whilst, for Conservatives, there was nothing particularly sacrosanct about a definition of full employment that placed joblessness somewhere near to 1½% of the labour force, nonetheless this would have been a major departure from the assumption that the Government could not survive in office with a level appreciably higher. After 1944, this view pervaded the Party’s central organisation, as Peter Dorey has evidenced in recent research.24 It exhibits the fragility of Macmillan’s confidence in his Government’s survival that, in defiance of his instincts and those of most liberal Tories, he could so gamely accept the Thorneycroft diagnosis of the likely electoral penalty if the Government was to remain idle in the face of escalating inflation. Thus, as well as an economic decision, this judgement was about the correct means to return the Conservatives at the following election. This was, of course, still in accordance with the ‘minimalist’ statecraft strategy. Its aim was unchanged: the creation of an image of governing competence and the delivery of the ‘goods’ that were necessary to preserve the Conservatives in office. What had altered–albeit that the change was evanescent–was the primary economic ‘good’ that the Chancellor at least believed the state should be delivering. We ought to bear in mind that the Prime Minister was, not yet nine months into his premiership, probably unconvinced that he could carry the Cabinet with him against his Chancellor’s views. In any case, the possibility of another resignation coming so abruptly after Salisbury’s could have caused enormous harm to the administration’s standing. Macmillan may have also become more sanguine about unemployment as the Chancellor had been pressing on him the line that “deflation would cure the wage/price spiral without forcing the Government to face a row with the Unions or a strike.”25 It seemed, in other words, to promise a degree of painless labour market modernisation.

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Behind this was a rather more complex argument about the cause of inflation. The analysis contained in Macmillan’s memorandum demonstrated the inconsistencies in the Government’s approach. The standard neo-Keynesian assumption was that inflation was the price to be paid for economic growth stimulated by expanding domestic demand. Accordingly, it was pressure on resources that instigated price rises. Opposing this ‘demand pull’ view of inflation was the argument that escalating factor costs, particularly wage rises in excess of productivity, contributed directly to price increases. Macmillan’s paper seemed to hold that both of these causes were important. This was not necessarily incorrect, although the PM made no attempt to weigh their relative importance. Then, overlaid on these hypotheses, came the idea that increases in the supply of money caused changes in income–and hence demand running ahead of production–rather than, as most economists then believed, money supply growth following expansion in economic activity. Though Macmillan was considerably more economically literate than any of his post-war predecessors, this melange of views indicated both the confusion and uncertainty that still beset his premiership and long-running antagonisms in the Party’s economic thought. Antagonisms that were to make the pursuit of modernisation much more difficult for the leadership over the next seven years. Thorneycroft’s own contribution to the debate followed seven days after the PM’s. It built successfully on the foundations prepared by his chief, save that the bromides that Macmillan had carefully trickled into his memo were absent. Quite correctly, he identified that the previous decade’s policy of “appeals to employers and unions for restraint” had been exposed as a broken reed. But what was the alternative? Restriction of the money supply–by cutting back expenditure–was the solution, though in embarking on this policy the Government “must be prepared to see the rate [of unemployment] rise to… 3%”. Scarcely more worrying for the Cabinet than the Premier’s text, perhaps? Instead, here, on the subject of the next election, was the gleam of doctrinal purity: What matters is not whether [the Party] loses it but why… If we are thrown out because we have flinched from duty and allowed our economy to drift to disaster, I see no reason why we should ever be asked to resume control.26

This strikingly pessimistic analysis could certainly be described as un-Tory in its disregard for a widespread Conservative view, best articulated by Alan Clark’s adage that “the interests of the British nation state are best served by contriving the perpetuity of a Tory administration, whatever apparent sacrifices of principle or policy this may entail.”27 Unsurprisingly, the Cabinet was horrified. Even the bowdlerised minutes of the two meetings at which Thorneycroft’s proposals were discussed convey a sense of the magnitude of doubt cast upon both the

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Chancellor’s economic and, more scathingly, political judgement. Ministers were convinced that the measures “would be interpreted as representing a major change in the Government’s economic policy… [We] would… appear to be willing to sacrifice full employment in the interests of price stability”. Inevitably, this would have damaging consequences given the number of trade union members that had voted Conservative at the 1955 election.28 Indeed, far from demonstrating competent economic management, the package would bring about “industrial dislocation, the failure of many small businesses, and substantial unemployment”.29 The weight of such opinions was insufficient to prevent the hike in the bank rate, but they augured ill for negotiations over the 1958-59 spending round. For it was clear that Thorneycroft was determined to effect what he believed to be a restriction in the money supply through reductions in public spending. Yet it was obvious too that, to be successful, he would have to do this in the teeth of ministerial opposition. In truth, this was not a battle that Thorneycroft was ever odds-on to win. In his memoirs, Macmillan claimed that he had regretted the September package and determined shortly after its introduction “not to yield indefinitely to pressure.”30 If this was true, rather than a bout of selective memory, it is likely that the Cabinet’s negative reaction to the Chancellor’s new streak of parsimony emboldened the Prime Minister. He was probably aware besides of the manner in which Thorneycroft had ridden over his critics in the Treasury mandarinate. Harrod, too, was assiduous in pressing the reflationist case, both in letters to the PM and in the press. “No-one supposes,” he wrote in The Director, “that a credit squeeze, or any other disinflationary policy, is going to get a reduction in wage rates… [Furthermore] it cannot be denied that… the economy is still running below capacity.”31 Naturally this was tendentious in the assumption that no-one believed that disinflation could deliver wage restraint, but it portended the type of opposition that the Chancellor was likely to face as he embarked on his crusade to hold all budgetary expenditure to 1957 levels. Thus, by the time the twin problems of domestic inflation and sterling’s value interlocked in the civil estimates’ negotiations for 1958-59, a notable array of opponents had amassed against Thorneycroft’s economy drive. Given the likely dissent over their proposal, Thorneycroft and his accomplices shrewdly chose the short period between Christmas and the beginning of the Prime Minister’s Commonwealth tour on 7th January to force the matter to conclusion. The view in his private office was that the triumvirate was “putting a pistol to the Prime Minister’s head”. It was a mark of the seriousness of the state of affairs, as well as proof of the extremely tight-knit relationship between the PM and his officials, that some of Macmillan’s private secretaries remonstrated with Thorneycroft over his “improper” behaviour. Thorneycroft may have been embarrassed, but he was unmoved, retorting that

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the short span of time available should help to concentrate minds.32 Thus on Friday, 3rd January, a Cabinet meeting was hastily orchestrated for the purpose of reconciling Thorneycroft and his detractors. Although these negotiations managed to pare down the estimates by £100 million, the Chancellor was anything but conciliatory. The sticking point was his proposed abolition of family allowance for the second child, which would have saved £65 million. When the Cabinet seemed struck against this idea, he demanded “£30 million certain from welfare and to be free to seek other economies on the rest of the civil side”: an astonishing ultimatum that Iain Macleod, according to John BoydCarpenter, declaimed as “Hitler tactics”.33 Summing up, the Prime Minister–in contrast to September–suggested that ‘disinflation’ could easily be pursued too far, creating a stagnant economy and provoking the very industrial strife that it sought to subdue.34 Thorneycroft, humiliated, resigned three days later; Powell and Birch accompanied him. The Treasury team’s departure has been given tolerably good attention by commentators. Some, not least Powell and Birch themselves, have seen the argument as being about the principles of government intervention in the economy: a pre-figuring of ‘New Right’ monetarists in the 1970s and 1980s.35 Others have suggested that it would be more sensible to see the incident as it was understood at the time, simply a row over the level of state expenditure.36 If it had long term influence, it was that it drew attention to the disproportionately negative impact inflation could have upon Conservative inclined voters (particularly those on fixed incomes), and so may have contributed to the reasoning behind the later political strategy of the Thatcherites.37 Besides, there is scant indication that Thorneycroft understood the economic theory that he wanted to advocate: that the volume of money circulating in the economy caused domestic inflation. His resignation letter stated that he regarded “the limitation of government expenditure as a prerequisite to the stability of the pound, the stabilisation of prices and the prestige... of our country”.38 This was hardly a sophisticated analysis, though. It merely aped commonplace Treasury doggerel about the dangers of an expanding public sector. His civil servants seemed to be equally unconvinced of his grasp of ‘monetarism’. Some, notably Hall and Makins, considered that he “confused government expenditure with the quantity of money”.39 This seems clear if one acknowledges that what the Treasury trio was actually trying to limit was money GDP by installing an expenditure ceiling: in other words, demand management.40 Macmillan was anyway just as concerned to resist inflation as Thorneycroft, but considered some items of public expenditure to be sacrosanct. However, the episode was of immediate consequence if only because it removed from government a leading adversary to the ‘Stocktonian’ mindset. This betokened a switch in emphasis away from relative austerity and towards

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expansion. The affair confirmed too that the Government now considered wage factors to be potentially significant causes of inflation. But by simultaneously ruling out a ‘Paish’ strategy to weaken union wage bargaining through tight money and deliberately created unemployment, it made more likely the later switch to an incomes policy. Politically, the Government made some profit out of the resignations. For example, two months later, in the publication commemorating the twentieth anniversary of The Middle Way, Macmillan dispatched a volley against his former colleagues. “The strict puritanical application of deflation was in danger of being developed into a sort of creed,” he wrote (in effect, branding the three deserters as those despicable creatures–Gladstonian Liberals).41 The newspapers, too, were generally kind. They had seen Macmillan as hailing from the Conservatives’ right; the departure of Thorneycroft, on the back of that of Salisbury, uncovered that fallacy. The FT welcomed the appointment of Derick Heathcoat Amory as marking movement towards a moderate growth policy.42 Alone amongst the serious press, the Times was critical of Macmillan’s failure to back his “courageous” Chancellor.43

Problems of Macroeconomic Policy II: The Expansionist Dilemma. The Treasury squabble was followed propitiously by a period of economic improvement in Britain. Amory relaxed the deflationary policy pursued since 1956. Between January and the election, albeit aided by improving terms of trade which partially disguised industrial weaknesses, economic expansion went ahead assuredly.44 All industrial production either rose or remained steady; the standard rate of income tax was held at 8s.6d.; and the retail price index increased by barely one point.45 Macmillan’s oft-misquoted comment about most British people never having had it so good seemed to be correct. Perhaps the Government would have been advised to heed the caveat in Macmillan’s famous speech. In that, he recognised that “our constant concern today is: Can prices be steadied while at the same time we maintain full employment in an expanding economy?”46 There was a penalty to be paid for the extravagance of the Government throughout 1958 and 1959–which year had seen another expansionary budget. In December 1958, the Treasury had tried to warn Macmillan that stoking up demand in the economy would breed inflationary impulses. “[P]roduction remains well below capacity and there is some risk of renewed pressure by prices on wage level. In other words we have reached a point where the Chancellor thinks we have done all that we can safely do to stimulate demand,” suggested Burke Trend, Deputy Secretary to the Cabinet.47 Despite his admiration for Trend, Macmillan paid little mind to this,

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instead drawing his inspiration from Harrod, whose appeals for a “thumping Budget deficit to stop recession” fitted more readily with political necessity.48 Under consistent pressure from his master, Amory buckled. He stimulated the economy with a combination of tax cuts and investment allowances in his March 1959 budget, just as world commodity prices began to recover from the 1957-58 recession. The combined effect of increasing domestic demand and expanding world trade, whilst just sustainable through election year, left the Government with an over-heated economy by the beginning of 1960. Neither had the 1959 budget addressed the underlying weaknesses of industry to which the earlier RTPA had been one, largely ineffective, response. In particular, the overweening power of the unions and competitive deficits leading to supply ‘bottle-necks’ were left unaddressed, although this might be excused on the grounds that budgets were not the best vehicle to effect such changes.49 Nonetheless, the Chancellor, in trimming both income and purchase taxes, had delivered what was widely seen as an election-winning budget. A consumer boom was created and unemployment further reduced. Such circumstances set up the Conservative Party for its astonishing election treble in October.50 As in 1955, the Party’s biggest advantage was its record in office. The Tories claimed growing affluence, a mushrooming economy, and a successful housing policy as their handiwork. Yet, even after the budget, fears amongst the governing élite remained. The Chancellor of the Duchy of Lancaster cautioned Macmillan in April that: [The] next six months will be quietly dangerous. We must stress the positive forward looking character of what we are doing. We must avoid offending the middle of the road voters who vote for us with some reluctance… Among the subjects to which groups of uncommitted are sensitive… [is] anything which could revive the pre-war ‘Tory’ image. 51

Macmillan was concerned enough to pass on Hill’s insight to the Cabinet, though they hardly needed reminding of it.52 The spectre of the ‘bad old Tories’ played a prominent part in determining the statecraft strategy pursued under Macmillan. More than one quarter of Conservative votes derived from the working class, according to research prepared for the Home Secretary in 1958. “The minority vote of the working class is crucial to the Conservative Party in that hardly any reasonably possible improvement in the voting of other classes could compensate for its loss”, concluded the survey.53 The inter-war period remained a particularly distressing apparition for this group, the Conservative élite held. (A phenomenon which, as we observed in the preceding chapter, was also observable in the case of small traders and partly explained their attachment to the cartelised economy.) A comment from the Parliamentary Secretary at the Ministry of Education demonstrates how ground-in this notion was:

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Chapter Three The working classes will never submit to a return to the conditions of the ‘twenties and ‘thirties. They are different people now. They are more numerous, better educated, better organised and more intelligently led and, most of all, they have known better times.54

Even if the Government had wished to, it was scarcely possible to introduce policy (as Thorneycroft had endeavoured to do) that would antagonise these electors. Unsurprisingly then, the Conservative manifesto promised more of the same. “The main issues at this election are therefore simple,” it claimed, “(1) Do you want to go ahead on the lines which have brought prosperity at home? (2) Do you want your present leaders to represent you abroad?”55 It says much for Macmillan’s bilateral brokering after Suez that the second question could be posed at all, but it was the first that provided the campaign’s motif. It is not the case that the manifesto ignored structural problems in the British economy, nor did it shirk the need for modernisation. However, rather than a task of absolute urgency, policy in these thorny areas was, with good reason, presented in routinely soothing terms of assisting industry to achieve adjustment to modern conditions and easing general mobility of labour.56 There was no candid reference to the difficult choices that might arise in the realm of competition policy or supply side reform, still less to the Government’s view of European trade. Once the campaign had begun officially these trickier aspects of economic and industrial policy were largely avoided and the spotlight was turned onto material prosperity. The Labour Party had little with which to counter this, and their discomfiture was compounded by Gaitskell's inability to explain how the Party’s proposals to cut taxes whilst still increasing state expenditure could work.57 Yet the Conservative victory, which resulted in a Commons majority of 100 seats, was based upon not only Labour’s inability to mount an vigorous attack, but on a continuing re-structuring of class distinctions. Many skilled manual workers were enjoying a standard of living similar to the middle classes–with consumer durables such as television sets and refrigerators now installed in working class households–and class identification had become less important in deciding voting intention.58 This is not to support the rather basic embourgeoisement theories, popular at the time, which suggested that a permanent shift of support from Labour to the Conservatives was occurring due to workers’ new affluence and their adoption of middle class patterns of consumption.59 Rather, it is to say that all class ties and attitudes were beginning to loosen, and that an individual’s vote was more likely to be determined by factors other than class than at previous elections. This was not, of course, all good news for the Tories since it meant that deferential voting was also in decline, and their maintenance of office was now more contingent on the impression of competent admin-

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istration and the delivery of popular political ‘goods’. As we shall see, this led to problems of ‘governance’ over the next five years, and was to have a grave impact on Conservative electoral fortunes. In 1959, however, these concerns were not apparent. Instead, whilst Labour appealed to the electorate mainly in class terms, the Conservatives approached voters on several different levels, each corresponding to a (partially) separate role in society. People were not simply middle or working class; they were also consumers, commuters, women, young people, and so forth.60 Leaflets from this period, although circulation is difficult to judge, indicate that the central Party viewed these groups as discrete and was endeavouring to petition them directly to some extent. The entire set of ‘Doorstep Aids’ was symptomatic of this approach: each providing activists with a pre-made set of points to raise with groups of potential voters, such as housewives, young people, widows, and working men.61 Much of this thinking found its clearest expression in the establishment of a series of enquiries (such as Beeching on railways, Molony on consumer protection, and Robbins on higher education) which were intended to provide the basis for a domestic programme of modernisation. Even in 1959, before modernisation had become the dominant motif of the Conservatives’ approach, this emphasis was apparently more popular with the electorate than Labour’s more traditional distinctions. After the election Macmillan, slightly prematurely, declared the class war to be obsolete. Mark Abrams, the prominent psephologist, suggested that “Labour Party supporters saw the Conservatives as exercising a much greater attraction for ambitious people, middle-class people, the young, office workers, and scientists.”62 The consequences of Heathcoat Amory’s expansionist flourish became apparent shortly after the election. Inflation triggered by the boom was at first mild, but the Exchequer was keen to dampen the economy before it began to have an adverse impact on the balance of payments. Macmillan, on the other hand, felt that a deflationary budget, in the light of the election programme would be viewed as dishonest by the voters and would make ministers look like “fools”.63 Although national output in Britain was 14% higher than it had been in 1955, in the newly formed EEC it was twice this rate.64 A decade beforehand, this would hardly have mattered, but, as Samuel Brittan has observed, “during the later 1950s it [had become] fashionable to circulate league tables showing that the UK had slower growth rates than other European countries–although not, interestingly enough, slower than the United States.”65 The Labour Party was not slow to build political capital out of this phenomenon, whilst academic writers from the ‘What’s wrong with Britain?’ gang also began to take notice. This made Macmillan even more opposed to fiscal restraint, despite the fact that no general policy had yet been adopted to encourage the levels of productivity that would be required to produce growth rates comparable to the Common

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Market’s. Macmillan’s assessment again owed a considerable amount to Roy Harrod, and once more the finished budget bore the Oxford man’s stamp rather more than that of Great George Street. The PM even read over the budget speech before it was delivered to ensure that it did not renege on expansion.66 Amory did succeed in introducing some deflationary measures, but these were piecemeal in comparison to the original Treasury plan.67 In the prevailing circumstances of an over-mighty pound, the budget was not nearly deflationary enough. Employment levels remained at approximately the same level as they had been during 1959, but without an attendant rise in production, productivity declined. The Government was storing up trouble, which was eventually to emerge as a balance of payments crisis in 1961. Heathcoat-Amory’s Treasury departure in July 1960 was not a critical shock; the Cabinet had been preparing for the eventuality since at least March. A measure of the Chancellor’s unease at being compelled to take expansion so far was, however, revealed in his resignation note. This contended that the balance of payments “must… take precedence over everything else”, and trusted that his successor would not have to do “unpleasant things”–by which he almost certainly meant severe deflation.68 Unfortunately, he left the Exchequer’s next occupant, Selwyn Lloyd, with economic conditions that were almost certain to require “unpleasant” remedies. Amory’s resignation warning was borne out when October’s trade figures were announced. The trade gap had widened by some £46 million. By March 1961, the crisis had worsened as the German currency was revalued (causing speculative money to flow into DM), and the pound once more came under threat.69 The Cabinet had attempted to forestall the impending balance of payments emergency in November 1960. Undoubtedly the immediate failures to contain domestic inflation and to proscribe wage increases within the margin provided by productivity exaggerated the weakness.70 Then again, these problems were in their turn the consequences of misassessment of the economic cycle and, more fundamentally, a neglect to tackle the structural deficiencies in the domestic economy. It was the slow realisation of this actuality which began to impel the Government towards the policy modifications which are often termed ‘modernisation’. It was some time before the movement towards ‘planning’, as one aspect of modernisation, was to bear fruit. For what remained of 1961, the Chancellor was forced back on to short-term measures to repress inflation and correct the balance of payments. In April, Lloyd had invested the Exchequer with two prerogatives, termed ‘regulators’, that allowed the Treasury to give the economy a fiscal prod between budgets. These were, firstly, the option to vary purchase tax and excise duties by up to 10% between budgets, and secondly, the payroll tax–an addition to employers’ National Insurance contributions for each of their

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employees.71 These were undoubtedly useful additions to more conventional monetary armoury. The former was first invoked in mid-1961 in the package of emergency adjustments (sometimes referred to as the ‘little Budget’ or the ‘July measures’) that Lloyd introduced to correct the supposedly perilous balance of payments position. The exact balance of measures contained in this package was necessarily the result of compromise between Cabinet expansionists, including the Prime Minister himself, and those like Lord Cromer, the new Bank Governor, and Treasury officials who argued for stronger restraint.72 In late July, Lloyd announced bank credit and public expenditure cuts, implemented the purchase tax regulator, lifted the bank rate to 7%, and laid down a ‘pay pause’. The bald outline of the episode described above nonetheless disguises an enlightening illustration of the ample institutional and political constraints on economic policy. Lloyd had originally argued for a temporary rise in income tax to puncture the inflating economy, whereas his officials preferred the application of ‘regulator no.2’ (the payroll tax). The Bank of England had also lined up behind the use of the second regulator. In the event, neither was used. Alec Cairncross, who had replaced Robert Hall as Economic Adviser to HMG, maintained in his diary that officials at the Exchequer “killed” the income tax proposition; Lloyd, conversely, “emphatically rejected recourse to an increase in National Insurance contributions, [despite that] it was never clear what his objections were nor why he had allowed the second regulator to be included in the Finance Bill.”73 Why? The reaction against the second regulator’s introduction provides a key. Within a matter of hours of April’s budget speech, the FBI had been “deluged with telephone calls and telegrams” from angry member firms about the potential increase in labour costs that the regulator promised.74 The support its Grand Council had initially given to the proposal was briskly reversed. Unsurprisingly, the TUC too protested against the prospect of the payroll surcharge, fearing that it would cause labour shedding. Added to this formidable opposition was personal antagonism to the regulator from the Pensions Minister, John Boyd-Carpenter, who was on the cusp of resignation over the issue in early April, and from the backbenches.75 In the face of this massed hostility, and particularly with the two most important peak organisations of industry and labour united against the use of the levy, it is hardly surprising that Lloyd grew quickly to be disenchanted with the device. The other line of attack open to the Government to alleviate the negative trade balance was, of course, devaluation of the pound. Some in the Cabinet contemplated the idea, but Lloyd–like Thorneycroft–was mesmerised by the strength of sterling as a symbol of British financial virility. Furthermore, defending the pound’s value had been a prominent undertaking in the 1959 manifesto.76 Thus constraints on radical action were severe, albeit that some had been imprudently self-imposed. With the exception of the ‘pay pause’ and the

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first regulator, the constituents of the little Budget’s strategy were the old, threadbare favourites of credit squeeze, plus expenditure cuts, plus rate rise. In his memoirs, Macmillan suggested that July’s measures were more-or-less forced upon him.77 Certainly, Lloyd was uncharacteristically firm in his insistence that the measures were necessary, and the PM, suffering from one of the periodic bouts of tiredness that coloured so much of his premiership, was not in a position to resist. Yet, in the manner of his announcement of the ‘pay pause’, Lloyd could have benefited from employing some of the PM’s conciliatory presentation skills. The pause–which, obviously, was only enforceable by the state in the public sector and had to rely on the steel of industrialists to adhere to it elsewhere–had been sprung on the Federation and trade unions without prior consultation through the normal channels of the Economic Planning Board (EPB). The measure was generally acceptable to the former’s executive body, though it regretted that it had not been consulted. Their member firms were more ambivalent, with many larger, labour-intensive enterprises fearing that it would only deepen industrial strife.78 But from the labour side, the reaction was fierce. George Woodcock, the Congress’ General Secretary, took personal umbrage both at the pause and the lack of consultation. Interviewed in 1963, the former Treasury chief, Sir Frank Lee, recalled Woodcock as “volatile, emotional, and unreliable” and claimed that there was no reason why he should have been consulted about the July measures.79 Technically, of course, Lee was correct, but the absence of dialogue was nonetheless damaging to the spirit of tripartite cooperation. The manner of the announcement also did maximum harm to the prospect of trade union acquiescence in wage moderation. Alec Cairncross judged that Lloyd’s desire to be bellicose on the subject had made any accommodation with the TUC over a long-term structured incomes policy more unlikely. The Chancellor, noted Cairncross in his diary, had seemed to relish strikes as an opportunity for a “show-down” with organised labour.80 No doubt this pleased some on the right of the Tory Party, but it elicited an enormous shock wave of press criticism.81 It was from this point that the Conservatives’ opinion poll ratings began significantly to decline.82 It remains a moot point whether it was within Woodcock’s gift to deliver the co-operation of his member unions on matters of pay. We have already observed that intra-institutional restraints upon decision-making were present in the FBI; in the TUC, restrictions on the executive were, if anything, even more acute.83 The delivery of the unions into a wage restraint pact would have required, firstly, the reversal of the TUC’s official line on income growth: that it was not one of the causes of inflation, at least from the cost side. In 1958, Woodcock had admitted privately to Cairncross his belief that cost inflation was a reality brought about by the bargaining power of the wage-earner in the conditions of full employment. Yet he had also commented that it was almost impossible to

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suggest such things in Council, for fear of being “derided as giving voice to Tory propaganda”.84 Secondly, even if the leadership was willing, the task of binding in an obstinate membership was not easy. The weakness of the TUC at the centre, much like that of the state itself, was naturally a product of its peculiar historical development. Such frailty made it vulnerable to revolts from its grassroots and impaired its claim to be representative and arbiter of labour in the realm of industrial policy. Woodcock despaired of the TUC being able to exert effective pressure upon its member unions, particularly on the matter of wages.85 Nonetheless, unlike the FBI on the employers’ side, the TUC was the ‘only show in town’ insofar as the Government was concerned. In shutting the door against its leader on the 25th July, Lloyd blotted out even the slender chance that wage issues could be brought within the ambit of the forthcoming planning apparatus. The pause had a number of consequences, not least that the opprobrium piled upon Macmillan provoked him into a more active personal role in the framing of economic policy, and hardened the Government’s resolve to repair the tripartite system through the establishment of a framework of planning institutions. Electorally, its impact was seen from the autumn onwards in by-elections. On 8th November, the Tory vote collapsed by over 20% in East Fife and by 15% in Oswestry.86 And whilst in the Scottish constituency the down-turn could be explained by the novelty of a Liberal Party candidate standing, in the Shropshire seat no such excuse was possible. In any case, the pause was only of limited effectiveness, as, for example, electrical workers forced the Electricity Council to break the settlement. By April 1962, when the pause was supposed to expire, it was clear that Lloyd had developed no new ideas to further the fight against wage-push inflation. A White Paper entitled Incomes Policy: The Next Step was produced in February 1962, which suggested a ‘guiding light’ of between 2 and 2.5% as sanctionable wage increases, but it contained no indication of how this was to be achieved or policed.87 This failure, coupled with the loss of the safe Conservative seat in the Orpington by-election of mid-March (see below, chapter four), probably prompted the PM to consider the premature removal of his Chancellor. But the macroeconomic context delineated above offers only glimpses of the wider debate. Government progress towards what might be termed modernisation’s ‘high period’ was both more complex and subtler.

The Conversion to Modernisation. In a sense, the idea that the Macmillan Government was ‘converted’ to a modernising agenda sometime between 1959 and 1961 is a misnomer. Perceptions that certain aspects of national life were in need of being brought

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up-to-date was ever present in Macmillan’s political philosophy, and that of considerable sections of the Tory Party at large. Where the administration was ‘converted’ was in the acknowledgement that to regenerate Britain and reverse her relative decline, various policy departures should be brought together into a scheme extending across virtually the whole of political and economic activity in the UK. It is the scale of the project that is unique. The period from 1957 until late 1959 has been characterised above as one in which minimalist statecraft was adopted–directed firstly towards post-Suez survival and secondly to the creation of economic conditions that would secure election victory. Whilst minimum goals undoubtedly typified that phase, to assume that the Government simply mindlessly “shift[ed] the basis of politics towards material rewards” and was hence neglectful of the need for modernisation, as Kevin Jefferys has alleged, is not only to concentrate far too heavily upon government rhetoric and thus miss crucial dimensions of policy, but also to make the unwarranted assumption that there was an alternative strategy available to the Conservatives.88 Similar barrages have been launched from historians with rather different perspectives too: for Correlli Barnett, 1957 was Britain’s “very last chance to reinvent herself as an industrial country” which, under Macmillan’s captaincy, was carried away on a tide of “warm opium and treacle”.89 Sadly, Barnett (and, to a lesser extent, Jefferys) detaches the Macmillan Government from the political constellation in which it had to operate. If the Government had been operating in conditions of political stability; if there was a viable alternative strategy that would have ensured survival in the first instance and subsequently re-election; and if that approach also enabled a weak state to overcome considerable institutional friction and mutilate the 1944 settlement for no political expense, then Barnett might have a very strong case. In reality, miracles were not nearly so plentiful in the late 1950s. Of course, one of the problems that Macmillan’s Government faced was recouping lost time after the relative indolence of the Churchill and Eden administrations. This is not to excuse ministers, many of whom had, after all, sat basking quietly in the glow from Churchill’s Indian summer, but rather to observe that by 1957 structural problems had become rather more challenging, if still (just) remediable. There was, needless to say, a rather different reason why Churchill’s 1951 Cabinet was governed by torpor in the area of industrial renewal. A slim majority in the Commons on a share of the national vote less than that of the Labour Party, plus a determination to show that Conservatives could make the 1944 compact work, provide the major components of an answer to that question. Which is rather different from Andrew Roberts’ argument that the 1945 election “emasculated” an entire Tory generation and forced it into timorous appeasement on the subjects of trade union reform and the growth of

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the state.90 The brief Eden period is more problematic of course, but that is not primarily our concern here. In a sense, it is almost worth thinking about Macmillan’s ministry as a fresh start, from the point of view of policy. The argument here has already been prefaced: although sometimes haphazard and unsuccessful, for a vulnerable government it is surprising how much it did accomplish. Innovations were not few. The establishment of the Council on Prices, Productivity, and Incomes (CoPPI) in August 1957 was one attempt at mollifying the unions by drawing them into a forum of discussion which, in exchange for the limitation of wage claims, would give them the opportunity to make their views known on the direction of economic policy.91 Unhappily, the TUC, sensing wage control by the back door, would have nothing to do with it, so it became instead a three man board shorn of union and employer representation. Its deliberations were, regrettably, tarnished by the views of Sir Dennis Robertson, the panel’s economist, who rejected full employment as part of Council’s terms of reference. Its first report unsurprisingly declared for the Thorneycroft medicine–which, since it materialised after the departure of the man himself, set it against the changed line in policy.92 Nonetheless, though it was stymied by institutional non-compliance, it was a genuine attempt to provide a public body to assist the Government in educating both sides of industry as to the limitations of policy. The Council did manage to produce four reports before it was wound up in 1961, all of which nudged the Government towards the acceptance of a more thoroughgoing approach to the problems of restrictive practices. It was, for instance, the CoPPI report of 1958 that was responsible for bringing the issue of rpm’s persistence, even after the 1956 Act, to government attention.93 Moreover, its final report leant considerable intellectual weight to the case for planning.94 Another departure was the establishment of the Radcliffe Committee, which was charged with the revelation of the monetary system’s workings. Created in April 1957 and reporting shortly before the general election, this commission took evidence from a wide variety of interested institutions, including the Treasury, TUC, employers’ organisations, and representatives of the banking world.95 As such it became an important means to open up dialogue between the post-war settlement’s partners. Thus the first three years of Macmillan’s stewardship showed at least the Government’s willingness to remedy its deficient knowledge in economic policy. Together with the attempt to re-educate itself in matters of economic policy, there were a number of other departures that suggested not a party obsessed with the stimulation of material well-being in order to foster its re-election chances, but one actively trying to grapple with the requirements of industrial modernisation. For instance, the 1957 Sandys’ White Paper on Defence, which

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proposed the abolition of conscription and cuts in conventional weaponry–with increasing reliance to be placed upon nuclear deterrence–was based on the need to shake skilled manpower, particularly engineers and technicians, out of the military sector.96 It was consequently a largely innenpolitik decision grounded in the view that Britain’s industrial future required the state to foster improved mobility of technical labour. The continuing attempts to create a free trade area between the EEC and outlying European nations, expansion of technical colleges, Butler’s work on penal reform, and even the introduction of life peerages for the House of Lords in 1958, also stand testament, in their different ways and disparate policy areas, to the Government’s acknowledgement of the necessity to bring Britain ‘up-to-date’. In that sense, the period from 1957 until the general election can be seen as one of embryonic modernisation. Given the profuse constraints on government action that prevented anything like a meticulous review, it is surprising perhaps that even this level of activity– enormous in comparison to that instigated by Macmillan’s two predecessors– was initiated. Competition policy, on the other hand, lay largely tranquil for the period between 1957 and 1959. In part, this was determined by the requirements of minimalist statecraft. In rpm’s case, the painful negotiations of 1956 had revealed the possibility of intense opposition to further attempts to curtail the practice. An administration that believed it had only a delicate hold on power was unlikely to start kicking over the traces on the business of price agreements. It was felt by most politicians that the RTPC ought, in any case, to be given sufficient time to scrape away at the multiplicity of agreements before the Government instigated another attack. Although some groups, such as the Cooperative movement and the newly created Consumers’ Association (CA), kept the issue alive at the fringes of public debate, it was not until the CoPPI’s 1958 report that the Government was again notified of the rpm problem. Other areas of competition policy were similarly ignored, or rather, action was not taken because no problem was perceived. In the case of monopolies and mergers, for example, Broadberry and Crafts have argued that the 1950s saw the consolidation of an orthodox view amongst applied economists. This suggested that forms of market concentration and oligopolistic practice were frequently beneficial to the national economy for reasons additional to the social concord that politicians in the 1930s believed they maintained.97 The prevailing Schumpeterian assumption was that increased profits were the “baits that lured capital on untried trails”.98 Hence by creating substantial economies of scale that enabled rents to be appropriated more effectively, forms of industrial concentration stimulated more R&D and led, ultimately, to increased productivity.99 Alternative forms of market collusion such as price maintenance were often defended in similar terms, particularly at the RTPC and various MC

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investigations.100 This state of affairs was compounded by official agnosticism on mergers and monopoly within the mandarinates of economic departments, including Alec Cairncross and even the Permanent Secretary at Trade from 1960, Sir Richard Powell.101 Advice too from Macmillan’s preferred sage, Harrod, reflected the norms of neo-Keynesian thought: that industrial structure was irrelevant, and that if only the economy could be stimulated far enough and run fast enough, then investment would increase and productivity problems should disappear.102 Furthermore, the City was frequently in favour of industrial concentration. Take Ernest Kleinwort’s speech to Kleinwort-Benson’s shareholders in 1962, in which he boasted that the merchant bank had played an increasing role in the provision of advice and technical assistance for mergers. “Such amalgamations,” he claimed, “are the natural consequence of the need to build larger units in industry which are better able to carry rising overheads and, even more important, the heavy cost of research and development that will be necessary if the country is to remain abreast of competition, particularly in overseas markets.”103 Given that Kleinwort would not have wished to prompt disquiet amongst his shareholders by trumpeting a perilous diversification of the bank’s business, it seems likely that this was a view widespread in the financial sphere. The domination of this idea in the topography of economic debate had, in any case, been given political sanction through the pruning of the Monopoly Commission’s area of jurisdiction that, in part, enabled the passing of the RTPA.104 This gave tacit encouragement to oligopolistic and monopolistic practice. It is hardly astonishing, then, that the Government developed a leaning towards the active promotion of industrial combination, as for example in early 1960, when it was instrumental in the re-fashioning of airframe manufacturing firms Vickers-Armstrong, Bristol Aeroplane, and English Electric into the British Aircraft Corporation.105 As a result, the beginnings of re-evaluation in this quarter had to await Edward Heath’s arrival at the Board of Trade. The general election victory, however, removed the necessity to adhere to the minimalist statecraft stratagem of the preceding three years. It came at a suitably ripe time, as unease about Britain’s economic performance had been percolating through the strata of the polity at least since the Suez collapse. This disquiet had been characterised on the one hand by the Daily Mirror’s populist campaign against the “smug”, “anti-science” establishment launched in November 1957, on the other by the more serious-minded ‘What’s wrong with Britain?’ cult.106 Even the civil service had begun to view the economy’s structural deficiencies as the main reason for relatively slow growth rates and weak export performance. Constantly negative comparisons between the UK economy and its rivals moved the Treasury set up a secret interdepartmental committee on growth in January 1960.107 Its discussions, which continued into 1961 and ultimately drew into their ambit not only politicians but also business, unions,

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and think tanks, marked the beginning of Whitehall’s “great reappraisal”. The establishment of this review was the more startling because economic growth had not previously been a high Treasury priority.108 But this dialogue was crucial in informing government thinking and, ultimately, reinforcing the movement towards modernisation. Likewise, the executive was delving for suitable images of success and dynamism.109 At the level of high politics, the small reshuffle that the PM enacted immediately after the election brought advancement to economic departments for two prodigies in the progressive Conservative circle: Edward Heath became Minister of Labour, whilst Reggie Maudling was promoted to the Board of Trade. Both of these appointments linked fortuitously with the nascent modernising drive. It was not long before both ministers were forcing the agenda. Heath was concerned about the mobility of labour, in both its geographical and occupational guises, and was unafraid to exercise the power of the state to encourage more labour market flexibility. In particular he secured a Local Employment Act that introduced state incentives to persuade firms to relocate in high employment areas.110 He was, however, less successful in overcoming Cabinet and Treasury opposition in other areas. In order to reduce the 300 million working days lost to illness in UK industry each year, he proposed a new support organisation as an adjunct to the National Health Service (NHS), which would specifically address industrial workers’ health problems. This was vetoed by Great George Street, whilst his design for a tripartite conference to hammer out a new industrial relations settlement that would update the covenant of 1944 was rejected in Cabinet.111 Clearly, the Tories were not yet quite ready for tripartite corporatism. Maudling held many of the same views as Heath on the need for a deliberate reconfiguration of British industry. One year after the election, he was to be found composing an extensive diagnosis of Britain’s economic predicament. As a leitmotif for the difficulties that modernising Conservatism endeavoured to address, it could have scarcely been bettered: We are suffering the malaise of the affluent society… We still believe the world owes us a living… I have no doubt at all that this problem can be solved, given the will to solve it, but I am becoming increasingly doubtful as to whether this will can be created until the country as a whole has been brought face-to-face with the realities of our economic position…There are too many businessmen in this country whose reaction to any restraint whatever on home demand for their products is not to go out and look for export business, but to sit back and moan about the Government… Inflationary crises have been [due to] an excess of credit and personal incomes rising faster than productivity… Whereas the credit element that was at one time the more serious, it is rising personal incomes that are now the greatest threat… I have always felt that there was an over-simplification in the idea that

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you can solve a wage inflation by tightening credit, putting a ceiling on bank advances, and a limit on public expenditure… in practice it amounts to saying that if one man gets a wage increase that is too great we will put someone else out of work… [However] the inadequacy of our reserves means our freedom to manoeuvre is very limited and that we have to take action very early in order to prevent a healthy expansion ‘overheating’… hence we must find a way to prevent wages rising too fast and to increase exports–fundamentally the problem is one of [industrial] leadership.112

Here were two of the most important elements of Conservative modernisation: the Stocktonian rejection of Paish type initiatives, and the recognition of a problem of governance stemming from the failure of the state’s partners to do more to uphold the 1944 settlement. Also here, though, in the recognition of the UK’s meagre reserves, was the Treasury fixation with threats to sterling that had blighted and constrained government policy since 1951. Maudling was, of course, savvy enough to know what would please the Prime Minister, but nonetheless this was the authentic voice of the developing modernising clique. It was a short step from this type of analysis to the ‘new’ domestic strategy of dirigiste modernisation. Maudling, with his barrister’s training and instinctive leanings towards a progressive Conservative outlook that had been furthered by his stint under Butler at the Treasury in the early ’fifties, ought to have been the ideal choice to pilot the subject of rpm to the forefront of a modernising agenda. Instead, in late 1959, it was Amory at the Treasury who began to push the issue.113 Given the Exchequer’s growing fear of an inflationary surge, coupled with the restraints that Macmillan had placed upon Amory’s autonomy, the Chancellor’s rummaging for novel policies that might remove the momentum of price increases is perhaps not so surprising. In contrast to some of the other elements of the modernising package, the Treasury held no ideological objection against abolition of rpm–it would cost very little, would aid the Exchequer’s preferred macroeconomic strategy of reducing inflationary impulses, and, though it would initially involve state intervention in the market, that would be only to enable greater competition and freer labour mobility. With the PM so insistent on continued expansion, in the first instance Amory had tried the futile tactic of exhorting ‘businessmen’ to do everything possible to bring down their prices.114 As an adjunct to this crusade, such as it was, Hall’s officials in the Economic Section started to develop supplementary policies. First out of the hat was abolition of individual rpm. “[This] would have a considerable psychological effect and is perhaps the most striking demonstration that the Chancellor means business in his campaign to get prices coming down,” Hall was told on 12th November.115 The suggestion rose quickly through the Treasury, garnering

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support from Hall, Tom Padmore (the Second Secretary) and Anthony Barber (the new EST) as it went.116 There is also some suggestion in the Treasury files that, in his capacity of Minister of Labour, Ted Heath also weighed into the deliberations to urge the Chancellor to take a look at rpm.117 By late November, the FST–the impeccably modern-minded Sir Edward Boyle, who had begun to clamber back up the rungs of the executive ladder after his Suez resignation–was minuting his boss in strong terms to support the moves against price-fixing. His argument encapsulated three lines of attack that Heath was to develop to such outstanding effect four years later. Not only would rescission show sincerity in the campaign to bring down prices, Boyle argued, but also, since the distributive industries were taking an increasing share of national resources, it would be extremely useful in shaking out excess labour and capital from those sectors into more efficient areas of the economy. Finally, he believed (perhaps ingenuously) that to abolish price maintenance would be politically popular. His soundings from a recent lobby luncheon had given him the impression that abolition “would get press support even from those pretty far to the right on laissezfaire”.118 With both officialdom and the political chiefs at Great George Street behind the measure, the tendency in favour of ending rpm appeared very strong. Meanwhile, trends outside of the Government’s control also seemed to be adding momentum to the case for abolition. In the first place, the growth of large multiples in the grocery business seemed to have had some effect in excising price-fixing practices. The selfservice grocery sector was growing at the rate of 950 new stores a year between 1956 and 1959. Of the total number of these stores, large multiples’ share had increased from 25.3% to 31.9% in the same period.119 The presence of an increasing number of large retailers in the market inevitably represented both an opportunity and a threat for manufacturers. An opportunity, in the sense that the expense of servicing many small direct accounts with minute turnover (due to wholesale and delivery costs) ate into their profits far more than dealing with retailing firms with substantial market power in terms of the size and number of their outlets; a threat, because relinquishing the custom of a major retailer by the enforcement of price agreements could permit a less squeamish competitor to claim increased sales in that outlet. An additional danger, pioneered especially by Tesco, was the growth of retailers’ ‘own brands’–which, albeit available only on a small range, had nonetheless begun to have an impact on the pattern of sales in certain product lines.120 Even by 1957, less than a year after the passing of the RTPA, The Times Survey of Food in Britain found that manufacturers in the trade had become “lukewarm in their avowals of restrictionism.” The survey went on: “More than one would welcome a reduction in the number of outlets available to himself… and a concentration of the trade on the more efficient retailers.”121 Unsurprisingly then, over a year before the Treasury began to take

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an interest, the CA’s magazine Which? found that 68% of manufacturers in the grocery market had abandoned any attempt to enforce their retail prices.122 Indeed, in 1959 the FPDC gave up any attempt to claw back price maintenance in the grocery trade.123 The growth of the free price, self-service grocery sector was a development to which the Government had given tacit support in the election campaign, when Macmillan, doubtless endeavouring to build up his credentials as a sympathiser with modern practices, had visited a new Sainsbury’s supermarket in Essex, remarking that it was “a most ingenious way of serving the public and doing business”.124 This combination of circumstances that provided a fortuitous opportunity for abolitionists to push the case against rpm. Between 3rd November, when Amory had issued his admonishment on prices, and the end of the year, the Economist, Financial Times and the Guardian had all come out in favour of the repeal of section twenty five, whilst large retailing interests like the John Lewis Partnership (JLP) espied an opening to give a prod to the Government. On 18th December, Sir Bernard Miller, JLP’s Chairman, issued an open memorandum to government and press, in which he argued that abolition would produce “an increase in competition, a decrease in price for the public, and the greater efficiency of both retailers and manufacturers”. Furthermore, as JLP had discovered from the food retailing side of its business, the collapse of rpm in grocery products had led to “intense pressure on retailers to increase their efficiency and… an increase of efficiency has been secured, which would otherwise probably not have occurred for a number of years.”125 All of this, couched in the language of efficiency and modernisation, was calculated to appeal to the prevailing mood of the country: and of course to the predisposition of the Government. Interestingly, Miller also mentioned the prevalence of ‘hidden’ price-cutting in his memorandum that was operating unfairly against those retailers who adhered reluctantly to the system of maintained prices. This accusation had been levelled for some years by retailers against the Cooperatives’ dividend, but since 1956 two other developments had served to increase traders’ sense of indignation. These were, firstly, price reductions based on the mode of payment (for example, discounts for ‘prompt settlement’), and secondly, more insidiously from many retailers’ point of view, the introduction of saving stamps.126 These changes were beginning to provoke a sense of unease in the retailing sector.127 It was this unease that, in part, was responsible for the failure of the pro-abolitionists to make any headway in the removal of rpm in 1959-60. As on other issues, institutional pressures inveighed against the assumption of rpm’s abolition as government policy. Lawson and Bruce-Gardyne have suggested that the first impulse towards repeal of section twenty-five came from Trade officials.128 Treasury documents tell a different story. Shortly after the

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election, Brunner in the Economic Section was disappointed to discover that “amendment of the 1956 Act… would receive little encouragement from the Board of Trade. I understand that they feel the Act may have to be amended eventually but they want to give it a year or two longer and would be loath to make piecemeal alterations in the meantime.”129 Pressure from the Exchequer nonetheless forced the Board, in compromise, to propose an enquiry to be undertaken by the MC into the extent of individual price maintenance and the level of injury that it was inflicting upon the British economy. It was this proposal that Maudling brought to the Cabinet’s Economic Policy Committee (EPC) in mid-December. The principle of an enquiry was agreed, although it was suggested that one carried out by the MC “would be less acceptable to the Government’s supporters”, a cryptic remark that probably referred to the discreet pressure that pro-rpm groups (which, at this point, still included the FBI) had been exercising on ministers.130 After the Christmas break, both the FBI and the NCT sent delegations to the Board. To the FBI, Maudling promised that rpm would not be referred to the MC. The Chamber, on the other hand, was not grand enough to receive an audience with the President. Instead they had to make do with John Rogers, Maudling’s Parliamentary Secretary, who assured them that the Government would not take any decision on section twenty five until all interested parties had had an opportunity to express their views.131 Board officials were giving the same undertaking to individual manufacturers. Such muddle and prevarication caused enormous frustration at the Treasury. “All this is contrary to [official] advice,” complained one of the undersecretaries, “the result of [the Board’s attitude] is that pressures will be built up and semi-commitments will be made before ministers have an opportunity to consider rpm again.”132 Thus, thanks to a mixture of institutional antagonism and departmental disarray, the possibility of immediate abolition had receded to a somewhat remote aspiration by the time Maudling was able to bring the subject back to EPC in early February. When Maudling returned to the Committee he had produced a revised paper that gave three options: an enquiry by an eminent lawyer, immediate repeal of section twenty five of the RTPA, or retention of the existing law.133 The EPC emerged starkly divided, with the representatives of Treasury and Board lining up against the Paymaster-General, Lord Mills. The latter echoed the routine trade association argument, that “rpm had improved standards of commercial morality, and its abolition might lead to a deterioration in those standards.” (Unfortunately, it is unclear from the minutes as to whether Mills considered the beneficiaries of this ‘morality’ to be consumers, producers, retailers, or all three.) The counter-argument from Maudling and Amory was that “consumers should share in the benefits of increasing efficiency in distribution.”134 Maudling’s position was faultlessly ‘progressive’ and reflected the rising profile

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of consumerism that was evident in the Government’s creation of the Molony Committee on Consumer Protection in June 1959. Yet the EPC’s composition prevented any clear-cut decisions emerging on rpm. Leaving aside the neutrals, only Maudling, Heath, and John Hare can be counted as unambiguously sharing the modernising cast of mind; against them, Mills and the Attorney General, Manningham-Buller, were clearly in the traditionalist camp. It was hardly incredible that no concrete verdict was reached. And so the dispute was shifted to Cabinet. Macmillan probably saw the rpm issue as more complicated than most. Though temperamentally against restrictive practices, he sensed nevertheless that, in certain cases, they helped to preserve social harmony.135 Additionally, his publishing background made it difficult for him to support abolition unreservedly, unless some reprieve for the Net Book Agreement could be secured. Privately, he had confessed such reservations at the time of Thorneycroft’s Act.136 So it is quite likely that what could have been the first noteworthy modernising measure of the 1959 Parliament was brought to Cabinet with a fudge already in mind. Doubt prevailed: the Board was requested to conduct an internal enquiry into rpm’s effects “without inviting policy recommendations, which government might not wish to follow.”137 Given these numerous obstacles, the Government’s failure to act on price maintenance was hardly something for which it ought to be condemned. Rpm’s elimination might have assuaged ministers’ creeping dread that they ought, in some way, be doing more to bring Britain up-to-date. In retrospect, that seems inconsequential in contrast to the potential hazards of abolition in 1960. Nevertheless, having been raised once, the issue was never entirely to disappear in the next five years. Rpm may have been a Gordian Knot, but in other areas the trend towards modernisation was not stemmed. The most important single policy re-evaluation in 1960 was that undertaken towards the EEC. However it may have appeared to the general public when it was announced in July 1961, the official British application to join the Communities did not materialise unexpectedly. Instead, it was the culmination of a long process of germination that pre-dated Macmillan’s assumption of the premiership. ‘Plan G’ in July 1956 had represented the first attempt by the British executive to make a (limited) strategic move away from the UK’s former Empire as a trading bloc. In its place, some partial accommodation with the new Western European customs union was sought, based on a free trade agreement coupled to continuation of Commonwealth preferences in agriculture. Though Suez had ruptured the timing of that approach, proEuropean Tories had not surrendered hope of achieving a long-term realignment in Britain’s overseas connections that would enable the Empire to be replaced by an alternative economic grouping. Unfortunately, the next British enterprise, the

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creation of EFTA (sometimes referred to as ‘the Seven’, as opposed to ‘the Six’ of the Common Market), quickly proved to be ineffective in stimulating the sort of growth that Common Market countries were experiencing. EFTA was not intended to be an alternative to the EEC without the latter’s political agenda, rather it was conceived as a staging post on the way to a general free trade area across Europe. By the second half of 1958, the Government was trying to fashion a free trade zone which would contain the Messina powers, Britain, the Scandinavian nations, Austria, Portugal, and Switzerland. Once again, though, the Franco-German axis at the heart of the EEC was unprepared to commit itself to a British sponsored plan, and the Six withdrew from the negotiations.138 The remaining states eventually concluded the Stockholm Convention, which established the EFTA in November 1959, though the Convention did not actually come into full force until some seven months later. The Government believed that it could use this new unit as a lever of policy against the EEC, Macmillan remarking to his Chancellor shortly after the treaty’s conclusion that “the purpose of the Seven is to prevent the political as well as the economic division of Europe… it can and will be used to make the Six more liberal.”139 Importantly, the institutions of the FBI and the National Farmers’ Union (NFU) shadowed the Government in giving their backing to this policy.140 Institutional support on the issue of European policy, in marked contrast with other sections of the modernising agenda, was vital in ensuring a smooth transition from a free trade area policy to one of active engagement with the EEC (see chapter four below). But in this case Macmillan was mistaken: even at its inception, EFTA was a weak organisation which lacked the political rationale and, more importantly for the Government, the economic clout of the Common Market. In fact, three of its members (Britain, Austria, and Switzerland) did more trade with the countries of the EEC than with their partners in the Association.141 Macmillan was quickly disabused of the idea that the French would come round to the idea of a wider, European free trade settlement, and this, in tandem with a general movement in Commonwealth countries towards programmes of domestic industrialisation, eroded the position of Britain as a nation independent of the continent. The rapid failure of EFTA as an EEC substitute (or rather, the realisation that it was no long-term answer to Britain’s problems) coincided first with the crisis in British economic management, and second, the growth discussions in Whitehall in 1960-61. These various but linked developments, together with American pressure to make an application, impelled the British Government towards the option of seeking membership.142 This did not please Macmillan, signifying as it did the failure of his long-term strategy to reconfigure Europe into a large free trade zone. “A very interesting, if depressing document” was his comment on a missive from Gladwyn Jebb to Lloyd at the Foreign Office. In the memorandum,

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Gladwyn had maintained, with hindsight rather naively, that de Gaulle was in favour of the UK’s entry to the EEC and that a “resolute attempt” ought to be made to enter the Communities.143 Nonetheless, the PM was shrewd enough to recognise the tide’s turn and to start to prepare both Cabinet and Parliament for policy modification. Throughout November and December 1960 he was working on what became known as the ‘Grand Design’, an attempt to glue together the ‘Free World’ in opposition to Communism by realising greater economic and strategic agreement between America and Europe. Freeing up the world banking system (i.e., expanding international liquidity and pressing tariff reductions upon the United States) was essential, as was reaching a new concord between the Six and the Seven. The crucial strategic dimension here was Britain’s role as the ‘lynch-pin’ standing athwart the new European bloc of the EEC and the USA.144 It was a design calculated to appeal to the new US administration, but its primary function was to moisten Cabinet palates in advance of a decision to apply for membership of the Common Market. Though it carried a little about the British economic weakness–“We must expand, but without inflation… but we can’t do it all by ourselves”–the thrust of the document reflected Macmillan’s preoccupation with the opportunity to wield effective power within a new transatlantic bloc.145 As classic Churchilliana cut from the same stone as the great man’s ‘Three Circles’ rhetoric, it was devised to appeal to the ideas of British strategic greatness whilst, arguably, disguising its primary purpose: the stimulation of the British economy and the UK’s renaissance as a great exporting nation. Given the time at which it was composed, with the balance of payments riding into heavy deficit, this is not startling. Although he liked to muse in these grand, perhaps grandiloquent, terms Macmillan still knew that vast foreign policy designs were no substitute for the bread-and-butter of getting the domestic economy right, as he confessed to Tim Bligh on 16th September. “We are,” he reasoned, “a country to whom nothing else matters except our export trade. Without our revival our strength disappears… [thus] an agreement on the Sixes and Sevens… is the vital British interest today.”146 In this, Macmillan was following the line that the Treasury had pressed upon him, and particularly comments from its new civil service head, Sir Frank Lee. As we saw in chapter two, Lee had been one of the forces behind the creation of the RTPA and came to the Treasury equipped with all the nostrums of competition that one might expect from a former Trade man. His report on the ‘Sixes and Sevens’ problem had been delivered to the Prime Minister on 22nd April 1960. In it, he made an unequivocal case for more serious engagement with the EEC. Above all, he maintained that if, as seemed likely, the two trade blocs went “their separate ways”, then each “would discriminate against the other [in terms of exports]”, presenting the UK with a “most serious” economic situation in being detached from growing European markets “at a time when our

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balance of payments position once more gives cause for concern”. He observed that many industrialists were appalled at being locked into the Seven, and continued: The prospect is seen of three powerful economic groupings–the USA, the USSR, and the Six–able to develop internal markets of scale and therefore develop strong and competitive industries in those markets, whereas the UK will have a preferential position only in the Seven and in Commonwealth markets… The conclusion is inescapable–that even if one can leave the political factors on one side, from an economic standpoint we must maintain our broad objective of having the UK form part of a single European market unless a still wider grouping… became a possibility.147

Lee’s preferred policy option, like Jebb’s, was to opt for full membership, something to which in April possibly the PM, and certainly the Cabinet, would have been unlikely to accede. However, the reshuffle brought about with the departure of Amory from the Exchequer in July made the possibility a more viable one. The consequence of these alterations was that Edward Heath, a committed ‘European’, was given the role of Lord Privy Seal with special responsibility for Europe, Christopher Soames was made Minister of Agriculture, and Duncan Sandys took over Commonwealth responsibilities.148 Moreover, the prodigal twins of Thorneycroft and Powell were re-admitted as Ministers of Aviation and Health respectively. The latter appointments were important since they brought back under the cloak of collective responsibility two formidable intellects who might otherwise have been expected to lead a campaign against economic expansionism from the free market right of the Conservative Party. And in Thorneycroft especially, Macmillan restored an old European ally from the Eden period. The Cabinet still possessed its sceptics on the European project, notably Butler (who sat for the thoroughly agrarian constituency of Saffron Walden) and Hailsham, but neither held a Cabinet position directly related to European policy. When, later, the Government entered finally into negotiations for full membership, Macmillan carefully neutered Butler’s opposition by giving him the chairmanship of the committee that oversaw the negotiations from London. Thus, in Nigel Ashford’s view, cleverly playing to Butler’s natural sense of the importance of party unity.149 Yet though it created a ‘space’ within which the Macmillan-led clique could pursue its European ambitions the reshuffle was criticised most extensively in the newspapers for the elevation of the Earl of Home to the position of Foreign Secretary.150 The designation of an aristocrat to a position of such prominence seemed very much out of place in a post-war Cabinet, particularly as the Government was about to embark upon the first stage of its modernisation programme (though, of course, the press were not to

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know this at the time).151 Macmillan was, however, very defensive of his decision. For instance, when challenged at a meeting of the Oxford Union as to his reasons for appointing Home to the Foreign Office, he simply replied, rather huffily, “best man for the job”.152 The truth was that this appointment, and the other key one of Lloyd to the Treasury, were strategically designed by Macmillan to foster an agreement with the EEC, possibly even to create the conditions for entry, and to continue the economic growth that Amory had endeavoured to check. Whilst Home was no EEC enthusiast, he was nevertheless compliant to Macmillan’s wishes. In any case, he was not supposed to make the running in European policy (that was Heath’s role) but rather to reassure the traditionalist wing of the Party that Common Market entry was quite compatible with Britain’s world role.153 Similarly, Lloyd was chosen for his supposed commitment to economic growth, although, as we have seen, Macmillan’s confidence that his appointee would follow his line on this was found, eventually, to have been misplaced. So the personnel necessary for the movement from the first, untidy, postSuez version of modernisation were, in large part, in place. This is not to say that the influence of personalities at the level of high politics was henceforth negligible. The dichotomy between the loose categories of traditionalists and modernisers still remained. However, a definite line had been drawn beneath the 1957-59 ‘minimalist statecraft’ period; the new Cabinet was clearly more in line with the PM’s progressive Stocktonian tendencies than its predecessor. The strategy adopted thereafter, though still on occasion stymied by opposition from the traditionalist faction and, of course, by periodic institutional defiance, was more clearly geared towards modernisation. We have already illustrated the internal reasons for the administration’s change of heart over the Common Market, but there were also strong institutional pressures driving the Government towards the metamorphosis in policy. Groups such as the FBI, the ABCC, and the TUC made clear their acceptance of the shift through the Export Council for Europe during 1960, and this loose consensus gave the Government the required stimulus to proceed with the European application.154 The other fundamental change of heart which accompanied this institutional pressure was the acceptance of the Common Market as a permanent part of the international framework, a device which enhanced global stability. British involvement would ensure not only that any political renaissance on the part of Germany could be checked, but would also allow the British Government a mechanism to exert influence over the often obstructive de Gaulle.155 The ‘conversion’, then, though brought about for primarily domestic economic reasons, was also triggered by the ‘great power impulse’. The Government recognised that British influence could not be wielded effectively outside of the new continental grouping.

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Practically, the negotiations over the creation of a more extended free trade area could not be abandoned immediately. Since the French were far from enthusiastic to continue talks that they believed had no prospect of success, the British Government continued to negotiate bilaterally with the Germans for most of the remainder of 1960. This tactic was always unlikely to exert much leverage on the Fifth Republic’s masters. Indeed, in December, Wormser at the Quai d’Orsay expressed incredulity on the matter to Harpham (the economic advisor at the Paris Embassy) and suggested that it was “no use… attempting to reach an agreement… with the Germans and hoping that the rest of the Six would swallow it”.156 When Macmillan met de Gaulle at Rambouillet in January 1961, the main aim of the British was therefore to push the French President towards re-opening Anglo-French negotiations on preferential treatment for British exports within the Six’s markets, if possible through the adoption of a limited common tariff. Though de Gaulle himself was not keen, he permitted limited talks to go ahead in February, though they ran quickly into the sand as the French took the line that the simplest arrangement was for the UK to accede to the Treaty of Rome.157 It was around this point that Macmillan abandoned hope of a limited free trade agreement between Britain and the Six, and moved at length towards a formal application as the inevitable solution.158 The process of softening up Parliamentary, Cabinet, and public opinion began in earnest. On the 25th April, in the Commons, the Prime Minister nudged forward the agenda with a speech about an “agreement” between the Common Market nations and the UK. The old actor was to the fore as he presented the question of the Six as a matter of political strength of mind: “[One aspect] is whether there is really the will to bring this about. I have always felt that if there is, and if that could be arranged on the political basis, somehow or other we would find a way through the difficulties.”159 This lead quickly brought on board publicly a number of important allies, especially the FBI and most of the heavyweight press.160 Meanwhile, the following months saw the launch of Lord Gladwyn’s pro-EEC campaign and, from across the Channel, a powerful signal from Jean Monnet’s Action Committee for a United States of Europe that it was strongly in favour of UK accession. By contrast, the anti-marketeers were slow to organise. Only the Daily Express in the early stages mounted any sort of campaign against membership. For most of 1961, the Government had a cakewalk. With the Cabinet broadly behind the idea of modernisation, the objections raised there were relatively muted. Maudling was one of the few to express substantial doubts, despite his immaculate modernising qualities. In a letter to Macmillan on 13th June, he conveyed his reservations. He feared–in hindsight with considerable justice–that an application to join the EEC would probably fail and would antagonise his carefully cultivated relationships with the EFTA nations for no discernible advantage.161 Four days after Maudling’s broadside, the

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Cabinet met at Chequers in order to discuss the potential application. The President of the Board of Trade was the sole member in outright opposition, though other ministers still foresaw considerable difficulties in reaching an agreement.162 Two further Cabinet meetings were required, one in the week following the Chequers’ gathering and another on 26th July, to grind out a decision in favour of an official application. On 31st July, finally, Macmillan rose in the House to announce that the Government would be entering negotiations to establish on what terms the UK might be admitted to the Communities. A major component of modernisation had emerged finally from under the mantle of indecision. Fitful resistance to the whole idea of European integration had marked the period of its gestation; this was to be minor in comparison to the opposition it encountered during the course of the negotiations. This hostility, often emanating from within the Conservative Party, is discussed in chapters four and six. The other main strand of the economic package to revive British economic performance was the move towards quasi-corporatist ‘planning’ on the French model. From 1957 until 1960, the Government recognised only slowly the relative failure of a policy that used almost exclusively macro-economic levers.163 Nonetheless, once the need for the strategy of 1957-59 had been eliminated, the requirement to move to a method of economic management which acknowledged that micro-economic behaviour was not inevitably rational, nor uniform across the country, began to occupy the administration. This was not so different from the diagnosis that both Macmillan, whilst at the Treasury, and Thorneycroft, in his time at the Board of Trade, had appeared to share. Both ‘Plan G’ and the RTPA had been, in different ways, intended as remedies for such structural wrinkles through the injection of more competition. But policies that built on these foundations had been held in abeyance in the post-Suez era by more urgent statecraft objectives. Although Edward Heath’s suggestion of a tripartite forum to pound out a revised settlement predicated on the canon of 1944 was turned down in early 1960, the Cabinet adjustments of July enabled a change of attitude. Roy Harrod, probably at the peak of his influence in his relationship with the Premier, first mooted a growth policy backed by an institutional covenant on 30th August 1960: [If] you brought forward a specific policy for growth based on a White Paper, like the Full Employment White Paper of 1944… then you could call a round-table conference of employers and unions with a view that it would be impossible to implement the policy there set out without some agreement in the broadest terms… to safeguard us from a wage-price spiral…164

This letter, which was fully compatible with Harold Macmillan’s penchant for defence of the post-war settlement, was circulated to the PM’s colleagues in the

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economic departments. For a Harrod proposal, it prompted a surprising degree of accord–probably because it resonated harmoniously with the growth discussions beginning in Whitehall at the time. We have already witnessed Maudling’s splendidly progressive reply about the problems of industrial management and the necessity of bringing the country face-to-face with the realities of Britain’s straitened position (although he was neutral about the ‘round table’ approach, and, later, sceptical about planning’s prospects for success). The new Minister of Labour, Hare, and also, perhaps more unexpectedly, Lord Mills, adhered also to the view that industry and labour needed educating; the latter arguing that if full employment and a healthy export market was to be sustained then a target for growth that would bind in employers and unions would be very helpful.165 These were only the first inklings of a policy, but Selwyn Lloyd began to investigate this strand of thought throughout the autumn. By the end of 1960, he had become convinced of the necessity of moving government policy away from the supposed laissez-faire of the 1950s towards more state direction. The only questions were what form that direction should take, and what areas should it encompass? Lloyd’s progress towards this revelation was vitally assisted, as was the simultaneous movement in the direction of active engagement with the EEC, by the FBI’s positional shift that had occurred at its special conference held in Brighton during late November.166 Its group on ‘Economic Growth in Britain’ stated that it was “no longer possible… to resist the political commitment to full employment, the pronounced role of the state in the mixed economy, and the pressures of new technology.”167 Hence, British businesses would have to seek solutions to problems of inflation and exports through economic growth. Whilst the Federation shied away from the term planning, it nonetheless advocated more systematic “assessments of possibilities or expectations”, which was subsequently taken to mean, by the Treasury at least, that the organisation would be willing to be associated with some form of state-sponsored planning machinery.168 Subsequent to the conference, the FBI set up a committee to examine the possibilities for long term economic planning in Britain which, crucially, connected at official level with the Treasury and Board of Trade. Thus by the early months of 1961, the cross-fertilisation between industry and the economic departments was well under way. As Robert Hall remarked in his diary on 5th January, a plan for growth was “in the air… partly because of the almost continuous comparisons which are being made between ourselves and the US, and various other countries like Russia, Germany, France, Italy, Japan… we are now trying to get [the Government] to think about it, for instance, the Planning Board has asked for a paper about it. After ten years, the Conservatives are less worried than they were about the word ‘planning’.”169 This was almost certainly not a valid assessment of the

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bulk of the Party, but of the modernising clique surrounding the PM it was increasingly true. On the same day that Hall recorded his comments, the Prime Minister, prompted by a letter from Lionel Fraser in the Times, wrote to his Chancellor on the same topic. Fraser had argued that modern conditions required something along the lines of a “five year plan” since annual budgets were “surely antiquated… causing uncertainty and preventing forward planning.”170 This line was echoed in July by the Plowden Report, which advocated the long term planning of public expenditure, the recommendations of which were to prove of considerable benefit to the efficiency of Treasury forecasting over the next few years.171 Fraser, though, was not part of the administrative machine. He was one of the grand old men of the City, having been Deputy Chairman of the Issuing Houses Association in the early post-war period, and though, as David Kynaston has remarked, it was unlikely that the Square Mile was as keen as he on planning, it was nonetheless unusual for any support for dirigisme to come from this quarter.172 Macmillan was certainly impressed, though it is improbable that he expected any wholesale change in City attitudes. His note to Lloyd betrayed a certain sense of urgency (as did so many of his communications to his neighbour), but also indicated that the move towards growth planning had been a topic of discussion at executive level for quite some time: “It is ironical that this is exactly what you decided to do on the first day you took office as Chancellor and are now working on with our colleagues. Of course the trouble is that we cannot say so–or perhaps we can?”173 In fact, it was too early for Lloyd, who was still in the early stages of parleying with his officials about what shape planning should take. Officials saw France as possessing a planning model which might be possible to graft on to British industrial conditions. This is not to say that British civil servants believed that French experience could be adapted easily (for one thing, the French polity was considerably more state-centric than that of the UK). Nevertheless, the Commissariat au Plan’s work seemed to be nearer to what the British Government wished to achieve than other continental systems.174 An early Treasury brief on the subject suggested that two prerequisites were needed for the successful adoption of a French type system–the availability of detailed statistical knowledge about the recent past, and the long-term co-operation of business. “It seems doubtful,” concluded the report, “that this [the second precondition] could be easily secured in the UK.”175 Pessimism about the qualities of British industrial leaders stretched beyond politicians. Despite these doubts, throughout the first half of 1961 the Treasury and leading businessmen, mostly FBI members, entered into discussions with officials at the Commissariat that examined the nature of French planning apparatus.176 The conference hosted by the National Institute for Economic and Social Research (NIESR) in late April was one of the most important

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assemblies, not least because of the fairly substantial and positive coverage that it received in the quality press.177 The many representatives of Great George Street may conceivably have felt that they were being reprimanded by J.C.R. Dow, the Institute’s Deputy Director, who argued in his keynote address that the whole structure of the civil service was not conducive to forward planning. The Treasury seemed to operate “at one remove from the world that it was controlling” and contacts with industry were too often “not made direct but through other departments.”178 This had long been a gripe within employers’ organisations. The Board of Trade, powerful though it was in the aggregate structure of the civil service, was still, as a sponsoring department, a mediocre surrogate for the Treasury.179 At the executive levels of the FBI, the NUM, and their siblings, the presumed privileged access to the Exchequer afforded to the City had long been a source of frustration. Nonetheless, in the divisions it exposed, the conference offered substantial matter for contemplation and ensured favourable political conditions for the advocates of planning. Within a fortnight, Frank Lee was urging Lloyd’s Principal Private Secretary [To] consider seriously whether it would not be of both political and economic advantage if we could try to build up some similar system here… [In] terms of economic education and understanding… an attempt to operate such a system might well be worthwhile.180

With Lee’s considerable authority behind the proposal, doubters at the Treasury were (temporarily at least) marginalised. The Treasury swung surprisingly easily behind the idea because NIESR’s deliberations simply confirmed the discursive trend of its ‘great reappraisal’. The first round of results from these consultations was distilled into a report to the Cabinet in July 1961.181 The document was remarkable insofar as it demonstrated the mighty shift in economic departments’ thinking since 1959. Most importantly, perhaps, it suggested that demand management could no longer be used to flush the economy out of recession since domestic supply could not react quickly enough to rising demand, and so instead increasing spending power sucked in more imports. These ‘bottlenecks’ were many, but amongst them the paper recorded restrictive practices (from both sides of industry), labour’s geographical and occupational immobility, low levels of investment, and external tariff policy. It could just as well have been the catalogue of industrial ills that modernising Conservatism sought to cure. The document only hinted at planning as one of the tools that could be utilised to effect this huge transformation, but nonetheless its tone was unmistakably sympathetic to the idea of state intervention and tripartite partnership (as long as they were in the service of greater efficiency). Prime Minister, Chancellor and Whitehall mandarins were all on side.

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But the Conservative Party was a more difficult proposition. Though the Party had set up its own secret committee on planning in spring 1961, this hardly connoted broad agreement amongst the Party membership.182 This is not to say that planning was antithetical to a Conservative heritage. Indeed, it had been espoused in broad terms in the Industrial Charter.183 After 1951, though the laissez-faire crew had usually been the most vocal internal critics of the Government, they had always been matched by a strain of opinion that argued for more state economic planning. Bob Boothby, for example, had promoted this case in the 1950s, arguing that government ought to have a strategic plan to direct investment into the economy in order to allow rational and manageable expansion.184 Macmillan himself was well aware that some Tories would look upon the construction of more explicit corporatist apparatus with dismay; nonetheless he urged Lloyd to go ahead. “I do not think we should be afraid of a switch over towards more direction. Our Party has always consisted of a number holding the laissez-faire tradition, but of an equal number in favour of some direction,” he maintained in a note to the Chancellor on July 1st. He went on: “I have no fear of it because these were the policies I recommended before the war. Therefore, I shall be able to claim, like Disraeli, that I have educated my Party.”185 Treasury and PM were successful in suppressing dissent in this area. Potential opponents of planning were largely unaware of moves in this direction until Lloyd announced to the Commons, in somewhat loose terms, the Government’s desire to enter into formal consultations with both sides of industry on growth policy.186 The Chancellor’s statement that indicated the turn towards planning came on the same day as the ‘little Budget’ measures. Understandably, the policy shift was given less press attention than the rather more dramatic use of the tax regulator and the launch of wage freezing. Nonetheless, by late summer Lloyd had obviously become fretful about criticism from the Party’s right flank. On 29th August, the PM was moved to reassure him: “I do not think we need be too alarmed by right wing criticisms which are merely heirs of the Liberal laissez-faire policy. Let us stick to our pragmatic approach.”187 This essential division into Gladstonian and Tory factions was a constant feature in Macmillan’s conceptualisation of the Party. Of course, the reality was not as straightforward, but nonetheless many of the PM’s actions, certainly after the ’59 election, were based on his long-standing preference for moderate state direction over free market solutions. In this, he set himself deliberately against the views of many Conservatives. The construction, over a series of reshuffles, of a progressive, intervention-minded ‘court’ dedicated to the preservation of the goals implicit in the 1944 compact was intended to provide some fortification against the slings and arrows of the right. Therefore it was with a tone of mild surprise that the PM recorded his impressions of the two Cabinet meetings in September that were required to agree the form of plan-

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ning’s machinery. Emerging from those discussions, he noted, was “a rather interesting and quite deep divergence of view between Ministers, really corresponding to whether they had old Whig, Liberal, laissez-faire traditions, or Tory opinions, paternalists and not afraid of a little dirigisme.”188 Evidently, though planning did squeeze past its Cabinet assailants, the Premier’s education work was somewhat short of complete. The eventual form of ‘planning’ adopted was, in some ways, similar to that of the French: in that it was termed ‘indicative’, with the main institution established for its maintenance, the NEDC (or ‘Neddy’), operating as a forum for guidance, suggestion, and investigation. It circumvented, on the other hand, the Commissariat’s mania for currency devaluation as one of the major tools of economic management.189 This reflected the unduly exalted position accorded to the sterling area and the Government’s determination to avoid the ‘competitive devaluation’ that arguably disfigured the conduct of monetary policy through the early post-war period. Its position in relation to the polity was an early problem, however. Assisted by Macmillan’s adroitness, Lloyd had acquired Cabinet assent to Neddy’s creation in September, but at a price. Two stipulations were added to the Chancellor’s brief. First, as he pointed out to the FBI’s President, “responsibility for final decisions on matters of Government policy must remain with the Government”. And secondly the Council’s full-time staff (eventually named the National Economic Development Office (NEDO)) must come under government auspices, albeit outside the “ordinary government machine”.190 This was certainly a disappointment to the idealists at the FBI, who had preferred a ‘two tier’ system closer to that of the French, in which the Office was conceived of as independent of government and given freedom to publish.191 Ironically, whilst the FBI was disappointed, it was not aware that Lloyd had been lucky in the first instance to be able to wrench the Office from Treasury control. Suspicion at the Exchequer was high about an organisation which was not fully incorporated into the polity, but instead was positioned in the murky penumbra of the state. Opinions had only grudgingly changed when Frank Lee insisted that NEDO be divorced from Great George Street.192 Still, this was preferable to the fully independent NEDO that the FBI Council had wanted. Again, institutional friction contributed mightily to the shape of policy. The Council officially came into existence on 1st January 1962, yet still acceptance from the other major peak organisation had not been secured. Lloyd’s antagonistic tone when announcing the pay pause made negotiations thorny, and the threat that Neddy would simply end up as an enlarged CoPPI seemed altogether possible. The fear, especially amongst increasingly powerful left-wingers such as Frank Cousins, was that the Council was merely a device to institute permanent wage constraint. Misgivings were only amplified when, on the 16th August, the Chancellor extended the pay pause to cover the 3.5 million

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workers in private industry where minimum wages were fixed by Wages Councils. By January 1962, the TUC had still not replied officially to the invitation to join the Council that had been extended five months earlier. Lloyd was concerned. On 10th January, he wrote to Woodcock, tantalising him with “the great opportunity [the NEDC] provides for the two sides of industry to influence policy, to tackle in co-operation with the Government the obstacles to sound growth… I ask you once again, as a body which has consistently urged upon me the advantages of such co-ordination of economic effort, to join us in this work.”193 The following day, Woodcock met Lloyd and delivered the promise of TUC support and co-operation which ensured that NEDC, unlike the CoPPI, would not be throttled at birth by trade union hostility.194 The crucial points that swayed Woodcock, it seems, were Lloyd’s undertaking that NEDC would not come under Treasury auspices, and the pledge that the body would not have any function in imposing wage restraint.195 Lloyd had pulled off something of a coup, though he could have saved himself a frantic eleventh-hour by a more conciliatory approach to the pay pause. In any case, he was almost certainly culpable for losing the only chance to bring the subject of a permanent, productivity-related incomes policy within the ambit of Neddy. The purpose of the NEDC was to create a plan which would indicate a target growth rate for the British economy agreeable to the three partners. Its work was to be supplemented by a number of industrial planning groups (the ‘Little Neddies’), each of which “would work out the implications of that growth rate for their own sectors and agree the investment levels, wage levels, and manning necessary to attain it.”196 At a deeper level, there was hope that this limited corporatism would instruct both sides of industry, but particularly the TUC, about the economic ‘facts of life’; this would, in turn, induce the latter to moderate wage demands. Certainly it was one of the last genuine attempts to produce industrial concertation which would promote responsibility on all sides without fracturing the tenets of the delicate post-war settlement. It soon became apparent, however, that even the broadest discussion of wage increases the TUC was determined to keep away from the Council.197 Neddy also came under fire from critics who considered it to be variously a convenient invention to escape a short-term crisis that would disappear when the emergency did; another instrument with which the Government could put off taking real decisions about future economic management; or as a move towards a socialist planned economy.198 In fact, for all its deficiencies, it was none of these. Its most serious weakness was that, after its initial indication of a 4% growth target, its deliberations appeared to have no practical effect on the conduct of Government economic policy–at least to the electorate. Ostensibly, neither the stimulatory 1963 budget, nor the more cautious one of the following year was related to its

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work, except in the sense that the Council provided an additional source of economic estimates to supplement those produced by the Treasury.199 The other innovation that the Government launched in 1962 to buttress the emergent corporatist system was the short-lived National Incomes Commission (NIC). Unlike the NEDC, ‘Nicky’ (as it became known) was the Prime Minister’s own handiwork. Having experienced closely the TUC’s refusal to dilute the principle of free collective bargaining, Lloyd was openly sceptical about its chances for success.200 Although by May, when Macmillan first mooted the idea, the Chancellor had already been borne out of the PM’s inner circle, even if at the time he was unaware of the current. Despite the quasi-corporatist framework’s eventual failure to deliver a clear response to the systemic problems of Britain’s economy, the fact that the Government even embarked upon such a scheme is enlightening, since it marked the inauguration of the ‘high period’ of modernisation. The active promotion of planning constituted, to some extent, a volte face for a party that had based its governing period from 1951 predominantly upon macro-economic policy as a means to create the conditions for affluence. Consequently, 1961 marked the fulcrum in modernising Conservatism. From this point the pursuit of modernity became the administration’s axiom. It denoted a final shift in the Government’s domestic statecraft towards radical progressive measures as the only way to secure the minimum objectives of the regime. Macmillan cemented the changes in policy that had been announced over the summer with a modest reshuffle in early October that further entrenched the modernising clique. He moved Iain Macleod to the Party Chairmanship where his obvious rhetorical skills would be well used in rallying the faithful in a period when the Tories were suffering great opinion poll injury.201 The PM was pleased with the press reaction to Macleod’s selection: “The significance of Macleod becoming Chairman is well understood. It means ‘Progressive Toryism’.”202 Reggie Maudling was moved to the Colonial Office to supervise another aspect of the modernising reassessment, the imperial withdrawal that the Prime Minister had signalled in February 1960. After his open scepticism about prospects for the NEDC’s success, this was possibly because the PM wanted to prevent him pouring poison into the ear of the FBI. His replacement at the Board was the dependable, if unexceptional, Freddie Erroll. The new President may not have been a ‘go-getter’ in the Heath mould, but his modernising credentials were solid enough, and soon he was to launch a particularly dogged attack on rpm. By the time of the Party Conference in the second week of October, the Premier was convinced that the image of the Party–“progressive, modern, efficient”–had been restored.203 This was to prove wildly optimistic, as we shall shortly learn.

CHAPTER FOUR

‘MODERNISE WITH MACMILLAN’

Growth Pains. In February 1961, an intriguing debate took place in the Conservative Party’s Advisory Committee on Policy that foreshadowed the problems of a Tory Government advancing a relatively radical modernising agenda. With the invigorating election victory now sixteen months past, and the first inklings of modernisation beginning to nudge public consciousness, the Home Secretary inaugurated a discussion on ways of marking the decennary of Conservative administration. Perhaps surprisingly, this revealed acute divisions over how a Tory government ought to behave in office. The European enthusiast, Gilbert Longden, thought that the Party needed to “look forward to try to bury the idea that we were a materialistic Party. [Since] the morale of the people needed raising.” His fellow backbencher, Alan Green, got more support for his contrasting caution. For him, the British people were “very conservative” and had “no wish to move or change”; the idea that the Party was to be a force for progress would have to be put across with “great tact”.1 In essence this was a debate about tactics, not principle. Nonetheless, it was evidence of earnest misgivings about modernisation within the Party’s upper reaches. In addition, it demonstrated one of the deep problems of a modernising statecraft strategy. To succeed, not only did its advocates need to overcome the weaknesses inherent in a state-led programme of economic renewal, they also had to appeal above the heads of Conservative activists to a wider public. It is not clear whether the Cabinet was aware of such considerations at the time that the modernising strategy was being formulated. That middle class Tory members were unhappy with the Government’s failure to tackle unions’ alleged restrictive practices and to attack inflation more diligently was widely known from early 1956, as E.H.H. Green has lately demonstrated.2 However, at least until the calamity of Orpington in 1962, the assumption seems to have been widespread that the core Tory vote would hold up even in the face of the

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antagonism to it that certain elements of modernisation offered. The Monday Club’s formation in November 1961, embodying the opposition of the Party’s Empire wing to decolonisation policy, would have given the Government a foretaste of internal resistance. But, in contrast to later reactions against, for instance, the Beeching plan, it was easily dismissed by Central Office as an “extreme right wing” group with which the Party had no official connection.3 Hence although by mid-1962 fierce internal hostility to aspects of modernisation had become very apparent–as we shall see shortly–in 1961, when the alignment of forces behind the modernising strategy was very strong, the central Party appeared to believe that it could overlook such traditionalist concerns. Discussions on growth, the EEC, and planning at executive and civil service levels in 1960-61 created conditions in which debate began to move towards the contemplation of other areas of modernisation. To the public, if they considered it at all, it must have appeared as if little was happening in the realm of industrial policy between the Common Market and planning announcements of July 1961 and mid-1962. Beneath a unruffled surface, though, practically all economic and industrial policy debates were being conducted in an atmosphere that reflected the now voguish commitments to growth and modernisation. For example, the Working Party on Decimal Currency reported in May 1961, albeit with a somewhat equivocal report. Frank Lee, as ever in the vanguard of modernity, was quick to utilise the occasion to launch a typical volley against traditionalist thinking. In addition to the excellent “psychological benefits” of adopting a decimal currency, failure to decimalise would demonstrate that Britain was “not moving with the times” and would risk breaking more links with those Commonwealth countries that had already abandoned the imperial system.4 The Chancellor was also keen to change to a decimal currency on similar grounds, maintaining that “it would be a forward looking step that we are ready to adapt our traditional arrangements to fit in with the modern world.”5 To Lee’s especial frustration, decision on this issue was deferred for fear of stirring up opposition in the Party’s lower reaches. But the debate that it provoked was symptomatic of the urgency with which modernisation was now being discussed. Even large-scale technological projects such as Anglo-French designs to build both the Concorde supersonic airliner and a Channel Tunnel were being examined in the fresh light of modernisation. Both had their origins in discrete areas, but they were increasingly co-opted into the modernisation project. Each was seen as a way of proving the sincerity of Britain’s new desire to re-engage herself with the continent, for example. Almost as importantly, each possessed the type of psychological and structural benefits that were flourishing in the new growth-friendly atmosphere of domestic politics. They could be parcelled up as ‘Festival of Britain’ style industrial ventures that would wow the electorate (eventually) with tangible emblems of modernity. Potentially, both undertakings

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would also stimulate knock-on R&D effects in engineering and aviation industries and thus were eagerly welcomed by politicians–even if civil servants were often more incredulous.6 More prosaically, but just as pertinently, whilst the Board’s internal rpm enquiry trundled on, the price-fixing debate had acquired a considerably higher profile. The Institute for Economic Affairs (IEA), a think-tank created in 1955 to argue for free market solutions to economic problems, had provoked interest in some Tory circles.7 In February 1960, it chose to launch its series of ‘Hobart Papers’ with an attack upon rpm penned by Professor Basil Yamey.8 Price maintenance, Yamey argued, caused inefficient labour and capital allocation, whilst its abolition would lead to “the establishment of more efficient firms, as well as the provision of consumer choice in price and services.”9 Of course, this was what several civil servants, notably Lee, had argued since the early 1950s. The IEA’s paper was nonetheless useful to abolitionists since it provided independent corroboration for their views in terms that reflected the Government’s concerns over such symbols of modernity as labour market flexibility and the consumer interest. To Yamey’s challenge, the response from the pro-rpm lobby was swift. Frank Friday, an ex-Board of Trade economist, and P.W.S. Andrews, editor of the Journal of Industrial Economics, supplied a rejoinder in a pamphlet entitled Fair Trade. They concluded that the retail sector was “competitive already and a ban on resale price maintenance is likely to reduce overall competitive pressure.”10 Prophetically, they pointed out that rpm’s removal would only swap one type of monopoly for another. For whilst it might weaken industrial concentration, it would bolster the market dominance of large retailers by giving them supremacy over manufacturers.11 The intellectual debate begun by the rival pamphlets kept alive the public controversy that the Cabinet had hoped to mute. For instance, in 1961 the CA was prompted to canvass both its members’ views and those of the public on maintained prices. The Association’s research revealed a drift of opinion against rpm: 77% of its membership and 57% of the public were in favour of shopkeepers being able to sell any branded article below its advertised price at any time.12 Major retailers like JLP and Tesco also intensified their campaigns against price maintenance. JLP’s staff journal provides an illustration of this. In 1960, the partnership frequently used articles in its in-house journal to defend the fitness of its position. These caught neatly the tension between the traditional and the modern that was gripping not only the Tory Party, but British society generally. Its Deputy Chairman asserted, in language that would have made a Tory moderniser proud, that: [Britons] tend to be lazy and require stimulus. In business stimulus is provided by competition and this must include price competition. It must be remembered that conditions today are not those of the 1930s… We are a conservative people and

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Chapter Four life is more comfortable as it is. But we cannot afford just to be comfortable. If price maintenance did not exist would we really vote for its introduction today? I do not believe so.13

Rpm’s role in preventing resurgence of inter-war hardship was a red herring. The debate’s parameters were becoming more widely drawn. Presently, the second report of the Registrar of Restrictive Trading Agreements demonstrated that the RTPA was frequently circumvented.14 Thus “industries… [often] achieve substantially the same degree of organisation by a series of less formal [unwritten] arrangements, each concerned, perhaps, with the pricing, distribution, and production of a single commodity.”15 Equally, the RTPC was making extraordinarily slow progress in its elimination of restrictive practices. By 1961, although 2,350 practices had been registered under the aegis of the ’56 Act (not all of them concerned with price, naturally), only 125 had been abandoned.16 With announcements on the EEC application and national planning imminent in mid-1961, the PM seriously contemplated bracketing together these policy shifts with an attack on restrictive practices. (Indeed, in the spring, the Foreign Office had expressed concern that many domestic restrictive practices would have to be tackled if the UK was to accede to the Rome Treaty.17) On 24th June he minuted Maudling with this in mind. In his note, Macmillan wondered if the “elaborate trials of procedure” employed by the RTPC to tackle price-fixing hadn’t become too protracted. “If we really dramatise this,” he continued, “could we not make it the beginning of an attack on restrictive practices across industry? Really, until we get over this, I see no hope of our recovery.”18 This was typically melodramatic, of course–though it was certainly in keeping with the restlessness of the time. Maudling, however, was now aware that tinkering with rpm possessed great potential to destroy the career of whoever tried it. And Reggie Maudling was, one senior civil servant recalled, more career minded than most. Indeed, being earmarked early on for the top job meant that “all his manoeuvres and attitudes were somewhat dictated by that ultimate goal… albeit [that] he played his part in the power game with a certain lightness of touch, almost amusement.”19 In respect of rpm, such actions were to prove rather ironic in the 1965 leadership election, but, in 1961, Maudling’s reply to the PM reflected his desire to remain below the parapet until the internal enquiry had provided more ammunition. To indulge in this assault now, he asserted, would add to growing “complaints that nothing comparable has been done about the restrictive practices of labour.”20 Although the opportunity for a third salient was temporarily lost, within months rpm resurfaced with the emergence of the Speed Report (the informal title of the Board’s internal paper, after its chairman). The investigators, unsurprisingly, backed rpm’s eradication. They asserted, gloomily, that except

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for the grocery trade there was “no ground for believing that apart from government action the practice… will dwindle of its own accord.” Moreover, “the spread of branding and pre-packaging to new classes of commodities” tended, if anything, “to facilitate a wider adoption of rpm.”21 However, some of the report’s language unwittingly demonstrated the extent of the furore that surrounded the practice. Indeed it leant support to those who argued that the political costs of legislation outweighed the economic benefits: its conclusion claiming feebly that “the emotional fervour which has been injected into its discussion has exaggerated… the scale and importance of the present effects [of the practice].”22 Such equivocation left the new minister, Erroll, with a dilemma. Clearly the enquiry’s results could not be suppressed indefinitely, yet neither did they provide a politically compelling case for abolition. Additionally, the results of the Exchequer’s growth discussions were being transmitted to the executive. In July 1961, the ground-breaking Treasury report, ‘Economic Growth and National Efficiency’, had reached Cabinet. It condemned rpm as causing “maldistribution of resources” and “rises in the general level of prices”.23 Despite this encouragement, the Government was slow to act on restrictive practices. Grumbles surfaced amongst Treasury officials. One turned the usual Tory grassroots’ argument on its head: If ministers are to attack ‘undergrowth’ and inefficiency properly they will have to tackle a whole lot of unpleasant things like rpm… If they look at them piecemeal and decide that each is too horrible to tackle… alone, they will make no progress on… promoting growth. If they ‘let off’ the shopkeepers, will the trade unions be willing to look at their shortcomings?24

Such frustrations were understandable, though much of the delay in autumn 1961 can be ascribed to Erroll’s status as a Board ingenue. Once the joint steering committee on monopolies and restrictive practices–which comprised participants from the major economic departments–had endorsed Speed and urged the President to break his silence on rpm, Erroll did act speedily. By midMarch, the President’s office had produced a draft EPC paper, which was circulated through departments for comment, thus garnering much support amongst officialdom on its travels. The authentic heavyweight support emanated from the Treasury though. Officials seemed to have a greater understanding of what modernisation might entail than their political superiors. Chief amongst the advocates for abolition was again the Permanent Secretary, who dispatched a diatribe to the Chancellor’s Principal Private Secretary, David Hubback–on the clear assumption that it would reach the desk of his master. I unreservedly welcome this proposal and I hope that the Chancellor will support it strongly… [The] abolition of the practice will reduce consumer

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Chapter Four prices; should lead to a more efficient use of labour and other resources; and is one of the few direct contributions which government can make on its own volition to assist growth and healthy competition… I always thought that the 1956 legislation [was] one of the outstanding… achievements of the 25 Government and I hope that it will now… round off its work.

Of course, Lee was closer to being an advocate of ‘cold showers’ than a disciple of the ‘warm bath’, and this showed clearly in his tirade, but promoting growth through modernisation meant neither exclusively one or the other. The point is that Lee’s support was crucial in providing institutional momentum behind abolition. Thus armed, Erroll ought to have found his task much easier. Other influences were, however, at play. Regrettably, the paper that had accrued such ample backing from Great George Street was launched at the EPC at just the point when the wisdom of modernisation was being cast into doubt. Ostensibly, throughout 1961, a substantial weight of opinion had built up behind government policy; if anything the biggest criticism was that the administration was moving with insufficient haste towards modernity.26 Yet in early 1962, the Conservatives received a colossal shock which almost shattered the strategy. The reservations voiced in the ACP, it transpired, were not the misgivings of over-cautious reactionaries; instead on March 14th a by-election in a medium-sized commuter-belt town demonstrated that the modernisation project would not be uncontested.

Premonitions of Mortality. By-election results began to show an anti-Tory swing from late 1961, but the perception amongst core middle-class Conservative supporters that they were being neglected was highlighted most spectacularly at Orpington. In March 1962, Eric Lubbock demolished a 14,760 Conservative majority in the Kent constituency and erected a 7,855 Liberal one, all the more astonishing for the fact that in 1959 the Liberals had polled in third place.27 The impression of crisis was thus cemented at the level of the Parliamentary Party and in the Government itself. Several Tory policies were proving unpopular amongst the middle class: most notably the ‘pay pause’.28 Lloyd’s measures to cool the simmering economy had, in part, given the lie to the Conservatives’ claim at the previous general election that they could be trusted to handle and extend affluence. The drop in production attendant on the July package necessarily had a substantial electoral fallout. The 14th March result compounded anxiety about the direction of Macmillan’s statecraft, especially in the vicinity of Tory backbenches. Such anxiety, perversely, gave momentum to the sense of emergency, and doubtless was responsible for still further dwindling in Conservative popularity.

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The post-Orpington navel-gazing began almost immediately. The 1922 Committee conducted a lengthy meeting to decipher the results, though this served only to accentuate the differences between traditionalists and modernisers. Several MPs complained that the Conservatives’ soft soap approach to the unions had diminished their vote; others that the NEDC was a piece of recidivism that failed to provide for representation of Conservative interests. Conversely, at least one participant argued that people were simply bored with the Government and that it had become “no longer avant-garde to vote Tory”– implying that the electorate ought to be tempted with more innovation, not less.29 At least, however, virtual unanimity was reached on the invidious character of the pay freeze.30 Similar divergence could be observed elsewhere. Whilst, for instance, the bright young men in the scrupulously forward-thinking Bow Group urged an even more vigorous pursuit of modernisation as the solution to the electoral puzzle, less dazzlingly contemporary intellects suggested precisely the opposite.31 The CRD examined a selection of letters and telegrams sent to Central Office and the local associations, largely from Party members, in order to identify common points of protest. The Department noted that the majority of this correspondence had come from retired people and the “little man”. What these groups had to say would have made for depressing reading for ‘progressive’ Tories. “Recent economic policy [had demonstrated] a change of principle from that in which they had believed and upon which they had relied,” the CRD’s analysis noted. Several letters referred also to deep distrust of the Common Market, the Government’s “lack of guts” in combating strikes, and its pursuit of unspecified “socialist policies”.32 This was, naturally, a manifestation of traditionalism and was unlikely to be typical of the majority of voters who had deserted the Tories. It was not less worrying to the Government for that, since it hinted at a deep reservoir of anxiety amongst electors thought to be unusually loyal to the Conservatives. The campaign report from Orpington’s constituency agent made scarcely better reading. Although it presented mitigating circumstances, such as “unscrupulous” tactics on the part of the Liberal Party–whose activists were alleged, amongst other things, to have torn down Conservative election posters–and poor handling of the campaign by Peter Goldman, the Tory candidate, it came to some withering conclusions about the Conservatives’ ability to deliver their message. “[The] middle class voter, in the £1,000 to £2,500 salary group, and in particular the younger marrieds, feel they have not had a fair share of the cake,” it claimed. Furthermore, though the Liberals’ platform was “vague”, their candidate adopted the sort of language that was “fashionable”: speaking about “freedom, individual liberty, private enterprise, tax reform, cutting waste and planning more rapid progress for the economy.”33 Such discourse was the embodiment of modernisation. Evidently, a

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robust and unambiguous government response to such contradictory intelligence would be extremely tricky. An interesting piece of evidence that demonstrated the state of backbench trepidation after Goldman’s collapse came in the form of an impromptu report sent to Central Office by David Price, MP for Eastleigh, on problems in his constituency. Eastleigh was the fifty-fifth most marginal Tory seat in the UK, well within Labour’s target range for winnable constituencies; it was small wonder that Price viewed the prospect of a general election with unease.34 In Price’s view, far from acquiring a pinkish shade, policy had been disfigured by “surrenders to the Right”, which had driven “younger and more radical members” away from the Party in his locale. He insisted: If the Conservative cause is to prosper in a division like ours, [its] image must be dynamic, progressive and generous… The Government must be bolder in their approach to reform of our practices and institutions… The people want the country brought up to date…35

Of course, such interventions by backbench Members (even though Price was, at the time, something of a rising star) had negligible impact on high policy, but nonetheless his exposition–like the ’22 meeting that preceded it–was suggestive of the tension between the Party’s two broad tendencies that had been unleashed by the modernisation strategy. An unnerved Prime Minister, too, was concerned that Orpington represented a victory for those Tories of a traditionalist proclivity, the “enemies of the leadership”. He confided in his diary: “Lord Salisbury is working hard, with growing power. He genuinely believes that the loss of our Conservative voters to the Liberals is due to our having followed too ‘liberal’ policies! He thinks that reaction is the cure, and he regards me as the arch-enemy of reaction.”36 In truth, it is likely that the lion’s share of the drift in votes was the result of Lloyd’s economic policies–the ‘pay pause’ had been the foremost reason for voting Liberal given by NOP’s survey respondents in Orpington.37 Although what really casts Salisbury’s view into doubt is the Liberal candidate himself. Lubbock was, in the words of his party leader, widely regarded as [A] representative of a new generation… the generation which was classless, understood technology, was free from the patronising airs of the old Eton… hierarchy and intended to apply to the management of the country the principles of modern science… [In addition] the Lubbocks were an old Orpington family.38

In short, he was exactly the sort of candidate who should have represented the Conservative Party in its new reformist clothes.

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Effectively, the dilemma for the leadership highlighted by Orpington was not whether it should be radical in its pursuit of modernisation–the modernising tendency was, by spring 1962, too securely established in the executive for such thoughts to be taken seriously–but rather how to sell it in such a way that it would inspire its intended audience without estranging traditional supporters. The agonising this prompted amongst the Party’s top-drawer was both public and uncomfortable. It appeared in diverse forms. T.E. Utley’s complaint, for example, was that the Government had for too long fought simply a containing operation against collectivism and should instead be considering a genuinely ‘Tory’ offensive in which state expenditure would be pruned and trade union power resisted.39 On the other hand, echoing David Price, Reggie Maudling lamented that the Government could not obtain younger voters’ allegiance as it had “not yet found a way of talking to them in language they understand and in terms of the ideals they cherish”.40 Even the normally gung-ho CRD began to doubt whether the Party was approaching modernisation in the correct manner. As Brendon Sewill, one of the Department’s Section Heads, cautioned during preliminary work on the election manifesto: Modernisation tends to be all large-scale stuff, rather over-powering. Therefore we need to devote some space to protecting the individual from this juggernaut… If possible, in describing the modernisation programme we should endeavour to get people to identify themselves with it, to feel it is not just the Government’s programme but their programme…41

Sadly, but predictably, these conflicts were too obdurate to be resolved under Macmillan’s stewardship. Which is not to say that the Prime Minister was idle in developing a response to the bloody nose handed him by the citizens of Kent. He spent the next month alternately chivvying his Chancellor to take a more active role in developing an alternative to the ‘pay pause’ and working on his own proposals with which to grasp the initiative back from the Liberals.42 These proposals became known collectively as the ‘New Approach’. It was within them that the PM showed a rekindled willingness to tackle the obstacles to higher growth.

Rpm and the New Approach. Into the maelstrom of hand wringing after the March setback was pitched the Board’s EPC paper recommending the eradication of rpm. Unfortunately, after Orpington, it was scarcely difficult to visualise the impact that its removal would have upon electoral support. While Erroll used the scrupulously forward-looking argument that the practice was “inconsistent with a modern competitive economy” and should promptly be abandoned, and Christopher Soames pointed

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out that the Government should concentrate on consumers since there were vastly more of them than there were shopkeepers, a significant minority of the EPC remained unconvinced.43 The same arguments were repeated when the issue reached Cabinet on 15th May. Abolition was again rejected on the political grounds that it would excite too much public opposition, though the Chancellor was charged with investigating the matter from the point of view of growth policy.44 But rpm would simply not disappear. From spring 1962, its idiosyncrasies had acquired the upsetting habit of appearing in the general news sections of the press. Much of this emanated from the personal anti-rpm crusade of Sir Jack Cohen, co-founder of Tesco, in his “housewife’s friend” pose.45 Tesco had fought and lost several recent battles with manufacturers over price-fixing, which had encouraged a increasing stream of injunctions against price-cutters and ever more press reports.46 By May, so unrelenting had newspaper coverage become, that Macmillan wrote to Erroll, accusing Board officials of deliberately stoking the “great spate of propaganda” about rpm.47 Meanwhile, the Treasury was concerned about the Cabinet’s price maintenance prevarications. For Edward Boyle, Orpington was in danger of emasculating the growth project. This was because Tories had drawn the wrong conclusions from the by-election. It was not in essence a poujadiste revolt, but by not tackling rpm, the Government was behaving as if it was. Ultimately, this weakened the Government’s declared policy.48 Frank Lee was sterner still: “A muffled decision [on rpm] would do much harm to the Government’s reputation… is it really the case that all the items in the approved legislative programme ought to be given priority over this?”49 After a couple of weeks of such brow-beating Lloyd acceded to a pro-abolition paper for Cabinet. Politically, abolition would be dangerous, the paper stated; economically, rpm had little to recommend it. It held back growth by exaggerating capital and labour immobility, but, perhaps most vitally, it could decrease prices by as much as 5% and “the importance of [this] in the context of our incomes policy cannot be exaggerated.”50 With the NEDC now meeting regularly and the European negotiations embarked upon, competition policy and its relation to inflation-free growth was being pushed constantly higher on the Government’s agenda. In April, Whitehall had produced a paper for the Council entitled ‘National Efficiency and Obstacles to Growth’, which was a distillation of Exchequer and Board thinking on the major structural deficiencies of the British economy. Not unexpectedly, the document lambasted individual price maintenance as an impediment to the adoption of new techniques in the distributive sector.51 Though the paper was roughly received in Council–the TUC suspected that it was a prelude to a permanent incomes policy and the FBI disliked its suggestions on rpm and

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managerial practice–its appearance was indicative of the way the intellectual debate was altering.52 These arguments, at state level, fused with the parallel dialogue about the place and importance of the consumer in an affluent society. The final report of the Molony Committee was shortly due and rumours were almost ubiquitous that the committee’s report would advocate the abolition of rpm.53 Harrod, too, had been suggesting to the PM that, since Orpington, the Government had drifted and needed a “new found sense of purpose”.54 Under the Oxford economist’s influence, Macmillan had become convinced that the twin problems of a contracting economy and inflationary wage claims presaged a major crisis of what was later to become known as ‘stagflation’.55 His solution was to advocate a permanent, though not statutory, incomes policy to replace the blighted ‘pay pause’. But since an incomes policy alone could be easily disrupted by the trade unions or knocked off course by private sector noncompliance, something was needed to sweeten it. The balance would be provided in a “package deal for the consumer”.56 In this, Macmillan demonstrated that political vocabulary was shifting towards more modern conceptions of individuals’ roles in society. The PM’s comprehensive scheme was first sketched in Cabinet on 28th May. Pointedly, it resuscitated the heritage of post-war ‘new’ Conservatism by reviving suggestions from the third section of the Industrial Charter.57 For example, it envisaged abolition of the day contract, measures to deal with excessive profits, and greater stress on industrial training. Consumers, too, featured heavily in the design. A Consumers’ Council should be established for their protection and, crucially, the restrictive practices that injured them (such as individual rpm) should also be confronted.58 Thus the idea of rpm reform became an intrinsic component in the PM’s New Approach document, which he composed in mid-June. In the New Approach was the breath of modernising Conservatism. It was essentially an attempt to tackle the problems of industrial relations and paydriven inflation that were corroding the Government’s image of economic competence, through a more explicit institutional framework.59 As such, it was not simply compatible with the growth-through-modernisation strategy, it was critical to its prospects for long-term success. Its most notable, if ephemeral, aspect was the creation of the NIC. Unhappy with Lloyd’s failure to follow up the ‘pay pause’ with any measures, other than the frequently flouted ‘guiding light’, and with the unions studiously keeping the wages issue away from NEDC, Macmillan had decided to establish a body which would examine particular wage settlements.60 In his Commons speech launching NIC in July 1962, shortly after the Cabinet cull that had deprived Lloyd of the Exchequer, Macmillan was nonetheless careful to stress that the Commission would not be a replacement for the machinery of arbitration, nor for the wage councils.61

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Indeed, even at this point, before the TUC had said it would not co-operate with it, NIC’s powers looked flimsy. It was not permitted to examine arbitration awards, and could only judge claims that the Government chose to submit to it. Macmillan’s hope was that NIC would be sufficiently moderate and limited in power that the unions would find it possible to ally with the body. In addition, Macmillan revealed simultaneously his new ‘consumer / worker package’. Some of this was based on the Molony Committee’s recent conclusions, although shorn of Molony’s recommendation to act against rpm. The package announced the creation of a Consumer Council and measures to increase workers’ contractual security. The speech also recognised the urgency for reforms to the apprenticeship system, recognising that the state would have to play a role in the creation and mobility of skilled manpower.62 These olive branches were, however, insufficient to stimulate union interest. As unemployment began (slowly) to rise from September 1962, which temporarily relieved inflationary pressures, the NIC fell into abeyance.63 In fact, from its first introduction at Cabinet the New Approach paper was already being diluted, particularly in respect of its provisions on rpm. Macmillan planned to sketch the new Conservative industrial policy in a speech at Luton Hoo in late June. However, Iain Macleod, now nine months as Party Chairman, recommended strongly that its planned references to rpm be deleted.64 When Macmillan consulted Tim Bligh, his Private Secretary working on Treasury matters, he was advised not to drop rpm abolition since “if no change is made, that element of the package devoted to the consumer will lose… its impact and freshness.”65 Unsurprisingly, the Premier dangled between his modernising instincts and his desire, after the fiasco in Kent, not to inflame the Party’s grassroots. His hesitancy was on display in his reply to Macleod, as he invited the Party Chairman to prepare an assessment of the electoral pros and cons of ending rpm.66 Macleod approached the problem with a chairman’s hawkish eye for party unity. Citing a CRD report that small traders were already harassed by increased competition and interest rate rises, and cautioning that a recent 1922 Committee meeting had shown antagonism to rpm’s abolition, he opted to defend retention.67 Macleod at least appreciated the delicacy of the bond between government and supporters. Macmillan heeded Macleod’s advice: rpm was quietly erased from the New Approach. But there might have been an alternative outcome had the Exchequer had a different incumbent. Lloyd, despite giving his name to the June’s proabolition Treasury paper, had been back-sliding in the face of party hostility. Insulated from political considerations, Frank Lee made a final attempt to persuade the Chancellor to champion rpm abolition. If his earlier polemics against price maintenance had been tough, his letter to Hubback on 9th July was

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astonishing in its ferocity. It also saw how rpm was deeply enmeshed in the other skeins of economic growth and modernisation: I know that the Chancellor feels considerable doubts… concerning the proposals in regard to rpm… I would venture to urge as strongly as I can that, despite the political difficulties, the Government should… show themselves resolute in this field… This system wastes economic resources and is an impediment to faster growth… It is surely quite wrong for Government to be prepared… to come out strongly now against restrictive practices on both sides of industry, for example through the proposed Incomes Commission, but to leave this old fashioned practice untouched… Abolition of rpm is a necessary corollary to the Incomes Policy. Anything else will be nothing more than vague words… The Government cannot bury its head in the sand over this issue… To say that the practice has to be reprieved would create a deplorable impression of indifference towards economic growth and competitive strength, just at the time when the whole question of our ability to ‘win out’ in the Common Market will be most under 68 critical scrutiny…

By July, Lee had probably decided that he would have to retire (he had recovered from his heart attack of the previous year, but was not in the rudest of health), this perhaps explains his urgent desire to drive forward certain policies prior to his departure. His assessment of the situation was almost certainly correct–if the executive’s strategy was genuinely directed towards economic growth and industrial efficiency then to reprieve rpm was downright inconsistent. However, Orpington had left the strategy politically in doubt. This did not mean a return to subsistence level statecraft, but it suggested that modernisation would have to be pursued more cautiously in order to reverse the tide of the polls. In addition, as we have observed, Macmillan had put his Chancellor increasingly at arm’s length since early spring–even had Lloyd been amenable to Lee’s initiatives, the Permanent Secretary was speaking to the wrong person. High political intrigues had some impact on the decision to drop rpm reform, but the issue was probably more a casualty of the entire climate of Tory midterm politics. We have already seen that much of Tory modernisation was contentious because of its potential impact upon solid conservative constituencies: decolonisation upset Empire loyalists, for example, whilst Beeching hit the interests of rural dwellers and moves against rpm, as we know, appeared to attack the back-bone of Tory support, the petit bourgeois small shopkeeper. The tangible disquiet that had been occasioned by earlier events such as Macmillan’s ‘wind of change’ speech was substantially intensified by the PM’s mid-year ruminations. The reaction from some colleagues to his Cabinet speech of 28th May was scepticism: “this is not Conservatism,” averred the Chief Whip.69 Such disgruntled rumblings were exacerbated by heavy

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trailing of the New Approach in the newspapers. As the proposals on rpm dribbled out into the press, the loose coalition of its defenders was stung into movement. For instance, PATA, the retail chemists’ trade association, hastily produced a paper that was dispatched to all potential parliamentary supporters. It complained of the ad nauseum investigations into individual price maintenance, and (of course) reminded them of the fairly substantial numbers employed in retail pharmacy.70 Immediately following the Whit recess this upwards pressure manifested itself into a series of heavily portentous questions to Erroll in the Commons. “Does my right honourable friend appreciate,” asked Sir Thomas Moore, ex-director of Hatchards bookshops, “that if rpm were abolished the book trade, for one, would be in chaos and would probably collapse?”71 Cyril Osborne, Gerald Nabarro and other hoary old ultras had similarly ominous predictions.72 It was these vocal attacks upon the trend of the New Approach in general, and its provisions on rpm in particular, that led to Macleod’s assessment that, once again, rpm should be shelved away.

The Policy Comes Apart. A surface reading of the events of the 13th July 1962 would suggest that this was the moment at which the Tory Party in Parliament lost confidence in Macmillan. It is certainly not the intention here to rehearse that tired story in detail again. Suffice it to say that the ‘night of the long knives’ has, over subsequent years, attained a certain mythical status. The denunciations of Selwyn Lloyd’s dismissal from Lord Avon and Nigel Birch lent a rather specious high drama to what was a long thought out and carefully prepared series of Cabinet changes designed to inject life into a declining executive. Indeed, the Spectator applauded the PM’s actions in these very terms, though it was virtually alone amongst the press in doing so.73 To suggest that the incident destroyed Macmillan is to read too much into newspaper comment of the time. In truth, the suddenness and savagery of the act was partly the result of press agitation. The reconstruction had been scheduled to take place in a more dignified manner over the course of the 12th to the 15th July, but the fevered conjectures of the press lobby telescoped the affair into twenty-four hours. Lord Rothermere later claimed privately that Rab Butler had told him of the impending Cabinet alterations on Wednesday 11th July.74 Such indiscretion was not beyond Butler, and certainly Rothermere’s flagship paper, the Mail, ran a fulsome and disturbingly accurate series of speculations the following morning. These were pursued, naturally, by the other dailies. To avoid the insinuations that would almost certainly have flooded the weekend papers had the announcement been made as scheduled on Monday 16th, the PM completed the reconstruction before the weekend–a statement being made instead on the evening of the 13th.75 There

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is also some speculation that Butler, Macleod, and especially Martin Redmayne (the Chief Whip) had put pressure upon the Prime Minister to conclude a transformation of the Government sooner rather than later; Redmayne arguing that the backbenches “were restless and would not be placated with the sacrifice of only one Minister, or patient about the postponement of the wider purge until the autumn.”76 Such advice was, with hindsight, at the very least faulty–but, the Prime Minister not consulting widely before wielding the scalpel, it was one of the few sources of counsel open to him. Whatever its unseemly hurriedness, the reshuffle did expunge one of Harold Macmillan’s biggest political mistakes: putting Lloyd in the Treasury in the first place. Assessments of Lloyd at the time were not, in general, benevolent. In his diary, Alec Cairncross remarked that the erstwhile Chancellor was “not an attractive man to work with. He often saddles his advisors with responsibility for what he is saying…”.77 Furthermore, his opinion on policy options was frequently purblind, “his attachment to the strength of sterling was mystical rather than reasoned” (seemingly a common disorder amongst Chancellors) and in incomes policy, as Macmillan had feared, “he rarely showed any inclination to dig below the surface.”78 Another heavyweight, Frank Lee, saw him as unable to resist the “genuinely inflationist” demands of Macmillan, and prone to “saying things like ‘What is the master going to say?’.”79 In a similar vein, Lloyd’s biographer notes his “sense of social diffidence” in the presence of the somewhat snobbish patrician, Lord Cromer, who was Governor of the Bank for most of Lloyd’s tenure at Number Eleven.80 But perhaps these assessments were overly unkind to Lloyd, who tended to look at the long-term economic impact of policy, rather than its short-term political one.81 He may have been dilatory over creating an institutionalised incomes policy not because he was disinclined to dig, but because–after his experiences in creating ‘Neddy’–he was unconvinced that one could be made to work. Besides, it is difficult not to feel some sympathy for a man who was constantly harried and then suddenly fired by his boss. Nevertheless, for Macmillan the elimination from Cabinet of his Chancellor paid an internal political dividend, since it signified the removal of the last personal obstacle to the launching of his New Approach. Lloyd had been sceptical of ‘Nicky’ as a corporate institution, believing that it was insufficiently strong to deliver the industrial peace and co-operation in wage restraint necessary to dampen inflation and improve productivity. His reluctance to give the Commission sanction was potentially serious for its long-term prospects of success. That, over time, he was proved correct should not distract us from the boldness of its creation. The problem with the New Approach was not the NIC per se, but that relentless carping had forced Macmillan to water it down. By early July, indeed fully two weeks before the reshuffle, in the absence of compulsory reference of wage claims to the Commission and legislative pro-

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vision on rpm, “the cat in the bag”–as Macleod was apparently fond of calling it–had become, in Harold Evans’ words, “a rather tatty kitten”.82 Even whilst the diminished version of the New Approach was being announced, though, a far more serious setback to the hopes of modernisers was hatching in Brussels. Despondency about the possibility of reaching a negotiated series of terms upon which Britain could join the Common Market had begun trickling through almost as soon as the official negotiations had commenced in November 1961. In an early instance of the French negotiators’ generally unaccommodating stance, France’s Foreign Minister, Couve de Murville, had admitted to Selwyn Lloyd that the initial consultations were not proceeding well; he believed association, rather than membership, might be the solution for Britain.83 De Gaulle was frustrated at Britain’s seeming refusal to press the US Government into releasing atomic weapons’ secrets to his administration. (The British themselves were privy to such information under the Atomic Energy Agreement of July 1958.) Without such agreement, de Gaulle’s plan to maintain France as an independent nuclear power was, at best, unpromising; the French President made no secret that delivery of a package similar to the one that Britain enjoyed was to be the price of dropping his resistance to the UK joining the Six. Barely four months into the negotiations, Edward Heath had complained angrily to the Foreign Secretary: We must never forget that the countries of the Community are interested … in strengthening their defence against what they regard as a persistent and menacing threat from the Soviet Union and her Satellites along beside her–as to our attitude towards this, they can only judge by the proposals we put forward for dealing with it. What they see here is our apparent determination, with the United States, to prevent the French from developing their atomic and nuclear defence… and an apparently irresistible urge to settle these matters in favour of the Anglo-Saxons at the expense of the Europeans… In fact, our colleagues have instructed us to carry out a negotiation for our entry into the EEC at the same time as they–showing a complete lack of understanding of European attitudes and problems–are carrying out contrary policies in the political and defence fields. It is no wonder that these negotiations, already sufficiently difficult and complicated, threaten to become almost unmanageable.84

If this warning was not stark enough, a month prior to the Prime Minister’s meeting with President de Gaulle at the Château de Champs in June 1962, the considered view of Sir Pierson Dixon (the leader of the British negotiating team on the official side) was that de Gaulle had definitely decided to exclude the UK. Though he believed it was possible that the British Government might yet outwit him.85 Macmillan was not persuaded, scribbling in the margin of Dixon’s correspondence: “Interesting, but not convincing.”86 At the meeting itself, which

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took place on the 2nd and 3rd June, Macmillan managed to state–according to the official record–that “if there was an attack against Europe at some future date, the United States might perhaps hesitate to use her nuclear forces. Some European deterrent was therefore perhaps necessary.”87 Unfortunately, what was probably no more than an attempt to imply that Anglo-French nuclear collaboration could be much closer in the event of British accession to the Common Market was read by some French officials as a binding pledge, a problem which may, in the long run, have further tilted de Gaulle against Britain’s entry.88 Even so, the PM came away from Champs, if not exactly full of hope, at least convinced that the talks had not been an absolute catastrophe. Although in his diary entry for the second day at the Château, he reflected that the General did not want Britain to join because her entry would “alter the character of the Community” due to British interests being too “intimately tied up with the Americans”, he felt it was nonetheless “difficult to be sure” about the attitude of such an enigmatic man.89 In reality, little could be done on the British part to ease the concerns of Heath and Dixon. The EEC negotiations coincided with US attempts, in Robert Holland’s phrase, “to pull the plug on British claims to be a Great Power, even of the second-order kind into which of late they had been transmuted.”90 Concrete illustration of this was provided by the remark made by Robert McNamara, Kennedy’s abrasive Defence Secretary, in a speech at Ann Arbor, Michigan, in June 1962, that independent nuclear capabilities were “dangerous, expensive, prone to obsolescence, and lacking credibility as a deterrent”.91 It was hardly escapable that the comment was directed principally at the French designs for nuclear independence, though by the same token it also implied criticism of British attitudes. The French were enraged; the partial headway that Macmillan believed he had made with de Gaulle at Champs was shattered instantly. Yet, if the speech was naïve from the Prime Minister’s point of view, it was only the expression of American policy long held. Kennedy might be able to make some dispensation for the British in nuclear strategy; he was unable to do so in the case of France. Thus the lynchpin of the modernisation strategy was fatally weak from the outset. Unlike the comparative weakness of the PM in the British system, the French state was dominated utterly by de Gaulle (at least until Évian was concluded and the OAS had been beaten down), and the President was determined not to allow the UK into the Common Market without the quid pro quo of American knowledge on atomic weaponry. Britain, meanwhile, was barely strong enough in her relationship with the USA to sustain her own special prerogatives in relation to the maintenance of an independent nuclear capability, let alone to engage in plea-bargaining on behalf of her European neighbour.

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Such a reading is of course coloured heavily with hindsight. For the participants themselves, caught up in the daily tensions of negotiation, such conclusions were not possible. In the months immediately following the Prime Minister’s June meeting with de Gaulle, both Macmillan and his negotiators swung readily from periods of optimism to episodes of depression on the state of consultations. By the summer, however, the mood of both was in upswing. Despite the negotiations failing to produce the outline agreement that had been expected by the end of July (when the negotiations were scheduled to adjourn for the holidays), Macmillan was cheered by the progress that had been made in the teeth of dilatory French tactics. Arrangements on imports from India, Pakistan, and Ceylon had been essentially concluded, for instance, and it was also clear which of the Commonwealth members would be allowed association. The PM wrote optimistically to Heath: “I only hope that your efforts will meet ultimately with success. I cannot help feeling that they will do so.”92 Domestically, the other promising sign for the PM was the apparent conversion of Rab Butler to the Common Market cause. The First Secretary of State had been an undisguised sceptic at the time when the potential EEC application had first been discussed in Cabinet, but on the 21st August 1962 he told the PM that, in spite of the likely dire consequences for the unity of the Tory Party, he would support accession to the Communities, if it could be negotiated.93 September’s Conference of Commonwealth Prime Ministers, which was an enormous obstacle for the Government to clear, could be looked forward to with reasonable confidence. The Conference, however, was extremely difficult. Led by John Diefenbaker, the Canadian Premier, the EEC design was subjected initially to relentless criticism. In his diary entry of 12th September, the PM was moved to write of Diefenbaker–with whom until that point he had possessed a cordial enough relationship–“[he is] a very crooked man… so self-centred as to be a sort of caricature of Mr Gladstone”.94 Nonetheless, Macmillan, in concert with Norman Brook, managed to manoeuvre the delegates away from the initial plan of issuing a long statement at close of Conference towards the construction of a communiqué that was sufficiently short, and which contained enough caveats on preservation of their interests, to allow Commonwealth representatives to accord to it.95 Despite its jerry-rigged, makeshift nature, the communiqué ensured a measure of Commonwealth unity sufficient to allow the Government to declare the Conference successful. Yet doubtless, by declaring that Britain would endeavour to guarantee the Commonwealth’s interests when negotiations resumed, it increased the likelihood of further French intransigence when Heath returned to La Rue des Quatre Bras. The French may have been the remaining external enemy, but there was still much public and internal party opposition to the idea of EEC membership. In

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September, CRD’s psephology group drew attention to a disquieting shift in opinion. An NOP poll early in that month had recorded 52% of its sample opposed to Common Market entry, whilst qualitative reports from Party agents suggested that members were showing an “increasing distrust of foreign political connections and indeed of foreigners”. Disturbing phrases that equated British membership of the EEC to the “surrender of [UK] interests to ‘frogs’ and ‘wogs’” were, the group maintained, finding their way into these local reports.96 Although, as noted previously, the anti-EEC campaign began tardily, by early 1962 there had been an efflorescence of groups opposing entry, of which the moderate Anti-Common Market League (ACML) was only the most prominent.97 1962 saw, throughout the UK, large numbers of public meetings concerning the EEC. Often, Party members attended these meetings simply because the issue confused them and they believed a public debate might disentangle in their minds its complexities. However, partly because most of these meetings were heavily opposed to the Government’s EEC application, and partly because, at them, anti-Common Market arguments were often combined with more unsavoury political stances, they caused considerable anxiety amongst regional agents.98 It was no wonder, given this perceived dissent, that certain traditionalist Tories hoped to ambush the leadership on the subject at the Party Conference, which was to be held in the second week of October. Robin Turton, who was later to become one of the most formidable opponents of rpm’s abolition, possessed major land-holding and farming interests in North Yorkshire and hence had a better claim than most MPs to represent the Party’s agricultural interest. As in the case of many other segments of traditional Tory support, farmers appeared antagonised by the EEC ingredient of the modernisation programme, especially since the retirement in 1961 of Lord Netherthorpe, the pro-European President of the NFU. Predictably, the Union was wedded to the British system of agricultural support–in other words, deficiency payments from the Exchequer that gave farmers a price for their produce higher than the market rate. By October, it was becoming clear that the transitional period for the integration of British agriculture into the Community’s new Common Agricultural Policy that the negotiating team had hoped to secure would be much shorter than at first had been anticipated.99 The NFU’s initial agreement, in principle, to the Government’s EEC application, which had been an essential part of the institutional coalition that had persuaded Macmillan to apply for membership, was being withdrawn. In alliance with the Member for East Hertfordshire, Derek Walker-Smith, Turton hoped to harness such agrarian disgruntlement and thus proposed an anti-Market amendment to the strongly pro-European motion that was to be discussed at Llandudno. In all likelihood, there was never any serious threat that the leadership’s position would be

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defeated on the floor by the Turton–Walker-Smith amendment, but the Government was still apprehensive of a sizeable revolt (Ted Heath was particularly anxious because he believed the amendment might confuse the audience).100 Fortunately, a combination of factors interposed to minimise the rebellion to a tiny handful of delegates. Principal amongst these was the stance on the Common Market taken by the Leader of the Opposition at the previous week’s Labour Party Conference. Gaitskell had abandoned neutrality on the issue and attacked the attempts to gain entry with the famous phrase that Britain would be discarding “a thousand years of history”. In Llandudno, the newly converted Butler issued the equally famous riposte: “For them one thousand years of history books. For us, the future.”101 Labour’s newly acquired aversion to the project, coupled with Butler’s exceptional speech, and some judicious preconference propaganda issued to farmers and other interest groups by Bill Deedes through the Central Office of Information, virtually ensured the overwhelming majority in favour of the Government’s policy.102 Nevertheless, the mere fact that the amendment had been tabled suggests that there remained a great deal of residual anxiety about the Common Market–the Government, after all, could not rely permanently upon the Labour Party to shamble to the rescue. Still, progress against the anti-Europe tendency had been made. Yet, in the light of this, according to Sir Christopher Audland, one of the officials on the Heath team, Macmillan’s attitude changed: “The anti-Europeans within the Conservative Party, and amongst the popular press, began to say that Macmillan would now feel free to ‘sell Britain down the river’. His reaction, amazingly, was to slow down forward movement in order to prove his negotiating machismo!”103 Whilst this does not seem entirely out of character for the Prime Minister, there is little other evidence to support this view–though it may be that the movement of the PM’s unofficial economic adviser, Harrod, to an antiMarket position, combined with a rising violence of tone on the part of the Beaverbrook press, may have shaken Macmillan sufficiently to force him into this standpoint.104 But according to the delegation’s deputy leader on the official side, Eric Roll, sudden fluctuations of this type should not be taken seriously. They were not at all unusual and in reality made no difference to the negotiations since throughout the talks “we would never quite know what the London view was… it was changing all the time due to the Ministerial and to some extent even the civil service balance of opinion… So to an extent we were ‘on our own’ and [therefore] able to make our own policy because London opinion was frequently floating around.”105 Of course, it might just as well have been the exhaustion occasioned by having to secure the victory over first the Commonwealth and then the Party that caused the PM to ‘take a back seat’. Indeed, Macmillan’s poor health and the likelihood that it would force him to surrender his leadership was a consistent feature of the second half of his

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premiership. For example, press speculation about his imminent retirement had grown so feverish in mid-1960 that the PM had written to Beaverbrook in a fit of pique, demanding that his papers stop printing such rumours.106 Similarly, those of his closest advisers and Ministers who bothered to record their thoughts, even in the most sporadic fashion, made mention of the PM’s increasing problems with fatigue.107 Any assessment of Macmillan’s actions, especially after the 1959 election, must take this into account. If the Conservatives had been temporarily placated on the subject of Europe, though, Llandudno proved that the grassroots could still be prickly. That comparative rarity, a motion critical of the Conservative Government’s strategy and communications was debated and, more significantly, passed there.108 Though allegedly poor communication with the electorate had regularly featured in party bickering for the previous fifteen years, this was the first unremittingly critical motion on this subject approved in the post-war period. It expressed its “deep concern at the lack of understanding of Government policy on the part of large sections of the community” and begged “the Government to give immediate… priority to explaining… the vital need for the success of its policies”.109 Far from being enthusiastically welcomed, the rationale for the modernisation strategy (even in its depleted form) was still unclear to the Party’s supporters. Not surprisingly, at the beginning of December, Butler detected in the PM’s thoughts “a certain fin de siècle atmosphere… [he] reflects philosophically that the two party system was created for a purpose and at the end of the Parliament it may have to give evidence of its operation.”110 This was an overly pessimistic assessment, of course. Possibly the Premier had in mind the surprising defeat for the US Republican Party in the 1960 Presidential election, although there is little evidence in state and party records that this caused the Prime Minister or the Party excessive anxiety. More likely, it may have been a product of one the PM’s periodic bouts of melancholia–possibly in this case brought on by the toll that the Cuban missile crisis had taken on his well-being–rather than a genuine expression of defeatism.111 Nevertheless, it was symbolic of the manner in which the reversals of 1962 had eaten away at the confidence that had surrounded the initial development of the modernisation venture. Despite lingering confusion and restlessness in the lower reaches of the Party, the Government had more pressing and immediate business. The crisis over Cuba in November, although it only engaged Macmillan in a peripheral fashion, wearied the PM and wrested his attention from home front problems. More ominously for Britain’s long term defensive capacity, in the midst of the Cuban affair the USA had cancelled the Skybolt missile programme, upon which Britain had, since the collapse of the indigenous Blue Streak project, wagered her future as an independent nuclear power. Though the US had been warning

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the British of Skybolt’s technical deficiencies since the beginning of the year, its loss was nonetheless of deep import to an administration that had to be seen to defend Britain’s freedom to act alone against an aggressor in the event that the Americans would not come to her aid. This was sine qua non stuff. Lord Home recalled some years later: “We’d set a lot of store by [Skybolt’s] success, and the success had been advertised… so it was a shock…” and if Britain had been unable to secure an alternative the Government “would have been in a very, very nasty position politically… It might well have been a case for an election, I would have thought.”112 Far greater, then, than any single plank of modernisation, even the prospect of acceding to the European Communities, was Britain’s need to cling onto some tangible form of ‘great power’ status. And in Skybolt’s failure was the single blunt reminder to the British state of how frail that grip was. Thus, when Macmillan met de Gaulle again at the beginning of December 1962 in Rambouillet, the shadow of nuclear politics once again hung above the discussions, though before the meeting the French were not yet aware that Skybolt had been unequivocally cancelled. The position was soon made clear to them, as was Macmillan’s determination to ask the Americans for an alternative warhead delivery system–namely the submarine-based Polaris missile. De Gaulle, in reply, repeated his view that the British should relinquish their special ties with America once and for all.113 If anything, at Rambouillet de Gaulle was in an even stronger position than he had been at Champs. The French parliamentary elections in the preceding month had delivered a rout for parties more in sympathy with the cause of Britain joining the Six, and had left the Gaullists enjoying an absolute majority in the Chamber of Deputies. With domestic security consequently ensured, de Gaulle could afford to be truculent about the British negotiations. Thus Macmillan left the meeting with the clear understanding that de Gaulle, “in his role as Louis XIV”, was determined to capsize the British bid.114 If some hope had existed for a French change of heart prior to the meeting, Rambouillet buried it. In the interim between Rambouillet and Christmas, Macmillan also flew to Nassau for discussions with President Kennedy. Naturally, the talks centred upon the cancellation of the Skybolt missile and its possible replacement. Here, the personal relationship between the ageing Premier and the young man in the White House was crucial in achieving the British aim of securing Polaris in lieu of its defunct predecessor. There is every indication that the Pentagon was less than keen to award Britain the Polaris system, and certainly at one point in the negotiations Thorneycroft, the British Defence Secretary, was on the threshold of walking out of the talks.115 Yet Macmillan was able to prevail. All his reserves of emotional blackmail, delivered under a blanket of cosy allusions to the joint sacrifices of the two countries for freedom over the preceding half-

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century, were required to bring Kennedy around to accepting the British proposal.116 It may have been a dishonest approach; it was also a necessary one. If Britain had been denied access to the ‘Top Table’, the island’s image of itself as a great power (already under attack from a variety of quarters) would have been shattered. The already dim electoral prospects of the Tory Party would have been, in all likelihood, extinguished. This is not to say that the Nassau agreement did not have its critics–the opposition of the British left is understandable, but even within the establishment there was deep cynicism. To take two examples: Air Vice-Marshall Donald Bennett argued at a press conference early in the new year that the breakdown of Skybolt was a “breach of trust on the part of the US” and castigated those who supported the agreement as “defeatists”.117 (Although in assessing this rather strong reaction it ought to be remembered that the RAF was, naturally, peculiarly angered at the switch from an air-launched to a submarine-launched missile.) On the 11th January, the Secretary of the Conservative Backbench Committee on Defence, Anthony Kershaw, raised Party fears about Nassau: “We have absolutely nothing but US good-will to rely upon.”118 Polaris might have been better than nothing, but it was still a token of how beholden the UK was to the USA. In addition, such criticism interlocked uncomfortably with a number of other distressing developments, both internationally and domestically. Foremost amongst these, needless to say, was the premonition of an imminent French veto on British entry to the Common Market. Even before Rambouillet, Heath had written to the PM in exasperation: “The French are opposing us by every means, fair and foul. They are absolutely ruthless. For some reason they terrify the Six–by their intellectual superiority, spiritual arrogance, and shameful disregard of truth and honour.”119 If further proof of this long-standing problem was needed, it was provided at de Gaulle’s press conference of New Year’s Eve, at which he had stated that the “European Union was ready to welcome in the future an England which could, and wanted to, join it definitively and without reserves.”120 In other words, not at that time. The final blow was planted on the 14th January, when another press conference by the French President made it unambiguously clear that he would use his veto to keep Britain out–although he did offer the miserable sop of association. The negotiations shambled on pitiably for another fortnight before finally collapsing. A further word here is needed about the failure to achieve entry to the EEC. The argument here has been that, at least in the absence of any way of revealing the labyrinthine workings of de Gaulle’s mind, the French Government always intended to shut Britain out unless the UK could manage to secure them access to American knowledge on atomic weaponry. In this sense, to rely on the Common Market as the vehicle by which the British economy would modernise

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was perhaps foolish (though the Macmillan Government did not, to be fair, entirely delude itself on this matter). For some, the suspicion remains though that there were other forces at play aside from Gaullist caprice. Sir Roy Denman, a relatively minor official at the time of the Heath negotiations (though a central one at the Rippon talks), has claimed that a major obstacle to success was internal opposition from Whitehall: “The Foreign Office in those days… was not terribly interested in economic questions. The Ambassador I worked under in Germany once declared roundly that gentlemen did not concern themselves with trade. You may think that laughable now, it wasn’t laughable in 1960. And the barons of the Board of Trade and the Treasury were solidly against any involvement in Europe.”121 This seems odd. From 1961 at least, there is precious little evidence of either Board or Treasury attempting to de-rail the entire European project, though there was certainly defiance from some areas of the City.122 However, reservations about the Common Market, certainly once the negotiations had begun, were not uncommon amongst Whitehall’s élite. It was other areas of the modernisation initiative, though, that attracted more open animosity from the mandarinate. If the General’s veto and internal criticism of the Polaris deal were not dismal enough for the Government, a freezing January produced the worst unemployment figures since 1947, rising over 200,000 in a month.123 The NIC’s increasing redundancy was also demonstrated by university lecturers’ vocal opposition to the Government’s reference of their remuneration to the Commission in the second week of January.124 Furthermore, a backlash, of sorts, against modernisation continued, with the NFU (belatedly) voting unanimously against EEC membership “on current terms”.125 And with the French position finally being made public, an opportunity for anti-Marketeers to advance an alternative agenda emerged. Turton and Walker-Smith, in conjunction with Peter Walker, advanced proposals for a Commonwealth Economic Conference, the expansion of OECD, and enhanced commercial connections between EFTA and the Commonwealth.126 Macmillan was dismissive. “Naturally,” he wrote in his memoirs, “there had been some talk, especially by the old adherents of ‘Empire Free Trade’, of a new Commonwealth Prime Ministers’ Conference. This I was determined to reject, for it would suggest that something could be done by reviving an obsolete concept.”127 Macmillan appeared on television on 30th January to deliver a speech to the nation that in content clearly had more than one audience. According to his press secretary, prior to making the address, he had determined to ditch all contrivance and to pursue a “‘say what you really think about it’ approach”.128 The result was disarmingly and surprisingly honest: “Ah well, it’s no good arguing about all this now… What we have got to decide is what we are going to do… Is there an alternative? Well, there isn’t in the sense of a sort of ready-made plan, better

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than the one which we have been pursuing.” Then, more importantly, came the Churchillian rallying call, redolent of all the ghosts of June 1940: “We must rely on our own determination, our own vigour, our own resources. We must be ready to accept change, to modernise, to adapt, to get rid of obsolete plant and… obsolete ideas wherever they are.”129 This was directed as much to the PM’s traditionalist critics in the Party as to the television audience: the veto would not mean the abandonment of modernisation, indeed it would be pursued with even more enthusiasm. In some ways, Harold Macmillan was an unlucky Prime Minister. Unlucky in the sense that he was faced with a series of problems internationally and at home that had been exacerbated first by the immediate post-war Labour Government and, more tellingly, by his two immediate predecessors. All had failed to recognise openly the assumed economic and global decline of Britain and to address that decline. In this he was not unique: all Premiers have to contend with the mistakes and myopia of their forerunners. However, Macmillan had the misfortune to reach the summit of his career at a time when the country’s degeneration had been thrown into vivid relief by the Suez crisis. The circumstances of this, as suggested earlier, had provided an outlet for a new strain of criticism of governmental performance. By 1961, as noted in the third chapter, the twin developments of serious ‘What’s wrong with Britain?’ commentary along the lines of Michael Shanks’ The Stagnant Society and the beginnings of the satire boom had begun to scuff away at the patina of authority with which the office of Prime Minister (and the establishment’s position in general) had previously been imbued. The development of a homogenous, working class, youthful culture, coupled with the destruction of the BBC’s monopoly of broadcasting and a movement towards television from the press as the main source of political information, justifiably increased scepticism about the state’s ability to deliver.130 In short: the task of governing became much harder. Macmillan’s administration came increasingly to the conclusion that it must, to employ a favourite metaphor from political science, “steer” rather than “row”.131 In January 1961, John F. Kennedy’s election to the US Presidency had added to this bubbling cynicism an arresting contrast between the young man and the elderly Macmillan. “The youth and energy of President Kennedy,” lamented the PM to Selwyn Lloyd, “are in danger of creating a kind of image that he and his country are young and full of ideas and that we are out of date, governed by ageing politicians.”132 As the volume of criticism from outside of the polity became more shrill, it was a theme he returned to with increasing regularity in his remaining three years as PM. In the aftermath of Orpington, for example, he speculated to the Canadian Premier whether the Government’s defeat was not the product of “a strange move away from the older parties, which is perhaps a sign of spiritual pressure upon young people today and the

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long drawn out contest between East and West. We older people know that this will last our life-time, but the younger ones hope to see some sign of dawn.”133 Modernisation was a solid attempt to provide an eye-catching and electorally popular theme for the bundle of policies that were intended to engage and inspire younger people (which is not necessarily to say youth). The denial of the exogenous catalyst for this process was deeply distressing and almost overwhelming for the Prime Minister, despite the brave face that he had attempted to show in his national broadcast. A week after the negotiations had broken down, he visited Rome. There, at a meeting with Italian delegates on tariffs, “he suddenly burst out, with an emotion that astonished the Italians, to say that he was not interested in these details, that he wanted to make only one thing clear–that for him the events of the past week had been a complete disaster, and he did not know what to do next.”134

Modernising Alone. What Macmillan did resolve to do was to press on with a theme that he had first outlined in late 1962, in one of his periodic Cabinet disquisitions. A Cabinet paper followed this called, explicitly, ‘The Modernisation of Britain’, which advanced the growth offensive on two familiar salients. The first was to “increase our productivity by bringing our full productive capacity into use, eliminating restrictive practices, and by developing to the utmost the new methods which technology is bringing within our reach”. The second aimed meanwhile to eliminate the imbalance between regions and increase labour mobility by greater state involvement in the micro-economy, rather than relying on the neo-Keynesian panacea of macro-economic demand management–in other words, a grand regional policy.135 The latest venture would be typically Macmillanite. It had been six months since the previous majestic, over-arching plan, and so the occasion was almost certainly ripe for another. In his peroration launching this ostensibly novel approach, Macmillan noted: The time has come for a reappraisal, a new look and a new impetus on the home front… Europe is exciting… [but] the negotiations will take longer than people think… We need something positive and more precise, a blueprint for modernising Britain against which the Government’s actions can be judged… At present [people]–particularly the young–have the feeling that they are, or ought to be, on the move, and are looking to the Government to give a lead.136

Of course, the PM had discerned “the time” for a fresh start with almost cyclical regularity during his premiership. So whilst this was certainly re-heated pottage, still it was clear acknowledgement that, whatever the outcome of the EEC talks or the state of the Party’s disquiet, the pursuit of modernity would not be entirely

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abandoned.137 To represent the theme behind this reincarnated approach, Macmillan used the phrase “creative dirigisme” and remarked that the Government “should not be afraid of criticism, nor of spending money”.138 The Cabinet having just approved, in the teeth of Treasury opposition, the AngloFrench project to build the Concorde–itself a by-product of the modernising drive–the Prime Minister was obviously in munificent temper.139 “Creative dirigisme” was a fitting description of the modernising mindset’s preferred means, although some contemporary commentators and certainly later Tory critics were apt to misrepresent it solely as a compulsion to spend money.140 Even before de Gaulle’s veto, some of the ‘Modernisation of Britain’ agenda had borne fruit, with the announcement of Hailsham’s appointment as Minister for the North East on 9th January 1963. The PM had accompanied this declaration with a speech to the Birmingham Chamber of Commerce, in which he exhumed his Stocktonian tendencies whilst returning to the language of the Dunkirk spirit, urging industrialists in the Midlands to expand into the North East and Scotland: “They are the boys who fought and died with us and as long as I have anything to do with the conduct of affairs I shall regard them as my highest priority. We must ask for the co-operation of industry in this task.”141 January also saw the inauguration of an all-party campaign called ‘National Productivity Year’. Yet there was something hollow about this largely exhortatory approach to structural problems within the economy. Macmillan’s weepy appeal to wartime spirit was doubtless genuine and heartfelt, but it appeared ever more threadbare–especially to an electorate now becoming more fluid (in terms of Party allegiances) and sophisticated (in terms of political nous). At least until Heath was created President of the Board of Trade towards the end of year, concrete policy was, unfortunately, slow in gestation. In an attempt to provide more ideas to complement the modernisation theme, a fortnight after the PM’s television appearance, Harold Evans minuted his chief to suggest a campaign of action and propaganda, of which the keynotes should be “vigour, crispness, movement, action”.142 With the Prime Minister’s interest piqued, the press secretary followed up with another suggestion on the 19th February. Evans called this “Plan Fifty”. Backed by “an independent organisation”, which would “drive forward the feelings of…people that the time has come to reassert traditional values of action and conduct”, it would try to get every person in the country to give “fifty per cent more effort”.143 Evans’ job was certainly not to produce major policy proposals, but, once again, exhortation was displayed as the solution to Britain’s inability to modernise herself. It was not one of Evans’ most breathtaking ideas. However, it was at least illustrative of the inability of the state to force the pace of economic and social change–and certainly the reference to the reassertion of traditional values and conduct was to become painfully ironic within the next two months.

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Elsewhere, the initial spurt of energy behind the ‘Modernisation of Britain’ was unsurprisingly burning out in the airless atmosphere of the state’s economic departments. Whitehall had expressed misgivings on the project’s second component when the subject was first broached in November. An internal meeting of Board of Trade officials convened to discuss the Premier’s initiative had, for example, repeated the old macro-economic saw that “it was difficult to see how the Government could aid growth industries other than ensuring the economy was sound.” The meeting’s record also noted that many officials believed that “the chief problem in increasing competitiveness was the unwillingness of industry to adapt to new techniques and products.”144 This latter had been a frequent criticism of business by civil servants throughout the 1950s, indeed the first Treasury paper to the NEDC had complained explicitly of the persistence of the “traditional belief amongst industrialists that managers are ‘born not made’.”145 Recent research by Nick Tiratsoo has suggested that Whitehall was right to be concerned: boardroom hostility towards industrial modernisation generally, and new managerial practice in particular, was considerable in the decades following the war (especially as it was perceived as marked with the taint of Americanism).146 That great chronicler of professional society, Harold Perkin, has noted too that management theory was “looked on with suspicion by many, if not most, practising business men” in the UK. Specialised institutes that provided courses and literature on the science and practice of managing were extraordinarily slow in getting off the ground–for instance, in 1963 the British Institute of Management had only 19,000 members out of a potential catchment area of half a million.147 Books on management training in this period habitually lamented that managers treated their own development as fundamentally unimportant.148 Even if it had been within the state’s capacity to deliver it, how to make management more modern, scientific, and responsive was too prickly a problem for an ad hoc group of mandarins, however. Sir Richard Powell, the Permanent Secretary, settled for a more conventional formulation to deliver to the President, such that the Government, to force efficiency, should concentrate upon stimulating increased competition, whilst encouraging the trend towards industrial concentration, by providing R&D resources.149 Finding common cause with the Board was easy for the Treasury, which was still smarting over its defeat on the Concorde. An exchange between Jack Rampton and Russell Bretherton was typical of the petulance in Great George Street during late 1962. Referring to the “ministerial shopping lists” which were the first tangible outcome of the PM’s new brainchild, Rampton urged his fellow under-secretary to try vigorously “to knock down everything which is senseless, unreasonable and hopeless.”150 A more fulsome critique was sent to Louis Petch, the Third Secretary, in January:

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[The] ‘Modernisation of Britain’ proposals were mostly half-baked where they were not complete nonsense… [The regional proposals] ought… not to be regarded as being outside and over-and-above the ordinary national programme… We need to get it firmly into people’s heads that, if more expenditure is decided upon in the development regions, it will have to be fitted into the national programmes, probably by cutting back the rate of expansion elsewhere.151

Over the next half dozen months, the Treasury was moderately successful in diluting what it considered the inflationary implications of the modernisation project, though in this they were abetted by other incidents. It is peculiar, perhaps, that ministers did not pick up on the problems associated with inferior management at an earlier point in the Macmillan administration; nor indeed make the logical inference that better management practice would be stimulated by the removal of the anti-competitive padding that market-rigging regimes like oligopolistic pricing and price agreements bestowed.152 Amongst the executive, Hailsham made occasional lament about resistance to new technology and management training in industry boardrooms, though he was deeply cynical about the Government’s ability to offer any solution beyond better targeted spending and yet louder exhortation.153 Training for employees was a different matter. Here, the Government did make headway, publishing a White Paper in December which acknowledged that a higher rate of economic growth would not come about without a better distribution of skilled manpower. And the latter would be unattainable without a series of state incentives.154 This led directly to the Industrial Training Act, which was passed under Douglas-Home’s Government in 1964. Freddie Erroll, however, comprehended that the new focus on removing economic impediments to commerce should clear the way for an assault on rpm. Whilst Macmillan was in Nassau, the Board’s President dispatched a letter to Maudling, the new Chancellor, which echoed the argument Frank Lee had been pushing prior to the ousting of Lloyd: To advance a policy of modernising Britain, which expressly includes getting rid of restrictive practices and yet do nothing about rpm leaves us wide open to a charge of insincerity and is bound to frustrate our efforts to convert industry to a more progressive outlook… In the opinion of some of our colleagues many of our supporters are wedded to the principle of rpm and … any move to abolish it would be damaging electorally… I think the effect of a change on their votes and their influence on other voters can easily be over-estimated.155

Maudling agreed, but when the two ministers met to discuss the matter on the 9th January it was recognised that the uncertainty over the EEC negotiations meant that they could not act immediately. Erroll’s main contention, though, remained a powerful one–indeed, it was one of the principal arguments employed by

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Heath a year later. A subtle take on this line of reasoning was also employed by some Treasury officials. If the Government was to show willing by bringing price levels within NIC’s terms of reference, then the unions might agree to cooperate in the construction of an incomes policy, which had by then become seen as an essential tool in economic re-structuring. Abolition of rpm was suggested as a means for the Government to prove the sincerity of its stance.156 Institutional support for such a move was beginning to build up as well. The NEDC was showing especial interest in the idea–particularly as it was predicted to ease labour immobility by shuffling excess workers out of inefficient concerns in the distributive trades and into more productive areas of the economy.157 Again, the perceived political benefits of retaining rpm outweighed the economic (and political) gains of its rescission. Although the EPC met on the 13th February in an attempt to fashion an industrial competition policy which would fill the cavity left by the veto, moves against monopolies and rpm were rejected as unviable given the crowded parliamentary schedule. Macmillan subsequently ordered the creation of a sub-committee on monopolies which would also examine the feasibility of abolishing or limiting price agreements.158 In July, this group came down in favour of whittling away at rpm by referring all cases progressively to the MC.159 This, whilst it was undoubtedly a fudge, at least showed a greater appreciation of that organisation’s role in stimulating competition than had the establishment of the RTPA in 1956, and was illustrative of the shift in Tory thinking on the market consequences of monopoly. But by early summer, in any case, the whole theme of modernisation, already crippled by Whitehall’s stance, had been rather drowned by events. The Profumo scandal lies rather outside the scope of this book, though its impact upon the normal conduct of policy was considerable.160 From late April through to July, the scandal dominated the UK press and rendered ‘normal’ politics almost impossible to carry out. The satirists had a tremendous time. Private Eye began the whispers in its 22nd March issue with an spoof article that read: “Mr. James Montesi, a well-known Cabinet Minister, was last night reported to have proffered his ‘resignation’ to the Prime Minister, on ‘personal grounds’. It is alleged that the Prime Minister refused to accept his alleged ‘resignation’. Mr.Montesi today denied the allegations that he had ever allegedly offered his alleged ‘resignation’ to the alleged ‘Prime Minister’.”161 Even Flanders and Swann, the musical revue artists, usually less overtly political in their satire than Private Eye and its ilk, could not resist a reference to the luckless Profumo in their song ‘Just Friends’: “Such models of friendship are precious and rare/ But the friendship of models–is not”.162 It seems, from poll evidence anyway, that the affair did not dent the Tories’ popularity unduly: 98.6% of NOP’s sample in July 1963 indicated that it had not changed their voting intention, and only 12.8% allotted Macmillan any blame for the affair.163

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If this was, in the long-term, a relief to the Conservatives, that this was the case was far from apparent in the confusion that accompanied the revelations. Hence it is hardly surprising that Macmillan was reluctant to act upon any new initiatives to further his modernisation motif either whilst the conflagration was in full blaze or in the close aftermath. This is not to suggest that nothing happened to further the scheme of modernisation, but much was adjourned or simply did not resound loudly in the press. Just before the scandal broke, in late April, the PM had convened a meeting at Chequers to plan a Conservative programme for the remainder of the decade. Though Macmillan described the meeting as “very useful” in his memoirs, little came of the discussions.164 Some Cabinet members seemed rather uninspired by the affair. Iain Macleod later referred to the gathering as “somewhat pointless”, whilst in his autobiography, the Postmaster General, Reggie Bevins, lambasted his colleagues as “obsessed with material values… I felt that they did not understand that the younger voters were deserting the Conservative Party because it was so preoccupied with materialism, with easy money, with big business, to the exclusion of…idealism.”165 Curiously, in the one hundred and fifty-nine pages of his memoirs, Bevins failed to mention the ideals that the Tory Party ought to have been endeavouring to embody; nonetheless his comments suggest that modernisation, indeed the nature of Toryism itself, was still a highly contested matter. The divisions that Macmillan had observed between ‘Tories’ and ‘Whigs’ in discussions over planning in September 1961 were nowhere so visibly illustrated than in the debate on the economy at Chequers. The minutes of this encounter noted: Two broadly different views emerged… [Firstly] that the state should take a more active role, with more emphasis on a managed economy… [There was] a need to encourage… industries where growth was lagging and there was an inadequacy of research… We should therefore consider whether we were right to stress our disapproval of monopolies and mergers in all cases… [We should also] look for partnership between Government and industry in new ventures… To the public, an active planning policy of this kind could be made to appear very sensible… There was a long tradition of Conservative thought that we should… use the power of the state to shape the economy… [The] alternative thesis gave rather greater emphasis to the role of private enterprise… Those who favoured dirigisme seemed to assume that they could forecast where growth would come… Although the state could help in many ways… this did not add up to a sufficient policy with which to confront the socialist panacea… We could always be outbid by the socialists… We must look at monopolies, mergers, and tariffs and not let any of these things support an industry which was inefficient… on the whole [we ought to] take a tough line. 166

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In form, this debate might have taken place amongst almost any group of Conservatives at any point in post-war history; in fact, even this might be narrowing the focus too much. These philosophical divisions were authentic; despite a carefully cultivated image as the ‘pragmatic’ Party, when taken aside from the daily frustrations of policy management, even Conservative politicians liked to philosophise. But the two tendencies revealed in the debate were perhaps not so far apart. Modernisation, after all, was essentially a technocratic and managerial approach to stimulate economic growth. In that it was ‘practical’ it was not so very different from the manner in which the Tory Party had governed for most of the twentieth century. What appears to have been less clearly understood by some participants at Chequers was that this solution looked to the appropriate use of the state–sometimes to plan economic activity, sometimes to clear the obstacles that thwarted effective competition. Maudling’s summing up, though, demonstrated that he at least understood that the strategy need not mean an outright cleavage between competition and state intervention. Whilst he stressed that the Government should stimulate private enterprise, it should also build up the country’s infrastructure, develop industry partnerships, and encourage the acceptance of modern methods by giving a lead on R&D and via better management training.167 Alas, such honourable intentions were largely forgotten in the tempest that the Profumo imbroglio unleashed. In fact, the only modernising measure unveiled over the spring and summer months of 1963 that attracted any substantial media interest was the proposal to restructure the rail system unveiled in Dr. Beeching’s report, The Reshaping of British Railways. Under this plan, 266 train services were to be withdrawn and 2,363 stations were designated for closure. In popular memory, the savagery of the cuts proposed by the Reshaping report is uppermost, which has led to frequent suggestions that Beeching was simply a callous hatchet man whose bias against the railways led to the annihilation of viable rural communities.168 Recently, however, Charles Loft has undertaken some renovation on Beeching’s image by demonstrating that the rationale for his enquiry’s prospectus had arisen from a specific government acknowledgement that all nationalised industries had to be rendered more efficient and responsive to modern needs, in the process reducing their reliance on handouts from the Exchequer and aiding patterns of growth.169 As probably the largest culprit in the siphoning of public finances, the railways were predictably an early target for reform and economy. But the programme was intended to be only the first phase of an attempt to create a modern national transport infrastructure.170 Certainly this was the marketing stratagem by which Ernest Marples, the Transport Minister, endeavoured to sell the package.171 That the report emerged at a time when the Government had thought of nothing exciting to say about other forms of transport says more about its declining

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ability to handle public relations than it does about its heartlessness. Despite that any especial fondness for nationalised industries in Tory ranks was somewhat uncommon, the closure programme brought many local associations into flat conflict with the Government. In fact, Lord Deedes, recollecting his period in government under Harold Macmillan, has suggested that the closure programme was possibly the “biggest single vote loser” for the Tories in the general election of 1964.172 Though the inter-war Conservative rhetoric of the eternal verities of rural life beloved by Baldwin and Halifax had become largely dilapidated in the post-1945 period, still there were Tories enough who believed that it was the Party’s duty to protect and foster a viable countryside.173 Hundreds of little Titfield Thunderbolt campaigns (after the Ealing comedy of 1952 in which a small village attempted to prevent the closure of its local branch line) were foreseen. Indeed, the speech given in the film by the local squire to the public enquiry, could have been transplanted without alteration into the mouth of many a Tory-voting rural dweller in 1963: “Don’t you realise you are condemning our village to death? Open it up to buses and lorries and what’s it going to be like in five years time? Our lanes will be concrete roads, our houses will have numbers instead of names…”174 The only comfort for the Government in this was that the opposition would be concentrated in those few dozen constituencies that were threatened with a line closure and that, since the closures were to be enacted only slowly, the whole countryside would not be in mutiny at once. The reaction from backbenchers was scarcely more encouraging, being muted at best. Literally so, in the event of the Commons’ debate on Reshaping, in which Marples was heard in “utter silence” from the benches behind him.175 Given this, the Government was perhaps lucky to get away with only six obvious abstentions in the vote on the report (although, since its majority dropped by 20 and no Labour or Liberal votes were cast in favour of the proposals, it seems likely that a further handful of backbenchers were absent unpaired).176 The most important consequence of the Beeching report was, however, not the effect that it had on the Parliamentary Party, but the unremittingly negative coverage that the plan received in much of the media, especially local newspapers in those areas, such as the West Country, potentially hardest hit by the closures. Thus it offered the Government not even modest encouragement for the economic transformation strategy and scant relief from its opinion poll decline. Thus when ill health forced Macmillan from office in October 1963, his reforming legacy was patchy. modernising Conservatism was still alive–just– though its internal traditionalist critics had been far from routed. The malady that it was intended to correct still infected the patient, but there were some encouraging signs, if not of recovery, then at least in research for a cure. Though the NIC was more-or-less a broken reed, the NEDC had managed to embed itself into the pattern of institutional negotiation, and had begun to bear fruit–if only in

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providing a forum within which tripartism, and thus the 1944 compact, could survive. The French veto had been a crushing setback, admittedly, but Britain had at least secured its place as the leading player amongst the second division nations through its retention of an independent nuclear capacity. In addition, some elements of the New Approach had begun to take root: notably the Consumers’ Council and improved industrial training. The immediate danger was that the strands of modernisation would perish under Macmillan’s successor, but as we shall shortly see, if anything they became stronger under Sir Alec Douglas-Home.

CHAPTER FIVE THREATS AND PROMISES: THE CONSERVATIVES UNDER DOUGLAS-HOME

The Problem of Home. At its Blackpool Conference in early October, and throughout the following week, the Conservative Party showed itself in an unedifying light as its leadership struggle developed.1 The intrigues that it engendered are not of concern here: its outcomes, however, are. The first and most important of these was that the direction of a fractious Tory Party was handed to Lord Home of the Hirsel, who triumphed over ostensibly better qualified candidates such as Maudling, Butler, and Hailsham. That the appointment of an aristocrat was a shock outside of Conservative circles is evidenced by the fact that, on Macmillan’s resignation, hardly any of the press considered Home a serious contender for the highest office. As late as Wednesday, 16th October, for instance, the Daily Express cartoonist Michael Cummings depicted the supposed candidates for the vacancy clumsily donning articles of Macmillan’s clothing. Home was not amongst them.2 Two days later, he was invited to form a government. What sort of man had been conferred upon the country as the Queen’s First Minister? In attitude, Macmillan’s heir could not have been more different.3 Where the former Premier had been urbane, Home offered earnestness: substituting moral purpose for his predecessor’s broad-mindedness and Christian sacrifice for the affluent society. He was also more willing to give his fellow Britons the benefit of the doubt, if his comment to Paul Emrys-Evans in 1961 can be seen as typical: “It is frustration, not malaise, from which the country is suffering. Somehow, having lost an Empire we must find another fanfare for Britain.”4 The fanfare that Home may have had in mind, however, was unlikely to have been ‘modernisation’ or ‘Europe’. Those were answers one might have expected from Macmillan, but the new Prime Minister would have more likely selected a theme that reflected his deeply held sense of moral obligation. Shortly after his

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assumption of the premiership, Home was asked by the CRD to prepare a ‘statement of personal beliefs’–an attempt to define his reasons for entering politics (and, incidentally, to give the Department a marketing tool with which to ‘sell’ the new PM). The resultant draft was saturated with a feeling of duty and honesty. “I have never really believed that the well-off society is the answer to everything,” wrote the new Prime Minister. He continued: “If people gain riches and lose their feeling for religion and service they are poorer and will be discontented and bad neighbours.”5 Few better documents exist in state records to demonstrate a Prime Minister’s motivations or values; likewise, no single piece of evidence better illustrates the difference of approach between Home and his immediate forebear. The new PM was unlike Macmillan, whose instincts that the realm of moral judgement and the realm of state activity ought to be kept rigidly apart were well summed-up by his comment upon moral purpose–that if people wanted it they should get it from archbishops, not from politicians. In blunt contrast, Home saw the two as fundamentally interwoven: “The evidence of history is conclusive that the greatest acts of public life have been inspired by positive moral values or a conscious rejection of them.”6 It was a theme that informed his entire premiership and to which he returned frequently. If this overt Christian moralism in a twentieth-century Prime Minister seems unusual, it must be acknowledged that it was popular amongst certain sections of the electorate.7 It was welcome as well to Britain’s international partners. Tory Party members in the constituencies in particular were still, broadly speaking, deferential; Home’s presence as an aristocratic leader in the Tory paternalist tradition was reassuring to Party activists at a time when many other aspects of social behaviour seemed to be slipping. For Lord Deedes, who served under Home, his importance was that, after the “nightmare of Profumo”, his manifest decency and straightforwardness meant that he could avoid any accusation of deviousness–not something that could be assumed of the other candidates in the leadership contest.8 Many members were especially pleased because they believed Douglas-Home’s accession signified the end of the modernising impulse and in particular any thoughts of joining the Common Market. A typical example of members’ feelings, charmingly penned in lilac ink, was sent to Selwyn Lloyd, whom Home had recalled to the Cabinet as Lord Privy Seal: “When Sir Alec became Prime Minister there were, I think, many of us who thought, ‘Oh, it will be all right now–he won’t sell us for a mess of pottage’…”9 The former Foreign Secretary’s more ideological and manichean view of the USSR, demonstrated vividly in his address on the 1963 Queen’s Speech–“the Communist aim is still unchanged: to destroy, if possible, our way of life”–was also more to the American Government’s taste than Macmillan’s weary cynicism.10 In the week following Home’s appointment, the UK’s Ambassador to Washington sent a letter to the new Premier that confirmed this. Speaking of a

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potential summit between Britain and the Soviets, he noted that “there would have been considerable suspicion [in Washington] if Harold had invited Khruschev to visit London, the situation would be significantly different if you did it.”11 In this respect, then, Home was the ideal Tory leader. Trenchantly, George Lichtheim, the US journalist and expert on European politics, observed that the foremost reason for Home’s selection was that “he was needed if trueblue Tories were to be kept busy working for the Party in [the] general election.”12 Not everyone was overjoyed by Alec Home’s elevation, however. Most of the criticism levelled at him was on the grounds that he, in Butler’s words, “spoilt the image of modernisation”.13 The ‘liberal’ Tory press was scathing. For instance, William Rees-Mogg, a prominent supporter of the Butler tradition, in the Sunday Times claimed that Home’s success represented the “turning aside from progress”.14 The juxtaposition of a noblesse oblige peer as PM with an increasingly youthful cultural scene gave political cartoonists the opportunity to depict him as a peculiarly comic figure. Emmwood in the Daily Mail cast him as an elderly pop star, ‘Ringo’ Home, tweed-clad and carrying a guitar.15 Vicky, meanwhile, portrayed the new leader admiring his lordly robes in a full-length mirror and exclaiming: “I'll take off my coronet to give the party that new, modern, progressive image!”16 Cabinet members Macleod and Powell were similarly dismayed and declined to accept office under Home. Macleod commented later to Cecil King, chairman of the International Publishing Corporation (which included the Daily Mirror) that the Tories “were in confusion and in that state they returned to the womb–the landed aristocracy!”17 Even amongst those ministers who agreed to serve in the administration still there were those with considerable doubts. The Postmaster General, for example, had told the Chief Whip, that “not at any bloody price” should either of the peers (Hailsham or Home) be handed the leadership.18 As the nearest thing to a working class Tory in the Cabinet, perhaps Bevins can be excused his outburst on the grounds that he feared the appointment of an Earl to the top job would demolish any pretence that the Conservatives were a classless party. Nonetheless, he exaggerated. Even Reggie Bevins had his price–and the simple retention of his post appeared to be its sum. Amongst the general public, too, ambiguity and reservations seemed typical. Though Home almost certainly shored up some votes amongst core supporters, opinion polls taken shortly after his entry to Downing Street suggested that his impact was, unusually for a new leader, slight. Although 57.2% of the voter sample–and 67.8% of Conservative supporters–approved, ostensibly, of the new Prime Minister in NOP’s October survey, a Gallup poll published in the Daily Telegraph on 1st November showed that the appointment had made no difference to the voting intention of the majority.19 Furthermore, only 23% of respondents were prepared to criticise the

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refusal of Macleod and Powell to accept office. Given that Douglas-Home had inherited a party that was in a particularly parlous state in opinion polls, such revelations were disappointing to the Conservative élite. If some had expected a lurch to the right, however, Home was to disappoint them, at least in his Cabinet choices. Given the manner of his accession and the acrimony it had released, the first need was to maintain party unity. Hence the only alterations afforded to the PM were those enabled by the resignations of Powell and Macleod, plus the ennoblement of John Hare (who became Viscount Blakenham, retaining a Cabinet post as the Chancellor of the Duchy of Lancaster).20 Home’s vacated role as Foreign Secretary was taken by Butler, whilst Joseph Godber moved to the Ministry of Labour, Anthony Barber filled Powell’s post at Health, and Erroll was given what appeared to be a sideways move into the Ministry of Power. Selwyn Lloyd, as we have seen, was handed some good fortune by his selection as Lord Privy Seal. By far the most significant appointment, however, was Edward Heath’s acquisition of the Presidency of the Board of Trade. Hand-in-hand with this appointment came an enhanced portfolio encompassing industry, trade, and regional development–a blend of responsibilities which, in itself, suggested that the modernising flame was not to be snuffed out under Macmillan’s successor. This Cabinet was, as Harold Wilson observed acidly, “the same old gang”, and yet it would have been surprising had the Government been anything other than the old gang: October 1963 was not the time for another dose of comprehensive butchery in the vein of July 1962.21 The same faces at least ensured that the modernisation programme would not wilt on the vine. So the broad direction of policy was to remain the same under Sir Alec–as he became, having renounced his Earldom. But whilst Macmillan was willing to give a clear lead in the development of a modernising agenda, albeit that in some areas, such as decolonisation, he delegated heavily on matters of detail, DouglasHome adopted the role of co-ordinator rather than initiator.22 (His stewardship may have been the last hurrah for aristocratic authority, but, with hindsight, it looks also like the last for genuine Cabinet government.) To a large extent, the PM’s public image made such a position inevitable. ‘Modernise with Home’ as a slogan hardly matched a Prime Minister who was viewed as an anachronism by a large section of the general public.23 His inheritance was a programme that, perhaps, he did not understand fully, but of which he was determined to carry through as much as was electorally possible. Lest anyone be in doubt of his sincerity on this matter (and many, in hope, were), Home’s first television interview as PM made obvious his commitment. In response to a suggestion that the Party would squander progressive support in rejecting Butler as leader, Home retorted that this was “plain, flat nonsense–he would pursue progressive policies and he had appointed Edward Heath to carry forward a modernisation-

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of-Britain programme.”24 In October, the Prime Minister could not suspect just how vigorously Heath would pursue this aim. Even so, the interview confirmed that, even if Home would not be himself determining the schedule, high policy would not automatically be surrendered to the traditionalists. In the arena of economic policy, Sir Alec sided, though perhaps reluctantly, with the broad Macmillan heritage. It is here that one can discern a distinct Home influence, albeit filtered through the ministerial briefs of the Board of Trade and the Treasury. On the subject of economic modernisation and expansion, Home exhibited some arguably paradoxical qualities in a Cabinet memorandum shortly after becoming Prime Minister. He declared that: Plans for reform and modernisation must be matched by fiscal and financial responsibility… Any proposals for action will… have to be judged in relation to the sharp increase in public expenditure… now taking place.25

Simultaneously the memorandum called for renewed vigour in the pursuit of modernising policies. Whilst not a complete contradiction, this paper employed far from Macmillanite language, and illustrated the tension within Home’s (and the Party’s) mind between financial continence and the necessity for boldness. The Douglas-Home Government’s economic agenda was virtually indistinguishable from that of his predecessor, although Home’s concern with competition, rather than unemployment, gave policies a different, though no less ‘moral’, slant.26 Heath was encouraged to pursue his modernising agenda, in particular the introduction of a comprehensive regional policy which endeavoured to complement inducements to industrial development with public investment in the social infrastructure.27 At the Treasury, Maudling was able without much interference to continue with the Macmillan policy of expansion, tempered by the clear resolve, at least publicly, to control inflation.28 There was no backsliding (on the part of the Government at least) on the question of ‘planning’. The NEDC was producing encouraging results, as far as fostering cordial relations with the trade union movement was concerned, although Nicky, as we have observed, had become almost redundant due to the TUC’s refusal to co-operate with a ‘wage-fixing’ regime. The problem facing the new Cabinet was not essentially one of policy, but of presentation of strategy. How to persuade a sceptical electorate that the Fourteenth Earl of Home was the best candidate to navigate the ‘progressive’ trajectory into which the Conservatives had locked themselves, especially against an unusually effective Leader of the Opposition who had managed to make the language of modernity his own, was a question that exercised Tory minds considerably in the year that followed October 1963. Douglas-Home’s Premiership accordingly developed many Janus-faced qualities, with Ted Heath’s pounding away at the issue of industrial modernis-

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ation juxtaposed with socially conservative legislation in the form of, for example, the Drugs (Prevention of Misuse), Malicious Damage, and Obscene Publications Acts.29 This was a strangely mixed brew, though probably no more odd than any other post-war premiership taken as a whole. That this stood out had more to do with who Home was, the gentlemanly and collegiate style of government that he adopted, and the uncommon passions aroused by some of the laws passed under his leadership. And foremost amongst this latter type of legislation came the proposition to abolish rpm.

Price Maintenance and the Impact of Heath.30 Heath’s appointment to the Board of Trade marked the end of a lengthy journey on the part of the core executive away from the early 1950s ‘hands off’ approach to industry, through the first stuttering attempts at fostering a competition policy, such as the RTPA, to an acknowledgement that some state intervention was necessary to correct the market imbalances that hampered economic growth. It was also the catalyst that forced rpm to the top of the political agenda. Although it was the battle over rpm’s abolition that secured Heath’s reputation and was partially responsible for his assumption of the leadership in 1965, it was not conceived as such. With the possible exception of Churchill, twentieth century Conservative leaders had not been created through bold strokes, nor by attacking the Party’s grassroots. The decision to assault rpm was not taken in the service of ambition: the truth is far more humdrum. Having led the complex negotiations on the Common Market application, Heath was peculiarly aware of the need to extend the field of freely determined prices as part of a process of economic modernisation. Alive to the fact that certain types of rpm ran contrary to the rules of EEC price competition, he believed that the UK should be in a suitably dynamic state industrially when the next occasion to apply for Community membership at length arose.31 The Board’s position on individual rpm in relation to the Treaty of Rome was that it was not illegal per se, unless it was operated by a firm in a “dominant position” in the Common Market, or resulted from an agreement which had as its result “the prevention, restriction, or distortion of competition within the EEC”.32 Nonetheless, if price maintenance was retained there would be clear scope for the European Commission to question its operation; indeed, in relation to the six existing members, it had already started to move in this direction towards the end of 1962.33 Hence it was far from astonishing when Board officials were able to ‘persuade’ their boss to champion abolition. Heath began in his new post with the belief that industrial adjustment and an active regional policy were the principal requirements for the next decade. Both, however, were “far too extensive to produce any electorally palatable results in the next nine months;

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neither could they easily be shown to be relevant to the public’s demands as consumers.”34 Although Heath’s initial impulse was to inaugurate a showpiece regional development policy–indeed this was the Board’s major contribution to November’s Queen’s Speech–he was persuaded by Trade officials to consider doing away with rpm. Abolition, they argued, could be passed before the election and, unlike regional policy, could garner easy electoral popularity by piggy-backing the rising consumer movement.35 The ‘grouse moor’ persona that Home had imported to the leadership was, the ‘progressive’ tendency presumed, electorally damaging; here was an opportunity for a strategic measure which not only would be thoroughly in keeping with the trend of policy since 1961, but also would help counterbalance the PM’s image. This, and not lofty ambition, was the source of the decision to attack the practice. Heath was assisted in his determination by various developments in the area of consumer issues.36 The first was the growth of the mail order business and the phenomenon of manufacturers selling directly to consumers. This type of transaction often circumvented the strictures of price agreements. By 1961, it was turning over £227m pa, a fivefold increase on its level a decade earlier.37 Still more important was the mounting popularity of trading stamps. These vouchers had a long history, of course, being offered by companies such as Perks in the inter-war years, where they were redeemable on crockery. Earlier still was the ‘divi’ (a metal token when introduced in the 1850s), which was presented by the Co-operative societies. By the early 1960s, though, they had begun to transform the retail market significantly.38 Around the time of the 1959 election, combined turnover of the main stamp companies had been estimated at between £1m and £2m a year; by 1965, thanks to new providers entering the market, this had grown to £11m.39 Stamps were given to customers alongside goods, and on collection of sufficient number could be redeemed either for discounts on purchases or, by 1964 more commonly, an article from a tailored range of ‘gifts’. That these coupons represented a form of hidden price-cutting was loudly trumpeted by antagonists. Opponents were keen to highlight the cost to the individual retailer of dealing in the tokens.40 But the phenomenon had a more insidious effect: stamps encouraged customer loyalty to those retailers that offered them. Where the most gargantuan multiple retailer could not undercut the minnow corner-shop, trading stamps became a means for consumers to differentiate between them. Additionally, many stamp companies were Americanowned and opposition to them fell in with the not uncommon tendency to deride other aspects of supposed Stateside gimmickry, like management training and hard-sell advertising.41 Indeed, by autumn 1963, rpm’s usual defenders–the NCT and the trade associations–believed, erroneously, that the serious threat to small retailers came not from government moves against price-fixing, but from the stamp companies.42 Thus the campaigning funds of the Resale Price Main-

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tenance Co-ordinating Committee (RPMCC), essentially the FPDC in new guise, were invested into the anti-stamp crusade that was being run by the Distributive Trades Alliance (DTA), rather than going towards fortifying price maintenance.43 This was perhaps not unreasonable. In October 1963 the ‘stamp war’ had become especially frenzied as Tesco began to offer the Green Shield variety, leading to reports that its Leicester store (then the biggest in England) had been “besieged by housewives”.44 Both sides took out advertisements in the national press defending their respective positions, whilst some manufacturers began to investigate whether section 25 of the RTPA, which gave legal sustenance to individual price maintenance, could also be used to justify action against stamp traders.45 In November, the confectionery market leader, Cadbury, had rewritten its conditions of sale to forbid the granting of trading stamps on its chocolates.46 It was clear that the shopocracy felt its interests were being molested, and looked to the new Industry Secretary to provide legislative protection. Heath, naturally, was reluctant: stamps were a minor issue which in any case after some months would find their natural level in the market. The Molony Committee had reported in 1962 that vouchers and stamps were not detrimental to the public interest and required no legislative restraint.47 Much to the chagrin of the DTA, Heath was content to abide by this position–a standpoint that no doubt inaugurated his status as the bête noir of the small shopkeeper.48 The effects of stamps and the controversy around them were threefold: consumer issues were kept flourishing in the press, rpm enforcement was made to look a nonsense, and it reinforced in Heath’s mind the conviction that price maintenance was “absurd and archaic” and ought promptly to be removed.49 As if to prove that consumer issues were assuming as high a profile in MPs’ minds as they were in the thoughts of the public, on 13th November the annual ballot for Private Members’ Bills in the Commons threw up two measures which, if passed, would impact directly on the distributive trades. Polling second was John Osborn’s Bill to regulate stamp trading, whilst first place was taken by the Co-operative MP, John Stonehouse, with a proposal to outlaw price-fixing. Osborn’s legislation was relatively uncontroversial. It did not make stamp trading illegal–as the DTA and many Tory backbenchers had wanted–but it did regulate the conditions under which stamps could be offered, insisted that each gift stamp bore a cash value, and made stamps redeemable for cash when their value exceeded five shillings.50 Believing that this would take the heat out of the trading stamp war, the Government eventually gave sanction to the Osborn Bill and it passed onto the statute book in April 1964. The Stonehouse package, however, was much trickier. The Government would as a matter of course be required to express an opinion on the bill, and ministers could hardly cast themselves as modernisers if they opposed the measure.

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If Heath was prevaricating even after the emergence of Stonehouse’s proposal, three events pressed him into unequivocal support for abolition.51 The first was the publication, on 18th December, of an MC report which claimed that car battery manufacturers were enforcing informal price-fixing through an unregistered price information agreement. This was maintaining “an artificial level of price at the top end of the market”, thereby acting against the public interest by limiting competition.52 The following day, and unconnected with the MC’s conclusions, Macmillan’s late creation, the Consumer Council, publicly recommended that rpm be made illegal.53 Simultaneously, at the final EPC meeting of 1963, in Heath’s absence, members contemplated rpm’s elimination as part of a policy package to reduce the cost of living, thereby strengthening employers’ bargaining positions in relation to wage claims. They invited their colleague at Trade to investigate this area further.54 The consumer interest, which, as late as 1959, Matthew Hilton has noted, was a considered a trivial subject by many MPs, had made a remarkably swift journey to centre stage in British politics.55 No doubt this migration had been caused by a cluster of related developments including changes in retail patterns, the rise of self-service shops and trading stamps, the inquisitorial culture fostered by the CA and Which? (and more broadly by the ‘What’s wrong with…?’ squad), and government rhetoric about modernity.56 But the corollary was that, in the context of the Government’s growth strategy, its ramifications–including engagement with price maintenance–could no longer be laughed off. Heath’s memo to Douglas-Home on the imminent arrival of the MC report did not advocate rescission openly, but suggested only that a government policy statement should be released as soon as possible.57 However, if this hinted at some vestigial anxiety on Heath’s part, by the return from the Christmas break such worries had been conspicuously banished. Even the secretariat’s customary bowdlerisation of committee minutes could barely disguise the intensity of the language Heath employed when introducing his proposal to abolish rpm at the first EPC meeting of the new year. It was “out of the question… to say on Mr. Stonehouse’s Bill that the Government had not made up their minds on this matter, or that they had concluded that the practice was beneficial or at least not harmful.” Nor would it suffice to postpone proceedings until a future Parliament: “the action must be taken in this one as part of the policy of modernisation… which had been accepted by the country as the dominant purpose of domestic policy.” The likely opposition should not deter the Government; nowadays consumers were more important, and the popularity of trading stamps had proved that they were “impatient” with the practice. Furthermore, the Government was “embarrassed” by the continuance of a practice that ran counter to an effective competition policy–increasing competition was not a long-term ambition but was “needed now, in 1964.”58 This last phrase can be interpreted as

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censure of those who believed (or hoped) that the Conservatives’ only option in the interval before the election was to maintain calm and competent governance without estranging solid Tory opinion in a dash for modernity. In other words, ministers should return to the stratagem pursued by Macmillan in his first twoand-a-half years as PM. Heath’s version of domestic statecraft, however, precluded such niceties: for him the Tory Party must be radical or forfeit the next election in any case. The EPC was genuinely divided. Something in the region of two million people worked in retail trades; in an election year, to surrender these votes, understandably looked to many committee members spectacularly ill advised. The arguments in Cabinet pursued a similar pattern. Other than the Chancellor of the Exchequer, who presented the reform as entirely consistent with the Treasury’s growth strategy, the case against rpm was made largely on the (political) point of timing.59 Two memos were forwarded to Cabinet–one each from the Treasury and the Board. Each bore their long-standing preferences for a competition policy that endeavoured to unstop the bottlenecks in the economy. Equally, both set rpm’s abolition in the context of the prevailing ‘progressive’ agenda of economic growth and renewal and its appeal to the new consumer generation. Taken together, they can be seen as a bid by the two most important Young Turks of the Party’s modernising faction to ensure that national transformation remained the focal point of domestic statecraft. For Maudling: [T]he Government’s performance on Mr. Stonehouse’s Bill may be widely awaited as our test of sincerity over modernisation… The boldest measures may secure the widest support, especially from our younger generation who ardently support rapid modernisation, less cosseting and more real opportunity.60

Heath argued that Labour was beginning to take more than a cursory interest in the subject–if the Opposition was able to appropriate the Government’s position on the subject of modernisation, the electoral disadvantage would be just as great as that notionally resulting from the eradication of rpm. So “let us, therefore, seize all the advantage we can from the fact that this will be seen as a bold and courageous step fully in accord with our theme of the modernisation of Britain.”61 Heath’s determination was that rpm’s removal should be seen only as stage one of a comprehensive assault upon restrictive practices of all kinds. The Cabinet was unconvinced. In the van for postponement of the here-and-now were notable progressives Butler and Blakenham. Less surprising was the opposition of Quintin Hogg (as Hailsham had now become, after the renunciation of his peerage) and the apprehensive Selwyn Lloyd. The latter had, of course, been browbeaten into an abolitionist position with which he was sorely uncomfortable when at the Exchequer. Two full sessions were required to

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persuade the Cabinet to adopt the measure, on the evening of the 14th and the morning of the 15th January. The ancient ‘protection versus free trade’ debate was recast in ‘traditional versus modern’ shape, though thankfully with some of the animus removed. Ultimately, no Cabinet member was willing to play Stanley to Ted Heath’s Peel, though the two meetings demonstrated that old seams of argument and distrust were far from mined out. Heath’s language was unchanged on that he had used at the EPC. He was antagonistic to his critics and displayed no trace of emollience: a stance that, on this issue, remained virtually unaltered throughout the next few months. The Government’s actions on this matter, he argued, were a test of its conviction, so frequently expressed, to modernise the British economy. Failure to abolish price fixing would be regarded as a victory for the sectional interests of large manufacturers. Others saw the same issue differently–that if the measure preceded action on monopolies and other restrictive practices (including, crucially, those of labour) it would be interpreted as penalising individual retailers rather than powerful firms.62 Some historians have suggested that Heath threatened to resign if he did not secure ministerial backing, though his memoirs denied that he exerted unnecessary pressure upon his colleagues.63 Importantly, Heath was backed by the PM, who possibly remembered the younger man’s loyalty in the weeks following the previous year’s leadership crisis. Home, in subsequent interviews, always suggested that his decision was based upon his preference for right over expediency, though frankly, having made a public commitment to modernisation with Heath as its patron, to do otherwise could have fractured his authority irrevocably.64 The timing of the general election may have also persuaded him to support his Secretary of State, as he claimed in a BBC interview in 1989: “I happened to think it was right and since it wasn’t far off an election I thought we'd better settle it one way or the other and go for it.”65 Thus Heath emerged on 15th January, after three hours of ferocious debate, with agreement to act against price maintenance with, in the Prime Minister’s words, “speed and decision”, and with sanction to produce a White Paper on monopolies which would describe the Government’s case for yet again amplifying the MC’s powers.66

The Last Ditch. In the last year of a parliament, perhaps opponents of abolition outside of the core executive were entitled to be sanguine. Of course, there was the Stonehouse proposal, but a Private Member’s Bill could be crushed easily in the absence of a government granting it sufficient parliamentary time. It was inconceivable that the Government would alienate its supporters whilst in its trough of unpopularity.67 They relaxed. On the afternoon of January 15th, Heath rose in the House to announce the Government’s intentions and shatter their complacency.

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In its immediate circular to its members, the NCT proclaimed itself, with good reason, “shocked”; the RPMCC was spectacularly wrong-footed; backbenchers were thrown into a state of alarm–there had been no consultation, Heath had not mentioned rpm at the backbench Trade and Industry Committee in December.68 The NCT’s old machinery of parliamentary pressure that had fallen into desuetude since mid-1962 had to be brought into operation to stiffen the backbones of Conservative MPs. However, since 1961 rpm’s supporters had lost some major institutional support. Under Sir Robert Shone, the NEDC had, from 1963, moved into discussions with the Board of Trade as how best to eliminate rpm as part of an overhaul of pricing policy.69 Its pro-abolition position, made explicit in its report The Growth of the Economy early in 1964, was significant as it both maintained the link with the earlier phase of modernisation and enabled organisations like the FBI and the TUC, through their participation in that body, to abandon their earlier opposition and nudge towards tacit support for repeal.70 The ABCC conducted a survey of chambers to ascertain the position it should take, discovered that its membership was deeply split, and was constrained into mute neutrality.71 Certain individual chambers did lobby against the Bill, but without the support of their parent body such efforts had the slightest of impacts.72 From the other side of industry, the formerly antagonistic USDAW cautiously welcomed the announcement, subject to a condition that smacked a little of 1930s’ political discourse, namely “that safeguards be introduced to prevent a deliberate and pernicious system of selective price cutting… and persistent selling…below the normal cost prices available to bona fide traders, since these practices are destructive of trade stability.”73 Hardly fullhearted support, but nonetheless indicative of the unravelling of the institutional coalition that had hitherto thwarted government action against rpm. Heath’s Commons’ statement was short, but it set abolition determinedly in the context of modernisation. It illustrated that Heath comprehended the strategy not as crudely unleashing the free market, but rather as using the state where appropriate to encourage competitive impulses. He began: “The Government’s policy of modernisation requires the promotion of the greatest possible efficiency in all sectors of the economy… Effective legislative measures are essential if the nation is to enjoy the benefits of a high rate of economic growth and stable prices.” Consequently the Government had concluded that rpm was “incompatible with their objective of encouraging effective competition and keeping down costs and prices” and would legislate against it immediately.74 In reply to his opposite number, Douglas Jay, who criticised the non-inclusion of rpm’s rescission in the Queen’s Speech, Heath was again defiant. “The whole emphasis of the Queen’s Speech was on the modernisation of the economy of Great Britain and making it more efficient and more effective,” he growled.75 Of course, this was a good ploy temporarily to dish the Socialists, but Heath’s

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audience on this point was far wider than his fellow parliamentarians. This was a public pledge to modernisation, maintaining that it would not be abandoned, and furthermore underscoring that this was exactly what the Government had said it intended to do in November. The Commons could hardly turn faint-hearted if now it had decided that modernisation was not, after all, what it wanted. Thus, additionally, Heath’s sally was directed at the public in general and the Tory Party in particular. But the Tory Party was not persuaded so cheaply; indeed some of its members were blatantly chagrined. Unusually for a Government statement, a queue of MPs formed immediately to express their opinions–to the extent that the Speaker had to intervene to curtail debate. Two Conservative MPs did manage to speak, and if the President had believed that rumours of rpm exciting curious passions were exaggerated, he would have been speedily disabused. First, the Chairman of the backbench Trade and Industry Committee, John Vaughan-Morgan, with an impromptu paean acclaimed the Cabinet’s decision; he was followed, however, by the fearsome Dame Irene Ward, who declared, with winning turn of phrase, that the Government was “throwing a lot of people to the wolves for pie in the sky.”76 The unhealthy spectacle of one half of the Party squaring up for a fight with the other was unlikely to have been Heath’s intention; but relations were about to worsen. A political party is ill advised to enter an election year in public dispute over its philosophy, yet this was what the Conservatives were doing even before the advent of Heath’s price maintenance submission. In fact, as we noted in the previous chapter, its introspection had begun with Orpington (arguably earlier, with the onset of the ‘pay pause’) and had continued with only mild abatement ever since. This had subjected the strategy to a type of microscopy, which, as we have seen, had impeded the adoption of some of its more contentious aspects– such as decimal currency and indeed rpm abolition itself. Though contemplation of ‘Tory principles’ seemed to animate much discussion in the organisation from 1962, Home’s appointment had at least produced an uneasy peace, if only because of the election’s imminence. Heath’s declaration unstitched wounds that were as yet unhealed. Unfortunately, it coincided with the appearance in the Spectator of Iain Macleod’s review of Randolph Churchill’s book, The Fight for the Tory Leadership. Not only did Macleod claim (correctly) that Churchill’s account was mendacious, he took the opportunity to launch an attack upon the “magic circle” that had fixed the succession upon Lord Home, primarily in order to deprive Butler of Downing Street.77 The article’s abrasive tone–especially its scorn of the privileged, Old Etonian set that allegedly had been guilty of outmanoeuvring the Cabinet–suggested again that the Party was only a footstep away from internal war. Macmillan’s private assessment, when Prime Minister, of Macleod as a man with “no background” who was “not to be trusted” was perhaps prescient, although it also suggests that Macleod’s assessment of his

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former master as an unrepentant establishment intimate was equally accurate.78 At any rate, the ex-minister’s comments provoked backbench outrage; he was forced to stay away from the Commons for a month.79 Although MPs quickly “came to [their] senses and realised that open recrimination was not going to help”, the impression that Macleod’s salvo had created in the country was of a party mortally disunited.80 The quarrel over rpm that was to come served to perpetuate this image. In the hiatus between Heath’s first announcement and the Bill’s publication a flurry of minutes passed from Martin Redmayne to the PM, each of which suggested various palliatives which might quieten backbench discontent. 1964’s first meeting of the 1922 was held on 16th January. It was dominated by price maintenance–indeed rpm was to take “more of the Committee’s time during the first months of 1964 than any other single issue since... Members’ pay in 1954.”81 It was obvious from that meeting that it would be fruitless to corral backbenchers into supporting the coming Bill unconditionally. Redmayne had been in business before entering parliament, in a family-run concern that sold sports goods–a market which still operated under rpm–and was himself opposed to its prohibition. He was thus a sympathetic ear into which backbenchers could pour their venom. Redmayne quickly secured government backing for Osborn’s stamp trading measure, but his efforts to suggest other concessions were mostly rebuffed by Ted Heath.82 To link rpm to trade union law reform might have seemed attractive, since it had long been a cherished hope of the right of the Conservative Party. It was well known in parliament that the Tory Party in the country was, broadly speaking, distrustful of the union movement and sceptical of its ability to reform itself. Indeed, in the late ‘fifties and early ‘sixties the problem of union power, the political scientist Jean Blondel discovered, was the issue upon which the views of grassroot Tories exhibited the greatest distance from those of their leaders.83 If that had not been clear to the Government in the 1950s, a markedly acerbic debate at the Party’s 1961 conference, which featured several anti-union speeches, would have made it unambiguous.84 However, throughout the Churchill and Eden Premierships (and a fair proportion of Macmillan’s), most MPs were sufficiently mindful of the necessity to garner votes from trade unionists to espouse a policy of voluntarism, whereby persuasion and exhortation would induce the unions to demonstrate restraint in wage bargaining and in the use of the strike weapon. This was thoroughly in tune with the deal implied in 1944’s full employment White Paper.85 At the time of Neddy’s creation, it seemed that this approach was about to deliver positive remuneration, when the TUC Conference resolved to reorganise the movement in the light of modern industrial conditions.86 Unfortunately, this reformist position had proved to be an illusion. By 1964, the dominant trend appeared to

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be in the opposite direction. To many Tories, it was almost axiomatic that the trade unions were unprepared to exercise decorous restraint in the matter of pay claims; after all, had not Frank Cousins, the turbulent left-winger of the Transport and General Workers’ Union, openly advocated major strikes at any sniff of wage restraint at Labour’s 1961 Conference?87 The numbers of unqualified voluntarists on the Conservative benches had thus steadily dwindled since the late 1950s. The debate at second reading of the 1963 Contracts of Employment Bill indicated that by the fag-end of Macmillan’s stint as First Lord of the Treasury, a majority of the Parliamentary Party had begun to harbour solemn reservations about the preservation of this approach.88 Redmayne’s memo to the PM on 24th January played upon this scepticism, claiming that “if ministers could bring themselves to include in the White Paper [on monopolies and restrictive practices] a proposition to refer union practices to some sort of tribunal, most of our other problems would melt away.”89 In this case, the Government, despite the Secretary of State for Labour’s misgivings, showed itself not immune to backbench pressure.90 Put down on 13th February, a motion on the order paper from Tom Iremonger that linked moves against rpm to quid pro quo demands for a Royal Commission on restrictive practices in trade unions and commercial monopolies accrued over thirty signatures within twenty-four hours. The attack was supposed to expose Government duplicity– why should retailing be targeted for modernisation and not other areas of the economy? Such arguments did have an effect on the executive, some of whom surreptitiously agreed with them. Additionally, the outcome of the high-profile Rookes v. Barnard trial in early February had weakened some trade union immunities; this, some believed, might induce the unions themselves into cooperation with an investigation.91 After Cabinet discussion, the unenthusiastic Joseph Godber was cajoled into announcing an enquiry into trade union law, to begin in the next Parliament. However, if this was intended as an analgesic to rpm’s defenders, it was a signal failure. The deliberate omission of unions’ restrictive practices (as opposed to strict questions of law) from the enquiry’s parameters caused conspicuous annoyance amongst backbenchers and made not one crumb’s worth of difference to the developing guerrilla warfare over pricefixing. There was nothing inconsistent with modernisation about an investigation into union practice; indeed the CRD’s young guns were keen that if the Government announced a Royal Commission, it should be set in just that context.92 Instead, the problem with connecting an assault on rpm with an attempt to assail the union movement’s deficiencies was one of votes. It is not difficult to imagine the majority of the Party’s leadership feeling, to use Iain Macleod’s phrase in his time as Party Chairman, “schizophrenic” about of legislation to curb union excesses, since although such moves would be

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“welcome in the Party”, it was impossible to envisage the Conservatives returning to office “without the support of four and a half million trade unionists and their wives”.93 In addition, reasonably cordial relations between government and unions had been established under NEDC’s tripartite auspices. Indeed, the Industrial Training Act–a law with an impeccable modernising pedigree–had only just passed onto the statute book, which was to lead to the corporate structure’s formal enlargement through the creation of Industrial Training Boards. This legislation had been achieved only by way of a protracted and painful gestation, in which, for example, the TUC had been forced to adopt a compromise position to placate its craft union members–which were concerned that the system envisaged by the Act might prove a gateway through which their control over apprenticeship schemes would be weakened.94 To antagonise the union movement by serving up anything more pungent than the enquiry announced in March might have rendered another strut of modernisation under strain from its inauguration. However, if the approaching election and the threat of institutional upheaval conditioned and constrained the executive’s response, it may be fairly asked why similar logic did not apply to its approach to the Conservative-inclined small trader? For these were certainly the tactics employed by the NCT and RPMCC. Their message was plain: this was a bill that injured Conservative supporters the most. Agitated backbenchers with thin majorities were particularly susceptible to this assessment. The member for Shipley, Geoffrey Hirst–who had served on the executive councils of both the NCT and the FBI–promptly indulged in an attack on Heath which somewhat lacked temperance: After a spurt and a splash of throat-cutting through a Government-inspired ritual murder of small traders, the trend will be for loss leaders to mark an increase in prices in other directions… I really feel that, sometimes, the Government make it… hard for their best friends.95

Ugly portents of ruin were stock-in-trade for the Bill’s opponents, but Hirst’s speech was notable not only for its floridity. It suggested that some backbenchers were prepared to legitimate the almost Poujadiste discourse, as peddled by the RPMCC and frequently indulged by local Conservatives, of the small, Tory-voting trader besieged by big business and government. It revealed, as no other issue, how deeply divided between traditionalist and moderniser the Party was. Indeed, in the moment’s tumult it was almost forgotten that there was a handful of backbenchers who, the Spectator explained, were “disgruntled that they could not present [the Bill], in the absence of monopoly legislation, as a part of a comprehensive modernising scheme.”96 The answer to the conundrum of why the Government did not pull back from tackling resale price maintenance

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lies, as we have seen, partly in the character of Edward Heath, but also in the tactics of the rpm’s guardians in the years preceding the Bill. Almost from the moment that the RTPA was passed, and with the exception of the scare in 1962, the FPDC and its allies had lapsed into a remarkably casual attitude regarding potential threats to price maintenance. To begin with, the Committee did not meet formally between November 1956 and December 1959, and at that latter meeting many of its members had wanted it wound up, arguing that Thorneycroft’s Act had rendered its existence superfluous.97 A product of this negligence was that the war-chest available to the pro-rpm coalition was shrinking: the Rpm Defence Fund was consistently in the red from late 1958 until 1963.98 Although the NCT was able to stir up a well-supported campaign in the country, most notably in its rally at St. Pancras Town Hall, which attracted over 700 protestors, this was a very weak substitute for institutional backing.99 As Lawson and Bruce-Gardyne have commented, the rpm pressure group neglected to lobby the Board of Trade directly, believing–probably correctly– that its frosty receptions there were unlikely to become more convivial. More seriously, it also failed to cultivate the FBI as a partner: one that would have provided a more effective route into Whitehall.100 (Whilst not explicit, there is a hint of this in the FPDC papers, when, in 1960, the Committee decided to concentrate its propaganda efforts only on “the most useful channels”.101) That the FBI began to look upon abolition more favourably from 1961 onwards, splintering the institutional coalition that had previously defended rpm, tends to corroborate this view. Nor was pressure put upon the Co-operative movement, which did contain a small number of rpm adherents and might not have forced the pace with the Stonehouse Bill had the NCT and its collaborators more effectively targeted it. The RPMCC was left, therefore, with direct lobbying of Tory backbenchers as its foremost weapon. Unfortunately, this meant that the fight against abolition, when it came, was vastly more likely to be conducted in the last ditch than anywhere better appointed.102 Still, last ditch resistance is no less fierce for it coming when a cause is almost lost. Martin Redmayne’s suggestion of 27th January concerned reform of the Shops Act to permit longer retail hours, a proposal that the Home Office had been long keen to pursue and which, in part, the Crathorne Committee on Sunday Observance had been created to investigate in 1961.103 The Chief Whip’s smoking room soundings had left him with the impression that greater flexibility in opening times would be popular amongst small retailers; the reality was exactly the reverse. The shopping hours’ proposal exhibited the mighty breach between the executive’s understanding of the Tory-voting mittelstand and the genuine position at the grassroots. Henry Brooke, the Home Secretary, claimed in late January that the Government would solicit views on the Shops Act in order to judge the necessity for legislative changes.104 Redmayne was

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assiduous in pushing the issue. However, either the Chief Whip’s supposedly infallible nose failed to sniff out potential trouble on this point, or, more likely, retailers had failed to make it clear to their backbench comrades the extent of their opposition to longer opening hours. MPs were not kept in ignorance for long. The NCT launched a ferocious attack on the proposal in its February journal, for the first time explicitly unleashing the spectre of electoral disaster. Its cliché-saturated leader sputtered: An overwhelming majority of traders also believe that the suggestion put forward by the Home Secretary, namely, that the smaller units in distribution should be allowed to remain open later in the evening, is merely adding insult to injury. After having one’s wage reduced, it is surely an unkind cut to be told that you will be allowed to work for longer hours…We must shortly be having a General Election, but when we don’t know! Retailers are electors in exactly the same way as men and women in any other walk of life… Let Mr Heath and Mr Brooke think very carefully indeed!’105

The pharmacists’ trade journal, Chemist and Druggist, though less intimidating in its language, was also infuriated. Raising the phantom of public safety, its editorial argued that whilst alterations to the Act might allow the pharmacist “to hang on to his present financial return while working more hours per week to achieve it… it is no service to the public that he should dispense medicines when fatigued.”106 Whether opposition from small traders was the only cause of the quiet shelving of the proposal is, on the other hand, doubtful. The unions’ attitude was of at least as much significance: having secured approval from USDAW and the TUC for abolition, the Government was unlikely to fracture the new institutional consensus by pressing the issue too hard.107 Even the normally hawkish Board of Trade believed that this confrontation should be saved until after the election.108 The NCT and its allies may have believed that through their actions a small victory had been secured; in truth, with the felicity of hindsight, the retail hours’ controversy demonstrated their relative weakness against the power of major institutions and confirmed the distance between the executive and its ‘natural’ supporters in the arena of modernisation. The six weeks between the initial announcement and the Bill’s publication saw both Heath and his fellow ministers trying to counteract RPMCC propaganda in a number of speeches across the country. On the BBC’s Panorama programme, the general public was given its first savour of the President’s immovable object routine. Heath’s position was as unequivocal as in private, and he stressed the agreed government themes of competition and the consumer interest. He was dismissive of objections tendered by Leonard Pagliero, the RPMCC’s Chairman, and rubbished the accusation that the measure was aimed at destruction of the small shopkeeper–it was merely the

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first part of a package to combat gratuitous concentration and restrictive practices in industry. Furthermore, as to the prediction that rpm’s removal would devastate after-sales service, why shouldn’t “the purchaser… have the opportunity of deciding for himself [sic] whether he buys [his goods] without service…?”109 This TV episode set the tone for the ensuing debate, with Heath surrendering no ground and repeating (often at inordinate length and in impressive detail) the arguments that he had worked out prior to the Christmas recess. At Eastbourne on 10th February, Heath advanced an unusual justification for outlawing price maintenance that linked the measure to the long tradition of Conservative devices to protect the consumer through enhanced competition. “It requires constant attention on the part of the Government to ensure that competition is working properly,” he argued. “Since the time of Shaftesbury, Conservatives have a record of legislation to prevent the pressures of competition working to the disadvantage of the worker… rpm must be seen in the context of a wider move to make free enterprise work.” And there was another compelling reason to intervene in the distributive industries, because “changing consumer demands, a more mobile population, and new patterns in living and building” would cause “big changes in any event over the next few years.”110 Hence, all the state was doing was working in the grain of movements toward modernity. It is easy to typify the attitude Heath displayed both on television and in his Eastbourne address as some sort of prototype Thatcherism representing a break with the post-war consensus.111 In fact it was fully in keeping with the ‘progressive’ Toryism that had been accepted by all of the post-war Tory administrations, and in particular Macmillan’s. Samuel Brittan has characterised Heath’s convictions as arising “not from any philosophical commitment to free markets as an instrument of choice but to his belief that British industry needed a shock of one kind or another.”112 Rpm’s abolition was certainly a shock–although it may have been more of a political than an economic one–but it should be set alongside the simultaneous commitment to a regional policy, which was obviously anything but a laissez-faire instrument, yet just as in tune with the idea that the state should be used to prod the economy at suitable points. Heath’s somewhat less than emollient attitude failed to convince sufficient backbenchers to support the Government proposal at late January meetings of the Trade and Industry Committee and the 1922 Committee.113 Slowly, it became clear that he intended to give no ground on the Bill’s essentials. Redmayne’s final throw came on the 14th February. His memo to Sir Alec suggested that books and tobacco should be exempt from the legislative provisions, since they had “already been through the hoop” of defending their rpm practices in the RTPC.114 This would have openly contravened Heath’s principle, expressed frequently in debate, that no group of products should have

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protection explicitly written into the bill since “this would amount to parliament… making an arbitrary decision in advance of the Court’s consideration”.115 On this point, Heath’s Bill was later almost to collapse, over the so-called ‘chemists’ amendment’. Nonetheless, both the PM and Heath stood their ground. With the publication of the Resale Prices Bill on 25th February, the pro-rpm rebels’ tactics changed. It became their intention to subject the legislation to death by amendment. The occasion of the Bill’s second reading on 10th March was possibly the cruellest episode of the matter for Heath. The Minister explicitly connected the measure to economic expansion, asserting that lower prices would help to block excessive or inflationary wage claims. Furthermore, he suggested the symbiosis between growth and modernisation, stating that abolition was about “much more” than reduced prices, it was “part of a policy to make the economy more dynamic, for producing the sustained expansion on which depend all the programmes for modernisation which the country so much desires.”116 The backbenches were unconvinced. George Hutchinson, then the Party’s Publicity Director, wrote a few years later: “I have never heard a Cabinet minister so much abused by his colleagues, so badly spoken of and widely condemned in the party, as Heath was then.”117 Twenty Tories voted against the Bill whilst at least another twenty-five abstained: “the largest Conservative revolt [on a major issue] since [the Norway debate in] 1940”.118 The Government was dismayed, and when the Cabinet next met Butler insisted that the legislation should be dropped immediately, but Heath was adamant and made it clear that his future was tied to that of the Bill.119 Publicly, the Prime Minister continued to support his embattled charge, but in private urged Heath to find a compromise position to head off further amendments and other stalling tactics as the Bill entered its committee stage.120 To defuse the ominous state of affairs that had developed on the backbenches, a steering committee was set up to allow the chief rebels to negotiate with Heath. Nonetheless, this was insufficient to placate the more feral of the traditionalist rebels. An alarming letter from Major Morrison (Chairman of the 1922) clattered onto the PM’s desk within two days of the second reading: Unless a very different approach is adopted by Ted Heath, quite frankly HMG will be more likely to fall than not at the Committee stage… A number of people that night [10th March] voted for HMG out of loyalty – but they will not do so on individual amendments. They have told me this. The steering committee set up as an ad hoc body looks like breaking down before it starts... I do not think Redmayne fully appreciates the mess we are in… 121

Similar sentiments were also exhibited at Cabinet level, particularly on the part of the Lord Privy Seal.122 We should be careful here, however. For whilst the

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‘antis’ were certainly the most voluble of backbenchers at this time, it seems likely that the majority of the Parliamentary Party tacked more closely to the position of Gilbert Longden, who wrote to the Party Chairman that “the ‘national interest’ has suffered from price maintenance for years… but of course we cannot have a fight now.”123 And a small group was absolutely thrilled with Heath’s performances. Just after the Panorama programme, for instance, the former Olympic athlete and now MP for North Lewisham, Christopher Chataway, showed himself enthused by Heath’s version of the modernisation programme. To the embarrassment of his companions, in the lobby of 10 Downing Street he gushed indiscreetly that Heath’s TV showpiece was “the best [political] performance he could ever remember…Of course, they should have made him Prime Minister!”124 Unfortunately, though, the Chataways of the Tory Party were numerically too insignificant to rescue the Bill alone. It is worth asking who exactly, beyond Edward Heath, a clutch of Tory modernisers, and the network of corporate institutions represented at NEDC, did support the abolition of rpm. Evidence is slight, but that which exists suggests that the public broadly approved of the measure: a Gallup survey in January demonstrated 63% support for the proposal, with only 18% opposed, whilst a more detailed poll conducted the following month by NOP recorded that 53% of the sample deemed abolition “praiseworthy”.125 Naturally, this support was predominantly passive–and was in any case eroded as the Bill became increasingly mired in Parliamentary procedure.126 Some of this change can be put down to the Daily Express, then the newspaper with the widest cross-social class circulation, and its stalwart campaign in favour of retention (which gave the Beaverbrook organ another opportunity to bait its bête-noir, Ted Heath, summarily reviving its old animosity from the days of the EEC negotiations). Indeed that paper even, at one point, congratulated itself upon supporting “a minority cause”.127 In the course of consultation with its members the ABCC also discovered that: [T]hose openly in support of legislation to terminate rpm were industrialists with a particular interest in exports, their argument being that they would support any move calculated to reduce costs and put them in a more internationally competitive position.128

This should not be considered startling: it was not in the interest of larger capitalists to display especial fondness for trade encumbrances that served only to protect a small number of people, no matter if they were themselves capitalists. Although Helen Mercer has recently argued that manufacturer opposition to abolition was as fierce as that from small retailers, she spoils a good case by exaggeration.129 In some trades, notably those of publishing and music, which distributed stock largely through a network of specialist retail outfits (and, incidentally, saw themselves as conserving works of cultural or

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artistic merit), this manufacturer opposition was clearly in evidence.130 On the other hand, though, many producers were eager to surrender rpm, which had tended to raise distribution costs through the preservation of small, uneconomic, and geographically widespread retail units. Upon the announcement of legislation, some major firms, Esso and ICI amongst them, were unusually prompt to abandon a practice about which they had been unenthused for years. Supermarkets also were quick to rally behind abolition–especially those, like the John Lewis Partnership and Marks & Spencer, which had diversified beyond food retailing.131 JLP even displayed posters supporting abolition, which of course reminded shoppers how tremendously cheap their stores were.132 Area Conservative associations, however, threw up mixed evidence of their members’ opinions, though there was at least one case of an en masse resignation of local officials, at Arbroath.133 The next chapter sifts out these complexities amongst the grassroots. Coupled with general praise from those heavyweight Tory elements of the national press that were sympathetic to modernisation like the Sunday Telegraph, the Times, and the Economist, this evidence lends a limited credence to Heath’s assumption that rpm’s abolition was an electoral plus, not the political suicide of common myth. In these muddied waters emerges a solid outline of the division over rpm: a large mass of passive support of unclear partisanship, pitted against a vocal and broadly conservative minority. By late March, this minority was in full cry. Some concessions had materialised from the steering committee, in particular that the Bill would be debated in committee by the whole House, a prerogative usually reserved for finance bills. In consequence, Martin Redmayne assured the PM on March 20th, the rebels seemed inclined to “get back on the bandwagon”, an assertion that was still being repeated by the press lobby four days later.134 John Morrison’s earlier candid assessment of Redmayne’s comprehension of the situation seemed doubly confirmed when the Chief Whip’s assertion was unstitched on the evening of 24th March. The rebels launched a spectacular attack in committee, via an amendment designed to exempt medicines from the face of the Bill. Sir Hugh Linstead, Secretary of the Pharmaceutical Society of Great Britain, had proposed the amendment; he was seconded by the monarch of purple prose, Geoffrey Hirst. Capriciously, the Labour and Liberal Parties switched tactics for the vote. Perhaps hoping to scalp one of the Tories’ most effective spokesmen and their only serious contender for Wilson’s modernising crown, the opposition voted against the Government rather than abstaining. With thirty-two votes from the Conservative benches cast for the amendment, and numerous abstentions, the Government’s majority dropped to one.135 The Chief Whip had proved a peculiarly inadequate conduit for the Parliamentary Party’s views to the executive. Had the vote gone against him, Heath later admitted, he might have been forced to resign.136 In fact, if Heath’s Shadow is to be believed, it was Roy

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Jenkins that saved Heath from such humiliation. Jenkins was so bored with the rpm debate that he declined to vote on the amendment, preferring to remain in the Commons library–although perhaps his ennui can be attributed to his position as an economic adviser to JLP.137 But if Jenkins’ supposed apathy had saved the Bill, it was not at all obvious in the days that followed. In the interlude after his near humiliation, Heath had buckled on a couple of minor amendments–allowing civil sanctions against persistent loss leaders and permitting evidence from previous RTPC hearings to be admissible in future tribunals. Despite these concessions, however, the beginning of April saw modernisation’s old adversary, Robin Turton, propose an arguably wrecking amendment. This would have exempted those products where rpm’s removal would deprive consumers of specific and substantial benefits. Possibly trying to atone for his earlier failure, amendment sixty-nine was pushed assiduously by Martin Redmayne–even attempting to force the agenda by meeting privately with Trade officials whilst Heath was out of the country.138 The Easter recess provided scant respite from attacks, especially since Home took some time off to attend his daughter’s wedding–prompting cruel insinuations from some of the press that he was turning his back at the very time at which the Party was tearing itself into ribbons.139 The NCT urged its members to bombard their MPs with telegrams to support Turton’s amendment, whilst the RPMCC launched a leaflet entitled Rpm: The Basis for Honest Trading, a specious collection of foreboding statistics on bankruptcies and so forth, which nonetheless found wide circulation in small shops countrywide.140 Backbenchers, too, were feeling evidently no more peaceable. Another agitated letter from John Morrison awaited the Prime Minister on his return from the recess. The Major sounded the siren over amendment 69: “Unless Ted Heath can be persuaded to be a little flexible… then HMG are riding for trouble… I just thought I ought to put it in writing before he succeeds in breaking us up entirely, which is in my opinion quite likely.”141 Douglas-Home met Heath privately on the afternoon of the 15th April, and though he managed to persuade his Secretary of State to address the 1922 executive, Heath was, as usual, uncompromising: “the Government must draw the line… sixty-nine was a wrecking amendment.”142 Unsurprisingly, the President’s meeting with the ’22 executive proved no more productive, so the PM decided to drag the issue back to Cabinet for further discussion. That meeting, on 21st April, almost entirely reprised those in mid-January. Heath’s language was unaltered: there had been “too many amendments of this kind, any more… would jeopardise the purpose of the bill,” he grumbled.143 But crucially the opposition, on this occasion, was more muted. Sir Alec was compelled to support his minister. As the executive closed ranks and with uncertainty about whether the Labour Party would back the amendment, no amount of upward pressure on the rebels was sufficient to ensure their continued fight. With an

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election only months away, further protraction of the controversy–we may surmise–forced many back-benchers to look at their prospects for re-election in the light of the continuing disunity that another rebellion would reveal. The amendment was withdrawn the following day.144 The reformers had their Act. What, then, was the significance of this anarchic period in early 1964? The Tory Party had left itself exhausted from the turmoil and Heath in particular had to take a holiday after his exertions. This, as we shall see, had some arguably regrettable consequences for the content of the platform on which the Conservatives would fight the election. It also conditioned the Home Government’s domestic statecraft and made a return to a minimalist ‘steadying’ strategy impossible. Unfortunately for the Party, it meant too that the divisions between traditionalist and moderniser remained unsalved for at least a further six months. The next two chapters examine the consequences of these circumstances. First, we shall observe how modernisation in general affected the Conservative Party in the constituencies and, insofar as it can be ascertained, the populace in general. The seventh chapter will then investigate the significance of the Tory version of modernisation for the 1964 general election.

CHAPTER SIX THE BIRTH OF UNCERTAINTY: REACTION IN THE COUNTRY

Anxiety in the Ranks. Like a nocturnal animal described whisperingly for a wildlife documentary, the Tory Party in the country is a shy creature. Though recent studies by Richard Kelly and Whiteley, Seyd and Richardson have more fully described its anatomy, post-war commentators gave little attention to its shape or metabolism.1 Indeed, only one major study of its structure and values was published in the early 1960s. Even that survey, by Robert McKenzie, minimised the Tory grassroots’ importance in terms of the power they exercised within the Party. Furthermore, it characterised the average Party member as an “ardent partisan” holding views markedly more extreme than those of the leadership or of Tory voters.2 This assumption was little challenged at the time, and certainly there is evidence, as earlier demonstrated, that this view of their followers as immoderate reactionaries predominated amongst Party leaders. Whether this was in truth so is difficult to determine, due largely to the intricate party structure in the country. No central records of Party membership were kept and individuals could only join through a local association. Not surprisingly, estimates of Conservative Party numbers in the 1950s are exceptionally vague, but a figure of 2.8 million has emerged as the standard approximation.3 Whilst the Conservative Party’s preference for a substantial degree of local autonomy can be seen as fully in accordance with the movement’s traditions, relations between Central Office and the local parties were (and continue to be) uneasy.4 Throughout the twentieth century, there had been repeated attempts by the central organisation to impose some uniformity upon its awkward offshoots, the most recent having been the successful effort to strangle the London Municipal Society at the turn of the 1960s.5 One consequence of friction between associations and the party machine has been that local records and minutes of meetings are guarded jealously, so that relatively few have escaped into the public domain, and those

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that have are often only of appeal to those historians with an unnatural interest in bazaars and summer fêtes. Thus assessing the validity of the idea that the average 1960s Tory was a die-hard opponent of modernity is a demanding task. Added to the difficulty posed by the meagre traces of the written historical record is the problem of the political nature of the grassroots’ organisation. The large number of passive local members who did little but pay their annual subscriptions has been well documented, but beyond this lay the tendency for many Conservative associations “resolutely to eschew political discussion and activity”.6 At the Flanders and Swann musical revue, ‘At the Drop of a Hat’, which ran from 1957 until 1960, the guffaw that greeted Michael Flanders’ joke that his local councillors were “strictly non-political: they’re all Conservatives” was almost certainly the laugh of recognition at the Party’s strong ‘apolitical’ image.7 Such tendencies, of course, had a long and respectable heritage, as the historian Martin Pugh has noted. By concentrating on social activities, the Primrose League had pioneered a powerful ‘non-political’ form of political allegiance towards the end of the nineteenth century, by which policy discussion was let alone and Conservative principles were taken for granted as simple “common sense”.8 This is not to say that we cannot discern some signals about Tory grassroots’ attitudes. Evidence may not be fulsome, but it exists. It is its interpretation in the light of the complexities outlined above that is difficult. Some excellent work has already been undertaken in this area, notably by Ewen Green. He argues that from the mid-1950s onwards, a considerable portion of the Conservative Party in the country began to dispute policy trends under the Eden leadership. Some members became attracted to newly created protest groups such as the People’s League for the Defence of Freedom (PLDF) or the Middle Class Alliance (MCA) which advocated a ‘libertarian’ agenda.9 The former group, which was run by maverick former Liberal, Edward Martell, concentrated primarily upon the supposed threat from trade unionism: it sought to outlaw the closed shop and make secret ballots compulsory before strike action. The latter’s programme was drawn more widely–it argued for reduced state expenditure, selectivity in welfare, lower income tax and greater tax relief for earned incomes.10 The Alliance was nominally led by a Conservative MP, Henry Price, who admitted that it had been formed to provide a channel through which “specific admitted grievances can be ventilated”.11 Central Office was sufficiently concerned about the impact of these two organisations on Tory support to institute an investigation into their activities. It was thought, initially, that the PLDF was a “Liberal front” formed to sow discontent in Conservative ranks, though this was later dismissed.12 (If anything, the investigating committee became convinced that, in terms of attitudes at least, the group’s leadership was closer to the far right than to the Liberals.13) Indeed, the committee concluded, contact with the League ought to be avoided and energies

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devoted instead to strengthening the Conservative trade union movement.14 The MCA was a different matter. To Central Office, it was more worrying than the League, not because it was markedly extreme, but because it was larger and it encompassed a significant number of party members: it was a “fundamentally Conservative” body.15 It was thus a genuine reflection of deep anxiety amongst some Conservatives about the administration’s policy direction. Of course, this is not to say that these concerns were heeded at the Party’s top levels. The distraction of Suez to some extent stifled both organisations, and Macmillan’s early premiership was marked, as we have observed, by a type of minimalist statecraft in which the room for major policy change, even had it been desired, was limited. Certainly any pandering to ‘middle class’ demands for greater thrift on the part of the state in order to pay for tax cuts, or for stricter restraints on union activity, would have wrecked the strategy, as Peter Thorneycroft discovered to his political cost in January 1958. It is far from certain how universal these feelings of disquiet were within the extra-parliamentary Party, although it is perhaps not thoroughly unreasonable to suppose that, during Macmillan’s period of administration, many constituency associations (at least in comparable suburban areas) held the view of the Richmond Association, as expressed by its historian, W.S. Carroll: The first eight years of Tory rule had not overjoyed the Tory rank-and-file, but the only alternative was something far worse so, hoping for better luck in the next five years, even for some Conservative legislation, [in 1959] they rallied to the Party Flag again…They were doomed to disappointment. The Party Leaders seemed to be determined to commit suicide. They succeeded. 16

The pith of traditionalist Tory antipathy to Macmillanite policies, could hardly have been expressed more curtly than in the implication that the Government had even failed to follow a recognisably Conservative line in policy. But whilst this signified extensive, albeit imprecise, discontent amongst the local membership, it did not mean that these Conservatives were the “ardent partisans” identified by McKenzie. Another contemporary commentator’s assessment was altogether more prudent: On the Conservative side… one finds very few people who should… be called ‘extremists’. Some people want a return to past policies on some specific questions; many simply do not like the pace at which the Conservative government is succumbing to the ‘wind of change’. These people should not be labelled extremists. Only those who hold a comprehensive body of doctrine which purports either to put the clock back or to constitute society on a different basis should be qualified in that way. There are few holders of such doctrines in Conservative associations.17

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Heartening though the knowledge that the ordinary Tory member was unlikely to break into Fascetta Nera at any opportunity may have been, this still left considerable scope for protest against the Party’s leaders. Such latitude was amply exercised after the 1959 election, when increasingly the Government locked itself into a modernising course. Unfortunately, although dissent was fulsome on a number of issues, properly formed coherent alternatives to government strategy were in modest supply. It should not be assumed that opposition to the various measures that constituted the modernising agenda came inevitably from the same groups within the Party; nor should it be taken for granted that the ordinary Tory was in possession of a consistent philosophy or doctrine with which to counter the trend of policy. Though it has been suggested that ‘libertarian’ type solutions had proved popular amongst some local members, this does not mean that most Tories thought about the role of the state and its relationship to personal initiative in anything like a systematic manner. Nor should we infer that those who criticised the Government from an ostensibly ‘libertarian’ standpoint were necessarily neo-liberals demanding the emancipation of markets from gratuitous impediments. In the case of trade unions, for instance, Jim Tomlinson notes that although Party conferences from the mid-1950s until the early 1960s showed noisy evidence of anti-union feeling, this stemmed more from “a hostility to the perceived political success of the unions than from an endorsement of neoliberal views about the need to free the labour market from their embrace.”18 What was true of the trade union issue was doubly so of more thorny and perplexing (for Tories) issues such as Common Market entry or rpm’s abolition. Whilst we can endeavour to describe some solid contours of the resistance to modernisation, we must keep always in mind Blondel’s cautious judgement cited above. The generalised discontent in the mid-1950s found some focus on a number of specific policy areas in the post-1959 election period. This interlude has been described as producing the “estrangement of the rank and file from the Macmillanite modernisers”, as the Conservatism that had been forged in the 1940s and which had involved acceptance of the welfare state began to be cast into doubt by, amongst other things, the rise of moralism and the resurgence of neo-liberalism.19 Whilst interesting, this hypothesis is overdrawn, as it appears to assume that the Government’s critics possessed a coherence and consensus of view across different policy areas which, in truth, did not exist. Discrete rifts did, however, occur on separate issues. To take the matter of apparent ‘moral decline’—there was considerable unhappiness over Butler’s penal reforms at the Home Office, his refusal to reintroduce judicial corporal punishment, and more generally about the Government’s seeming inability to tackle crime and youth delinquency.20 Signalled initially by an emergency motion passed by the

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women’s conference in 1956 against the removal of the sanction of capital punishment from certain offences, the issue grew in significance.21 At full conference in the five years from 1957, elements of the grassroots, and particularly women members, demonstrated considerable opposition towards the alleged leniency of Butler’s reforms. Calls for a return to, in the words of one delegate at 1960’s convention, “the stern discipline our fathers knew”, were frequent and voluble.22 Although the platform was not defeated on any of these occasions and Butler’s narrow dishing of his detractors in 1961 appeared to quieten public dissent, criticism of the leadership’s embrace of modern, liberal thinking remained as a background murmur, with sporadic eruptions, throughout the remainder of the Tory period of government.23 After Orpington, for example, a torrent of letters to Central Office gave notice that many Tories blamed the defeat on the ‘crime wave’ sweeping Britain.24 Such unease was to surface in a different guise in 1964. These nebulous fears over the malign power of “young toughs” and criminal activity became focussed with the teenage Mods-and-Rockers’ ‘riots’ which occurred at Clacton, Margate, and Brighton on successive bank holidays in April and May 1964.25 Here was the physical embodiment of the menace to social order posed by a violent youth sub-culture. Furthermore, for many people, this was not an uncomplicated issue about the perennial rowdiness of youth. Instead, it was bound up tightly with the threat presented by a broader, Americanised mass consumer culture to established social mores, to the habits of social deference, self-sacrifice, and imperial duty.26 Through television, pop music, the fashion industry, and a new youth-orientated press, this vulgar, but undeniably modern, culture hooked the nation’s youth: to its traditionalist critics the seaside riots were its apogee.27 Which is not to say that those critics had no weapons of their own, of course. January 1964 saw the beginnings of one of the most popular manifestations of resistance to what later became known as ‘permissiveness’–Mary Whitehouse’s campaign to ‘Clean Up TV’ (CUTV), which fastened onto the ill-effects upon young people that the portrayal of sex and violence in that medium was supposedly creating.28 Spurred on, no doubt, by tabloid reporting of unprovoked destruction in the coastal towns, by mid-1964, CUTV was claiming over 230,000 supporters to its cause, plus an advanced network of clergymen promoting its message.29 Several backbench MPs became concerned about Whitehouse’s campaign, identifying it as representative of a considerable reservoir of moral indignation amongst Conservatives. For instance, in June 1964 Ludlow’s MP, Jasper More, wrote to Frank Pearson, Home’s PPS, to warn of the Government’s negligence in not exploiting the ready-made issue provided by the crusade. “The campaign,” recorded the agitated Member, “is assuming the dimensions of a mass movement… and could have a significant influence on public opinion… I think it is fair to say that, potentially, [its] leaders are Con-

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servative supporters.”30 The correspondence between More and Pearson reached not only Home, but also William Deedes, Minister without Portfolio, who dealt with televisual matters. Deedes confessed: “Like my colleagues, I sense she [Whitehouse] is right, which is maddening…It is beyond doubt that some BBC programmes… are harmful to the young, therefore a duty exists that we are not fulfilling.”31 Fortunately for the Home Government, perhaps, 1964 was not to be a conference year; there was no opportunity for another public assault on the Home Office over the twin problems of moral laxity and inadequate penalties for criminal behaviour. But, as Deedes’ comment indicates, that does not mean that the executive was not unnerved, especially as, in some quarters, anxiety over moral decline was becoming bound up with the Tory Party’s ‘surrender’ to what was viewed as the socialist post-war social compact.32 For example, that archpeddler of sensation and sauciness, the Daily Sketch, without any tinge of irony, served up the view that unruly youth culture was a “by-product of the welfare state mentality–the attitude that, whatever you do, there is a great government financed safety net to prevent you falling on your face.”33 Such ideas did not sit ill with general demands to collapse the welfare state, reduce state expenditure, and bring down taxes: some of which had early been observed in the appeals of the MCA. Recent research has argued that such pressure from below did instigate some government movement towards a solution to the problem of disintegrating moral decency.34 The Obscene Publications Act, the Drugs (Prevention of Misuse) Act, and the Malicious Damage Act were all laws forced through by Sir Alec’s Government that were intended to correct the worst manifestations of this decline. Home was also more at ease than his predecessor in the employment of a more ‘moral’ tone in his speeches, which too gave the impression that the administration was prepared to act against the perceived decay of ‘decency’. There is evidence that, had the Conservatives been returned at the 1964 election, further legislative measures could have been advanced to control, for example, dancing clubs and television programmes.35 On the other hand, though, the neoliberal strand of criticism with which the belief in moral degeneration was sometimes connected was generally resisted by the executive. It is difficult to disentangle this strain of criticism from the traditionalist critique of government policy offered periodically by figures such as Lord Salisbury, but, though it demonstrated similarities in relation to economic policy, the ideas advanced by groups like the IEA were not (in general) twisted up in old concepts of empire and global reach. By the time of Home’s accession to the Premiership, it is certainly arguable that free market arguments were at least as important as those of the supposed reactionaries; indeed some political scientists, notably Brendan Evans and Andrew Taylor, have gone even further to claim that they were the most important single ideological current within the grassroots’ Party.36 Until

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October 1963, however, neo-liberalism, both as an economic model and an electoral strategy, had suffered from a shortage of support from major political figures (with the exception of the nostrums of Nigel Birch in the last months of 1957, perhaps). Following Macmillan’s resignation, however, it escaped from its doldrums in the shape of Enoch Powell. After leaving the Government, Powell had been far from idle, and in the early months of the following year installed himself as chief Gnostic for a free market version of Conservatism. A speech at the National Liberal Forum in January signalled the beginning of his assault. Powell spoke of the “dangerous nonsense” of planning institutions like ‘Neddy’ and claimed that attempts by the state to exercise any control over wages, profits, and prices were “hocus-pocus”.37 He delineated this further in April, first by a series of articles in the Times, which were anonymous to the extent that they were shown as authored by “a Conservative”, and secondly through a speech in Glasgow which urged “a return to the free market”.38 Powell’s argument was that, to borrow an apt phrase from Gilmour and Garnett, the Conservatives “should espouse a capitalism as dogmatic, rigid and complete as the socialism extreme left-wingers had tried to foist on Labour.”39 In June, he spoke again to the theme at the London School of Economics–in which he also accused the Government of “hypocrisy” over rpm, as it attacked “restriction” only when “opponents were too few, or too unpopular, to resist” whilst displaying timidity towards the unions, who were likewise “price fixers” in the case of the price of labour.40 The effect of the former minister’s campaign was not, by any means, to bring grassroots Tories out into open revolt. However, it was clear that Powell’s views resonated amongst many Tory members in the constituencies–as the number of supportive letters he received in the first half of 1964 indicates.41 The dispatching of Quintin Hogg to slap down Powell’s case in a speech on 24th April, in which the Lord President of the Council labelled him as “a sort of Mao Tse Tung of Toryism”, suggested that the executive was unnerved by the resurgence of free market doctrine in the hands of a influential past government member.42 Fortunately for Home’s administration, the impending fact of a general election (plus a little danegelt in the form of a small role in drafting the manifesto) served to silence Powell from mid-year onwards, but the impression already created by the rpm fracas that the Party was at odds within its own ranks was a difficult one to eliminate. It was to have serious consequences for the manner in which the general election was fought, as the next chapter endeavours to show. A move towards neo-liberalism in macro-economic policy would have destroyed the modernisation programme’s careful balance and was thus sternly resisted by the Cabinet more-or-less throughout the Macmillan and Home premierships. Other issues, though, showed its continuing vitality amongst the Party’s foundations.

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Rodney Lowe has pointed out that by concentrating on economic policy historians have often overlooked that, from 1957, the Conservative Party undertook a far-reaching reappraisal of welfare policy. He argues that this reappraisal, which was conducted by a series of party committees, of which the most important was the CRD’s Future of Social Services Committee (FSSC), began with the impeccably neo-liberal preference for radical change in the service of limiting state expenditure by introducing greater selectivity into the system.43 Between 1960 and 1963, and roughly contemporaneous to the development of the high period of modernisation, however, those undertaking the review moved away significantly from this starting point. Increasingly, influenced no doubt by the favourable environment for state intervention created by Macmillan’s strategy, they came to accept that the reduction of public spending on transfer payments was considerably less important than getting value for money within the welfare apparatus.44 By the time the FSSC produced its first draft report in spring 1961, it was advocating that welfare spending should increase in some areas–especially in provision for pensioners–but that benefits perhaps should cease to be supplied on the basis of universality.45 Albeit with a few individual differences in emphasis, slowly this became the accepted norm in social policy thinking at the top levels of the Party.46 At the organisation’s roots, however, the older MCA agenda of across-the-board welfare expenditure cuts was still very active. At Blackpool in 1963, Macleod announced this shift in emphasis by asking the questions: “Should the wall of social security be the same height for everyone? Does the Beveridge approach make sense 20 years on?” To which Butler in his speech added, “those who are able to make provision for themselves should be encouraged to do so”.47 These forms of words were perhaps designed to be open to interpretation, but they were dangerous because, though they intimated that support for benefit universality would be withdrawn, they failed to make plain that this would not mean reductions in social security expenditure. It is clear that many people mistakenly took them to mean the ‘rolling back’ of the state. On their return to Westminster, ministers were subjected to numerous enquiries from Conservative backbenchers, usually along the lines of: “Is it true that [the welfare state] is degenerating into a system where everybody tries to live at somebody else’s expense? If so, the time is ripe for another Beveridge! Those who can must pay for their needs.”48 Similarly, a resolution passed unanimously at the annual meeting of the National Union’s Central Council in early 1964 urged that welfare should be re-examined with the aim of removing the indiscriminate application of expenditure on a universal basis.49 Douglas-Home’s reply to Sir Max Bemrose, the National Union’s chair, was that “preferential treatment for those whose need is greatest… is in fact more of a feature of our system than is generally appreciated”–which was true,

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but it hardly pricked the bubble of neo-liberal argument.50 Evidently, the head of steam that was swelling behind the idea of selectivity was difficult to dissipate. In mid-June, the Chief Whip reported to the PM that backbenchers were keen to institute a new enquiry into the welfare state, on the premise that its benefits would no longer be distributed universally.51 Although Douglas-Home worried that a new Beveridge would be “too costly”52, he was won over by the Cabinet’s Steering Committee, which recommended that the manifesto should contain the promise of an evaluation, albeit without any commitment to the precise form that this reassessment would take.53 At the same time, abandonment of universalism may have revived public fears about the ‘nasty’ Tories of the 1930s, which, as we have previously noted, was a strong point of apprehension amongst ministers throughout the Conservatives’ thirteen years in office. Thus the Party went into the election pledging both “a full review of social security arrangements, so that their subsequent development may be suited to modern circumstances” and “rising expenditure on the social services”.54 This compromise kept a cap on the controversy for the months leading up to October (afterwards, of course, it became temporarily irrelevant), but the question demonstrated the Party’s continuing potential to divide along its habitual fault lines. There were, then, substantial outbreaks of displeasure from below over the issues of moral collapse, trade union practices, state interference in the economy, and the merits of universalism throughout the Macmillan and Douglas-Home administrations. Mingling with these broad concerns were various intermittent and specific anxieties about some of the manifestations of modernisation. Amongst these, Macmillan’s 1961 EEC application had the most volatile potential to upset the extra-parliamentary Party.

Common Market Difficulties. Perhaps, given its late palpitations under the mid-1990s’ Major Government, we might expect a considerable amount of Conservative opposition lined up against Harold Macmillan’s attempt to join the Common Market.55 Unquestionably there was extensive antagonism towards the EEC, although, amongst Tory members in the country, it tended to be muted at least until the Government’s announcement that it would seek to negotiate membership. In fact, in the month before Macmillan’s pronouncement, a Gallup opinion poll had indicated that Tory supporters were split 48% to 23% in favour of UK entry to the Community.56 Hostility to the policy, it seems, grew slowly. Nonetheless, we should be chary of claiming unified opposition to the enterprise. Indeed, though a sizeable minority of Conservatives was apprehensive at the departure, it is far from true that the anti-marketeers managed to secure a strong base within the

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Party. Nigel Ashford has even gone so far as to suggest that the 1962 conference, at which, as we have seen, the platform had dreaded a reverse in the Common Market debate, “showed a degree of enthusiasm that conflicts with the image of a party being dragged into membership only out of loyalty to its leadership… Many Conservatives felt that this was an issue which was an election-winner.”57 Against this slightly too buoyant assessment must be weighed the evidence collected by Central Office, often from local agents, which demonstrated increasing animosity to the European venture as Ted Heath’s negotiations became more protracted. Although local agents, as the primary conduits of members’ opinions to the central organisation, witnessed such qualms at close quarters and in consequence may have been prone to exaggerate their proportions, it is undeniable that by mid-1962 a small but vocal proportion of the Party was starting to adopt the unpleasant “surrender… to ‘frogs’ and ‘wogs’” imagery upon which we remarked in chapter four.58 The greatest nuisance for Central Office in this matter was countering the great variety of criticisms levelled at the EEC scheme. Many of these were stirred up by the assorted small pressure groups that had arisen on the back of the Common Market issue, several of which appeared to possess ulterior motives of a far-right or an extreme socialist nature. It was not unusual to find perplexed local Tories attending public meetings organised by these groups in order to glean some finer understanding of the arguments for and against entry. Some of these criticisms were, understandably, of a pedestrian nature, such as scares that EEC entry would cause a major hike in food prices.59 But they could also be outlandish. One of the more bizarre accusations that sprouted up was that the EEC was a “popish plot”, and that Britain’s religious freedom was threatened by amalgamation with a “Catholic dominated Common Market”.60 That this allegation was reported by agents across the country indicates that it was not simply a regional fixation. Central Office was sufficiently concerned about the development to produce a briefing paper for MPs and agents with suggestions as to the best techniques to employ in refuting such suspicions.61 If that objection was eccentric, a far more frequent complaint (and one which did at least contain a scrap of truth) was that Britain had been impelled towards the EEC by the USA. American stock was pretty low in the early 1960s, at least amongst those with tangible memories of the 1930s: it was the country of cheap gimmickry, of ‘un-British’ approaches to industry, of ‘hard sell’ advertising, and, from autumn 1962, it was also the untrustworthy nation that had welshed on the Skybolt deal. For the Beaverbrook press and the ACML to play upon this inclination amongst the British people was not difficult, therefore.62 Doubtless Beaverbrook’s opinion that the “blasted” Common Market was “an American device to put us alongside Germany,” and as Britain’s “power was broken and lost by two German wars, it [would be] very hard on us… to be asked to align

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ourselves with those villains” found an echo amongst many of his generation.63 Agents’ reports on constituency opinion, the Party’s psephology group noted in September 1962, increasingly featured sentiments such as “we are being forced into the EEC to serve American interests”.64 Aside from the considerable doubts amongst the farming community (see above, chapter four), the most serious point of opposition levelled at the Government’s departure was that from devotees of the Commonwealth. A Gallup survey in September 1961 indicated that 48% assessed the UK’s relationship with the Commonwealth as her most important international affiliation. By contrast, Britain’s relations with the USA were considered to be most critical by a modest 19% of the sample, and those with Europe by only 18%. Crucially, the same poll showed that 39% would not support Britain joining the Common Market unless a satisfactory solution to Commonwealth interests was found.65 This is not surprising. For many in the electorate, and still more for Tory supporters, the idea of Empire had “bitten deeply into the national psyche.”66 The Conservatives had, by long tradition, been the defenders of Britain’s image as a country whose interests, Anthony Eden had claimed in 1952, “lay far beyond the continent of Europe” and who possessed indissoluble “family ties” across the globe.67 As the then Foreign Secretary’s comments suggest, little indication had been given in the early part of the Conservatives’ period of office that these ties were to be undone. In February 1960, the moment at which the administration peeled away from such notions publicly, large segments of the Tory Party were caught unguarded. Shocked by the announcement of what appeared to be full speed ahead on decolonisation in Macmillan’s ‘Wind of Change’ speech, the traditionalist wing might have gone into open revolt, had it not been partially placated by the PM’s implication that commitment to Britain’s imperial predominance had not been displaced. Instead, it would be expressed through her role as the leader of a globally respected Commonwealth: old Empire wine was to decanted into new Commonwealth bottles.68 Given that this fresh totem had only recently been erected, it was a matter of concern that the Government should, little more than a year later, be so lightly considering tearing it down. The PM might have done well to consider more carefully the warning delivered by the old champion of imperial preference, Beaverbrook, that his papers would contest any derogation of the Commonwealth, the health of which was “an ineradicable clause in [the Express’s] creed”.69 So was it for many in the Party’s rank-and-file; Beaverbrook’s words gave a glimpse into the soul of the Tory Party at large. It seems likely that many activists felt that the Government had, in the words of one horrified local branch secretary, “abandoned kith and kin” and “shuffled off its responsibilities” by its indifference towards the UK’s “imperial responsibilities”.70 Whilst out of office in 1963, for instance, Selwyn Lloyd had undertaken a speaking tour of con-

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stituency associations: his conclusions on the matter of the Commonwealth confirmed that the EEC negotiations had only hardened sentiment amongst the Party faithful that Macmillan’s Conservative administration was untrustworthy on colonial issues. “The impression was given that the Government would have been prepared to go in [to the EEC] on any terms,” he asserted to the new Premier in late 1963. This had caused “enormous dismay” amongst the grassroots, which had been compounded by the lack of movement on Commonwealth development since de Gaulle’s veto.71 The effect of this dismay and the campaign against entry by the Express and others which played upon it appeared to be to propel a large number of people into the ‘anti’ camp. This the NOP poll in September 1962 which for the first time recorded a majority opposed to EEC membership seemed to confirm (see above, chapter four). Increasing antagonism towards the European project also seeped upwards through the Party and probably explains the forty Tory MPs that tabled a motion against entry in July of the same year. Finding ripostes to the many grievances that emanated from party grassroots and elsewhere was a testing assignment for the party machine, and the CRD in particular. The EEC issue, arguably more than any other aspect of the modernising strategy, cut across constituencies and clusters of interests, so that it was difficult to state unequivocally where certain groups stood. In autumn 1962, the CRD’s polling group came to the conclusion that “the young are in favour of joining; the middle aged and elderly against. This appears as a recurrent theme...”72 Yet the Young Conservatives (YC), for example, were split over the issue: delegates at the YC conference in 1961 approved a motion urging support for an integrated Europe only by the slender margin of 565 votes to 510.73 Whilst in July of the same year, several of the YC’s national officers came out against entry in a letter to the Times.74 Equally, the Monday Club, which had endeavoured to style itself predominantly as a young people’s organisation, was largely hostile (although the EEC was only a minor issue on its agenda).75 Though a crippling disappointment to the modernisers, de Gaulle’s veto at least released the central organisation from the burden of unpicking such tangles. If it had not been obvious prior to its commencement, the campaign against EEC entry demonstrated the great affection with which much of the Party viewed the Commonwealth. Although this was not immediately to produce a dividend, as Macmillan was loath to resuscitate an active policy, his successor was instinctively more sympathetic towards the idea. Considerable work was ploughed into the assembly of plans for a Commonwealth development organisation (though unfortunately this did not reach the manifesto) and the Government’s rhetoric was spruced up to give it a pro-Commonwealth feel.76 If this represented the executive ‘reconnecting’ with the Party’s activists, then it was a positive windfall from the Common Market campaign, in terms of party

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management. Nonetheless, the most important result of the EEC negotiations, or rather their failure, was that a fretful search–exemplified by the Cabinet’s strategy meeting at Chequers in April 1963–began to find alternative focal points for the modernisation policy. Out of this rummaging around in the stockroom of forsaken policies, which continued in a patchy and cheerless manner throughout 1963, emerged the decision to abolish price maintenance, which became the next arena in which the conflict over modernisation was to play out.

The Rpm Conundrum. Any researcher looking for evidence that opposition amongst Conservative Party members and voters to the abolition of rpm in 1964 was severe will find it abundantly in correspondence with Central Office, individual Ministers, or MPs.77 Typical was the letter from the “formerly staunch Conservative” giving notice that that he would “do everything in [his] power to get the Government out of office”, accusing the Tory Party of “standing for big business” against the small trader, and predicting a “return to the jungle conditions of trade”.78 Amongst such remonstrations, tightly argued economic treatises were few; instead, complaints were often laden with the language of tradition. Just as in the minds of modernisers the cleavage in British society lay between the ‘dynamic’, ‘efficient’, ‘professional’ apparition of modernity on the one hand, and the ‘complacent’, ‘archaic’, ‘amateur’ world of convention on the other, so just as easily could the discourse be inverted.79 Hence, rpm’s defenders depicted themselves in rather Baldwinesque language as not only protecting ‘security’, ‘honest trade’, ‘the provision of high quality goods’, and ‘Britain’s reputation’, but also shielding the shopper from the inevitable excrescences of retail modernisation: the outcrops of ‘cheap, shoddy gimmickry’, ‘fraudulent advertising’, and ‘fast buck’ schemes. Appeals of this nature were unlikely to have swayed Heath and his supporters, couched as they were in an idiolect deliberately abandoned by the Tory modernisers. All the same, in a mirror of the anti-EEC protests, the prevalence of this type of language illustrated the continuing vigour of established ideas of a well-ordered, socially responsible, and internationally potent Britain. This brand of lingua franca was also employed to great effect by the Daily Express in its attacks against Heath–so that he became the “fast-talking salesman of a bad, bad product” who had “bulldozed” his obnoxious law through parliament.80 More prosaically, but no less ominously, a substantial number of critical motions flowed from local constituency associations to the National Union, deploring the impact that the legislation might have on the Party’s electoral chances.81 And although we can, hopefully, presume that Tory members were not amongst those rpm supporters

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who conducted a campaign of vandalism and threatening telephone calls against the discount house Adsega in late January 1964, still their actions appear to have been often immoderate.82 Horror stories of desertions, including one (at least) of en bloc resignation of local constituency officials, started to come through briskly to Central Office after Heath’s first announcement; even reports of blackballing of members who dared to express pro-abolition views began to circulate.83 The combined effect of an over-active rumour mill alongside some deep and genuinely felt anguish amongst a significant proportion of the Tory Party’s social base tended to heighten the delirious humour of many sitting in the Commons. We have, for example, already noted the rather inflated phrases employed by the Chairman of the ‘22 in his doom-laden missives to the PM throughout early 1964. At practically every level, the feeling in the spring months was of a Party horridly riven with discord, which had consigned itself to defeat at the forthcoming general election before the campaign had even begun. On the back of two years’ worth of humiliation and division over the several manifestations of modernisation, not to mention poorly handled security scandals and a bruising leadership contest, such wretched despondency did not lack reason. Whether it was based upon a wholly correct reading of the rankand-file’s temper over rpm is open to question. A different story can be told. Since members’ communication with Central Office was rarely to congratulate the leadership, the idea that there was a large mass of passive support for rpm’s rescission within the Party cannot be proven. Small hints of this were, however, present. In April, for example, the 278 responses to the Political Centre’s ‘Two Way Topic’ on the price maintenance issue represented an above average level of interest from constituency associations; the CRD estimated that this represented discussion amongst almost three-and-a-half thousand local members. The results intimated that abolition had caused much less displeasure than the heavy postbags of MPs might have suggested. In an echo of public opinion poll results, 76% of responses backed the Government’s action (although some criticism was expressed as to the Bill’s timing), and an additional 10% indicated a preference for going further and removing outright the practice. There was even a substantial measure of backing for repeal of the Shops Act to allow greater flexibility in retailing hours.84 Winter 1962, when the impact of the Speed Report was rippling through Whitehall, had been the previous occasion on which rpm had featured in a ‘Two Way Topic’. At that time, the intelligence from the constituencies indicated an almost equal split for and against price maintenance.85 (Interestingly, the unusually high level of response to this topic–it was estimated that five thousand or more members had participated in the discussions–indicated the rising importance of consumer issues generally.) Ostensibly, then, Tory opinion had shifted a great distance in two years, and the grassroots’ view of Heath’s Bill

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may have been not nearly so condemnatory as the public furore suggested. However, though this is important evidence, it must be tempered by the knowledge that the ‘Two way Topic’ series was designed to elicit responses from the CPC groups in local parties. Numbers attending these discussions represented only a small percentage of local membership as groups comprised local activists who wished earnestly to discuss policy, in essence a “self-selecting élite”; moreover, they were not evenly spread across the country–considerably more groups were established in the south-east than in any other region.86 Perhaps we can speculate that the members of these groups were more likely than most to support the modernisation bent of the leadership anyway (although their responses to other contact briefs in the 1960-64 period did not suggest that their members were especially radical). Or, possibly, when confronted by the fait accompli that the administration would abolish rpm regardless of grassroots’ opinion, they felt they had little alternative but to support the Government.87 However, Philip Norton suggests in his study of the CPC that there was considerable continuity in membership of these groups, which would indicate that there was some movement in Conservative opinion between 1962 and the Bill’s introduction.88 Again, these thoughts are highly speculative; certainly what cannot be inferred from this evidence is 86% of local Tories were fully behind prohibition. Then again, it does imply a more complex situation amongst the membership than a simplistic Manichean division between modernising elect and traditionalist multitude. Throwing the net more widely to include Conservative supporters as well as members suggests even more strongly that the defence of price maintenance was a minority cause. Both of the major opinion poll organisations, NOP and Gallup, found that Tory voters favoured abolition consistently, albeit that these majorities tended to be eroded as the rpm crisis became protracted.89 Even a question that ought maybe to have alarmed Tories– whether respondents approved of the Government outlawing rpm in an election year–delivered still a 42 to 35% margin of support amongst Conservatives for Ted Heath’s exploit.90 Furthermore, it may be the case that Conservative MPs’ perception that local associations were stacked entirely against the Government over rpm arose from the types of contact that they were liable to have within those organisations. The cohort of councillors, constituency chairmen, and other local party officials probably contained many petit bourgeois small shopkeepers and businessmen.91 In other words, the most visible opponents of abolition were often also the natural sources of authority at a local level. In contrast, those Tories who approached the issue as consumers, amongst whom we might (very tentatively) count younger members and women, may have been constrained from voicing their opinions by their comparative lack of power within associations. A word should also be said about the rise in consumer activism and its impact on public

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opinion about rpm. The CA, for example, was claiming over one quarter of a million subscribers to Which? even before the publication of the Molony report shunted consumer issues into the media spotlight.92 Such phenomena had prompted an efflorescence of local consumer groups in the early 1960s, many of which campaigned openly for rpm’s termination.93 Whilst it would be a vast exaggeration to maintain that the value-for-money agenda that these groups advanced was intrinsically a Tory one, it is clear nonetheless that the movement was dominated by younger middle class women and had within it a large number of people who, whilst they might not be party members, were nonetheless in the Tories’ ideal catchment area.94 Indeed, James Douglas at the CRD bemoaned the failure of the Party to make more of a gesture towards these “lively” groups: They are the sort of thing in which we ought to take an interest… [since] by and large the appeal of Toryism is the appeal of the consumption economy [and] the people involved are very much the sort of people we ought to be reaching and are, I fear, those we are currently failing to reach, e.g. young marrieds…95

Given its vibrancy and its potential to canalise support for the Conservative version of modernisation, it is slightly surprising that the Government did not make a more direct appeal to the consumer movement in 1964. Regardless of this, it may fairly be said that consumer groups played a role, if only by stealthily altering shoppers’ perceptions of good value, in ensuring the slow erosion of public confidence in the price maintenance system and, plausibly, weakening resistance to its elimination. In any case, rpm’s abolition seems to have drawn its opposition unevenly from different parts of the country. This was almost the exact inverse of the pattern of resistance to another plank of the modernising scheme–the Beeching railway closure programme. Whilst, as we noted in the fourth chapter, Beeching’s ‘axe’ brought many in rural areas into conflict with the Government, the impending loss of rpm seemed to raise more defiance in towns.96 Largely this was because small shopkeepers in the countryside were not in immediate danger of being wiped out by vast supermarkets. This was kind fortune to the Government, since it was difficult enough to fight the two issues separately. So it is far from unequivocally certain that all constituencies were flooded with ill will towards the executive over price maintenance. At the time of Turton’s ‘wrecking amendment’, the CRD even suggested to Butler that constituency spirits were “relatively high, in striking contrast to the low morale at Westminster.”97 Of course, it was difficult for local members, even those who opposed Heath’s policy, to focus as intensely upon the issue as those incarcerated in the cockpit that Westminster had become in early 1964, and naturally there was the possibility that the CRD’s reading of the state of affairs was plain wrong. On the other hand, this assessment does not suggest a party in the clutch

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of internal warfare. Nonetheless, we should not discount opposition altogether, but simply note that it may have been less intense than commentators both at the time and later have been wont to claim. So, in different ways, the reactions to the EEC application and to resale price maintenance’s abolition both hinted at a considerable diversity of views in the extra-parliamentary party. They demonstrated, needless to say, the continuing relevance of die-hard opposition to modernisation, and yet also tantalisingly suggested that there was a constituency, although perhaps only a small one, amongst the grassroots that yearned for a bolder and more radical policy. The problem for the Government was how to motivate this constituency without alienating the larger traditionalist one.

Modernisation Rejected? To examine the resistance to modernisation as a whole returns us to the question that was posed in the first chapter: ‘what is modernising Conservatism?’. It has been argued that this was not a philosophy drawn from clear and eternal principles, but rather is best explained by a twofold division. Firstly, it exhibits its greatest coherence when viewed as a governing strategy that had as an essential precondition a particular mindset: a willingness to use the state to foster major political, economic, and social goals such as full employment, social amity, and, from 1961, faster economic growth (plus an assumption that the market alone was unable to deliver those objectives). This did not mean unabashed dirigisme in the socialist manner, though many right wing critics were prepared unfairly to characterise it as such, particularly from the 1970s; rather it implied the appropriate use of the state to secure these ‘goods’ both because of their intrinsic value and because their achievement was viewed as necessary to perpetuate the Conservatives in power. After the 1959 election, this way of thinking led, as we have seen, to the adoption of a (sometimes radical) modernising strategy linked to economic growth. Secondly, and more loosely, modernisation was a useful theme to link together, both rhetorically and practically, several policies that gestated at different times and which for their success were highly conditional on many elements, from major institutional support through to ministers’ personalities. Even here there are problems, as, except when a party first takes office, modifications to policy direction are not generally publicly announced; different stages of a government’s political evolution slide unevenly, but often quietly, into one another. If in early 1961 Harold Macmillan had announced, in vaudeville style: ‘Ladies and Gentlemen, I give you… Modernisation’, how much easier life for the historian. By the same token, opposition to the concept of modernisation (as opposed to its discrete

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components, like EEC entry) at grassroots’ level could be but erratic and inchoate. There were alternatives to modernisation, of a sort, available: the old certainties of the Salisburian right touched an especial chord with many, whilst the abrasive doctrines of Manchester Liberalism’s natural heirs offered a challenge on issues of economic management in particular. If there was on occasion much overlap between these two positions–for example, over union reform or welfare expenditure–there were considerable divisions too.98 One of the strongest pushes to abolish rpm had emanated from the free market soothsayers at the IEA, of course, whilst Empire and Commonwealth were in no way essential ingredients of the neo-liberal creed; in fact, they were more likely to be viewed as ungainly encumbrances to the UK’s economy. Furthermore, it is difficult to see how those on the genuinely libertarian right could have had much sympathy with the state interference in personal morality implied by campaigns such as that against ‘dangerous’ drugs.99 No authentic fusion (in political terms) between these tendencies occurred until, arguably, the late 1970s. As remarked upon earlier, though, it is distinctly unlikely that large numbers of grassroots’ Tories swallowed undiluted either of these prescriptions. Instead, what emerges from the glimpses of rank-and-file opinion on the matter of modernisation is a generalised suspicion that what the Government was doing was, in some indefinable manner, ‘un-Conservative’.100 In circumstances wherein the Conservatives could be seen to be fully in control of events and exercising a measure of “competence and flexibility” in government, they would continue to win elections and gripes such as those expressed frequently over decolonisation, the unions, and government expenditure would be of trifling importance.101 Or at least that was the view, supported by the Party’s increasingly sophisticated apparatus for the analysis of opinion polls, taken by the ‘progressives’ at the centre.102 That might have been so, but the patina of competence and flexibility had become tarnished, as we saw in the third chapter, in consequence of the balance of payments discrepancy in March 1961. The odd blemish was one thing, but the introduction of the ‘pay pause’ in July was quite another. It ate away rapidly at the Party’s support amongst the electorate whilst raising considerable hackles at constituency level. Constituency associations did not habitually engage in policy discussion, although it has been noted recently that this became a little more frequent after Churchill bowed out as PM.103 However, amongst the usual deliberations on jumble sales and raffles, occasional bubbles of resentment would rise to the surface in association minutes, such as this after Orpington: The pay pause has been very unpopular… People are rather fed up over the EEC and Africa… It is to be hoped that the Government will now do something to put

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people’s fears at rest and encourage them to keep faith… Orpington may well make the Government realise how people have been feeling.104

The CPC discussion groups also followed this pattern–most declared in “highly critical” tones that the policy was “unfair in its practical application” and should not have been necessary in the first place.105 Even the Party’s normally supine Trade Union National Advisory Committee (TUNAC) passed a motion disparaging Lloyd’s action on the matter of wage “freezing”–arguing that it endangered the principle of free collective bargaining.106 There was little doubt in the Party Chairman’s mind, after the disaster in Kent, that the main cause of disquiet was the pause. In his address to the 1922 Committee on 22nd March 1962, he claimed that it “was wholly right, but very unpopular… There was a feeling that the very rich and the Unions could opt out and the middle classes had been sacrificed.”107 Macleod identified precisely the misgivings that were contaminating constituency parties, but he was incorrect in his inference that the pay policy was the source of the Tory mittelstand’s belief that it had been unreasonably squeezed. Whilst the July measures may have drawn these concerns to the surface, it was only superficially their cause. Instead, the opposition to Lloyd’s wage freeze was of the same coin as that sentiment which had inspired the emergence of the MCA in the mid-fifties, and had more recently been expressed in the annual grousing about trade union practice at party conference. It was the habitual reaction of “threatened, beleaguered, demoralised property owners” who had been “sandwiched between an over-mighty state and an ever more militant working class”.108 This may have been but one step away from Poujadism, as in Orpington’s aftermath Macmillan had feared and Salisbury had hoped; yet it was no less keenly felt for that.109 For those disposed to this point of view, as each new block of the modernisation strategy was stacked up, the sensation of being crushed increased. In the face of such apparently overwhelming condemnation from the Party’s roots, it may seem surprising that the modernising statecraft strategy was not abandoned or ameliorated. This would be, again, to make the mistake common in the high political ‘Westminster model’ that governments have unlimited room to manoeuvre.110 As we have seen, the establishment of an institutional consensus that would make modernisation possible had been protracted and difficult, to tear it apart would have probably made governance impossible; likewise, a powerful administrative combination had built up in Whitehall behind the several strands of the strategy, not least on the Common Market application. To these real constraints, we have to add the modernisers’ instinctive predisposition against the recidivist remedies offered by neo-liberals or the Conservatives’ imperial wing. Growth-through-modernisation was the only strategy available to the Government. From the leadership’s standpoint, there was no alternative to its pursuit in the hope that it would deliver the

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intangible good–a credible image of competence and flexibility–that would persuade sufficient people to vote Conservative that the objections of a fractious and vocal segment of the Party would be rendered electorally irrelevant. By the summer of 1962, the pay pause had withered into the feeble ‘guiding light’, the trend of opinion on the EEC was distinctly drifting to the ‘antis’, and tripartite planning, though it had been immensely successful in facilitating constructive dialogue between the peak institutions of labour and industry, had failed to bring wage deliberations within its institutional precincts.111 On top of these unhealthy developments, or more correctly in part because of them, came Macmillan’s 13th July Cabinet surgery. Astonishment may have been the usual response from the press and MPs, but the horror of Tory activists was matchless. Selwyn Lloyd’s wage freeze might have been disliked, but, in the eyes of the average member, the manner of his dispatch at the PM’s hands was positively caddish. He had also been perceived as likely to act as a brake on the more outlandish forms of modernisation (this perception the grassroots shared with the Prime Minister: it was, indeed, one of the reasons why Macmillan fired him). Sensing unrest in the ranks following the reshuffle, Macleod had written to all constituency chairmen to drum up support for the EEC negotiations and the Cabinet’s reconstruction, but also to warn: “It is all too easy to slip into purely destructive criticism which has a weakening effect on the morale of our Party.” In a revealing illustration of the trough into which the constituencies had plunged, he was answered brusquely by Joe Harvey, Chairman in the Wirral: The chief task of Conservative leaders in this Division is to prevent the feeling of intense resentment [towards the Government] from growing into something far more serious and it can be truly be said that it was Mr. Lloyd’s statement… of complete loyalty to the Party which had the greatest bearing in avoiding an open revolt… In all the circumstances it would appear to me that less annoyance would be caused in future were your letter not to remain on my files and it is therefore 112 returned.

Truly, the executive was becoming more remote from its supporters in the country. Even stage-managed events like the annual conference could provide opportunities for criticism, as the repeated debates over Butler’s Home Office reforms proved. Any examination of records of these occasions, though, could generate the impression that serious criticism was confined to a minority of strident traditionalists on a few discrete issues. Attacks on the overall direction of policy appear to be largely absent. On the other hand, Richard Kelly has observed, in relation to the Thatcher period, that conference pleas for more information or better communication were, in actuality, often coded denunciations of policy under the guise of attacks on presentation.113 The same point holds true of the

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1960s. A splendid example is provided in the motion carried at Llandudno in 1962 which implored the Government to explain more fulsomely its policies “in simple language” and to establish “more direct contact” with the electorate.114 Almost certainly a considerable number of local members, as we observed in the case of the EEC negotiations, felt as if they had been cut adrift from the administration, but this motion implied a much wider sense of unhappiness–they remained utterly unconvinced of the need for modernisation. After the European project’s collapse, such objections came more frequently and increasingly appeared at higher levels of the Party. For instance, a motion insisting upon the “introduction of Government policies firmly based on Conservative principles” was carried by a substantial majority at the 1963 meeting of the National Union’s Central Council.115 In comparison to the Llandudno resolution, this was disguised very thinly, mordantly suggesting that recent policies had been based upon something other than Tory principles. Macmillan brushed off this rather large fleck of criticism with typically studied aloofness. “Conservative philosophy and Conservative principles must, I am sure, form the essential basis of all our policy, and not least in our attempts to adapt our country to the constant changes of the modern world,” he suggested, deliberately countering the sense of the motion with a small but calculated allusion to modernisation.116 He returned publicly to this theme in his introduction to Acceleration (even the title must have sent shudders down traditionally stiff spines), a CCO pamphlet prepared for the 1963 conference, which was composed in the spring of that year. Macmillan’s piece can be read as a rallying cry typical of this kind of publication, or it might be more fruitfully interpreted as a defence of his brand of modernising Toryism in the face of increasingly acidic attacks from below: What we see ahead of us now is a new Britain, sensibly conserving all that is best in its traditions and values, but radically uprooting all that bars the path to progress… National unity does not happen of its own accord: that was the mistake of laissez faire liberalism… What is required is the development in our country of a true economic democracy where planning takes place by consent and all concerned… work together for the common good. These are the true principles of 117 Conservatism.

It would have been easy enough for many traditionalists to caricature this as ‘pink’. Macmillan’s contempt for that strand of criticism, to which he was subjected throughout the final three years of his premiership, plus his refusal to ditch the modernising programme or even to resurrect old but popular ideas like the Commonwealth, rather failed to endear him to a large proportion of the

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extra-parliamentary Party. In contrast, Alec Home’s move to Downing Street was generally a matter of some considerable delight for this group. Unfortunately, such contentment did not last very long. Home’s administration, though it did adopt some measures that pleased traditional elements in the Party’s support and softly shifted its rhetoric away from the alarming images of “radical uprooting” in which Macmillan had late indulged, absolutely refused to jettison its commitment to modernisation, as the rpm question served to confirm. To some extent this was because Sir Alec did not take charge of policy-making to any significant extent. He was in thrall to major political figures such as Butler, Maudling, and Heath who were clearly struck from the modernising iron. They in turn relied heavily upon the channels of advice coming from especially the Research Department. Sir Michael Fraser’s stream of memoranda that poured from Old Queen Street throughout election year and which urged more keynotes of modernity in ministerial speeches, fresh and lively policies, and the vigorous trumpeting of modernisation’s achievements to date was extremely influential.118 Fraser’s argument was consistent and, given the trend of the previous four years, difficult to counter: “We will not be defeated because we are controversial. We will only be defeated because we are boring. We must not therefore be afraid of taking decisions between now and an election.”119 Not being boring might have been too much to ask for, but the electoral logic of Fraser’s argument was unmistakable. There could be no turning aside from the inexorable advance of the modernising tendency so late in the Parliament: it was impossible, if the Party was to hold together, to switch the Conservatives’ statecraft strategy from modernisation and growth to some form of traditionalism or resistance to cultural change. (Fraser was, naturally, far from neutral on this point: after all, CRD had staked much upon the identification of modernisation as the theme most likely to bring rewards at the ballot box, and Sir Michael himself quite clearly shared the modernising mindset.) Thus October’s election had to be fought, at least in part, upon a platform of modernisation. As the next chapter describes, the executive’s real difficulty was not choosing between radical modernisation and revanche Toryism, but deciding how wholehearted its commitment to the former ought to be.120 It was not all bleak for the traditionalist tendency, however. Extra-parliamentary activists did achieve some notable successes in shifting the executive. They may not have forced the Government to abandon voluntarism in regard of the trade unions (though they came close in the midst of the rpm dispute), nor were they able to overturn the shibboleth of welfare universalism, shore up the empire, or defeat Beeching’s modernisation plan, but, when they did not have institutional opposition ranged against them, they could produce results. Pressure from the floor at the 1961 conference, for instance, was probably the largest single reason that obliged the Government to introduce the Comm-

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onwealth Immigration Act the following year; whilst their efforts were also invaluable in bringing about ‘moral’ measures such as the first legislation against the ‘drug craze’.121 But though they achieved occasional success in the area of social legislation, they could not reverse the economic and industrial facets of modernisation. That they did not suggests their relative weakness against what Hugh Pemberton has termed the “policy network” in which, from 1961, the modernisation programme was cradled and nurtured.122 Whether the latter approach was necessarily appealing when tested in the fire of a general election, was another matter.

CHAPTER SEVEN THE CRUCIBLE OF MODERNISATION: THE GENERAL ELECTION OF 1964

Fashioning the Manifesto. In truth, the general election campaign had already begun by the time the announcement of polling day was made on 15th September 1964. The DouglasHome Government had been forced to run a campaign of sorts almost from the moment of its inception. Practically, this meant that many of the contest’s themes were already clearly apparent. In terms of the general public’s impression of the issues which would be of importance in deciding their votes, however, modernisation made a relatively late impact. When NOP asked this question in February, July, September, and October the matter of overwhelming concern on each occasion was the cost of living: in February modernisation barely registered.1 By October, however, 16% of NOP’s sample (21% of men) cited modernisation as an issue of importance to them. This outweighed the numbers who considered national defence or foreign policy, both areas of especial Conservative strength, to be a crucial influence on their voting resolution by 4% and 6% respectively.2 Modernisation, as previous chapters have amply demonstrated, was an enormous issue with considerable potential to have signified many different things to voters. But its rising prominence between early 1964 and polling day might have indicated feelings of distrust towards modernity just as well as wholehearted welcome. It is in this light that NOP’s findings should be approached. Nonetheless, the dramatic rise in the profile of modernisation, coupled with the knowledge that its tint coloured many other policy matters for both major parties, suggests that, if only implicitly, the issue was of deep electoral importance. Perhaps modernisation was always intrinsically of more consequence to politicians than to the electorate: they were, after all, in theory more likely to see how the sinews of the project ran through different areas of policy. Conservative candidates, for example, made reference to modernisation in their election

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addresses in about 58% of cases.3 Most such references were broadly positive, though it would be possible to argue that more traditionalist candidates took advantage of the supposed ambiguity brought about by Alec Home’s accession to the premiership to avoid tackling the subject. To give a far from exhaustive list, modernisation was variously associated with: reform of the trades unions; more competition; more planning; the development of science and technology; more housing developments using the new techniques of industrialised building; automation; Beeching’s railway plan; expanding the police force; consumer protection, and regional development. This gives at least a glimpse of how wide the boundaries of the modernisation project had been drawn. For example, Macclesfield’s candidate, in the spirit of Edward Heath, saw modernisation in terms of creating a competitive industrial framework: “We must strengthen the Monopolies Commission, expand the progress of automation and hold an early enquiry into the law affecting Trades Unions and Employers’ Associations.”4 Meanwhile, Peterborough’s MP advocated more powers to the NEDC for effective planning, whilst candidates in Chichester and Henley (amongst others) were concerned to stress the enormous amount of state expenditure under the Conservatives to improve British infrastructure, construct new hospitals and schools, and expand university education.5 The slant put upon modernisation by different candidates is enlightening. It does more than provide an example of diverse approaches to local electorates, depending on the perceived leanings of each; it is also indicative of the fault lines and misunderstandings that existed within the Tory Party on the subject. For instance, it might be expected that election addresses accenting the recent growth in state expenditure would have emanated from marginal constituencies, yet both Chichester and Henley were safe Conservative seats. Although Central Office provided a blueprint for election addresses, its basic outline was subject to extensive bespoke tailoring at least as likely to reflect candidates’ actual beliefs and perceptions of policy– albeit within the confines of the manifesto–as the expected aspirations and preferences of local electorates. In this context, it becomes clear that the idea of what modernisation was (or ought to be) was disparate even amongst prospective Tory MPs. Though only approximately 1% of candidates mentioned the abolition of rpm, those that did were sharply divided. The most significant modernising measure of the Home Government was lauded in Stafford as the first major step against monopolies and restrictive practices.6 On the other hand, Hove’s MP was at considerable pains to point out that whilst he supported fully industry’s modernisation, he had opposed the destruction of price maintenance. “In Hove the small shopkeeper is an essential part of our life,” he asserted, “I want to protect him from the big boys.”7 With the exceptions of rpm and the railway closure programme, though, the different concepts of modernisation advanced in addresses were not in serious conflict. But the manner in which

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most candidates simply picked out those elements which most appealed to them and ignored others, rather than acknowledging that modernisation was (or ought to have been) the programme’s entire rationale, is suggestive of a lack of understanding on the part of Conservative candidates of the centrality of the idea to the campaign.8 If clarity was lacking amongst Conservative candidates, were the higher reaches of the Party any more translucent? As has been noted, Douglas-Home’s pursuit of modernity was not vastly dissimilar to the trend of policy under his predecessor. Yet because modernising Conservatism had been so completely Macmillan’s progeny the lines of strategy were relatively clear until late 1963, now they were less so. Home’s temperament and methods of managing policy discussions meant that, throughout his premiership, a variety of ideas concerning the content of the modernisation portfolio were allowed to surface. Though these many suggestions were rarely contradictory, they were, like the initiatives advanced in election addresses, of vast and often confusing scope. Home had neither the broad conceptual grasp nor the charisma of Macmillan: both were required to create any sort of structure around the bundle of suggestions with which he was faced and to sell them to the electorate. Reading Prosperity with a Purpose, the Conservative manifesto, gives a clear idea of how the thread of modernisation touched all areas of policy, but just as apparent is the failure to seize it as a radical theme: Douglas-Home’s introduction did not even mention the word.9 It was easy for Conservative candidates to cherry-pick those ideas that stimulated them most and to present these to the electorate in rather more bullish terms than the manifesto offered. Hence, for example, “we intend to press ahead with negotiations for the Channel Tunnel” became, in the hands of the Member for Stafford, barely short of a commitment to start drilling.10 Discussions over the manifesto’s content were conducted–as perhaps one would expect given the opportunity it afforded for Whitehall’s Departments to advance, through their ministers, their own agendas–as a brain-storming operation. Home was keen moreover to bring in fresh thinking from a variety of sources. Outsiders like Enoch Powell were permitted therefore to offer suggestions on the draft; though there is little evidence that Powell’s submissions were taken up. The most radical ideas, however, emanated from the powerhouse of modernising Conservatism, the CRD; although many of its proposals were resisted by the ACP, which was also invited to review successive drafts. These various streams of opinion were channelled and assessed by the Cabinet’s Steering Committee, which held ultimate power of decision over the programme’s contents.11 Manifesto creation was thus a multi-level process of input and negotiation, which was capable of generating a large number of innovative ideas quite rapidly. In the first round of suggestions Quintin Hogg wanted the creation of a completely new technological university, whilst to

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counter the Labour Party’s proposal for a ‘University of the Air’ (which proposition, though it did not in fact make the 1964 Labour manifesto, eventually became the Open University) Reggie Bevins, oddly prefiguring the anxieties expressed by Mary Whitehouse’s CUTV organisation about the television schedules, advocated speedy expansion of BBC2 and the reform of ITV in order to offer more educational programmes.12 Ideas which sprang from the CRD’s manifesto group were, naturally, the most in tune with the modernising drive. The cultural changes that were, in Ted Heath’s words, “beginning to invigorate the country” were tackled directly in several of Old Queen Street’s submissions to the bartering process.13 Endeavouring to catch the tenor of the times, they offered suggestions from an eclectic field, including the removal of specific legal barriers to women, such as limits on their guardianship rights of children; decimalisation of coinage; raising the school leaving age; a law to protect the consumer from door-to-door hawkers, which menace the CA had highlighted consistently since 1960; and even the “concession to liberal opinion some legislation against racial incitement.”14 Unfortunately, most of its proposals were jettisoned in consequence of their very radicalism. Illustrative of this was the proposal to expand sound broadcasting with the provision of more radio channels, either commercially or through the BBC. Radio Caroline’s launch, in April 1964, had proved that there was unquestionably a market, amongst youngsters at least, for additional radio channels. Public opinion polls seemed to indicate also that there was some public desire for extra channels to offer listeners greater choice.15 Several Conservative MPs had, furthermore, a stake in the pressure group the National Broadcasting Development Committee, which was pressing for major enlargement in this area.16 A meeting of the Party’s Broadcasting Committee in May had dismayed the Postmaster General exactly because of the number of backbenchers who favoured Radio Caroline’s continuance. In a report to the PM, Bevins exclaimed incredulously: “some even suggested that Radio Caroline should be encouraged. They seemed indifferent to … the consequences of their attitude.”17 It seems that the introduction of wider sound broadcasting, then, would have attracted support not just from the young, but also from commercial interests and not least from within the parliamentary Party itself. It was also wholly in harmony with the administration’s modernisation policies. It not only would have caught the wind of cultural changes and provided a means to lever the youth vote back into the Conservative camp (the support of which group Home felt his Party had “forfeited”), but would have broken also the BBC’s sound broadcasting monopoly and stimulated competition, an approach fully consistent with that of Churchill’s Government in creating independent television in 1954.18 Yet the manifesto simply mewed weakly that the Conservatives would be “considering proposals for… a system of local sound radio.”19 Why was such a promising

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scheme relegated to the status of an after-thought? Something more than public disapproval of Radio Caroline–30% of a Gallup poll in mid-1964 expressed hostility to the pirates–affected the promotion of liberalisation.20 The Postmaster General’s exasperation at the Broadcasting Committee’s attitude provides a more promising clue. A certain type of Tory thinking, not uncommon amongst traditionalists, had always supported the paternalist BBC and had rejected the ‘vulgarisation’ and ‘Americanisation’ of broadcasting that had been unleashed in 1954. 21 In line with this viewpoint, Bevins was not an enthusiast of commercial broadcasting and was generally wary (as were many Tories) of antagonising the Corporation. He had, for instance, vetoed a petition on the part of the ITA in June 1964 for an increase in ITV’s permitted broadcast hours both because it would “upset the BBC” and on the grounds that he was “not convinced that there was enough good material available. Present programmes did not suggest there was.”22 His own suggestions for manifesto content, as indicated above, pointedly contained no mention of inaugurating an expansion of radio programming, commercial or otherwise. But if opposition from the Minister who might have been required to pilot any proposals through the Commons was the major obstacle to a more adventurous line on broadcasting policy, it was not the only one. Given that the Conservative Party, as we have seen, was riven apart by the termination of rpm, it could not afford to antagonise other potential sources of support. So it was, when, in the close aftermath of the Resale Prices Act, full Cabinet considered the problem of Radio Caroline. One of the major reasons for postponing action on Caroline and her ilk was that if the Government was to legislate to restrain the ships it would invariably increase pressure for alternative outlets of non-BBC sound broadcasts. Any consequent expansion in commercial broadcasting’s scope (particularly at the local level) would excite robust opposition from the provincial press, which would abjure the competition that local radio would offer.23 Local newspapers were not invariably Tory, of course, but as the main propagators of issues of community importance they played a significant role in the fashioning of public opinion, and most carried influential leader columns. The Conservatives would have been unwise to excite their disapprobation; thus the manifesto commitment was hedged. This was sound electoral strategy, even if it detracted from the manifesto’s commitment to modernisation. Many local papers had been displeased about the abolition of rpm: to unwrap the freshly bound wounds of that campaign would have been, to say the least, strategically naïve. The approach realised a dividend in delivering to the Tories the support of the majority of the main provincial titles, especially the Birmingham Post, Western Mail, Yorkshire Post, Glasgow Herald, Evening News, and Evening Standard.24 On the other hand, it also represented a defeat for those urging radical measures on the Party to counteract the Labour accusation that it had run out of ideas.

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Personal intervention in this case denied the Conservatives a singular policy (Labour offered nothing in its manifesto). Yet it was the old Treasury obsession, the issue of cost, that was most frequently the primary reason for discarding any dangerously novel departure. The Minister for Public Buildings and Works suggested constructing a showpiece new town by entirely modern methods, i.e. systems building.25 Initially this idea seemed to have a substantial measure of support from both Home and the Housing Minister, Keith Joseph, who maintained that the Government should be shown in the manifesto to support the “maximum use of system building”. (Though, with one eye on the popularity of such a enterprise, he did add the sensible Tory caveat that an entirely modern town could arouse public hostility because it “may invoke a ‘pre-fab’ image and there might be the strongest objection to thus making a guinea pig out of a whole community”.26) The arid wording of the final document, however, contained none of this initial eagerness. Instead the entire issue was delegated to the local state and the industries themselves: “Through the voluntary consortia of local authorities and the National Building Agency, [the construction industries] are enabled to introduce up-to-date methods and techniques which save site labour and increase productivity.”27 Cost was the major reason for sidelining this idea. Shortly after Joseph’s paean to Rippon’s idea, Allan Noble (the Scottish Secretary) wrote to the Premier that “the costs of using non-traditional methods are likely to be higher in the immediate future…and therefore deficits on the housing account will go up.”28 This seems to have ensured that Rippon’s idea did not cross the threshold into the manifesto. Other progressive ideas met the same fate. The ACP was not the arbiter on which policies reached the pages of Prosperity with a Purpose, but since it drew its membership widely from a number of constituencies within the organisation its influence was still marked. Certainly, it could be relied upon to be a more effective barometer of general party opinion than any cabinet committee. Consequently its work on the manifesto–it was invited to review three successive outlines of the manifesto during 1964–was of pronounced import to its final contents. Though the 1964 ACP minutes (on this matter) reflect opinions voiced in discussion, not firm conclusions, and therefore it cannot be inferred that each was supported universally, nonetheless a measure of agreement was necessary for points to be noted in the first place. Under the severe eye of the Committee, measures like decimalisation and the televising of Parliament faced doughty resistance, whilst the CRD suggestion to introduce laws against racial incitement was, by general consent, returned to Cabinet with a waspish recommendation that it be struck from the draft.29 All of these proposals, on the Advisory Committee’s counsel, were eventually omitted from the programme.30 Fallout from rpm’s abolition could also be discerned in the ACP’s attitude. One of the palliatives offered to ensure the passage of the Resale

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Prices Bill, as we have seen, was the reform of store opening times to enable longer shopping hours. This would have been thoroughly in step with the modernisation of distributive trades already begun with rpm’s removal. As the final publication acknowledged, such a move would also have been popular with “working women”: Which? found, for example, that over three fifths of its female subscribers wanted extended evening shopping.31 Although the executive had seen this as a sweetener for shopkeepers, quite the reverse was the case. The proposal was generally opposed by small retailers, who felt frequently that they were operating the maximum number of hours that it was humanly possible to do.32 The ACP showed itself to be more in tune with the feelings of the Party’s supporters in the country in recommending that, instead of committing the Conservatives to definite reform, as did the draft’s fourth incarnation, the manifesto ought simply to pledge a review of opening hours.33 The final document was shorn of any promise to dispose of the prevailing restraints. As earlier chapters have argued, there was barely a piece of the modernisation programme that did not conflict with at least one stratum of wellestablished Conservative support. The ACP in this case proved an useful opinion-divining apparatus–sending a series of warnings up through the Party, the main aim of which was to avoid further erosion of support by the adoption of policy proposals at odds with the feelings of grassroots’ traditionalist elements. As such, it impeded the adoption of more radical measures, already hobbled by personal interference and issues of state expenditure. Hence it was that the Conservative Party showed itself faint-hearted in its innovation as the election approached. Despite the seeming electoral imperative of this approach, not every member of the executive was content with it. Heath had played little part in the early drafting process of the manifesto, having taken an extended holiday in Spain after his exhausting battle to put an end to price maintenance. When, in August, he returned, his anger was almost immediately aroused by the (by now fifth) draft of the manifesto he was called upon to read.34 He dispatched an exasperated message to the CRD demanding changes and claiming that, even at the risk of alienating some colleagues, “what was needed was less of the lowest common denominator and more positive thinking”.35 It was too late, as Nigel Lawson (then a speechwriter at the CRD) patiently explained to him, “as too many people are too committed to particular sections of the early draft”.36 Though Heath’s impact on the final publication was limited, the incident is nonetheless enlightening as it demonstrates his continuing determination, undiminished by the rpm fracas, to be the genuine heir to modernising Conservatism within the Party’s upper echelons. Nor was Heath alone in his dislike of the enervating manifesto. The CRD was characteristically distressed at the lack of progressive ideas contained

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therein. Brendon Sewill thought that “the effect of the whole is soporific”, whilst Nigel Lawson remarked that the three main aims of the Conservatives, as laid out in the introduction–peace, prosperity, and freedom–“might just as well be the three main aims of the Labour Party, or the Liberal Party.”37 The CRD’s Director urged Home on a number of occasions to be more pro-active in the manifesto’s creation. In early June he warned the Prime Minister that “the press will say there is nothing new in it… it is necessary therefore that we should find a number of ‘novelties’ which may get in the main as a whole a better press.”38 After more than two weeks of negligible movement, he petitioned again. “We must have at least two or three novel and imaginative proposals to give us the headlines,” he entreated, “these should not be released early but saved for the manifesto.”39 Yet Fraser’s many pleas (and his notes to the Steering Committee on this theme continued throughout July) were suffocated. Where feasibly Macmillan might have intervened, Home’s ‘hands-off’ management style, coupled with his own preference for eschewing lavish promises to be delivered by a benevolent state, meant that he was not predisposed to interfere at this level. The Tory Party was fated to go into the election with any fire in its belly almost entirely dampened.

The Campaign’s Course. Naturally, once the campaign had begun the Conservatives closed ranks behind their manifesto. Though the forward-looking thread of modernisation ran virtually unbroken through the manuscript, the publication’s layout downgraded its importance. As the ACP had insisted, the Party’s defence and foreign affairs’ record was trumpeted, consisting in the first and largest section of the manifesto.40 The national campaign followed closely the manifesto’s example, with the Conservatives devoting more time to this policy area than any other single issue. There were sound electoral and strategic reasons for this. Consistently, polls revealed the Tories leading Labour in perceived competence in this area–NOP showed them ahead by a margin of two to one in September– but, perhaps more importantly, external affairs was the one topic on which Home, in marked contrast to Wilson (who had the clear edge in most matters), showed real strength and grasp of the issues.41 The campaign in the constituencies pursued similar lines: only 7% of Tory candidates declined to mention world affairs in their election addresses, the figure for Labour’s aspirant MPs was 22%.42 It is easy to say retrospectively that, in view of the public’s waning interest in foreign affairs as the campaign progressed, the Conservatives played this card too heavily–and, drawing on hindsight, this is precisely the conclusion that the ACP’s election post-mortem came to in the aftermath of the Labour victory.43 In reality, given their leader’s natural preference to fight on

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this issue, the paucity of their manifesto when it came to genuinely innovative ideas, and the lack of detailed poll data which would have enabled them to draw this inference in the midst of the campaign, they were left with little choice but to try to drag the campaign onto ground on which they felt they had a reasonable prospect of winning.44 This is not to suggest that the Party ignored the issue of modernisation during the campaign. Rather, in the main, it was left to individuals other than the Prime Minister to carry the standard. The irony was that, although opinion poll data is not conclusive on the matter, the electorate appeared to trust the Tories rather more than Labour on the subject of modernisation. NOP discerned a consistent lead for the Conservatives on the question “Which Party has the best policy to modernise Britain?” from early 1964 onwards.45 By October, indeed, the Tories led Labour on this point by 16%, despite that, since Scarborough, modernisation had been made Labour’s touchstone far more than that of the Conservatives.46 Why did the Tory version of modernisation, given the Opposition’s more overt espousal of the cause and the disappointments of the manifesto for progressive Conservatives, garner a greater measure of support than that of the Socialists? Part of the reason lay in the very moderation of the proposals brought forward in Prosperity with a Purpose. There is no reason to suppose that a majority of the public was keen on radical modernisation: poll data tended to suggest the reverse in fact. Only 29.3% of voters, according to an NOP survey, felt that modernisation was “urgent”; amongst Conservative voters the figure was much smaller (16%). However, the moderately progressive policies of the Tories were perhaps more likely to appeal to the 51.7% of voters who believed, ostensibly, that Britain needed “some”, but not drastic, modernisation.47 This cleavage between what many ordinary voters (and sections of the Party’s grassroots) sought, and what the legitimate heirs to Tory modernisation–Heath, Macleod, Joseph, and so forth–wanted the Tories to champion, was merely indicative of the long standing tensions within the Conservative Party. However, for the course of the campaign, it was not the cautious, but the progressives who swallowed their misgivings in the service of procuring the Party’s re-election. Unlike their relatively unconstrained candidates in the country, the disparate views of whom we have already observed, Tory ministers were inhibited by the boundaries of the manifesto, their practical (and often Janus-faced) performance in office, and the need to genuflect in front of a wider audience. Though the Party had begun 1964 by advertising its deep commitment to modernisation through a goodly number of ministerial speeches, by mid-year the effects of the rpm crisis and the fear that, in a time of cultural upheaval, the programme was causing considerable anxiety amongst natural followers propelled it towards an alternative electoral strategy. This increasingly stressed the defence of the status quo, and the threat to prosperity posed by socialism.48

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Heath provided one notable exception to this attitude. His centre-piece article in the Daily Mirror a little less than a week before polling confirmed his dedication to modernisation in language quite uncharacteristic of the Conservative campaign as a whole. Although he promised nothing that could not be located in the manifesto, the boldness of his approach contrasted splendidly with the meekness of other Tory spokesmen, and–had any of them been predisposed to take the Mirror as their daily paper–would have made apprehensive rank-andfile traditionalists. “The Conservative Party is the party of change. While we have been in power we have transformed the face of Britain,” he asserted.49 He went on to detail the Party’s record in office and to offer some choice words on one of his favourite subjects, regional development: I want to see the guts torn out of our older industrial cities and new civic centres and shopping areas built there, the older houses torn down and new ones in their place.50

The piece was a remarkable statement of the President of the Board of Trade’s political philosophy; it epitomised the modernising attitude. Shorn of any special pandering to Tory interest groups, and firmly placing modernisation at the centre of the campaign, Heath’s argument rejected the view that Britain should recline comfortably into post-industrial gentility.51 It doubtless contributed to his image as a capable, assertive, managerial type, and proved that he, at least, was not keen on tacking to catch the wind of electoral popularity or to keep Tory traditionalists on side. Such conviction was to have critical influence ten months later.52 At the time, however, it was one of the very few genuine attempts to fight Wilson on the modernising turf that Labour’s leader had annexed to himself. Heath’s admirable refusal to trim won him a certain amount of praise in the press, particularly from heavy-weight advocates of modernising Conservatism such as The Times and The Economist, though his old antagonist, the Daily Express, largely ignored his contribution to the campaign. When The Times offered its heavily qualified support for the Conservatives on the day before polling, it was Heath whom they lauded, not his leaden colleagues. Its leader column remarked that the paper was offering its backing to the Tories “without much enthusiasm”. But it added the crucial caveat that “if Mr. Heath was leading the Conservatives against Mr. Wilson …then the answer could be more confident.”53 Though it was difficult to perceive in October 1964, this early support from elements of the serious press was to prove fundamental in Heath’s triumph over Maudling the following year.54 The Times’ vaunting of modernisation was, perhaps regrettably, unusual. In general, with the exception of the Daily Mirror, the tabloid and middle-market press was wary of its ramifications. The Daily Express published a telling

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cartoon by Giles in early October, in which a gypsy fortune-teller, confronted by a bemused client, offered the prophesy: “Whichever way you vote your job is about to be taken over by a computer.”55 Simplistic: yet it was precisely how a large portion of the public saw automation, a major component of economic modernisation. For example, three fifths of a Gallup sample taken a year before the election associated automation with “machines taking over jobs”. Whilst this was not in itself necessarily a negative image, it is hard to imagine that no-one in this poll was concerned at the effect that the process might have on employment.56 Whilst this hardly connoted the spirit of Luddism, it did suggest that habitual economic certainties of the sort that price maintenance undoubtedly represented were fast becoming anachronistic. Such unease may also explain why, despite strenuous calls from the CRD to insert some positive references to computers and automation into the manifesto, the Party leadership permitted itself only one oblique allusion to these scientific developments in the workplace.57 Anxiety also stemmed from the accelerating pace of social change. Much has already been made of the moral panic that was the corollary of youth revolt, for example, but immigration, crime, and Labour’s proposals on the nuclear deterrent also posed a cultural threat to the traditional fabric of society and were hence sources of apprehension for a significant number of voters.58 Indeed in the minds of some Tories, the issues of criminal activity, delinquency, and immigration were so tightly bundled together as to be almost indistinguishable.59 For Charles Curran, MP for Uxbridge, lawlessness had been immeasurably compounded by immigration and youth violence. “Our moral mortar seems to be crumbling,” he concluded in an article for Crossbow.60 Views of this sort were not untypical of Tory voters’ concerns: it is interesting to note that, although in 1964 relatively minor matters in terms of national importance, at the time of the previous election these three ‘problems’ had not registered at all in opinion surveys. This change in perception hinted at the enormous upheavals that had taken place in British society in the five interim years. But it was also indicative of the increased amount of space devoted to crime and its associated dilemmas both in the popular press and serious organs of debate.61 (It is also possible that the excessive rowdiness of public meetings during the election campaign, particularly that held at the Birmingham Bull Ring, in which Home was literally howled down from the floor, contributed to this moral distress sufficiently to propel some electors into voting for the Government, as the nearest thing to a ‘law and order’ party.62) Significantly, in all of these areas, the Conservatives held a lead in the polls as to which of the parties was better able to deal with them.63 Conservatives were quicker to seize upon this residual disquiet than their rivals; indeed it was this perception that, in part, caused the manifesto to be framed in such coy terms. Had they been less restricted by the trend that had

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been established in the previous seven years and keener to cast off the freight of policy that Home had inherited from his predecessor, they might have managed to fashion a new strategy based upon a more thorough defence of the status quo. Though this chapter has been eager to demonstrate that the constraints on radicalism were severe, it is also valid to acknowledge that the inertia of the past and the requirements of electoral strategy also proscribed a programme of moral severity or wholesale resistance to cultural changes. It was a slender line to tread. One instance amongst many was Home’s speech at Pitlochry on 4th October, in which he was careful to promise “assured jobs” alongside “an up-todate Britain” and “an end to restrictive practices”.64 And in general, Conservative candidates were also unwavering in their commitment to full employment. Tory candidates were, needless to say, less constrained than the Cabinet. Their tendency to depart from Central Office’s blueprint for election addresses noted earlier was also very apparent in addressing the prevailing issues of moral anguish. To take the topic of immigration: whilst never quite reaching the pitch of hostility seen in the propaganda of Peter Griffiths, the candidate in Smethwick who unseated the sitting Labour MP (Patrick Gordon Walker) after running a staunch anti-immigrant campaign, many candidates had to bow to local pressure to calm disquiet. In areas such as Salford and Wolverhampton, which had seen relatively large influxes of immigrants, candidates were eager to parade their support for the Government’s policy of maintaining controls.65 “The result [of unrestricted immigration] is that these people immediately draw unemployment pay and live in squalid conditions. All the benefits which you pay for are theirs for the asking the day they land on our shores,” snarled the prospective Member for Salford West, in language that, by the end of the twentieth century, would be generally considered racist.66 Still others asserted the necessity of strengthening the deportation laws. More in line with the leadership’s line on the necessity for control, ironically, was Wolverhampton South East’s MP’s stance: “I am convinced that strict control must continue if we are to avoid the evils of a ‘colour question’ in this country.”67 Nonetheless, Powell’s peroration spoke to many in his locality (indeed, in the country) for whom the settlement of immigrants was simply another threat to civic society. The question also, belatedly, came to national prominence with Douglas-Home’s Bradford speech, in which (somewhat speciously) he claimed that, but for the Commonwealth Immigrants Act, something like a million immigrants would have entered the country.68 On this issue, Labour had no practical scope to attack the Government. Lest it should become vulnerable on the subject, the leadership had, shortly before its publication, agreed a caveat to be inserted into the manifesto: “Labour accepts that the number of immigrants entering the United Kingdom must be limited. Until a satisfactory agreement covering this can be

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negotiated… a Labour Government will retain immigration control.”69 Whilst this did suggest some realisation that insecurity over cultural transformation was a potentially potent election influence, Labour was as constrained by its past as the Tories.70 The fact that the Government, as distinct from its candidates and activists, was unable to make more headway on this subject was substantially because–having achieved, largely by default, an informal compact with the Opposition–it did not wish to employ an inflammatory issue as a tool to win the election. The importance of appearing to support established mores and defending civic society was, then, crucial for the Conservatives’ election chances.71 Although candidates had shown themselves more willing to grasp the nettle of immigration policy than their leaders, there was one question (though it touched many areas of policy) on which both the Party’s foundations and its apex were in concord: the requirement to attract the female vote. Women, seemingly, were likely to adopt a more traditionalist view than men and this worked to the favour of the Conservatives, it was presumed. Conservative women gave clear indication that it was moral issues with which they were primarily concerned in several law and order debates at annual conferences between 1957 and 1961; furthermore, it was predominantly women who were in the vanguard of the moral-rearmament movement and its offshoots like ‘Clean-Up TV’.72 There is evidence, too, that this gender divide went beyond these organisations. Butler and Stokes’ 1963 survey monitoring political change in Britain discovered that, although the majority of both sexes preferred to categorise themselves as “modern” in outlook, some 4% more women than men described themselves as being “traditional”.73 Similarly, the following year, when asked what qualities of the Conservative Party attracted them, women responded far more frequently than men that they liked that the Conservatives were not rash in their actions, and that the Party was traditional and patriotic.74 There is some evidence that this tendency also translated into effective electoral support–for example, the opinion poll lead that the Tories enjoyed on the question of which party was better placed to modernise the country was largely the consequence of women’s preferences.75 Likewise, Douglas-Home held a 9% lead over Wilson in popularity amongst women, and both Gallup and the NOP calculated after the election that women had voted Conservative in greater numbers than men–by margins of 5.9% and 4% respectively.76 Conservative candidates clearly had this gender gap in mind in their election addresses. Almost every married male candidate’s address carried a section penned by his wife, whilst many also reminded electors that their vote was secret. The rationale for this latter was that wives (in particular) would be more likely to vote Tory if they believed that their husbands would not find out. Sometimes this logic was even made explicit. “Most people give a great deal of thought to how they vote,” claimed Joan Hall,

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Barnsley’s Tory candidate, “this is becoming even more so with the dying tradition of… blindly following your husband.”77 There were, however, at least two female constituencies to which the Tories needed to appeal. Those concerned about declining morals were well catered for by the raft of legislation with moral intent passed between 1959 and 1964, but particularly that brought in under Home: the Obscene Publications Acts, the Drugs (Prevention of Misuse) Act, the Malicious Damage Act, the Street Offences Act, and so forth. This was the group that has been accurately and consistently identified by feminist historians of the left such as Beatrix Campbell.78 More recent and less partisan researchers like Ina Zweiniger-Bargielowska and G.E. Maguire have, however, noted that the Conservatives also attracted a relatively new female cohort: the comparatively affluent, modern, (often part-time) working woman. These historians have argued that this latter group were, in fact, moderately well catered for by the thirteen years’ of Tory rule, voting for the Party not out of “ignorance, deference or lack of sophistication”, but because the Conservatives were genuinely “more sympathetic than Labour towards women’s demands for greater equality.”79 This may well have been the case, but unfortunately in the 1964 election campaign the modern-minded group was less indulged than the traditionalists. Equal pay was being introduced in the Civil Service, but short of the lukewarm suggestions on shopping times and the announcement of a scheme to encourage married women to take up teaching jobs, the Tories had little new to offer in Prosperity with a Purpose. Once again, this was the result of caution winning out over radicalism. The CRD, and Michael Fraser in particular, tried to lead the manifesto group towards a more positive stance on working women, only to have the idea quashed by the personal intervention of the Secretary of State for Labour, Joseph Godber.80 Meanwhile, though Wilson was well aware of the Conservatives’ attempt to mobilise the female vote, short of a minor advertising campaign in mid-year and the launch of its own women’s broadsheet, Labour too failed to target younger women effectively.81 Labour’s neglect to submit any substantial policies of its own, as well as the traditionalist group’s numerical superiority at this point, no doubt helped the Government electorally. Curiously, it was the demolition of rpm that could have swayed the votes of younger working women toward the Tories, had the leadership been willing to make more use of it. As demonstrated in chapter six, there were some intimations that reform had been especially popular with this group. Nonetheless, although the Conservatives preferred to overlook the development, rpm’s demise still had a marked effect on the campaign.

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The Effect of Rpm’s Elimination. The abolition of rpm left its impression on the general election in a number of ways. Amongst the Cabinet, John Boyd-Carpenter suggested, sixteen years after the event, that it was the single most injurious event to the Tories’ re-election prospects, a view supported by Lords Hailsham and Home in their autobiographies.82 Such accusations have received some support from recent historians, notably Richard Findley. Findley builds a reasonably cogent case, rejecting the crude equation that the Resale Prices Bill led inexorably to electoral defeat, but nonetheless claiming that rpm’s abolition had a “pivotal impact” upon the Conservative Party’s “all-round electoral strength, in what was an extremely close contest”.83 Equally, Ian Gilmour and Mark Garnett, in their invigorating popular history of post-war Conservatism, describe the measure variously as “Sir Alec’s Poll Tax” and “electoral poison”.84 Evidence to support this conclusion is however, at best, mixed. The concentrated displeasure of some 450,000 small shopkeepers should not be minimised, but these people were unlikely to desert to Labour or the Liberals in a national election. In any case, their opposition must be contrasted with the numerous positive signs in opinion polls and elsewhere suggesting that rpm’s removal was, in fact, rather popular.85 A possible line of argument is that the rpm debacle delayed the Tory recovery until it was too late–as the Conservative measure did not begin any sustained climb on either of the main polls until after May–and certainly rpm was a major cause of the Cabinet decision to delay polling until October, to give discontent time to subside.86 Linked closely with this was the perceived electoral threat to the Conservatives from appearing quarrelsome. The degree of this concern can be ascertained from Lord Poole’s letter to the Party Chairman of 2nd April, in which he was at pains to call it to Blakenham’s attention: “[rpm] has done the party much harm, not because of the contents of the Bill but because of the impression of disunity which has been presented to the general public.”87 Injury had certainly been done to the Party’s image; a Gallup poll found during the campaign that only 46% of the public thought the Conservatives to be united (in contrast to the 1959 election when the same indicator showed 61%). But the Tories were still better off than Labour, which scored only 38% on the same question.88 Besides, it was simply not the case that disagreement within the Party had only surfaced with Heath’s attack on price maintenance. As we have observed, the Conservative Party had come to look disunited much earlier, largely in consequence of the grave fissures that opened up over various aspects of the modernisation strategy. On top of this, the unsightly leadership struggle of the previous autumn had solidly underlined these tensions. By the time that that Resale Prices Bill was introduced, the sensation of internal conflict was already imprinted upon the electorate’s thoughts. So, whilst some very tentative suggest-

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ions can be made as to rpm’s direct electoral significance, to claim that the issue was the biggest contributor towards the election’s loss is greatly to exaggerate its influence. The genuine importance of rpm was that it proved to be a paradox. On one hand, the passage of the Resale Prices Act confirmed that modernisation had not been abandoned in the passing of Macmillan, and hence ruled out the option of quietly forgetting about it and instead adopting an agenda more pleasing to the Party’s Salisburian wing. On the other, although it was the last major measure of economic reform of the Tories’ years in office, one that could have been satisfactorily employed as a catalyst for a more radical programme of modernisation in the manifesto, its perceived divisiveness meant that it could not be exploited in this fashion for fear of exciting more conflict. Indeed, except for one cursory sentence in the manifesto, it appeared that it could not even be mentioned. Hence the concerns about party unity that abolition brought to a head were vital: not in deciding which way the voters would swing, but in ensuring that the modernisers in the Party could not effectively present rpm’s rescission as the first stage of a project to drive down prices and to increase industrial efficiency through a more rigorous attempt to unbridle competition in private industry. Whilst some, although desperately few, Conservative candidates made this connection in their election addresses, the hierarchy was constrained from even broaching the matter. Thankfully for the Conservatives, the Labour Party was unable to extract any political mileage from this lacuna in its rival’s programme. Its manifesto, too, mentioned price maintenance in only one sentence: stating that “tinkering” with rpm hardly bore comparison with the Labour Party’s approach to the entire problem of inflation, which would be attacked, it was maintained, “at its roots”.89 (Of course, the elimination of rpm was not devised only to combat inflation, but one could hardly have expected the Labour Party to make its opponents’ case for them.) There was little point in raising rpm as an election issue from the Opposition’s point of view. Labour’s leadership had supported its removal in principle, and the opportunist tactics used by Labour MPs over the ‘chemists’ amendment’ during the Bill’s committee stage could easily have redounded to their discredit. An absence of Labour criticism, however, meant that ministers were not called upon to make any defence of their action (save two minor allusions in Conservative political broadcasts on TV). 90 Hence they were denied a further opportunity to demonstrate their modernising credentials, though in truth they would hardly have relished it.

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Ramifications. With the benefit of substantial hindsight, Conservative Party managers suggested that the election defeat had been primarily because the Party “was not completely succeeding in its appeal to new classes of voter who were expecting the pace of change and material improvement to be maintained.”91 This belief, and its seemingly inevitable counterpart that the Party would have performed better in October had it been stronger on the theme of modernisation, arose from the post-mortem undertaken by the CRD’s psephology section.92 It was also the view openly and vigorously shared by Heath.93 When Parliament re-assembled, he was charged with Butler’s erstwhile role of chairing the ACP, and used its first meeting to advance this explanation and argue his preferred remedy: the evolution of policy through a number of closely focussed groups undertaking detailed work in at least five main areas.94 More generally, it reflected a feeling that the progressives had somehow been unwilling–so close to an election–to press the case for modernisation, either in its Macmillanite incarnation or in some other format, hard enough. The argument carried acute potency in the Party’s post-defeat slump, indeed it can be understood as one of the main reasons for Heath’s victory over Maudling in the 1965 leadership election. However, this line of reasoning rested on two assumptions which were perhaps questionable. The first was that Conservative traditionalists would still vote for the Party even if it pursued a more radical version of modernisation than that to which it had adhered in Prosperity with a Purpose. This piece has observed throughout how deeply different aspects of modernisation affected, indeed damaged, traditional Tory constituencies. To open these lesions afresh would probably not have driven Conservatives of the traditionalist right into the arms of Labour or the Liberals, but they may have stayed at home, spoilt their ballot papers, or could have been steered towards voting for one of many independent candidates which began to appear in the 1964 election.95 Often overlooked in assessments of this kind was the extent to which, as his most recent biographer has put it, the Earl of Home appealed [To] a generation that had folk memories of the pre-1914 world. This numerically significant constituency … was part of the age in which he had grown up, people for whom decency, patriotism, integrity and restraint were accepted and expected standards of behaviour…96

It seems likely that Home managed to prevent many of these people from deserting the Party when a more buccaneering approach to modernisation would have driven them elsewhere.97

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The second assumption, intrinsically associated with the first but more telling, was that, irrespective of whether a more radical version of modernisation would have drained traditional reservoirs of support, the Tories had modernising zeal open to them as a credible option. The impact of rpm’s abolition has already been discussed in these terms; the discord that it provoked effectively circumscribed the Party from adopting more radical measures. Furthermore, it has already been argued that the presentation of policy under Home took on a moral tone in some areas, seemingly at odds with the cultural trends with which the Government was trying to come to terms. This rhetorical stance, with its appeal to those who considered themselves the moral guardians of the nation, could scarcely have been ditched in favour of a new emphasis on hedonism. A younger Macmillan might have been able to pull it off, but it would have been astonishingly out-of-character for Home to become some kind of Crosland of the right. In any case, 1964 had highlighted–with the launch of CUTV, the reaction to the mods-and-rockers riots, the recurring evidence of opinion polls–the potential electoral popularity of a moralist approach to issues which ostensibly threatened social harmony.98 It was apparent even before the election campaign began that such issues were of particular importance to (particularly slightly older) women voters, hence the Party’s strong, and well rewarded, petition for the female vote. To ignore the implications for strategy that these issues had demonstrated in the previous twelve months would have been foolish indeed. And, quite apart from these concerns, there remained the problem of Home himself. The EEC veto left modernisation without an external engine, and the Prime Minister’s palpable ineffectiveness on domestic affairs meant that it was always unlikely that he would lead on this issue. Add to this the difficulties revealed in framing the manifesto and it is evident that the scope for a genuinely different strategy dictated from the top was decidedly slender. From the moment that the rpm issue was detonated, if not before, it was almost certain that the election strategy would have to negotiate the middle way between modernisation and traditionalism. What was required was a leader who could stand athwart the two camps: reassuring the old school Tories, whilst simultaneously urging on the modernisers. Unfortunately, the existence of such a creature was the stuff of mythology. In fact, Sir Alec did arguably no worse in this respect than any other serious contender for the leadership would have done. It is difficult to imagine the bombastic Hogg or the lugubrious Butler uniting the Party any better in 1964, still less Heath, whose touting of the modernisation standard made him (at this point) a most unlikely binder of Conservative wounds. It remained, though, that the Conservatives’ thirteen years in office had ended, and the conclusions drawn from the experience of 1964, harsh though they may have been to some of the major protagonists, provided an impressive

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springboard for the modernisers in the next two years.99 In particular, they offered Heath the opportunity to situate himself ideally for the Party leadership and, even before he became leader, to inaugurate a policy experiment which would propel the Tories’ modernising agenda into new areas. But these developments did not necessarily follow the path that had been initially beaten in the first three years after the 1959 election; with the result of the October 1964 election, the Macmillanite version of modernising Conservatism was effectively at an end.

CHAPTER EIGHT CONCLUSION: REFLECTIONS AND LEGACY.

Reflections on ‘Modernising Conservatism’. Any explanation of modernising Conservatism is bound to be incomplete. Even a survey of this nature that concentrates upon only a few strands of the project cannot provide a comprehensive description. And the problem of modernisation’s scope is not the historian’s chief one. For the participants, close up to the events that brought the strategy into being, many of the broad lines that have been drawn here would have merged with the routine business of politics. Uncertainties, to paraphrase Jeremy Black, are the constant companions of actors in the political realm, no less than they are to every human being.1 Anxieties and doubts about unemployment, institutional non-compliance, and election defeat hung sullenly over the actors in the pages of this study, conditioning their reflexes and determining the frame of mind of each. The historian may yearn for a Lenin in these cases, issuing What is to be Done? type tracts at regular intervals and intellectually battering his colleagues into accord. Post-war British politics, though, lacked such certitude, and the various rococo designs and plans of Macmillan were no substitute. So an effort has been made here to illustrate the importance of these circumstances, the constant evaluations of possibilities, the attempts to second-guess the future. But, like all such endeavours, it can only illuminate to a degree–that is, if a narrative is not to collapse under the weight of qualifications. Instead, in the end, although they may abjure the more abstract models available to political scientists, historians are compelled, if they are to create any sense of unity from the phenomena they seek to penetrate, to construct their patterns and apply their finish to the course of events. Thus, for example, the participants in this story would have been unlikely at the time to conceptualise the period from 1957 until the election of 1959 as one in which a survival statecraft approach was followed. Nor would they have perceived it as thereafter replaced by a modernising strategy. It is not unreasonable for us to do so, however. The words themselves may have not been

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used by the actors here, but, just as it is extrapolated from the actions of a defendant in a case tried at law, so we may discern intent from the moves of the players in this account. We have seen the development of economic modernisation under first Macmillan and then Douglas-Home emerging from the realisation of systemic shortcomings that were leading Britain into premature decline, domestically, and then finding focus in the subsequent attempts to remedy that decline. Far from suggesting simply a neutral, managerial approach to empirical problems, though, this process involved a complex of considerations. First, it required the acknowledgement that the former, supposedly neo-liberal, vein of policy had been mined out and was unlikely to provide solutions to the dilemmas of the 1960s.2 Secondly, it had to be fitted to the electoral cycle, so that even though, for instance, the problem of imperial over-reach was visible long before Suez, its antidote (decolonisation–or, at least, that was the chosen cure) awaited for its announcement suitably propitious domestic political circumstances: a secure government and a sufficiently remote general election.3 As Frank Myers has pointed out, the British audiences for Macmillan’s Cape Town speech were at least as important as those physically present at its delivery.4 Third, it awaited Cabinet personnel of a similar cast of mind in order to implement the strategy. The reshuffles that took place under Macmillan can certainly be interpreted as necessary to provide the configuration of forces that would allow initiation of the Common Market venture, for example.5 To reconcile party and institutional interests to the project also required time—although, as we have seen, there was always a sizeable company of irretrievable refuseniks that resisted policy change, no matter how sugared the pill. It is important to take into account that this period also marked the beginning of an acknowledgement on the part of politicians that governance was becoming harder. In fact, that government could not operate effectively without the tacit or active support of actors other than itself. In other words, to ‘steer’ rather than to ‘row’. Finally, modernisation had to offer the prospect of maintaining the goals of the implied compact of 1944, thus vouchsafing the social harmony upon which it was assumed (by those in government at least) the Conservatives’ electoral health rested. Given these undercurrents, it is quite understandable that the programme was subject to alteration, not always coherent to those charged with its execution, and had adherents who were unconvinced of the necessity of some of its elements. We should not assume that the modernisers described in the preceding pages were always enamoured of the changes that they sought to bring about. Even the strategy’s foremost architect, Harold Macmillan, gave sporadic hints that he did not thoroughly relish the prospect of a country driven by constant technological and cultural change. However, it is clear that, unlike the traditionalist Tory faction, he had convinced himself that it was necessary to revitalise the UK.

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When the Cabinet discussed development of the Concorde in November 1962, for example, he was reported to have lamented modern society’s “mania for dashing around”. Nonetheless, he recognised that “Britain ought to cater for this profitable modern eccentricity”.6 These remarks reveal more than just that the Prime Minister underestimated the cost of the aircraft. They were drawn from the heart of the most ancient Tory dilemma: change always was both necessary and regretful. Similarly, when, in the run-up to the 1959 election, Butler had declared privately his intention to update the law on betting and gaming, Macmillan had declared, “I don’t know about that. We already have the Toby Belch vote. We must not antagonise the Malvolio vote.”7 Of course, this was half in jest, but it revealed nonetheless an underlying anxiety about some of the ramifications of modernisation. There is evidence that even the modernists had qualms about economic growth becoming so vigorous that it would upset social stability and settled communities. This apprehension was reflected in the interventionist regional policy begun in 1963 with the creation of development areas in North East England and Scotland.8 But whilst the Government sometimes felt obliged to soften its worst effects, in policy terms the exigencies of domestic renewal usually overrode desires for the tranquil life. For most Tory modernists, after all, the choice between Michael Shanks’ alternatives of “lotus island” or “dynamic race” was a false one. They were not animated by the vision of a serene post-industrial country living in genteel poverty–this was, to them, a chimera. The true alternative to radical reform was expressed most pithily by arch-moderniser Edward Heath when Prime Minister a decade later, it was “slums, dangerous roads, old factories, cramped schools, stunted lives.”9 Sadly, this genuine conviction placed the Government into a predicament which was, at root, a straightforward question of, as Macmillan’s official biographer succinctly put it, “how to… actually force regeneration on a country that doesn’t want to be regenerated?”10 This potential conflict became excruciatingly more real within the Conservative Party between 1959 and 1964, reaching its pinnacle in the rpm crisis. Though the Douglas-Home premiership hardly soothed Tory nerves in advance of the louring general election, we should underline the argument that has been developed above. It neither meant the end of modernisation, nor any derogation of the state’s economic role, in policy terms. Sir Alec’s triumph, notwithstanding his instincts, did not catapult the Conservatives into Salisburian reaction, despite the claims of some. Reggie Bevins, in his odd little memoir, which Bernard Levin characterised with splendid dagger play as “artless… in both senses of the word”, claimed that the Tory Party had lost the election because it had “moved to the right and lost its reforming zeal” under Home.11 Perhaps Bevins was thinking of the proposals for commercial radio that he himself had been so eager to torpedo, for there is little other evidence of any

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desire of the Party at the higher levels to ditch its reforming ardour. Likewise, evidence is scarce that the Party had “exhausted the intellectual capital with which it arrived in government in 1951 and become captured by the negative attitude of the Whitehall machine.”12 The former had been spent by 1960 at the latest–else the EEC application, corporatism, rpm’s abolition and all the other accoutrements of modernisation would not have been deemed essential. In terms of the latter, it was, as we have observed, the specific problems that arose after Christmas 1963 that fashioned the rather muted ‘modernisation with a traditionalist face’ campaign spearheaded by Prosperity with a Purpose, not the invasion of purportedly stuffy mandarinate thinking into governing circles. But October 1964 was a turning point of sorts, not just because the Conservatives were ousted from power, but because it meant that the modernisers would determine the direction of future Tory policy.

Legacy. Deliberately, this study has avoided apportioning guilt for the Conservative Party’s election defeat in October 1964. The fact that only approximately 200,000 votes separated the two major parties makes the task of allocating blame very difficult. For instance, Lord Home even suggested, some years later, that one very marginal seat (Brighton Kemptown) was lost because the local Mothers’ Union had organised an expedition on the day of the election, whereby its 400 or so members left before eight o’clock in the morning and did not return until after the polls had closed.13 However, what has been suggested above is that, contrary to Conservative Party legend, it was not rpm’s abolition that was directly responsible for Labour’s victory.14 There are also good reasons to doubt that a more radical modernising programme would have yielded Tory success. Nonetheless, this was the conclusion extracted by the modernisers at the CRD and elsewhere after 1964, and which, with reluctance perhaps, was accepted by the majority of the Party. In policy terms, this did not mean unbroken continuity with the aims of Macmillanite modernisation. Between 1965 and 1970, the balance between competition and state direction tilted undeniably in favour of the former, although this was partially in response to the actions of Wilson’s Labour Party in government. On the other hand, to say that the Conservatives embraced full blooded economic liberalism in those years and discarded the heritage of 196064 is a vast exaggeration.15 A great deal of misinterpretation has been applied to developments such as the 1970 Selsdon ‘manifesto’.16 However, the modernisation programme was to have a significant impact on the Party’s future leadership. Although many grassroots Conservatives had applauded the selection of the Earl of Home as PM, such feelings were not

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universal. In December 1963 a letter, typical of many, from a professed “senior industrial manager” and “lifelong Conservative” arrived at Central Office. People like himself could no longer bring themselves to support the Party, he claimed. This was the result of the élite’s ludicrous choice of leader: [The] establishment would rather lose the election than lose their power in the Party. We are looking for a 1963 leader… We are sick of seeing old looking men dressed in flat caps and bedraggled tweeds strolling with a twelve bore. For God’s sake, what is your campaign manager doing? These photos of Macmillan’s ghost with Home’s face date about 1912… The nearest approach to our man is Heath. In very task he performs, win or lose, he has the facts, figures and knowledge. We don’t give a damn if he is a bachelor. He is our age, he is capable, he looks a director (of the country) and most of all he is quite different from these tired old men… Capable as we think Mr Heath is, we don’t believe he or his kind will ever be allowed to take the reins from the tired old men or the Etonians… [This letter] may indicate to you where you are losing your votes–from the younger, thinking management types.17

Whilst the natives at the CRD might have secretly harboured similar sentiments, they had to work with the material that they were given. The letter, however, hinted at a possible reservoir of support for a younger, more modern-minded, Party leader. Had Douglas-Home won the election, it seems likely that a more traditionalist noblesse oblige style of government would have persisted for longer, but 1964’s defeat gave an opportunity to install a leader from the modernising school.18 That this proved to be Heath rather than Maudling (the two main contenders when the inaugural leadership election was held in 1965) was largely down to the allocation of blame for the general election result. This was attached, perhaps unfairly, to Maudling’s risky pursuit of economic expansion at a time when the economy was already running at full throttle.19 By contrast, his approach to both the EEC negotiations and rpm demonstrated Heath’s unabashed embrace of modernity. This seemed to suggest a clearsighted and steadfast attachment to principles that was very attractive to those “younger, management types” that the modernist tendency wanted so badly to seduce. Plus it gave the appearance of a good tactic with which to oppose Wilson. Maudling, too, was a moderniser of course, but in July 1965 just enough MPs preferred pugnacity and dynamism to laid-back urbanity all over again.20 In terms of what these years of modernising Conservatism actually achieved, perspective alters the answer. It was enormously successful in effecting a relatively bloodless escape from the African Empire and in the realm of social policy, especially education, it produced substantial reform. However, regarding the central theme of industrial transformation, its record was less accomplished. Admittedly, the administration had travelled a fair distance since 1952, when the CRD could rebuff a suggestion that a state industrial programme “with app-

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ropriate incentives and penalties” would help productivity and economic growth with the reply–“this is more a question for industry than for government”.21 Whether this journey produced policies that led to long-lasting economic improvement is, unfortunately, less sure. The biggest disappointment was indisputably the failure to reach agreement on entry to the EEC, but even this left a deep legacy. First, the policy turn publicly destroyed the prized Tory myth of the Commonwealth as a potential economic and industrial community. After 1961, any chance of restoring the former Empire to the central place in Britain’s international affiliations vanished, despite some attempts to revive its life-force after the French veto.22 It also meant that the Conservatives became, for the next twenty years at least, the British party of Europe. Once Heath had been elected leader, there was hardly any doubt that a future Tory government would try once again to prise open the Common Market door.23 Finally, the debates over entry to the EEC served a purpose, because they helped to draw industry, Whitehall, and to some extent even the general public into a discussion about how the realities of relative decline were to be addressed. In so doing, it tacitly acknowledged that government could no longer (if it ever could) sit on top of the system and dictate to the parties beneath it. By the same token, the veto proved that the success of domestic statecraft was now truly contingent on the snares and whims of an ever more intermestic political realm.24 The turn towards Europe retained a lasting impact on the Conservative Party’s evolution even in Opposition. Tory policy development in the following six years was strongly influenced by what we might call the need to modernise to be prepared for EEC entry. We might rank a close second behind the European setback the Government’s failure to bring wages and profits within the ambit of the tripartite planning system. But, on the other hand, the latter years of the Macmillan administration and the early days of Wilson’s ministry were perhaps the only periods in peacetime in which corporatism was approached by government as a positive commitment, rather than an negative (if indispensable) feature of crisisavoidance.25 The partnership engendered through the NEDC was already bearing fruit by the time the Tories left office, promoting dialogue and encouraging the reappraisal of policy in areas such as industrial training, contracts of employment, and redundancy pay.26 The 1964 Industrial Training Act emerged, in part, from the deliberations of the Council, whilst nine industry-level Economic Development Committees had been set up by the time of Labour’s triumph in October. Unhappily, it is almost impossible to assess how effective these bodies would have been under a continuing Tory administration. Elsewhere, despite its savagery, the Beeching plan had at least started the process of fashioning a rationalised transport system, the Consumers’ Council had begun to prove its utility, and large scale technological projects like the

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Concorde and the Channel Tunnel were in train.27 But the removal of rpm was, unequivocally, the single greatest success in the area of industrial efficiency; it was only unfortunate that it was carried through without concomitant reform in the fields of monopoly and trade union restrictive practices. Its abolition also bestowed, for good or ill, a significant legacy on British society. Firstly, it reinforced the trend towards large retailers’ power over British manufacturers. Secondly, it triggered a series of price wars between traders in which the multiple chains tended to come out on top, although small shopkeepers, against the predictions of trade associations, were far from extinguished overnight from the retailing landscape. Especially if they were willing to join one of the voluntary distribution groups such as Spar or Mace.28 Nonetheless, slowly, rpm’s demise began to eat away at small independents’ share of retail turnover, even if in some trades the crunch did not come until the 1970s. Ironically, although it is difficult to establish a causal relationship between the two, it was the Co-operatives’ market share that dropped most dramatically in the decade or so after the Resale Prices Act. Finally, abolition gave a considerable fillip to the consumer lobby, which continued to expand in numbers and influence during the 1960s and 1970s. It can be justly represented as another step towards the ubiquitous ‘consumer society’ of the late twentieth century.29 The period between late 1959 and 1964 is an intriguing interlude for historians of the Conservative Party. The strategy that surfaced between those dates represented the first, but by no means the final, attempt by a British government to face up to the realities of relative decline. The Government was forced to explain its arduous adjustment to straitened circumstances publicly. Still harder was the attempt to acclimatise the electorate and the Tory Party itself to this unpleasant state of affairs. Whatever its weaknesses, and they were not few, it was one of the broadest and most forward-looking government programmes of the twentieth century. It was also one of the most intrepid electoral strategies. That it fell short in securing re-election for the Conservatives does not mean that it was bound to fail.

NOTES

CHAPTER ONE 1

2 3 4

5

6

7 8 9 10

Stuart Ball & Ian Holliday, ‘Mass Conservatism: An Introduction’, in Stuart Ball & Ian Holliday [eds.], Mass Conservatism: The Conservatives and the Public since the 1880s, London 2002, 12. Frank O’Gorman, British Conservatism: Conservative Thought from Burke to Thatcher, Harlow 1986, 26-8, 51-2, provides a number of examples. Ian Gilmour, Inside Right: A Study of Conservatism, London 1978, 127. Michael Bleany, ‘Conservative Economic Strategy’, in Stuart Hall & Martin Jacques [eds.], The Politics of Thatcherism, London 1983, 133. It is, however, noticeable that although the Thatcher Governments pursued a nominally modernising agenda in the field of economics (though this was in some aspects inimical to the interests of British capital), many of its social and political manifestations were arguably regressive. It is important to separate economic strategy from political and electoral strategy in this case. Macmillan to Salisbury, 28th Jan. 1957, The National Archives, Public Record Office (PRO), CAB 134/1555; C.E. Bellairs, Conservative Social & Industrial Reform, London 1977, 80. Mark Jarvis, Conservative Governments, Morality and Social Change in Affluent Britain, 1957-64, Manchester 2005; On the retreat from Empire, valuable recent contributions include: Philip Murphy, Party Politics and Decolonization: Conservative Party and British Colonial Policy in Tropical Africa, 1951-64, Oxford 1995; John Darwin, Britain and Decolonization: Retreat from Empire in the Post-war World, Basingstoke 1988. A useful edited collection covering British reactions to the Cold War during the Conservative period of rule is: M.F. Hopkins, M.D. Kandiah, & Gillian Staerck [eds.], Cold War Britain, 1945-1964: New Perspectives, Basingstoke 2002. John Barnes, ‘The Record of the Sixties’, in David McKie & Chris Cook [eds.], Decade of Disillusion: British Politics in the Sixties, London 1972, 12. Mark Jarvis, ‘The Conservative Party and the Adaptation to Modernity, 1957-1964’, unpubl. PhD diss., London University 1999. Hugh Pemberton, Policy Learning and British Governance in the 1960s, Basingstoke 2004, ch.1 passim. Ibid., 11, 24-5. Pemberton suggests that this mesh of competing interests formed into “policy networks”. Whilst there is validity in this description, nothing quite so mechanical is employed in this work.

Notes

11 12 13

14

15 16 17

18

19 20 21

22

23 24 25

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Richard Cockett, Thinking the Unthinkable: Think-Tanks and the Economic CounterRevolution, 1931-1983, London 1995, 64-5. Andrew Taylor, ‘Economic Statecraft’, in Kevin Hickson [ed.], The Political Thought of the Conservative Party since 1945, Basingstoke 2005, 135. Eccles to Lloyd, 24 Jul. 1962, Churchill Archives Centre (CAC), Selwyn Lloyd Papers (SELO), 4/22. Eccles was Minister for Education and Lloyd was Chancellor of the Exchequer until Jul. 1962. In a nutshell, the ‘Paish’ strategy (after the economist, Frank Paish) was for the Government to introduce a greater margin of unused capacity into the economy (which obviously suggested a higher level of unemployment) in order to ease inflationary pressures. These ideas are discussed at length in chapter three. This fear of unemployment is shown very clearly at the time of the ROBOT plan, in diary comments made by Macmillan. See Harold Macmillan’s diary entry for 29 Feb. 1952. Peter Catterall [ed.], The Macmillan Diaries: The Cabinet Years, 1950-57, London 2003, 148. Jarvis, Conservative Governments, 4-6; Andrew Holden, Makers and Manners: Politics and Morality in Post-war Britain, London 2004, 81-2. Keith Middlemas, ‘A Competitive Symposium: The State in Modern Britain’, Transcript of Professorial lecture delivered at University of Sussex, 1993. Patrick Birkinshaw, Ian Harden, & Norman Lewis, Government by Moonlight: The Hybrid Parts of the State, London 1990, 65; Andrew Gamble & S.A. Walkland [eds.], The British Party System and Economic Policy: Studies in Adversary Politics, London 1984, 17. Jim Tomlinson, The Politics of Decline: Understanding Post-War Britain, Harlow 2001, 3, 21. Tomlinson is rightly critical of historians who have implied that an awareness of decline in ministerial circles only surfaced with the misadventure in Egypt, arguing instead that such beliefs were voguish within the Attlee Governments and in the early years of Conservative administration. One very recent example is to be found in Richard Weight, Patriots: National Identity in Britain 1940-2000, London 2002, 269, 274. George L. Bernstein, The Myth of Decline: The Rise of Britain Since 1945, London 2004, chs 1 & 4, passim. Tomlinson, Politics of Decline, 9-10. Keith Middlemas, Politics in Industrial Society: The Experience of the British System since 1911, London 1979, 424; Dilwyn Porter, ‘‘Never-Never Land’: Britain Under the Conservatives 1951-1964’, in Nick Tiratsoo [ed.], From Blitz to Blair: A New History of Britain Since 1939, London 1998, 130. Jim Bulpitt, ‘The European Question: Rules, National Modernisation, and the Ambiguities of Primat der Innenpolitik’, in David Marquand & Anthony Seldon [eds.], The Ideas that Shaped Post-War Britain, London 1996, 227. Michael Shanks, The Stagnant Society, Harmondsworth 1961, 232. Samuel Brittan, Steering the Economy: The Role of the Treasury, London 1969, 1417; Pemberton, Policy Learning, ch.3 passim. Gamble identifies four main theses which endeavour to explain British decline. In addition to the two mentioned above, he notes the supply-side thesis (which accounts

186

26 27

28 29

30 31

32

33 34 35 36 37

Notes

for deterioration in UK economic performance through failure of successive post war governments to pursue policies which would lead to supply-side improvements and to control growth in the domestic money supply) and the state thesis (which suggests that the British state had been “too weak to promote modernisation”, leading to inevitable government overload). None of these theories can be treated in isolation, and in fact the analysis and prescription of the Macmillan and Home Governments owes something to all of them. Andrew Gamble, Britain in Decline, Basingstoke 1990, 32. Peter Hennessy, ‘‘Quiet, Calm Deliberation’: Harold Macmillan 1957-63’, Transcript of lecture delivered at Gresham College, Nov. 1995. Andrew Gamble, The Conservative Nation, London 1974, 70-3; Andrew Taylor, ‘‘The Record of the 1950s Is Irrelevant’: The Conservative Party, Electoral Strategy and Opinion Research, 1945–64’, Contemporary British History, vol.17 no.1 (2003), 81-110. ‘Stocktonian’ after Harold Macmillan’s constituency in the 1930s, Stockton-on-Tees, where the PM supposedly cultivated his lasting fear of mass unemployment. David Seawright, ‘One Nation’, in Hickson, Political Thought, 72-6. Seawright suggests that the ‘One Nation’ dining group formed in 1950 drew its membership almost equally from the Party’s left and right and that its pamphlets in the following decade if anything leant rather more towards freer markets and limited state interference than towards the Government line. Though there is some justice in these contentions, nonetheless the phrase is habitually associated with the mildly statist tendency on the organisation’s left wing. Indeed, the majority of contributors to the volume in which Seawright’s article appears continue to employ the phrase in just this fashion. Such complexities are untangled in chapter two. George Hutchinson, The Last Edwardian at Number Ten, London 1980, 58. O’Gorman, British Conservatism, 189; It is hardly fair to call The Middle Way “nearly Bennite socialism”, as former-Thatcherite-turned-penitent, David Willetts, has done. (Willetts, Civic Conservatism, London 1994, 25.) It did, admittedly, lean towards statism rather more than most Tories were prepared to accept, but it was a genuine attempt to argue for the adaptation of Baldwinian Toryism to a new set of circumstances. The failure of its modified manifestations in the 1960s should not lead us to conclude that they were bound to fail, nor that the intellectual source from which they in part sprang was inconsistent with Conservatism. See E.H.H.Green, Ideologies of Conservatism: Conservative Political Ideas in the Twentieth Century, Oxford 2002, 186, for a more sensible verdict on Macmillan’s treatise. David Willetts, Modern Conservatism, Harmondsworth 1992, 40-2; Patrick Cosgrave, The Strange Death of Socialist Britain, London 1992, 71; Cockett, Thinking, 161, 164, 247. Prime Minister’s Cabinet speech notes, 29 Oct. 1962, PRO PREM 11/4520. Lord Egremont, Wyndham and Children First, London 1968, 166; Richard Lamb, The Macmillan Years 1957-63: The Emerging Truth, London 1995, 1. Interview with Lord Roll (Interviewer: S. Mitchell), Nov. 2002. James Barr, The Bow Group: A History, London 2001, 54-60. Birkinshaw et al, Government by Moonlight, 76.

Notes

38

39

40

41 42

43 44 45 46 47 48

49 50

51

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David Kynaston, The City of London. (Volume IV: A Club No More 1945-2000), London 2001, 373. Although, in a more general sense, the financial sector’s attachment to high exchange rates tended to lead to expensive manufactured exports, and it is at least arguable that the banking sector over-priced access to capital throughout most of the twentieth century. D.J. Jeremy, A Business History of Britain 1900-1990s, Oxford 1998, 317. In the case of the NCT, certainly, it could be argued that it enjoyed disproportionate political power between 1951 and 1964, due to the overlap between its membership and that of local Conservative Party associations. Jim Tomlinson, ‘Conservative Modernisation, 1960–64: Too Little, Too Late?’, Contemporary British History, vol.11 no.3 (1997), 18-38. Though, to be fair to Tomlinson, in the piece itself he does acknowledge some of the institutional restrictions that impinged upon government policy. On the other hand, his use of this phrase begs the questions ‘for what?’ and ‘for whom?’, neither of which seem fully answered in his article. Though not specifically related to the 1960s, some interesting comments are made in this vein by Bruce Pilbeam, ‘Social Morality’, in Hickson, Political Thought, 160-1. E.H.H. Green, ‘The Conservative Party, the State and the Electorate, 1945-64’, in J. Lawrence & M.Taylor [eds.], Party, State and Society: Electoral Behaviour in Britain Since 1820, Aldershot 1997, 184. Gamble, Conservative Nation, 80. Peter Walker, Staying Power, London 1991, 34. Keith Middlemas, Power, Competition and the State (Volume II: Threats to the Postwar Settlement, 1961-74), London 1990, 11. Robert Blake, The Conservative Party from Peel to Thatcher, London 1985, 294. Douglas-Home to Sir Michael Fraser, 30 Dec. 1963, PRO PREM 11/5006. Martin J. Wiener's phrase about “a nation, and an élite, at war with itself” in trying simultaneously to espouse the virtues of (industrial & technical) progress and the conservation of older, more established ways of life–the battle between Britain as ‘Workshop of the World’ and ‘Green and Pleasant Land’–seems most apt here. (Although the conclusions that Wiener draws from this conflict are questionable.) See M. J. Wiener, English Culture & The Decline of the Industrial Spirit 1850-1980, Harmondsworth 1981, 97. John Ramsden, The Winds of Change: Macmillan & Heath 1957-75, London 1996, 215. S. P. Mitchell, ‘Testing the ‘Cultural Revolution’ Thesis: The British General Election of 1964’, Working Paper delivered at Open University Staff Arts Seminar, Sept. 2001; Jarvis, Conservative Governments, 118-20. It should be noted, however, that measures such as the 1964 Obscene Publications Act and Drugs (Prevention of Misuse) Act would probably have been passed even had Macmillan remained Premier. Christopher Patten, ‘Policy-making in Opposition’, in Zig Layton-Henry [ed.], Conservative Party Politics, London 1980, 14-15.

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52

53 54

55 56 57 58 59 60 61

62 63

64

65 66 67 68

69 70 71 72

Notes

John Turner, ‘1951-64’, in A. Seldon [ed.], How Tory Governments Fall: The Tory Party in Power since 1783, London 1996, 321; See also Anthony Seldon, Churchill’s Indian Summer: The Conservative Government 1951-55, London 1981, 416-7. Andrew Gamble, ‘The Party and Economic Policy’, in Philip Norton [ed.], The Conservative Party, Hemel Hempstead 1996, 195. Andrew Roberts, Eminent Churchillians, London 1994, 253; Keith Middlemas, Power, Competition, & the State (Volume I: Britain in Search of Balance 1940-61), London 1986, 220. Porter in Tiratsoo, From Blitz to Blair, 103. Middlemas, Power I, 221. Seldon, Indian Summer, 171. Ibid., 427. Ibid., 184-6; Nick Tiratsoo & Jim Tomlinson, The Conservatives and Industrial Efficiency, 1951-64: Thirteen Wasted Years?, London 1998, 20-1. Middlemas, Power I, 222. Taylor in Hickson, Political Thought, 136-7; John Ramsden, The Age of Churchill and Eden, 1940-57, London 1995, 234; Ina Zweiniger-Bargielowska, Austerity in Britain: Rationing, Controls, and Consumption 1939-1955, Oxford 2000, 235. Though the disagreement was not in essence about the remedy, but rather its dosage. Green, Ideologies, 196. John Turner, Macmillan, London 1994, 177; Jim Bulpitt, ‘Accommodating the Imperial Frontier: The Domestic Policies of Empire/Commonwealth after 1918’, Working Paper delivered at BISA/PSA Political Science Group Workshop Conference, University of Warwick, Jul. 1998. On the practical implementation of decolonisation from the point of view of one of its architects, see Reginald Maudling, Memoirs, London 1978, 99. Macro-level tripartite planning is sometimes described, for convenience’s sake, as ‘corporatism’ in what follows. This is not meant to imply that tripartism is the only form of corporatism, nor that the institutional arrangements developed by the Macmillan Government precluded planning at meso-and micro-levels–indeed, the creation of meso-economic organisations under the aegis of the National Economic Development Office (NEDO) followed shortly from the establishment of the NEDC. Margaret Thatcher, The Path to Power, London 1995, 126. Ramsden, Winds, 177-8; Lamb, Macmillan Years, 440-2. Interview with Lord Deedes (Interviewer: S. Mitchell), May 2004. Rpm’s origins and nature are examined briefly in chapter two. For a fuller explanation, however, see S. P. Mitchell, ‘The Abolition of Resale Price Maintenance: A Case Study in Modernising Conservatism’, unpubl. PhD diss., Open University 2004. Gamble, Conservative Nation, 160. Ibid., 165; Norton, ‘Philosophy: The Principles of Conservatism’, in Norton, Conservative Party, 78. Gamble, Conservative Nation, 167-71. Though election manifestos are frequently sidelined by historians as evidence, looking at them in series can give powerful hints of the development of public policy.

Notes

73 74

75 76 77 78

79

189

Every manifesto from 1945 until 1959 paid suitable homage to the Commonwealth and Empire (although 1955 is the last such document in which the second expression appears), but, equally, over time the language in which that attachment was expressed became by stages more dilute. Brian Brivati has penned an elegant justification for manifestos as evidence in Brian Brivati & Richard Heffernan [eds.], The Labour Party: A Centenary History, Basingstoke 2000, 348-50. Bulpitt, ‘Accommodating the Imperial Frontier’. Andrew Geddes, ‘Europe’, in Hickson, Political Thought, 122. The latter part of the sentence paraphrases a quote from an undisclosed “senior official” in D. E. Butler & A. King, The British General Election of 1964, London 1965, 79. It is probable that the source was Sir Michael Fraser. Turner, Macmillan, 221. T.F. Lindsay & M. Harrington, The Conservative Party 1918-1979, London 1979 edn, 117-8. Wiener, English Culture, 98-103, 109-11. Additionally, recent studies have suggested that rpm’s rescission is often overlooked as a vital moment in the shaping of modern British retailing, contributing greatly to the rise of a consumer age and inexorably shifting the balance of power between large retailers and manufacturers decisively in favour of the former. See Jeremy Black, Britain since the Seventies: Politics and Society in the Consumer Age, London 2004, 12; Helen Mercer, ‘The Abolition of Resale Price Maintenance in Britain in 1964: A Turning Point for British Manufacturers?’, London School of Economics Working Papers in Economic History, no.39 (1998). John Boyd-Carpenter, Way of Life, London, 1980, 185; Richard Findley, ‘The Conservative Party and Defeat: The Significance of Resale Price Maintenance for the General Election of 1964’, Twentieth Century British History, vol.12 no.3 (2001), 327-53.

CHAPTER TWO 1

2 3

4 5

Two examples from many: Margaret Thatcher, The Downing Street Years, London 1993, 6-8; T. Russel, The Tory Party: Its Policies, Divisions and Future, Harmondsworth 1978, 7-12. O’Gorman, British Conservatism, 50. Martin Francis, ‘“Set the people free”? Conservatives and the State, 1920-1960’, in M. Francis & I. Zweiniger-Bargielowska [eds.], The Conservatives and British Society 1880-1990, Cardiff 1996, 58-61; Green, Ideologies, 240-1. Francis in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 60. Wiener, English Culture, 109; Leslie Hannah, The Rise of the Corporate Economy, London 1976, 156. The debate on whether, by temperament, the Government was actually rather partial to such forms of market ordering has neither been resolved, nor, given the seemingly endless interpretability of primary sources in this period, seems likely to be in the immediate future. There is some fruitful discussion of this in Alan

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6 7 8 9 10 11 12 13 14

15

16

17 18 19 20 21 22 23

24 25 26 27 28 29 30 31

Notes

Booth, ‘Britain in the 1930s: A Managed Economy?’, The Economic History Review, vol.40 no.4 (1987), 499-522 (esp. sect. III). The core argument of Maurice Cowling, The Impact of Labour 1920-1924: The Beginning of Modern British Politics, Cambridge 1971. Green, Ideologies, 10-11; Paul Addison, The Road to 1945: British Politics and the Second World War, London 1975, 231-3. Addison, Road, 223. Alan Clark, The Tories: Conservatives and the Nation State 1922-1997, London 1998, 245. Ibid., 246-7; Addison, Road, 224. Middlemas, Power I, 56. Cockett, Thinking, 64; Addison, Road, 245-6. A comprehensive overview is provided in Middlemas, Power I, 92-101. Michael Bentley, ‘1931-45’, in Seldon, How Tory Governments Fall, 311; David Willetts, ‘The New Conservatism? 1945-51’, in Stuart Ball & Anthony Seldon [eds.], Recovering Power: The Conservatives in Opposition Since 1867, Basingstoke 2005, 170. Mr.Churchill's Declaration of Policy to the Electors, London 1945, sub-sections entitled ‘Work’, ‘National Insurance’, ‘Health’, ‘Industrial Efficiency’, and ‘The Small Man in Business’. Bentley in Seldon, How Tory Governments Fall, 309; O’Gorman, British Conservatism, 48. The phrase “go and push” is lifted from the ‘Industrial Efficiency’ section of the 1945 manifesto. Lord Butler, The Art of the Possible: The Memoirs of Lord Butler, London 1971, 1324; Green, Ideologies, 169-70; Willetts in Ball & Seldon, Recovering Power, 172. Butler, Art of the Possible, 132, 135. Ibid., 134; Ramsden, Age of Churchill and Eden, 148-63. The Times, 27 Sept. 1947; Green, Ideologies, 171; Ramsden, Age of Churchill and Eden, 154-5. Daily Express, 14 May 1947. The Industrial Charter: A Statement of Conservative Industrial Policy, London 1947, 11, 25, 28-34. Harriet Jones, ‘The Cold War and the Santa Claus Syndrome: Dilemmas in Conservative Social Policy-Making, 1945-1957’, in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 245. Butler, Art of the Possible, 146. Willetts in Ball & Seldon, Recovering Power, 178. Industrial Charter, 13-15, 18. Ibid., 9. Ibid., 21, 23-4. Ibid., 29-32. Ramsden, Age of Churchill and Eden, 157. Harold Macmillan, Tides of Fortune, London 1969, 304.

Notes

32

33 34 35 36 37 38 39

40 41 42 43 44 45

46 47 48

49

50

191

Compare Macmillan’s phrase with Margaret Thatcher’s assessment of her first two Foreign Secretaries, in which Lord Carrington was “an entertaining Whig” whilst Francis Pym was “a gloomy one”. Thatcher, Downing Street Years, 306. Andrew Taylor, ‘Speaking to Democracy: The Conservative Party and Mass Opinion from the 1920s to the 1950s’, in Ball & Holliday, Mass Conservatism, 85-6. Ibid. ‘A Report on the Industrial Charter’, MO, File report 2516, quoted in ibid., 88. Zweiniger-Bargielowska, Austerity, 229. Ibid., 229-31. Willetts in Ball & Seldon, Recovering Power, 183. Paul Martin, ‘Echoes in the Wilderness: British Popular Conservatism, 1945-51’, in Ball & Holliday, Mass Conservatism, 126-7, 133-5; Martin provides greater detail on the Vermin Club in ‘The Vermin Club: 1948-51’, History Today, vol.47 no.6 (1997), 17-22. Martin in Ball & Holliday, Mass Conservatism, 122. On the MCA see below, chapter six, and Green in Lawrence & Taylor, Party, State and Society, 184. Ian Gilmour & Mark Garnett, Whatever Happened to the Tories: The Conservatives since 1945, London 1997, 48-50. Seawright in Hickson, Political Thought, 77-8. Ibid. Willetts in Ball & Seldon, Recovering Power, 186; Ramsden, Age of Churchill and Eden, 166. G. C. Allen, The Industrial Development of Birmingham and the Black Country: 1860-1927, London 1929, 356, 363. Cartelisation here is taken to mean the spread of any collusion or co-operation between firms competing in the same market which has as its object a reduction in the field over which competition can occur. So rpm, especially when collectively enforced (i.e., by a body representative of all firms in the cartel–usually a trade association), would be an attempt to remove price competition. Its adoption does not preclude other forms of non-price competition (e.g., branding, after-sales service) between the firms in collusion. E. T. Grether, ‘Resale Price Maintenance in Great Britain’, Quarterly Journal of Economics, vol.48 no.4 (1934), 620-44. A stop list entails refusal to supply a group of products to price-cutting malefactors. For the two sides of the argument see B.S. Yamey, ‘The Origins of Price Maintenance in Three Branches of Retailing’, Economic Journal, vol.62 no.247 (1952), 522-45 and Helen Mercer, Constructing a Competitive Order: The Hidden History of British Antitrust Policies, Cambridge 1995, 20. I argue for a more cautious conclusion than either of these in ‘The Abolition of Resale Price Maintenance’. J. F. Pickering, Resale Price Maintenance in Practice, London 1965, 45; Minutes of 9 Apr. 1930, Museum of the Royal Pharmaceutical Society of Great Britain (RPSGB), Acq. IRA 2001.039, Fair Price Defence Committee Papers (FPDC)– records the creation of and rationale for the FTC. On the ‘social utility’ in retailing, see Simon Phillips & Andrew Alexander, ‘An Efficient Pursuit? Independent Shopkeeping in 1930s Britain’, Enterprise and Society, vol.6 no.2 (2005), 278-304.

192

51

52 53

54

55

56 57

58

59 60 61 62 63

64 65 66 67 68

Notes

Alex Hunter, ‘The Monopolies Commission and Price Fixing’, Economic Journal, vol.66 no.264 (1956), 587-602. In the trade press during the inter-war years, there were also numerous examples of the grim consequences predicted to follow rpm’s abandonment—most notably from the Proprietary Articles Trade Association’s journal, the bluntly named Anti-Cutting Record. 4 Apr. 1950, RPSGB, FPDC Papers. Robert Millward, ‘Industrial and Commercial Performance since 1950’, in Roderick Floud & Donald McCloskey [eds.], The Economic History of Britain since 1700 (Volume 3: 1939-1992), Cambridge 1994 edn., 156. Millward cites the origin of moves against price maintenance in the 1944 White Paper on employment. J. D. Kuipers, Resale Price Maintenance in Great Britain, Wageningen 1950, 29-30. Of the three former coalition partners, the Liberal Party alone made any reference to the excision of price-fixing in general in its manifesto (Labour’s promised only to attack price rings in the building industry). Twenty Point Manifesto of the Liberal Party, London 1945, sect. entitled ‘Industry’. British Parliamentary Papers (BPP), Session 1948-49, vol. xx, Report of the Committee on Resale Price Maintenance (Cmnd.7696), pgh. 8. The pledge to maintain full employment assumed, of course, that governments would always try to flush the economy out of a slump by stimulating domestic demand. Ibid., pgh. 85. CC(51)14, 15 Feb. 1951, PRO CAB 128/19. For the TUC’s opposition, see The Times, 6 Mar. 1952. The FTC’s (largely successful) attempts to secure institutional backing from the National Union of Manufacturers (NUM) and the FBI is documented in papers of 27 Jul. 1949 and 2 Apr. 1951, RPSGB, FPDC Papers. B. S. Yamey, ‘The United Kingdom’, in B.S.Yamey [ed.], Resale Price Maintenance, London 1966, 264. Details on the Cabinet resignations of Wilson and Bevan can be found in most political histories that cover the period. Of particular use is Rodney Lowe, The Welfare State in Britain since 1945, London 1993, 177-9. ‘Interview with Sir Hartley Shawcross’, 29 May 1951, RPSGB, FPDC Papers. CC(51)60, 5 Jun. 1951, PRO CAB 128/19. 19 Jun. 1950 and 24 Jul. 1951, RPSGB, FPDC Papers. Nigel Lawson & Jock Bruce-Gardyne, The Power Game: An Examination of Decision Making in Government, London 1976, 84-6. M. Wilson, ‘Grassroots Conservatism: Motions to the Party Conference’, in N. Nugent & R. King [eds.], The British Right, Farnborough 1977, 87. Though three is not many, given the truncated period in which resolutions could be received these seem significant. ACP(51)10, 26 Sept. 1951, Conservative Party Archive (CPA), Harvester Microfiche Collection: Reel 1. Notes on Current Politics, no.16, 1 Oct. 1951. Industrial Charter, 24; This is the Road, London 1950, sect. entitled ‘British Industry’; Britain Strong and Free, London 1951. ‘General Election 1951: Questions of Policy – Resale Price Maintenance’, 3 Oct. 1951, CPA, CCO 4/4/287. Clark, The Tories, 287.

Notes

69 70 71 72 73 74 75

76

77 78 79 80 81 82 83 84 85 86 87 88 89 90

91 92 93 94

193

See below, chapters four and six. The logical consistency of this position was rarely as exact as the neo-liberal view to which Clark largely adheres, however. Gilmour & Garnett, Whatever Happened to the Tories, 86. John Charmley, A History of Conservative Politics 1900-96, London 1996, 145-7. Brendan Evans & Andrew Taylor, From Salisbury to Major: Continuity and Change in Conservative Politics, Manchester 1996, 95. Gamble, Conservative Nation, 63. David Gammans to Walter Monckton, 12 Jun. 1952, quoted in Evans & Taylor, Salisbury to Major, 95. Keith Middlemas, ‘The Party, Industry, and the City’, in Anthony Seldon & Stuart Ball [eds.], Conservative Century: The Conservative Party since 1900, Oxford 1994, 471. Ledingham to Woolton, 9 Aug. 1954, CPA, CCO 4/6/261. This file contains more correspondence of a like nature. Comparable sentiments were periodically exhibited in the literature of groups such as Aims of Industry. Sir Anthony Eden, Full Circle: Memoirs of Sir Anthony Eden, London 1960, 314, 320-3. Correlli Barnett, The Verdict of Peace: Britain Between Her Yesterday and the Future, London 2002 edn, 432. A number of notes and cuttings of this nature collected by the Research Department in early 1955 are contained in CPA, CRD 2/19/29. Churchill to Thorneycroft (margin note on letter), 26 Jan. 1955, PRO PREM 11/1042. Thorneycroft to Churchill, 5 Feb. 1955, PRO PREM 11/1042. Lawson & Bruce-Gardyne, Power Game, 84. CP(55)28, ‘Monopolies: Memorandum by the President of the Board of Trade’, 4 Jun. 1955, PRO CAB 129/77. Brook to Eden, 15 Jun. 1955, PRO PREM 11/1042. Pickering, Resale Price Maintenance, 26. 23 Feb. 1955, RPSGB, FPDC Papers; ‘General Election 1955: Fair Price Defence Committee’, n.d. (prob. Apr. 1955), CPA, CCO 4/6/261. Whips’ Office Report of Meeting of Parliamentary Trade and Industry Committee, 6 Jul. 1955, PRO PREM 11/1042. Pickering, Resale Price Maintenance, 37. Mercer, Competitive Order, 137. HC Debs vol. 543 col. 1943-4, 13 Jul. 1955; The Commission’s majority report had recommended that the continuance of certain restrictive practices be made a criminal offence, see BPP, Session 1955-6, vol.xxiv, Monopolies Commission, Collective Discrimination: A Report on Exclusive Dealing, Collective Boycotts, Aggregated Rebates and other Discriminatory Trade Practices (Cmnd. 9504), pgh.248. HC Debs vol. 543 col. 2024, 13 Jul. 1955. Pickering, Resale Price Maintenance, 29. Note of Meeting on the future of the Monopolies Commission, 10 Oct. 1955, PRO BT 64/4838. I.M. 2 Note: ‘Future of the Monopolies Commission’, 3 Dec. 1955; Lee to Ackroyd, 20 Oct. 1955, both PRO BT 64/4838.

194

95 96

97 98 99 100 101 102 103 104 105

106 107 108 109 110 111 112 113 114 115 116 117 118

119 120 121 122 123

Notes

Rees to Andrew, 16 Jan. 1956, PRO BT 64/4838. ‘Monopoly: Three Political Angles’, The Times Review of Industry, Apr. 1961; Jim Tomlinson, ‘“Liberty with Order”: Conservative Economic Policy, 1951-1964’, in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 285. This is discussed at greater length below, in chapter three. Tewson (TUC General Secretary) to Thorneycroft, 24 Aug. 1955, PRO BT 64/4765. ‘Notes for Consideration of MPs based on the views of the FBI, ABCC, and NUM’, 4 Mar. 1956, CPA, CRD 2/19/29; The Times, 16 Feb. 1956. ‘Attorney-General’s Working Party: Note by the Attorney-General’, 8 Nov. 1955, PRO BT 64/4840. Hall to Trend, 18 Nov. 1955, PRO T 234/69. Hall to Trend, 16 Nov. 1955, PRO T 234/69. ‘Resale Price Maintenance: A Note by the President of the Board of Trade’, 22 Nov. 1955, PRO PREM 11/1042. Lord Kilmuir, quoted in Pickering, Resale Price Maintenance, 50. BPP, Session 1955-6, vol.xxiv, Collective Discrimination (Cmnd. 9504), pgh.146. Lawson & Bruce-Gardyne, Power Game, 85. Under this section, a single manufacturer of a specified brand might issue an injunction against a wholesaler or retailer if rpm had been made formally a condition of sale, and yet goods at point of sale were sold below this price. 15 Nov. 1956, RPSGB, FPDC Papers. The Times, 9 Apr. 1956. Notes on Current Politics, no.16, 2 Jul. 1956. Barnett, Verdict, 422. Tiratsoo & Tomlinson, Conservatives and Industrial Efficiency, 120; Mercer, Competitive Order, 126-35. Hannah, Corporate Economy, 213; Tiratsoo & Tomlinson, Conservatives and Industrial Efficiency, 121. HC Debs vol. 549 col. 1927, 6 Mar. 1956. Stephen Blank, Industry and Government in Britain: The Federation of British Industries in Politics, 1945-65, Farnborough 1973, 63. Ibid., 62-4. Hannah, Corporate Economy, 169, 187. Tomlinson in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 277-9. Lawson & Bruce-Gardyne, Power Game, 86. Ian Clark, ‘Employer Resistance to the Fordist Production Process: “Flawed Fordism” in Post-War Britain’ Contemporary British History, vol.15 no.2 (2001), 2852. Ibid. Middlemas, Power I, 99-100. Bernstein, Myth of Decline, 8, 102. Gamble, Conservative Nation, 169. Weight, Patriots, 264; Bernstein, Myth of Decline, 111-3. Of course, the post-war pattern of trade was partly determined by the 1932 Ottawa agreements.

Notes

124 125 126 127 128 129

130 131 132 133 134 135

136

137

138

139

140 141

195

Policy statement on Empire, 1949, reproduced in O’Gorman, British Conservatism, 197-9. This can be seen with blatancy in the opening section of This is the Road. Seldon, Indian Summer, 413; Richard Lamb, The Failure of the Eden Government, London 1987, 66. Gilmour & Garnett, Whatever Happened to the Tories, 99. Weight, Patriots, 264. Unfortunately, some historians are still casually repeating the error that the UK did send an observer to Messina. They confuse the Messina meeting with subsequent talks in Brussels on the form of the union. (These did not occur until November 1955.) Geddes in Hickson, Political Thought, 119. Weight, Patriots, 265-6; Lamb, Failure, 74, 86. Lord Home, The Way the Wind Blows: An Autobiography, London 1978 edn, 103. Lamb, Failure, 74. Gilmour & Garnett, Whatever Happened to the Tories, 99-100. ‘Note by the Chancellor of the Exchequer & the President of the Board of Trade: United Kingdom Commercial Policy’, CP(56)191, 27 Jul. 1956, PRO CAB 129/82. The phrase “managed markets” comes from Turner, Macmillan, 215. Richard Griffiths, ‘A Slow One Hundred and Eighty Degree Turn: British Policy towards the Common Market 1955-60’, in George Wilkes [ed.], Britain’s Failure to Enter The European Community 1961-63: The Enlargement Negotiations and Crises in European, Atlantic, and Commonwealth Relations, London 1997, 38-9. Peter Catterall, ‘Macmillan and Europe 1950-1956: The Cold War, The America Context, and the British Approach to European Integration’, Cercles, vol.1 no.5 (2002), 93-108. Available [online]: www.cercles.com. Catterall mentions Hugo Young, Richard Lamb, and Spencer Mawby as historians who claim that Macmillan was, at the very least, inconsistent in his attitude towards Europe. ‘Memorandum by the Chancellor of the Exchequer & the President of the Board of Trade: United Kingdom Commercial Policy’, CP(56)192, 28 Jul. 1956, PRO CAB 129/82. This memorandum was produced as a more exhortative accompaniment to the note mentioned above. Although by its appearance on the day following the original note it appears more as an afterthought, it is (in ‘philosophical’ terms) probably the more important document of the two– as it was designed as an argument to win over a sceptical Cabinet. In the view of the deputy leader (on the official side) of the later Brussels negotiations, Macmillan was one of the first politicians to realise that the UK’s economic position was “precarious” and that her governments “had underestimated how quickly the countries of the continent were re-establishing themselves” in the post-war period, thus he sought to address British underperformance through a reconfiguration of Imperial commitments and a move towards engagement in an alternative (European) economic bloc. Interview with Lord Roll (Interviewer: S. Mitchell), Nov. 2002. Lamb, Failure, 98. Ibid., 97.

196

142

Notes

There are some interesting remarks in this direction in Jacqueline Tratt, The Macmillan Government and Europe: A Study in the Process of Policy Development, Basingstoke 1996, 12.

CHAPTER THREE 1

2 3

4 5

6 7

8 9 10 11 12 13 14 15

16

Blake, Conservative Party, 278-280. It is worth noting that Blake has argued that the ‘Suez effect’ may have materialised belatedly as a factor in the Conservatives’ 1964 election defeat since it contributed to a sense of unease about Toryism amongst intellectuals which took some time to spread to the electorate at large. Ibid., 279. A B.I.P.O. poll of early Dec. 1956 (albeit taken after the cease-fire) gave a slight majority in favour of the Eden Government’s policy over Suez. Alan Booth, ‘Inflation, Expectations, and the Political Economy of Conservative Britain, 1951-1964’, The Historical Journal, vol.43 no.3 (2000), 827-47; Lamb, Failure, 54-58. The Times, 11 Jan. 1957. The impression gained by the author (and it is no more) from private and state papers is that Macmillan felt that Lloyd was exceptionally malleable. This may provide an explanation for the PM’s reluctance to dismiss his Foreign Secretary. Note of conversation between Macmillan and Beaverbrook, 5 Apr. 1957, House of Lords Record Office (HLRO), Beaverbrook Papers (BBK), C/235. Lamb, Macmillan Years, 29. The removal of petrol rationing in this month as oil supplies to Britain improved was probably of equal importance in restoring some confidence in the Government. Macmillan to Wyndham, 27 May 1957, quoted in Egremont, Wyndham and Children, 161. Thorneycroft, as we have seen (above, chapter two) was moderately neo-liberal in his approach to economic issues. HM’s diary entry for 9 Apr. 1957. Harold Macmillan, Riding the Storm, London 1971, 358. Robert Hall’s diary entry for 8 Apr. 1957. Alec Cairncross [ed.], The Robert Hall Diaries 1954-1961, London 1991, 106. Respectively, the Daily Mirror and The Times, 10 Apr. 1957. The Economist, 13 Apr. 1957. Cosgrave, Strange Death, 233n. The Chancellor and most of the Treasury officials wanted a rise to 6% only. The Bank insisted on a two point rise, to which, reluctantly, both Thorneycroft and Macmillan agreed. Kynaston, The City IV, 86-7. RH’s diary entry for 27 Aug. 1957. Robert Hall Diaries, 124. [Emphasis as original.] This opinion was not uncommonly held by local members in the constituencies, but it was an unusual stance, at this point, amongst the executive. Chapter six investigates the phenomenon in greater depth.

Notes

17 18 19

20

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

36 37 38 39 40 41 42 43

197

Thorneycroft, quoted in Samuel Brittan, Steering the Economy: The Role of the Treasury, London 1969, 128. 9 Sept. 1957, Bank of England Archives, G 1/75, quoted in Kynaston, The City IV, 84. [My insert.] RH’s diary entry for 22 Oct. 1957. Robert Hall Diaries, 126; Sir Oliver Franks (Chairman of Lloyd’s Bank) corroborated this view of Thorneycroft’s dismissive attitude towards his civil servants a year later at one of the Radcliffe Committee’s sittings. Alec Cairncross’ diary entry for 27 Oct. 1958. Sir Alec Cairncross, Diaries: The Radcliffe Committee and the Treasury, London 1999, 13. The files containing correspondence between Harrod and Macmillan are worth reading for the acid comments of civil servants alone. Take, for example, Bligh’s note to Carey at the Board of Trade: “The PM has had to postpone his meeting with Roy Harrod. The ways of Providence are truly inscrutable.” Tim Bligh to Peter Carey, 25 Jan. 1962, PRO PREM 11/3742. Harrod to Macmillan, 13 Aug. 1957, PRO PREM 11/2973. Macmillan to Thorneycroft, 24 Aug. 1957, PRO PREM 11/2973. ‘The Economic Situation: Memorandum by the Prime Minister’, C(57)194, 1 Sept. 1957, PRO CAB 129/88. Peter Dorey, ‘Industrial Relations as “Human Relations”: Conservatism and Trade Unionism, 1945-64’, in Ball & Holliday, Mass Conservatism, 52. RH’s diary entry for 29 Oct.1957. Robert Hall Diaries, 126 ‘The Economic Situation: Memorandum by the Chancellor of the Exchequer’, C(57)195, 7 Sept. 1957, PRO CAB 129/88. [My emphasis.] Clark, The Tories, p. xiii. CC(57)67, 12 Sept. 1957, PRO CAB 128/31. CC(57)68, 17 Sept. 1957, PRO CAB 128/31. Macmillan, Riding the Storm, 357. Roy Harrod, ‘These Directives Should Go’, The Director, Oct. 1957. Egremont, Wyndham and Children, 178-9. Boyd-Carpenter was not a member of the Cabinet, but attended the meeting in his capacity as Minister of Pensions. Boyd-Carpenter, Way of Life, 138-9. Gilmour & Garnett, Whatever Happened to the Tories, 140. Enoch Powell in The Spectator, 24 Apr. 1971; Edmund Dell, The Chancellors: A History of the Chancellors of the Exchequer 1945-90, London 1996, 239-40; Shirley Letwin, The Anatomy of Thatcherism, London 1992, 77. Blake, Conservative Party, 281. Green, Ideologies, 212-3. Thorneycroft to Macmillan, quoted in Hutchinson, Edwardian, 63. Gilmour & Garnett, Whatever Happened to the Tories, 139. Alec Cairncross, ‘Economic Policy and Performance, 1945-64’, in Floud & McCloskey, Economic History of Britain III, 57. ‘The Middle Way: Twenty Years After’, CPA, Harvester MFC1, 1958/70. Financial Times, 7 Jan. 1958. The Times, 7 Jan. 1958.

198

44

45 46 47 48 49

50 51 52 53 54 55 56 57 58 59 60

61

62

63 64 65 66 67 68 69

Notes

David Childs, Britain since 1945, London 1992, 107. The slide in world commodity prices benefited British terms of trade by some 14% between the last quarter of 1957 and 1960. Figures in Cosgrave, Strange Death, 67. Macmillan’s speech at Bedford in July 1957, quoted in Hutchinson, Edwardian, 59. Trend to Macmillan, 4 Dec. 1958, PRO PREM 11/2973. Harrod to Macmillan, 2 Jan. 1959, PRO PREM 11/2973. ‘Bottle-necks’ in this case connoting that the level of demand at the peak of the economic cycle was too high to allow a reciprocal expansion in supply. Thus leading to inflation and/or an influx of imports. Ramsden, Winds, 60. Hill to Macmillan, 27 Apr. 1959, PRO PREM 11/2777. [My emphasis.] Brook to Macmillan, n.d. (prob. 28 Apr. 1959), PRO PREM 11/2777. ‘Analysis of Political Support in mid-1958’, 2 Sept. 1958, Trinity College, Cambridge (TC), Butler Papers (RAB), H39. ‘Thoughts on Meals and Means’, C(61)219, PRO CAB 129/107, quoted in Jarvis, ‘The Conservative Party and the Adaptation to Modernity’. [My emphasis.] The Next Five Years: The Conservative Party Manifesto, London 1959, sub-section entitled ‘The Conservative Record’. The Next Five Years, sub-section entitled ‘Employment and Economic Change’. Lamb, Macmillan Years, 61. Butler & Rose, The British General Election of 1959, London 1960, 22-4. Andrew Taylor, ‘Speaking to Democracy: The Conservative Party and Mass Opinion from the 1920s to the 1950s’, in Ball & Holliday, Mass Conservatism, 94. An approach that had its genesis in the opposition years with the production of, for example, A True Balance, a policy charter for women. See Zweiniger-Bargielowska, Austerity, 232. See for example: 1959/37-46: ‘Madam Chairman’ series (directed at women); 1959/109: ‘My Fair Lady’; 1959/52: Pocket Politics, ‘Young Voters’; 1959/27: ‘Tories and the Pensioner’; 1959/53: Pocket Politics, ‘Man at Work’, etc. See also ‘Doorstep Aids’ 1959/103-6. CPA, Harvester MFC1. Mark Abrams, quoted in Barnes in McKie & Cook, Decade, 10. This statement must be treated with some caution, considering Abrams was Labour’s psephological guru in the early 1960s; it is probably broadly true, though somewhat over-stated. Macmillan to Amory, 29 Feb. 1960, PRO PREM 11/2962; RH’s diary entry for 11 Mar. 1960. Robert Hall Diaries, 231-2. Figures in Lamb, Macmillan Years, 66. Samuel Brittan, ‘A Backward Glance: The Reappraisal of the 1960s’, Transcript of lecture delivered at Institute of Contemporary British History, Apr. 1997. F. T. Blackaby, ‘Narrative, 1960-74’, in F. T. Blackaby [ed.], British Economic Policy 1960-74: Demand Management, Cambridge 1979 edn., 15. Ibid. Amory to Macmillan, 27 Jun. 1960, PRO PREM 11/3291. Fortunately, realising the impending problem that the Mark’s revaluation would cause, the Bank of England, acting in concert with European central bankers, made

Notes

70 71 72 73 74 75 76 77 78 79

80 81 82

83 84 85 86 87 88 89 90 91

92 93 94

199

available a stockpile of some £300 million to boost currency reserves for the time when, inevitably, ‘hot’ money would begin to leak out of sterling. This was known as the ‘Basle arrangement’. Conversely, however, the Basle cover appeared to delay government action, as it disguised the problem. The paralysis which seemed to grip ministers in the crisis was only shrugged off when, in July 1961, the deficit reached £445m and Lloyd was compelled, finally, to act. See Middlemas, Power I, 298-300. Donald Winch, Economics and Policy: An Historical Study, London 1969, 292. D.R. Thorpe, Selwyn Lloyd, London 1989, 324-5. Note that the 10% figure refers not to a change in the tax itself, but a variation on the percentage of its prevailing rate. Middlemas, Power I, 300; Kynaston, The City IV, 259. AC’s diary entries for 17 Jul. & 16 Sept. 1961. Cairncross, Diaries, 42-3; also 36-7. Brittan, Steering the Economy, 157. RH’s diary entry for 2 Apr. 1961. Robert Hall Diaries, 261; Lamb, Macmillan Years, 71-2. The Next Five Years, sub-section entitled ‘Sharing Prosperity’. [My insert.] Harold Macmillan, At the End of the Day, London 1973, 35. Middlemas, Power II, 48. ‘Record of Conversation with Sir Frank Lee at Cambridge’ (Interviewer unknown), 17 Sept. 1963, CAC, SELO 4/35. Frank Lee was Roger Makins’ replacement as the Treasury’s Permanent Secretary, he was in the post for two-and-a-half years before retiring, having suffered a heart-attack. AC’s diary entry for 16 Sept. 1961. Cairncross, Diaries, 43. Howard Evans’ diary entry for 29 Jul. 1961. Harold Evans, Downing Street Diary: The Macmillan Years 1957-63, London 1981, 153. On Gallup, it represented the first time since the election that Labour had overtaken the Tories on their opinion survey. The former remained in the lead consistently until the Oct. 1964 election. See R. L. Leonard, Guide to the General Election, London 1964, 196 (fig. 10). Bernstein, Myth of Decline, 187. AC’s diary entry for 10 Aug. 1958. Cairncross, Diaries, 11. Ibid. Figures from Leonard, General Election, Appendix 3. Turner, Macmillan, 246. Kevin Jefferys, Retreat from New Jerusalem: British Politics 1951-64, Basingstoke 1997, 84. Barnett, Verdict, 515. Roberts, Eminent Churchillians, 253; Gilmour & Garnett, Whatever Happened to the Tories, 52-3, provides a necessary corrective. Richard Rose, The Prime Minister in a Shrinking World, Cambridge 2001, 182. The CoPPI was intended to provide an additional layer of ‘political education’ to supplement the EPB’s work; neither body had any explicit planning function. RH’s diary entry for 18 Dec. 1957. Robert Hall Diaries, 136; Cairncross in Floud & McCloskey, Economic History of Britain III, 62. Mercer, Competitive Order, 152; Yamey in Yamey, Resale Price Maintenance, 288. Middlemas, Power II, 38.

200

95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117

118 119 120 121 122 123 124 125 126

Notes

Alan Booth, ‘Britain in the 1950s: A ‘Keynesian’ Managed Economy?’, History of Political Economy, vol.33 no.2 (2001), 283-313. Tomlinson in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 279. S. Broadberry and N. Crafts, ‘Competition and Innovation in 1950s Britain’, London School of Economics Working Papers in Economic History, no.57, 2000. Ibid. Tomlinson in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 285. C. K. Rowley, The British Monopolies Commission, London 1966, 249. Cairncross to Lee, 12 Jan. 1962, PRO T 311/41. See for example, Harrod to Macmillan, 4 Jun. 1960, PRO PREM 11/2973. Ernest Kleinwort’s speech to shareholders in 1962, quoted in Kynaston, The City IV, 266. ‘Monopoly: Three Political Angles’, The Times Review of Industry, Apr. 1961. Hannah, Corporate Economy, 172. Daily Mirror, 14 Nov. 1957. Pemberton, Policy Learning, 71-2. Ibid. Christopher Booker, The Neophiliacs: A Study of the Revolution in English Life in the Fifties and Sixties, London 1969, 142. Edward Heath, The Course of My Life, London 1999, 195. Ibid, 198-9. Maudling to Macmillan, 10 Oct. 1960, PRO PREM 11/2973. [My inserts.] RH’s diary entry for 1 Dec. 1959. Robert Hall Diaries, 221. Financial Times, 4 Nov. 1959. Hopkin to Hall, 12 Nov. 1959, PRO T 234/622. See variously, Hall to Padmore, 13 Nov. 1959; Barber to Amory, 20 Nov. 1959, PRO T 234/622. Ogilvy-Webb to Mark, 9 Dec. 1959, PRO T 234/622, refers to an ‘approach’ by Heath to Amory on this subject in November. It is not clear from the document whether this was a verbal or a written approach. Boyle to Amory, 25 Nov. 1959, PRO T 234/622. Figures from Self Service and Supermarket Annual Survey and Directory, 1965, cited in Pickering, Resale Price Maintenance, 127. Pickering, Resale Price Maintenance, 137. The Times Survey of Food in Britain, 1957, Times supplement, 21 Jan. 1957. Which?, Summer 1958. 16 Dec. 1959, RPSGB, FPDC Papers. Carol Kennedy, The Merchant Princes. Family, Fortune and Philanthropy: Cadbury, Sainsbury and John Lewis, London 2000, 235. Memorandum from the Chairman of JLP on Resale Price Maintenance, 18 Dec. 1959, John Lewis Partnership (JLP) Archives. (No piece number.) Green Shield Stamps, the most famous of these, were introduced in 1958–though they were not the first saving stamps to be launched.

Notes

127 128 129 130 131 132 133 134 135 136 137 138

139 140 141 142 143

144 145 146

147 148

149 150 151 152 153 154 155 156 157

201

NCT Doc.1322, 26 Jul. 1960, Guildhall Library (GL), National Chamber of Trade Papers, MS 29343/7. Lawson & Bruce-Gardyne, Power Game, 86. Brunner to Hopkin, 12 Nov. 1959, PRO T 234/622. EA(59)25, 15 Dec. 1959, PRO CAB 134/1681. NCT Doc.1304, 23 Feb. 1960, GL, NCT Papers, MS 29343/7. Ogilvy-Webb to Mark, 13 Jan. 1960, PRO T 234/622. [My inserts.] ‘Resale Price Maintenance: Paper by the President of the Board of Trade’, EA(60)2, 26 Jan. 1960, PRO CAB 134/1686. EA(60)4, 10 Feb. 1960, PRO CAB 134/1685. A common Tory dilemma in the post-war period: see Tomlinson in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 283. HM’s diary entry for 22 Mar. 1956. Macmillan Diaries 1950-57, 545. CC(60)13, 26 Feb. 1960, PRO CAB 128/34. Tratt, Macmillan Government, 25-6; Maudling, Memoirs, 71-3. Maudling was the chief negotiator in the EFTA negotiations; his memoirs contain an adequate, if short, account of the events. Macmillan to Amory, 9 Dec. 1959, PRO BT 11/5562. Middlemas, Power I, 387n. Walter Lacqueur, Europe In Our Time, Harmondsworth 1992, 197. Macmillan, End of the Day, 6. Macmillan’s observation on letter from Gladwyn Jebb to Lloyd, 18 Jul. 1960, PRO PREM 11/4225. Lord Gladwyn was very shortly to become President of the European Movement. ‘Memorandum by the Prime Minister’ (Draft for the ‘Grand Design’), n.d. (prob. Dec. 1960), PRO PREM 11/3325. Ibid. [Emphasis as original.] Macmillan to Bligh, 16 Sept. 1960, quoted in Alistair Horne, Macmillan 1957-1986 (Volume II of the Official Biography), London 1989, 257; Lord Roll believed that Macmillan’s attitudes on this matter were not artifice, but were genuine and longstanding. Interview with Lord Roll (Interviewer: S. Mitchell), Nov. 2002. ‘Sixes and Sevens’, Lee to Macmillan, 22 Apr. 1960, PRO PREM 11/3133. Heath’s European credentials were well established. His maiden speech in the Commons, for instance, had been on Europe, the fact of which he never tired of reminding his colleagues in the Common Market negotiating team. Interview with Lord Roll (Interviewer: S. Mitchell), Nov. 2002. Ashford in Layton-Henry, Conservative Party Politics, 98. D. R. Thorpe, Alec Douglas-Home, London 1996, 208. Ramsden, Winds, 132. Private information. Ramsden, Winds, 131. Middlemas, Power I, 388n. Turner, Macmillan, 217-8. Note of exchange between Harpham and Wormser, 16 Dec. 1960, PRO T 299/87. Foreign Office Telegram for general distribution, 2 Mar. 1961, PRO T 299/87.

202

158 159 160 161 162 163 164 165 166

167

168 169 170 171 172 173 174

175 176 177 178 179

180 181 182 183 184

Notes

Owen (Treasury) to France (FO), 10 Feb. 1961, PRO T 299/87. HC Debs vol. 639 col. 234, 25 Apr. 1961. Tratt, Macmillan Government, 105. Maudling to Macmillan, 15 Jun. 1961, PRO T 299/88. Lamb, Macmillan Years, 150-1. Birkinshaw et al, Government by Moonlight, 66. Harrod to Macmillan, 30 Aug. 1960, PRO PREM 11/2973. [My emphasis.] Mills to Macmillan, 9 Sept. 1960, PRO PREM 11/2973. Astrid Ringe & Neil Rollings, ‘Responding to Relative Decline: The Creation of the National Economic Development Council’, Economic History Review, vol. 53 no.2 (2000), 331-53. Quoted in Stewart Wood, ‘Why ‘indicative planning’ failed: British industry and the formation of the National Economic Development Council, 1960-64’, Twentieth Century British History, vol.11 no.4 (2000), 431-59. Sir Hugh Beaver, from The Next Five Years: Report of an FBI Conference at Brighton, 24-26 Nov. 1960, quoted in ibid. RH’s diary entry of 5 Jan. 1961. Robert Hall Diaries, 256-7. The Times, 5 Jan. 1961. Brittan, Steering the Economy, 86. Kynaston, The City IV, 254. Macmillan to Lloyd, 5 Jan. 1961, PRO PREM 11/3293. Middlemas, Power II, 15. Middlemas argues that ‘neo-corporatist’ systems such as those in place in Scandinavia were seen by officials as too egalitarian and, since they eschewed ‘universality’ in their welfare, would have been inappropriate for the UK to adopt. Internal Treasury Brief: ‘French Methods of Long Term Planning’, n.d. (prob. Feb. 1961), PRO T 230/657. Blank, Industry and Government, 169. See, for example, the Manchester Guardian and the Financial Times, 24 Apr. 1961; Pemberton, Policy Learning, 65-6. Background note on Dow’s speech, n.d. (prob. 21 Apr. 1961), PRO T 230/657. On the origin and nature of ‘departmental sponsorship’, see Morris Davis, ‘Some Neglected Aspects of British Pressure Groups’, Midwest Journal of Political Science, vol.7 no.1 (1963), 42-53. Lee to Hubback, 5 May 1961, PRO T 230/657. ‘Economic Growth and National Efficiency’, C(61)94, Jul. 1961, PRO CAB 129/ 105. Wood, ‘Why ‘indicative planning’ failed’. Industrial Charter, 11-13. HC Debs, vol. 586 col. 403-4, 17 Apr. 1958. This speech, one of the last he made in the Commons, is a good illustration of Boothby’s sympathy for French style planning. His attitude to planning was coloured by a staunch pan-European mindset, of which a fair example is his Memorandum on Policy for the European Movement, 1950. This latter is reproduced in Lord Boothby, Boothby: Recollections of a Rebel, London 1978, Appendix 2, esp. 263-4.

Notes

185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200

201 202 203

203

Macmillan to Lloyd, 1 Jul. 1961, PRO PREM 11/3883. Also, see above, chapter two. HC Debs, vol. 645 col. 220, 25 Jul. 1961. Macmillan to Lloyd, 29 Aug. 1961, PRO PREM 11/3883. HM’s diary entry for 21 Sept. 1961. Macmillan, End of the Day, 37. Middlemas, Power II, 15-6. Lloyd to Harrison, 23 Sept. 1961, Modern Records Centre, Warwick (MRC), CBI Papers, MSS 200 F/3/S2/33/1, quoted in Wood, ‘Why ‘indicative planning’ failed’. Memorandum from Kipping, 14 Aug. 1961, MRC, MSS200 F/3/S2/7/7, quoted in ibid. ‘Record of Conversation with Sir Frank Lee at Cambridge’, 17 Sept. 1963, CAC, SELO 4/35. Lloyd to Woodcock, 10 Jan. 1962, CAC, SELO 4/22. Thorpe, Selwyn Lloyd, 328. Thorpe, Selwyn Lloyd, 329; CC(62)8, 25 Jan. 1962 (am), PRO CAB 128/36. Turner, Macmillan, 245. Nigel Harris, Competition and the Corporate Society: British Conservatives, the State and Industry, 1945–64, London 1972, 242. These criticisms, respectively, in The Observer, 14 Jan. 1962; The Economist, 2 Dec. 1961; The Spectator, 10 May 1963. Harris, Corporate Society, 243. An attitude that bore more than a passing resemblance to that of Labour’s Chancellor, Snowden, in 1930 towards MacDonald’s early piece of quasi-corporative machinery, the Economic Advisory Council, which was clearly MacDonald’s ‘baby’ (as was ‘Nicky’ Macmillan’s). For Lloyd’s attitude to NIC, see Barnes in McKie & Cook, Decade, 15. I am grateful to Julian Touhig for his suggestion of this parallel. Edward Pearce, The Lost Leaders: The Best Prime Ministers We Never Had, London 1997, 309. HM’s diary entry for 10 Oct. 1961. Macmillan, End of the Day, 41. HM’s diary entry for 13 Oct. 1961. Macmillan, End of the Day, 43.

CHAPTER FOUR 1 2 3 4

5 6

7

ACP(61)45, Minutes of 8 Feb. 1961, CPA, Harvester MFC1. Green in Lawrence & Taylor, Party, State and Society, 183-6. See also chapter 6 below. Ramsden, Winds, 148. Sir Frank Lee: Comment on the Working Party’s Report, 18 May 1961, PRO PREM 11/4768. I am grateful to my research assistant, Jane Swann, for drawing this source to my attention. Lloyd to Macmillan, 7 Jun. 1961, CAC, SELO 4/35. Richard S. Grayson, ‘The British Government, the Channel Tunnel and European Unity, 1948-64’, European History Quarterly, vol.26 no.3 (1996), 415-36; L. Johnman & F.M.B. Lynch, ‘A Treaty too Far? Britain, France, and Concorde, 19611964’, Twentieth Century British History, vol.13 no.3 (2002), 253-76. Cockett, Thinking, 151.

204

8 9 10 11 12

13

14

15

16 17 18

19 20 21 22 23 24 25 26 27 28 29

30 31 32 33 34 35

Notes

B. S. Yamey, Resale Price Maintenance and Shoppers’ Choice, London 1960. Mercer, ‘The Abolition of Resale Price Maintenance.’ W. S. Andrews & F. Friday, Fair Trade: Rpm Re-examined, London 1960, 73. Ibid, 71-2. Which?, Oct. 1961; CRD Research Paper on Price Maintenance, 5 Jul. 1962, PRO PREM 11/4536. The CA’s research revealed that a further 16% of its members and 22% of the public believed that price cutting should be allowed at designated ‘sale times’; in effect, only 7% and 17% respectively supported the status quo. Transcript of speech given by Mr. Paul May (JLP’s Deputy Chairman) at the Drapers Summer School on 19 Jul. 1960, The Gazette of the John Lewis Partnership, 23 Jul. 1960, JLP Archives. The post of Registrar of Restrictive Trading Agreements was created in 1956 to compile the register of practices and to bring such agreements before the RTPC for examination. BPP, Session 1960-1, vol. xix, Registrar for Restrictive Trading Arrangements: Report for the period 7 Aug. 1956 to 31 Nov. 1959 (Cmnd.1273), ch. 2 pgh. 38. [My inserts.]; See also ch. 1 pgh. 25. Middlemas, Power II, 407; Some 600 more had, however, been “modified”. Peter Donaldson, Guide to the British Economy, Harmondsworth 1976, 94. FO Draft Internal Memorandum, 26 May 1961, PRO T 299/88. Macmillan to Maudling, 24 Jun. 1961, PRO T 311/41. The phrase ‘our recovery’ I interpret to mean the recovery of the British economy, rather than the revival of the Conservative Government. Interview with Lord Roll (Interviewer: S. Mitchell), Nov. 2002. Maudling to Macmillan, 29 Jun. 1961, PRO T 311/41. ‘Board of Trade Enquiry into RPM – Report’, ch. 6 pgh. 234, PRO BT 213/122. [My emphasis.] ‘Board of Trade Enquiry into RPM – Report’, ch. 6 pgh. 257, PRO BT 213/122. ‘Economic Growth and National Efficiency’, C(61)94, Jul. 1961, PRO CAB 129/ 105. Vintner to Hopkin, 21 Dec. 1961, PRO T 311/41. [Emphasis as original.] Lee to Hubback, 3 Apr. 1962, PRO T 311/41. The Times, 20 Nov. 1961; Pemberton, Policy Learning, 77-9. Figures taken from Leonard, General Election, 239. Lindsay & Harrington, Conservative Party, 211. Extract from the minutes of the 1922 Committee of 22 Mar. 1962, quoted in Philip Goodhart with Ursula Branston, The 1922: The Story of the Conservative Backbenchers’ Parliamentary Committee, London 1973, 181-4. Ibid. Crossbow, no.20, Jul.-Sept. 1962. CRD Report - ‘After Orpington: Mar. 1962’, 2 Apr. 1962, CPA, CCO 120/2/89. ‘Orpington By-election: Final Report’, 22 Mar. 1962, CPA, CCO 120/2/89. Figure taken from Leonard, General Election, 185. ‘Current Issues in Eastleigh’, 1 May 1962, CPA, CCO 180/27/6/2.

Notes

36 37 38 39 40 41 42 43

44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68

205

HM’s diary entry for 24 Mar. 1962. Horne, Macmillan II, 336. [Emphasis as original.] ‘Background to the By-election’, CBER(62)3, 6 Apr. 1962, CPA, CCO 180/ 27/6/2. Jo Grimond, Memoirs, London 1979, 203. T. E. Utley in The Spectator, 10 May 1963, quoted in Gamble, Conservative Nation, 73. Maudling’s comment (mid-1962?), quoted in Anthony Sampson, Macmillan: A Study in Ambiguity, London 1967, 247. CRD Briefing 1963, n.d. (prob. early 1963), CPA, CRD 2/50/8. [Emphasis as original.] See, for instance, Macmillan to Lloyd, 11 Apr. 1962, CAC, SELO 4/35. EA(62)13, 4 Apr. 1962, PRO CAB 134/1693; Soames’ attitude is clear not from the minutes but from a subsequent letter from another EPC member, Edward Boyle, to the Chancellor, see Boyle to Lloyd, 17 May 1962, PRO T 311/41. CC(62)33, 15 May 1962, PRO CAB 128/36. Kennedy, Merchant Princes, 244. Financial Times, 3 Apr. 1962. Macmillan to Erroll, 28 May 1962, PRO T 311/41. Boyle to Lloyd, 17 May 1962, PRO T 311/41. Lee to Hubback, 18 May 1962, PRO T 311/41. Draft cabinet paper on RPM from Lloyd to Macmillan, 4 Jun. 1962, PRO PREM 11/4536. [My emphasis.] ‘National Efficiency and Obstacles to Growth’: Working Party on Economic Growth Paper for NEDC, 17 Apr. 1962, PRO BT 258/1467. ‘Meeting of the National Economic Development Council: Report to the Board of Trade’, 10 May 1962, PRO BT 258/1467; Middlemas, Power II, 74. Unusually, since rpm had not been part of Molony’s terms of reference. Harrod to Macmillan, 12 May 1962, PRO PREM 11/3742. HM’s diary entry for 12 Jun. 1962. Macmillan, End of the Day, 85. ‘Transcript of Prime Minister’s remarks to the Cabinet’, 28 May 1962, PRO PREM 11/3930. Industrial Charter, 28-32. ‘Transcript of Prime Minister’s remarks to the Cabinet’, 28 May 1962, PRO PREM 11/3930. ‘Incomes Policy’, Memorandum from the Prime Minister, C(62)99, 19 Jun. 1962, PRO CAB 129/109; CC(62)41, 22 Jun. 1962, PRO CAB 128/36. Macmillan, End of the Day, 106. HC Debs, vol. 663 col. 1751-68, 26 Jul. 1962. HC Debs, vol. 663 col. 1777, 26 Jul. 1962. Harris, Corporate Society, 167. Ramsden, Winds, 163. Bligh to Macmillan, 25 Jun. 1962, PRO PREM 11/4536. Bligh to Macleod, 4 Jul. 1962, PRO PREM 11/4536. Macleod to Macmillan, 9 Jul. 1962, PRO PREM 11/4536. Lee to Hubback, 9 Jul. 1962, PRO T 311/260. [Emphasis as original.]

206

69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96

97

98 99

Notes

HE’s diary entry for 3 Jun. 1962. Evans, Downing Street Diary, 199. PATA, Resale Price Maintenance: Effects of Possible Government Action Examined– A Statement to Members of Parliament, London 1962. HC Debs, vol. 661 col. 1351, 28 Jun. 1962 HC Debs, vol. 662 col. 1148-9, 10 Jul. 1962. The Spectator, 20 Jul. 1962. Note of conversation between Lloyd and Jonathan Aitken, 28 Jul. 1962, CAC, SELO 4/22. HE’s diary entry for 22 Jul. 1962. Evans, Downing Street Diary, 204. Nigel Fisher, Harold Macmillan, London 1982, 275. AC’s diary entry for 15 Jul. 1962. Cairncross, Diaries, 52. Ibid. ‘Record of Conversation with Sir Frank Lee at Cambridge’, 17 Sept. 1963, CAC, SELO 4/35. Thorpe, Selwyn Lloyd, 317. Private information. HE’s diary entry for 22 Jul. 1962. Evans, Downing Street Diary, 204. Lloyd to Sir Frank Lee, 19 Nov. 1961, CAC, SELO 5/83. Heath to Home, 10 Mar. 1962, PRO FO 371/171149. Fisher, Macmillan, 317. Nora Beloff, The General Says No: Britain’s Exclusion from Europe, Harmondsworth 1963, 115. Record of conversation at Château de Champs, 2 Jun. 1962, quoted in Horne, Macmillan II, 328. Horne, Macmillan II, 328-9. HM’s diary entry for 3 Jun. 1962. Macmillan, End of the Day, 120-1. Robert Holland, The Pursuit of Greatness: Britain and the World Role, 1900-1970, London 1991, 311. Quoted in John Baylis, Anglo-American Defence Relations 1939 -1984, London 1984, 102. Macmillan to Heath, 7 Aug. 1962, quoted in Heath, The Course of My Life, 226. HM’s diary entry for 21 Aug. 1962. Macmillan, End of the Day, 128; see also Butler’s diary note, 23 Oct. 1962, TC, RAB G38, for Butler’s (slightly different) take. HM’s diary entry for 12 Sept. 1962. Horne, Macmillan II, 356. Horne, Macmillan II, 356-7. ‘Public Opinion and the Common Market’, CRD paper, 15 Sept. 1962, CPA, CCO 180/27/6/2. Negative reactions to the EEC membership application are discussed more extensively in chapter six. A brief sketch is given in Anthony Forster, Euroscepticism in Contemporary British Politics: Opposition to Europe in the British Conservative and Labour Parties Since 1945, London 2002, 13-15; Several of these groups were causing disquiet at Tory Central Office, see CPA, CCO 500/31/3. A. N. Banks to Conservative Central Office, 8 Aug. 1962, CPA, CCO 500/31/3. N. Piers Ludlow, ‘British Agriculture and the Brussels Negotiations’, in Wilkes, Britain’s Failure, 115.

Notes

100 101 102 103

104 105 106 107 108

109

110 111

112

113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128

207

HM’s diary entry for 10 Oct. 1962. Macmillan, End of the Day, 140. Fisher, Macmillan, 319. Ramsden, Winds, 170. Sir Christopher Audland, ‘The Heath Negotiations 1961-63: Their Origins, Conduct and Outcome’, in C. Audland & R. Denman, with R. Ranieri [ed.], ‘Negotiating Britain’s Membership of the European Communities: 1961-3 and 1971-2’, University of Manchester Working Papers in Economic and Social History, no.43 (2000). Harrod to Macmillan, 7 Dec. 1962, PRO PREM 11/3792. Interview with Lord Roll (Interviewer: S. Mitchell), Nov. 2002. Macmillan to Beaverbrook, 21 May 1960, HLRO, BBK C/235. See, for example, HE’s diary entry, 29 Jul. 1961. Evans, Downing Street Diary, 153; also Selwyn Lloyd’s personal diary note, 1 Nov. 1959, CAC, SELO 4/33. S. Mitchell, ‘Douglas-Home, the Conservative Party and the Threat of Rebellious Youth: 1963-64’, University of Sussex Journal of Contemporary History, vol. 1 no.4 (2002). Available [online]: http://www.sussex.ac.uk/history/1-4-1-2.html F. W. S. Craig, Conservative and Labour Conference Decisions 1945-1981, London 1982, 19. A motion similar had been passed in 1952, but this latter at least acknowledged that the Government was tackling the apparent failure to convey its ideas–the stark absence of such analgesic in the 1962 motion stands in contrast. Butler’s diary note, 1 Dec. 1962, TC, RAB G38. Towards the end of his Premiership, and certainly after the Profumo scandal, Martin Francis has suggested that Macmillan habitually succumbed to episodes of despondency. Martin Francis, ‘Tears, Tantrums and Bared Teeth: The Emotional Economy of Three Conservative Prime Ministers, 1951-1963’, Journal of British Studies, vol.41 no.3 (2002), 357-387. Interview with Lord Home for BBC Radio 4, quoted in Peter Hennessy, Muddling Through: Power, Politics, and the Quality of Government in Postwar Britain, London 1996, 112. Heath, The Course of My Life, 226. HM’s diary entry for 16 Dec. 1962. Macmillan, End of the Day, 354-5. Holland, Pursuit of Greatness, 312. See, for example, Hennessy, Muddling Through, 113. The Times, 3 Jan. 1963. The Times, 12 Jan. 1963. Heath to Macmillan, 1 Dec. 1962, quoted in Horne, Macmillan II, 428. Manchester Guardian, 1 Jan. 1963. Sir Roy Denman, ‘Britain’s Entry 1970-1972: Prelude, Negotiations and Outcome’, in Audland & Denman with Ranieri, ‘Negotiating Britain’s Membership of the EC’. Kynaston, The City IV, 356. The Times, 25 Jan. 1963. Manchester Guardian, 9 Jan. 1963. Vote at NFU Conference of 21 Jan. 1963, report in The Times, 22 Jan. 1963. The Times, 30 Jan. 1963. Macmillan, End of the Day, 375. HE’s diary entry for 3 Feb. 1963. Evans, Downing Street Diary, 251.

208

129 130 131 132 133 134 135 136 137 138 139

140 141

142 143 144 145 146

147

148 149

Notes

1963/138: ‘Challenge Accepted’. A CCO leaflet giving the full transcript of the PM’s TV Broadcast of 30 Jan. 1963, CPA, Harvester MFC1. Middlemas, Politics in Industrial Society, 424. Pemberton, Policy Learning, 29. Macmillan to Lloyd, 1 Feb. 1961, PRO PREM 11/3883. Macmillan to Diefenbaker, 24 Jun. 1962, PRO PREM 11/3883. Sampson, Macmillan, 222-3. ‘Modernisation of Britain’, Memorandum from the Prime Minister, 30 Nov. 1962, C(62)201, PRO CAB 129/111. Prime Minister’s Cabinet speech notes, 29 Oct. 1962, PRO PREM 11/4520. See Green, Ideologies, 190-1, for some useful comments. Prime Minister’s Cabinet speech notes, 29 Oct. 1962, PRO PREM 11/4520. Lawson & Bruce-Gardyne, Power Game, 27-9; See also, Annabelle May, ‘Concorde – Bird of Harmony or Political Albatross: An Examination in the Context of British Foreign Policy’, International Organization, vol.33 no.4 (1979), 481-508. May suggests that the Treasury was defeated due to lack of resources to mount an effective campaign, rather than because of the Prime Minister’s predilection for increased spending. T. Russel, The Tory Party: Its Policies, Divisions and Future, Harmondsworth 1978, 35. The Times, 10 Jan. 1963; See also HE’s diary entry for 13 Jan. 1963, in which the Evans records the PM’s delight at being able to reprove the meeting’s chairman for “Birmingham’s indifference to the wellbeing of their fellow countrymen in less fortunate parts of the country”. Evans, Downing Street Diary, 245. Evans to Macmillan, 15 Feb. 1963, PRO PREM 11/5015. Evans to Macmillan, 19 Feb. 1963, PRO PREM 11/5015; See also HE’s diary entry for 24 Feb. 1963. Evans, Downing Street Diary, 255. Record of internal meeting of Trade officials, 20 Nov. 1962, PRO BT 258/1467. ‘National Efficiency and Obstacles to Growth’: Working Party on Economic Growth Paper for NEDC, 17 Apr. 1962, PRO BT 258/1467. Nick Tiratsoo, ‘Limits of Americanisation: The United States Productivity Gospel in Britain’, in Becky Conekin, Frank Mort, and Chris Waters [eds.], Moments of Modernity: Reconstructing Britain 1945-1964, London 1999, 112-3. In fact, complaints about this hostility towards a more technocratic approach in British management had been made on behalf of the state as early as 1929, in the Final Report of the Balfour Committee on Industry and Trade. See Hannah, Corporate Economy, 141. Harold Perkin, The Rise of Professional Society: England Since 1880, London 1989, 305; See also N.Tiratsoo, ‘”What you need is a Harvard”. American influence on British management education, c.1945-65’, in T.R.Gourvish & N.Tiratsoo [eds.], Missionaries and Managers: American Influences on European Management Education, 1945-60, Manchester 1998, 145-6. For instance: Nancy McNulty, Training Managers: The International Guide, New York 1969, ix, 1-2. Record of internal meeting of Trade officials, 20 Nov. 1962, PRO BT 258/1467.

Notes

150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174

175 176

209

Rampton to Bretherton, n.d. (prob. Dec. 1962), PRO T 224/1018. Bretherton to Petch, 29 Jan. 1963, PRO T 224/1018. Bernstein, Myth of Decline, 191-2. For instance, Hailsham to Macmillan, 6 Nov. 1962, PRO PREM 11/4520; H. Rose and S. Rose, Science and Society, Harmondsworth 1970 edn., 83-5. Pemberton, Policy Learning, 96-7; Tom Ling, The British State since 1945, Cambridge 1998, 63. Erroll to Maudling, 20 Dec. 1962, PRO T 311/260. Bligh to Macmillan, 19 Feb. 1963, PRO PREM 11/4202. See, for instance, C.F. Pratten to T.C. Fraser, 18 Apr. 1963, PRO FG 2/88. Lamb, Macmillan Years, 208-13. ‘Report of the Sub-Committee on Monopolies’, EA(63)105, 5 Jul. 1963, PRO CAB 134/1701. A reasonably even-handed summary is given in Wayland Young, The Profumo Affair: Aspects of Conservatism, Harmondsworth 1963, passim. Private Eye, 22 Mar. 1963. Flanders & Swann, At the Drop of Another Hat, Parlophone PCS 3052, 1964. N.O.P. Bulletin (Supplement), Jul. 1963. HM’s diary entry for 5 May 1963. Macmillan, End of the Day, 407. The Spectator, 17 Jan. 1964; R. Bevins, The Greasy Pole: A Personal Account of the Realities of British Politics, London 1965, 101. Minutes of meeting on the economy at Chequers, 28 Apr. 1963 (No piece num-ber), CPA, SC(63). Ibid. Charles Loft, ‘Reappraisal and Reshaping: Government and the Railway Problem 1951-64’, Contemporary British History, vol.15 no.4 (2001), 71-92. Ibid. CC(63)16, 21 Mar. 1963, PRO CAB 128/37; Lamb, Macmillan Years, 442. The Times, 1 May 1963. Interview with Lord Deedes (Interviewer: S. Mitchell), May 2004. Wiener, English Culture, 100-4. The Titfield Thunderbolt, Ealing Studios, 1952. Many of the Ealing comedy films possessed subtexts of resistance to modernity and the coercive power of the state, thus in their small way reinforcing the cultural scaffolding that upheld Britain’s selfimage of tranquil post-industrialism. Particularly, this is true of The Man in the White Suit (1951) and Passport to Pimlico (1949). The Times, 1 May 1963. Robert J. Jackson, Rebels and Whips: An Analysis of Dissension, Discipline and Cohesion in British Political Parties, London 1968, 168-9.

CHAPTER FIVE 1

The best (and wittiest) summary, albeit perhaps a little exaggerated in respect of Macmillan’s role, is contained in Gilmour & Garnett, Whatever Happened to the Tories, ch.VIII, passim.

210

2 3 4

5

6

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

28

Notes

Daily Express, 16 Oct. 1963. The following paragraph is based upon Mitchell, ‘The Conservative Party and the Threat of Rebellious Youth.’ Home to Emrys-Evans, 15 Nov. 1961, British Library (BL), Emrys-Evans Papers, 58257, fo.23. Emrys-Evans was Conservative Member for South Derbyshire until 1960. Home to Fraser, ‘Statement of Personal Beliefs’ (First Draft), Dec. 1963, PRO PREM 11/5006. I am grateful to Professor Peter Hennessy for drawing this file to my attention. Extract from Home’s speech to the General Assembly of the Church of Scotland on 28 May 1962, contained in Sir Alec Douglas-Home, Peaceful Change: A Selection of Speeches, London 1964, 48. Harshan Kumarasingham, ‘“Home sweet Home”: The Problematic Leadership of Sir Alec Douglas-Home’, Conservative History Journal, no.5 (2005), 13-15. Interview with Lord Deedes (Interviewer: S. Mitchell), May 2004. Constituent’s letter to Lloyd, 23 Dec. 1963, CAC, SELO 6/142. The “mess of pottage” in this case being the Treaty of Rome. HC Debs vol. 684 col. 46, 12 Nov. 1963. David Ormsby-Gore to Home, 21 Oct. 1963, PRO PREM 11/5011. Commentary, vol.36 no.6, Dec. 1963. Rab Butler’s comment to Home, quoted in Gilmour & Garnett, Whatever Happened to the Tories, 202. Sunday Times, 20 Oct. 1963, quoted in Thorpe, Douglas-Home, 316. Daily Mail, 31 Oct. 1963. Evening Standard, 18 Oct. 1963. Cecil King’s diary entry for 25 Jul. 1965. C. King, The Cecil King Diary 1965-1970, London 1972, 24. Bevins, Greasy Pole, 143. N.O.P. Bulletin, Oct. 1963; Daily Telegraph, 1 Nov. 1963. Kenneth Young, Sir Alec Douglas-Home, London 1970, 171. Harold Wilson, quoted in ibid. Interview with Lord Deedes (Interviewer: S. Mitchell), May 2004. Ramsden, Winds, 215 Douglas-Home’s television interview of 21 Oct. 1963, quoted in Young, DouglasHome, 173. (Programme and channel unspecified.) ‘The Government’s Policies and Plans’, CP(63)20, 22 Nov. 1963, PRO CAB 129/ 115. Middlemas, Power II, 73. John Campbell, Edward Heath: A Biography, London 1993, 158. For Ted Heath the idea of regional regeneration, coupled with his longing to take Britain into the Common Market, represented his personal ideal of ‘One Nation’ sentiment. In the respect that he was convinced of Heath’s commitment to the modernising agenda, Home’s toleration of the actions of the President of the Board (especially in relation to his assault on rpm) was understandable. Maudling, Memoirs, 116-7.

Notes

29

30

31 32 33 34 35 36

37 38

39 40 41

42 43 44 45 46 47 48

49 50 51

211

Mitchell, ‘The Conservative Party and the Threat of Rebellious Youth’; Also some useful comments in R. S. Grayson, ‘Mods, Rockers and Juvenile Delin-quency in 1964: The Government Response’, Contemporary British History, vol.12 no.1 (1998) 19-47. The following two sections are based upon my article ‘Resale Price Maintenance and the Character of Resistance in the Conservative Party: 1949-64’, Canadian Journal of History, vol.40 no.2 (2005), 259-88. A. Roth, Heath and the Heathmen, London 1972, 176. Draft paper on Rpm and the Treaty of Rome, n.d. (prob. May 1962), PRO BT 64/5234. F. D. Boggis, ‘The EEC’, in Yamey, Resale Price Maintenance, 182-4, 215. Middlemas, Power II, 73. Lawson & Bruce-Gardyne, Power Game, 95-6. For a decent survey see Lawrence Black, ‘Which?craft in Post-war Britain: The Consumers’ Association and the Politics of Affluence’, Albion, vol.36 no.1 (2004), 52-82. Board of Trade Statistics Division: Areas of Retail Growth, 9 Mar. 1964, PRO BT 258/1909; see also Porter in Tiratsoo, From Blitz to Blair, 119. Carlo Morelli, ‘Constructing a Balance between Price and Non-Price Competition in British Multiple Food Retailing 1954-64’, Business History, vol.40 no.1 (1998), 4561. Figures from Pickering, Resale Price Maintenance, 103. NCT Leaflet : ‘Now Who’s The Mug?’, n.d., GL, NCT Papers, MS 29343/7 We have already noted the reluctance to engage with American-style management education programmes in chapter four. Frank Mort has perceived similar cultural resistance to US models of advertising. F. Mort, ‘The Commercial Domain: Advertising and the Cultural Management of Demand’, in Conekin, Mort, & Waters, Moments of Modernity, 65-6. 10 Oct. 1963, RPSGB, IRA 2001.039, PATA Minute books. 2 Dec. 1963, RPSGB, PATA Minute books. Kennedy, Merchant Princes, 243-4. The Times, 17 Jan. 1964; Lawson & Bruce-Gardyne, Power Game, 93. Pickering, Resale Price Maintenance, 107. BPP, Final Report of the Committee on Consumer Protection (Cmnd.1781), London 1962, pgh. 814. DTA Bulletin, 29 Nov. 1963, GL, NCT Papers, MS 29343/7; S. Mitchell, ‘The Traders and the Tories: The Price Maintenance and Gift Stamp Controversies of 1963-4’, Conference paper delivered at University of Wolverhampton, Centre for the History of Retailing and Distribution Annual Conference, September 2004. Heath, The Course of My Life, 259. Pickering, Resale Price Maintenance, 218; Morelli, ‘Constructing a Balance’. The precise timing of his decision is unclear from the available evidence. I review this evidence in ‘Resale Price Maintenance and the Character of Resistance’.

212

52

53 54 55 56 57 58 59

60 61 62 63 64 65 66

67 68 69

70 71

72 73 74 75 76 77 78

Notes

BPP, Session 1963-4, vol.xvi, Monopolies Commission, Report 21, Report on the Supply of Electrical Equipment for Mechanically Propelled Land Vehicles, pgh. 1038. The Times, 20 Dec. 1963. EP(63)11, 19 Dec. 1963, PRO CAB 134/1803. Matthew Hilton, ‘Consumer Politics in Post-war Britain’, in Martin Daunton and Matthew Hilton [eds.], The Politics of Consumption, Oxford 2001, 243. Black, ‘Which?craft in Post-war Britain.’ Heath to Home, 17 Dec. 1963, PRO PREM 11/5154. EP(64)1, 8 Jan. 1964, PRO CAB 134/1805. [My emphasis.] Maudling to Home, 24 Dec. 1963, PRO PREM 11/5154. (Maudling had endeavoured to bring rpm back to Cabinet in the twilight days of the Macmillan administration–it was hardly surprising that he should defend Heath’s proposal therefore. Maudling to Macmillan, 29 Jul. 1963, PRO T 311/260.) Memorandum on EPC discussions from the Chancellor of the Exchequer, CP(64)13, 9 Jan. 1964, PRO CAB 129/116. ‘Memorandum on Monopolies, Restrictive Practices and Resale Price Maintenance’, CP(64)11, 9 Jan. 1964 PRO CAB 129/116. CM(64)3, 14 Jan. 1964, PRO CAB 128/38. Chapter six enlarges on this theme. For instance, Jefferys, Retreat, 186; Heath, The Course of My Life, 260. Young, Douglas-Home, 182. Alec Douglas-Home, Transcript of Interview for BBC Radio 4 (Interviewer: P. Hennessy), Oct. 1989. CM(64)4, 15 Jan. 1964, PRO CAB 128/38. Albeit that the Cabinet did manage to wring from him the caveat that manufacturers could argue a case for retention at an independent tribunal. Commander Powell’s comments to the Executive Committee, 12 Dec. 1963, RPSGB, PATA Minute books. NCT Doc.1452, 16 Jan. 1964, GL, NCT Papers, MS 29343/7; Lawson & BruceGardyne, Power Game, 101. Memorandum from F. Pickford to Council Members, 19 Apr. 1963, PRO FG 2/88; Also, on the same file, ‘A Programme for NEDO’, Discussion Paper by C.F. Pratten, 18 Apr. 1963. NEDC, The Growth of the Economy, London 1964, pgh. 487-9. Charles Hey (Secretary of the ABCC) to K.P. Bolton (Secretary of the Coventry Chamber), 21 Feb. 1964, GL, Association of British Chambers of Commerce Papers, MS 17453/2. Robert Booth (Secretary of the Birmingham Chamber) to Charles Hey, 20 Mar. 1964, GL, ABCC Papers, MS 17453/2. USDAW Council’s Statement on Rpm, reproduced in The Times, 10 Feb. 1964. HC Debs vol. 687 col. 224-5, 15 Jan. 1964. HC Debs vol. 687 col. 226, 15 Jan. 1964. HC Debs vol. 687 col. 229, 15 Jan. 1964. The Spectator, 17 Jan. 1964; Kumarasingham, ‘“Home sweet Home”.’ Selwyn Lloyd’s personal diary note, n.d. (prob. early Aug. 1962), CAC, SELO 4/22.

Notes

79 80 81 82 83

84 85 86 87 88

89 90 91 92 93 94 95

96 97 98 99 100 101 102

213

Gilmour & Garnett, Whatever Happened to the Tories, 206. Lindsay & Harrington, Conservative Party, 224. Goodhart & Branston, The 1922, 198. Redmayne to Heath, 10 Feb. 1964, PRO PREM 11/5154. Jean Blondel, Voters, Parties and Leaders: The Social Fabric of British Politics, Harmondsworth 1965 edn, 78. Blondel employed poll data from British Institute of Public Opinion surveys taken between 1959 and 1961. Peter Dorey, The Conservative Party and the Trade Unions, London 1995, 56 Middlemas, ‘A Competitive Symposium: The State in Modern Britain.’ Maureen Tomison, The English Sickness: The Rise of Trade Unions’ Political Power, London 1972, 215. Manchester Guardian, 3 Oct. 1961. Dorey, Conservative Party and Unions, 58-9. The Contracts of Employment Act 1963 first conferred on employees the right to minimum periods of notice on the termination of their contracts of employment and made the length of notice dependent upon the period of continuous service. It grew out of Macmillan’s ‘New Approach’ and, like the Industrial Training Act of the following year, can be viewed as an attempt both to modernise the labour market in respect of regulating aspects of the employment relationship and to cajole the unions into a more active strategy of internal reform. J. Kenner, ‘Statement or Contract? - Some Reflections on the EC Employee Information (Contract or Employment Relationship) Directive after Kampelmann’, Industrial Law Journal, Vol.28 no.3 (1999), 205-31. Redmayne to Home, 24 Jan. 1964, PRO PREM 11/5014. Godber to Home, 4 Mar. 1964, PRO PREM 11/4871. The Economist, 8 Feb. 1964; CM(64)19, 17 Mar. 1964, PRO CAB 128/38. Lawson to Home, 5 Mar. 1964, PRO PREM 11/4871. ACP(63)54, Minutes of 6 Feb. 1963, CPA, Harvester MFC1. Pemberton, Policy Learning, 98-9. Geoffrey Hirst’s speech to constituents, n.d. (prob. late Jan. 1964), quoted in NCT Doc.1457, 12 Feb. 1964, GL, NCT Papers, MS 29343/7. Hirst had a majority of just over 5,000 votes in Shipley–not an especially marginal seat, but possible for Labour to win on a large swing. The Spectator, 28 Feb. 1964. 16 Dec. 1959, RPSGB, FPDC Papers. 12 Feb. 1959 and passim, RPSGB, IRA 2001.039, Resale Price Maintenance Defence Fund Papers. Daily Express, 21 Feb. 1964; NCT Doc.1455, 5 Feb. 1964, GL, NCT Papers, MS 29343/7. Lawson & Bruce-Gardyne, Power Game, 114. 17 Feb. 1960, RPSGB, FPDC Papers. Small wonder, then, that after the Bill had passed onto the statute book, the NCT condemned the RPMCC’s campaign against it as “not wholly satisfactory”–but it was the pressure group’s activities (or lack of them) in the period between 1956 and 1963 that had, in part, brought such a situation about. Minutes of meeting between the

214

103

104 105 106 107 108 109 110

111 112 113 114 115

116 117 118

119

120

Notes

Chairman of the Board and Chairmen of NCT Area Councils, 27 May 1964, GL, NCT Papers, MS 29341. J.F. Buttery (Home Office) Memorandum to Board of Trade, 5 Feb. 1964, PRO BT 258/1909; Redmayne to Home, 27 Jan. 1964, PRO PREM 11/5154; Jarvis, Conservative Governments, 91-2. HC Debs vol. 687 col. 1262, 23 Jan. 1964. NCT Journal, Feb. 1964, GL, NCT Papers. Chemist and Druggist, 1 Feb. 1964. The Spectator, 24 Jan. 1964. ‘Notes on the Shops Act’, n.d. (prob. late Feb. 1964), PRO BT 258/1909. Transcript of BBC TV Panorama programme, 20 Jan. 1964, CPA, CCO 4/9/412. [My inserts.] ‘Draft of Edward Heath’s speech in Eastbourne’, 7 Feb. 1964, PRO BT 258/1903. (Probably the final draft, or, at least, the last one chronologically on this file.) Heath was not the only executive member to summon up publicly Shaftesbury’s spirit to demonstrate that rpm legislation lay squarely in the “progressive tradition”. Butler too connected its interdiction to the heritage begun by Shaftesbury of defending the public interest against the outrages of monopoly. TC, RAB H51, Butler’s notes for speech in Hornchurch (part handwritten, part typescript), n.d. (prob. April 1964). Cosgrave, Strange Death, 96-7. This humbug has been most recently repeated in the BBC TV documentary Tory! Tory! Tory! (BBC2, 5 June 2006). Brittan, ‘A Backward Glance: The Reappraisal of the 1960s.’ The Times, 24 Jan. 1964 (though note on the point made about responsibility for proof, this report is slightly inaccurate); Goodhart & Branston, The 1922, 173. Redmayne to Home, 14 Feb. 1964, PRO PREM 11/5014. HC Debs vol. 691 col. 274, 10 Mar. 1964; He made the same point again during the committee stage, HC Debs vol. 692 col. 369-370, 24 Mar. 1964. In fact, eventually the Net Book Agreement was allowed to stand unchallenged under a neat formula whereby “publishers would merely have to show that individual rpm was an essential element of the restriction in the… agreement which the Court has already approved.” HC Debs vol. 695 col. 260, 12 May 1964. HC Debs vol. 691 col. 276, 10 Mar. 1964. George Hutchinson, quoted in Campbell, Heath, 153. Votes and Proceedings of the House of Commons, no.70, 10 Mar. 1964, HLRO; Campbell, Heath, 153. [My inserts.] Although there had been a prayer to reject the legislation on the order paper, this was not the motion upon which the vote was taken. Instead, MPs voted on a proposal to deny the Bill second reading for six months, although this amounted to much the same thing. Heath’s remarks were not recorded in the official minutes of this meeting, but in a BBC television interview broadcast three years later on 20th January 1967, he admitted that had he had told Home that had Cabinet outvoted him on the continuation of the Bill, his future would have been in doubt. Hailsham, in his memoirs, takes this as code for a resignation threat. Lord Hailsham, A Sparrow’s Flight: Memoirs, London 1990, 392. Findley, ‘The Conservative Party and Defeat’; The Spectator, 27 March 1964.

Notes

121 122 123 124 125 126 127

128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144

215

Morrison to Home, n.d. (prob. 12 Mar. 1964), PRO PREM 11/4991. Lloyd to Home, 14 Feb. 1964, PRO PREM 11/5154. Longden to Blakenham, 14 Feb. 1964, British Library of Political and Economic Science (BLPES) Archive, Gilbert Longden Papers (LONGDEN), File 19. AC’s diary entry for 22 Jan. 1964. Cairncross, Diaries, 83. Gallup Political Index, no.48 (Jan. 1964); Daily Mail, 4 Feb. 1964; see also, N.O.P. Bulletin, Feb. 1964. Gallup Political Index, no.51 (Apr. 1964). Figures on circulation for Daily Express cited in Mark Abrams, Education, Social Class, and Reading of Newspapers and Magazines, London 1966; Daily Express, 12 Feb. 1964. William Hope to Charles Hey, 13 Feb. 1964, GL, ABCC Papers, MS 17453/2. Mercer, ‘The Abolition of Resale Price Maintenance.’ The Record Retailer and Music Industry News, 30 Jan. and 13 Feb. 1964; The National Newsagent and Bookseller, 1 Feb. 1964. Financial Times, 26 Feb. 1964. Photograph of posters at Waitrose (Ealing), Jan. 1964, JLP Archives, 578/C14. Hand-written note (provenance uncertain), n.d. (prob. 15 Feb. 1964), CAC, SELO 6/142. Redmayne to Home, 20 Mar. 1964, PRO PREM 11/5154; The Times, 24 Mar. 1964. HC Debs vol. 692 col. 399, 24 Mar. 1964. Campbell, Heath, 154. Douglas Jay, Change and Fortune: A Political Record, London, 1980, 294-5. Redmayne to Home, 31 Mar. 1964, PRO PREM 11/5154. Daily Express, 31 Mar. 1964. NCT Doc.1463, 3 Apr. 1964, GL, NCT Papers, MS 29343/7; There is also a copy of the RPMCC leaflet on the same file. Morrison to Home, 15 Apr. 1964, PRO PREM 11/5154. Note for the record of a meeting between Home and Heath, 15 Apr. 1964, PRO PREM 11/5154. CM(64)24, 21 Apr. 1964, PRO CAB 128/38. HC Journals 1964-63, No.94, 22 Apr. 1964.

CHAPTER SIX 1

2 3 4

Paul Whiteley, Patrick Seyd, and Jeremy Richardson, True Blues: The Politics of Conservative Party Membership, Oxford 1994; Richard Kelly, Conservative Party Conferences: The Hidden System, Manchester 1989. Robert McKenzie, British Political Parties, London 1964, 258, 230. A. J. Davies, We, The Nation: The Conservative Party and the Pursuit of Power, London 1995, 151. O’Gorman, British Conservatism, 5; Davies, We, The Nation, 153; Whiteley, Seyd, & Richardson, True Blues, 196.

216

5 6 7 8

9 10 11

12 13 14 15 16 17 18 19 20

21 22 23 24

25

26 27 28

Notes

Ken Young, Local Politics and the Rise of Party: The London Municipal Society and Conservative Intervention in Local Elections, Leicester 1975, 211-2. Blondel, Voters, Parties and Leaders, 93; Davies, We, The Nation, 154. Flanders & Swann, At the Drop of a Hat, Parlophone PCS 3001, 1959. Martin Pugh, The Tories and the People 1880-1935, Oxford 1985, 16-7. The League was also officially independent from the central Party (such as it was in the 1880s), another indication of the durability of the Tory preference for considerable local autonomy within the organisation. Green in Lawrence & Taylor, Party, State and Society, 183-4. Ibid; Ramsden, Age of Churchill and Eden, 298-301. Sunday Times, 5 Aug. 1956. Note to Conservative Agents, 4 Jul. 1956, CPA, CCO 120/3/1. ‘The People’s League and the Middle Class Alliance: Report of the Committee of Investigation’, Nov. 1956, CPA, CCO 120/3/5. ‘Report of the Committee of Investigation’, CPA, CCO 120/3/5. Green in Lawrence & Taylor, Party, State and Society, 184; Ramsden, Age of Churchill and Eden, 298. W. S. Carroll, 92 Years: A Chronicle of the Richmond and Barnes Conservative Association 1880-1972, Richmond 1972, 97. [My emphasis.] Blondel, Voters, Parties and Leaders, 107. Tomlinson in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 278. Beatrix Campbell, The Iron Ladies: Why do Women Vote Tory?, London 1987, 94; Gamble, Conservative Nation, 85. It was argued earlier that these reforms were another aspect of modernisation, but they are not the main focus here and therefore are not examined in any depth. Most of the changes were spelt out in the White Paper of February 1959, Penal Practice in a Changing Society. Butler himself gives a broad overview, see Art of the Possible, 200-3. There is an excellent survey of this area in Jarvis, Conservative Governments, ch 2, passim. G. E. Maguire, Conservative Women: A History of Women and the Conservative Party 1874-1997, Basingstoke 1998, 148. F. T. D. Prescott, quoted in Campbell, Iron Ladies, 96. Butler, Art of the Possible, 201; Jarvis, Conservative Governments, 57. CPA, CCO 500/18/52 contains a considerable number of letters of this nature; see also Francis in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 68. Stan Cohen, Folk Devils and Moral Panics, St Albans 1973, ch.1, passim; Grayson, ‘Mods, Rockers and Juvenile Delinquency in 1964’; Mitchell, ‘Conservative Party and the Threat of Rebellious Youth’. Bill Schwarz, ‘Reveries of Race: The Closing of the Imperial Moment’, in Conekin, Mort, & Waters, Moments of Modernity, 189. Arthur Marwick, The Sixties: Cultural Revolution in Britain, France, Italy, and the United States, Oxford 1998, 55-80. Manchester Guardian, 22 Jun. 1964.

Notes

29

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

53 54 55 56 57

217

For especial luridness, see both Daily Mirror and Daily Sketch, 18 May 1964; Membership leaflet from ‘Clean Up T.V.’ campaign, n.d. (prob. Jul. 1964), PRO PREM 11/4646. More to Pearson, 24 Jun. 1964, PRO PREM 11/4646. Deedes to Groves, 2 Jul. 1964, PRO PREM 11/4646. [Emphasis as original.] Mitchell, ‘Testing the ‘Cultural Revolution’ Thesis’. Daily Sketch, 19 May 1964. Mitchell, ‘Conservative Party and the Threat of Rebellious Youth’. Note of meeting held at the Home Office, 15 Sept. 1964, PRO HO 300/8. Evans & Taylor, Salisbury to Major, 135. Daily Mail, 29 Jan. 1964. The Times, 1-3 Apr. 1964; Powell’s Glasgow speech was also reported exten-sively, including in The Times, 4 Apr. 1964. Gilmour & Garnett, Whatever Happened to the Tories, 206. The Times, 17 Jun. 1964. Much of this correspondence can be found on CAC, Powell Papers (POLL) 3/1/29 and 3/1/30. ‘Transcript of Hogg’s speech to Stirlingshire Constituencies’, 22 Apr. 1964, CAC, POLL 3/1/30. Rodney Lowe, ‘The Replanning of the Welfare State 1957-1964’, in Francis & Zweiniger-Bargielowska , Conservatives and British Society, 255. Ibid, 256-7. ACP(61)46, Minutes of 3 May 1961, discussion of paper ACP/61/89, CPA, Harvester MFC1. Minutes of meeting on social problems at Chequers, 28 Apr. 1963, CPA, SC(63), no piece number. Manchester Guardian, 11 Oct. 1963. Longden to Maudling, 22 Nov. 1963; see also Longden to Green, 15 Jan. 1964, BLPES Archive, LONGDEN, File 19. Resolutions passed at the annual meeting of Central Council, Mar. 1964, CPA, NUA 3/2/7. Home to Bemrose, 9 Apr. 1964, CPA, NUA 3/2/7. Redmayne to Home, 19 Jun. 1964, PRO PREM 11/4956. I am grateful to my research assistant, Jane Swann, for drawing this source to my attention. Home’s margin observation on Redmayne’s memo, ibid. It is unclear from Home’s remark whether his objection was to the cost of the review, or to the potential expense of any proposals that might emerge from it. Steering Committee minutes of 24 Jun. 1964, CPA, SC (64)31. Prosperity with a Purpose: The Conservative Party Manifesto, London 1964, subsections entitled respectively ‘Re-shaping Social Security’ and ‘Ways and Means’. A reasonable summary of the trends in ‘Euroscepticism’ is provided in Forster, Euroscepticism in Contemporary British Politics, 129-43. Gallup Political Index, no.18 (Jun. 1961). However, this result denoted (obviously) a very large number of ‘don’t knows’. Ashford in Layton-Henry, Conservative Party Politics, 101.

218

58 59 60 61 62 63 64 65 66 67 68

69 70 71 72 73 74 75 76 77 78

79 80

81 82

Notes

‘Public Opinion and the Common Market’, CRD paper, 15 Sept. 1962, CPA, CCO 180/27/6/2. ACP(62)53, Minutes of 7 Nov. 1962, CPA, Harvester MFC1. Mellsop to Horton (Wessex), 11 May 1962; Powell (Cambridgeshire) to Central Office, 13 Jul. 1962, CPA, CCO 500/31/3. CRD Briefing Paper: ‘The Common Market and Religion’, 23 Jul. 1962, CPA, CCO 4/9/152. You and the Common Market, Daily Express pamphlet, 1961; Report of an address by Lord Sandwich at ACML meeting, 7 Nov. 1962, CPA, CCO 500/31/3. Beaverbrook to Macmillan, 7 Mar. 1962, HLRO, BBK C/235. ‘Public Opinion and the Common Market’, CPA, CCO 180/27/6/2. Figures from Gallup poll of Sept. 1961, cited in John Barnes, ‘Ideology and Factions’, in Seldon & Ball, Century, 337n. Ibid., 337. Sir Anthony Eden, speech in 1952, quoted in David Carlton, Anthony Eden, London 1986, 311. Frank Myers, ‘Harold Macmillan’s ‘Winds of Change’ Speech: A Case Study in the Rhetoric of Policy Change’, Rhetoric & Public Affairs, vol.3 no.4 (2001), 555-75; Booker, Neophiliacs, 88. Beaverbrook to Macmillan, 28 Nov. 1961, HLRO, BBK C/235. Ashton to Horsfield (Wigan), 27 Jan. 1964, CPA, CCO 4/9/412. Lloyd to Home, 7 Nov. 1963, CAC, SELO 5/94. ‘Public Opinion and the Common Market’, CPA, CCO 180/27/6/2. John Holroyd-Doveton, Young Conservatives: A History of the Young Con-servative Movement, Durham 1996, 163. The Times, 14 Jul. 1961. Barr, The Bow Group, 70. Lloyd to Home, 1 Jan. 1964, CAC, SELO 5/94; Home to Heath, 2 Feb. 1964, PRO PREM 11/5010. See, for instance, numerous examples in CAC, SELO 6/106; CPA, CRD 2/7/15. These are quotes from three different letters, but the researcher need only scan through the mountains of correspondence on the issue to see the sentiments repeated many times over. Here, I refer respectively to ‘The Anger of the Chemists’ by Reynolds, Walker, and Thonger, to Lord Blakenham, 25 Mar. 1964, CPA, CCO 4/9/152; Mohr to Blakenham, 19 Jan. 1964, CPA, CCO 4/9/152; Pyke to Lloyd, n.d. (prob. early Mar. 1964), CAC, SELO 6/142. Booker, Neophiliacs, 153-4. Daily Express, 20 Jan. & 9 Mar. 1964. Occasionally, though, the Tories could turn such language to their advantage, as when, early in his premiership, Sir Alec labelled Harold Wilson as the “slick salesman of synthetic science”. In Home’s mouth, such words sounded convincing: they would not have done so if uttered by, say, Heath or Boyle. Quoted in Jefferys, Retreat, 185. Ramsden, Winds, 220-1. Manchester Guardian and Daily Sketch, 20 Jan. 1964.

Notes

83 84

85 86 87

88 89

90 91

92

93

94

219

Hand-written note (provenance uncertain), n.d. (prob. 15 Feb. 1964), CAC, SELO 6/142; Kaye-Smith to Powell, 6 Apr. 1964, CAC, POLL 3/1/30. Report on responses to CPC Two Way Topic–‘Shops and Prices’, 24 Apr. 1964, CPA, CRD 2/52/4; see also Ramsden, Winds, 221–though the figures he cites appear inaccurate. Report on responses to CPC Two Way Topic–‘A Shoppers’ Charter’, 19 Feb. 1962, CPA, CRD 2/52/4. Philip Norton, ‘The Role of the Conservative Political Centre, 1945-98’, in Ball & Holliday, Mass Conservatism, 186; Whiteley, Seyd, & Richardson, True Blues, 26. As to the potential modernising radicalism of the CPC groups, it is worth noting that whilst on some issues they seemed ahead of the Party leadership in its pursuit of modernity (discussions on the decimal currency yielding a three to one majority in favour of conversion in 1963, for instance), on others, especially social issues, their conclusions aped more stereotypical grassroots’ concerns, such as young people’s declining respect for authority or the Government’s alleged inability to follow distinctively Conservative policies. Respectively, reports on responses to CPC Two Way Topics–‘Decimal Coinage’, 31 Dec. 1963; ‘Police and the Public’, 21 Aug. 1963; ‘The Liberal Left’, 11 Sept. 1962, CPA, CCO 4/9/111. Norton in Ball & Holliday, Mass Conservatism, 187. Tory voters split 57% to 33% in favour of abolition in NOP’s early Feb. survey (N.O.P. Bulletin, Feb. 1964), though seven weeks later that division was far narrower at 41% to 36%, suggesting less an upsurge in support for the ‘anti’ campaign, than the steady progress of utter bewilderment (N.O.P. Bulletin, Mar. 1964). Only on Gallup’s supplementary question ‘Would you approve of the abolition of resale price maintenance if it meant considerable hardships for small shopkeepers?’ did the figures reverse, with 43% then disapproving and only 39% showing endorsement (Gallup Political Index, no.49 (Feb. 1964)). N.O.P. Bulletin, Mar. 1964. I am grateful to Bill Purdue for this fruitful suggestion. It is not possible to state with absolute certainty that the local party makeup was as depicted here, for the reasons laid out in the first two paragraphs of this chapter. A survey of constituency chairmen in 1969 gives some evidence to suggest that it was. At that time, 16% of chairmen were small traders (and it is likely that this figure was slightly lower than that which had obtained at the time of rpm’s repeal). See David Butler & Michael PintoDuschinsky, ‘The Conservative Elite 1918-78: Does Unrepresentativeness Matter?’, in Layton-Henry, Conservative Party Politics, 194. Figures cited on the Consumers’ Association website. Available [online]: www.which.net. By May 1964, after the extensive coverage of price maintenance had given an additional fillip to the movement, that figure had risen to over 430,000. By February 1963, the CA had been made aware of 21 active regional consumer groups. The actual figure is likely to have been much higher than this, as not every group wished to have connections with the Association. Which?, Feb. 1963; See also Black, ‘Which?craft in Post-war Britain’. Matthew Hilton, ‘The Female Consumer and the Politics of Consumption in Twentieth Century Britain’, The Historical Journal, vol.45 no.1 (2002), 103-28.

220

95 96 97 98 99

100 101 102 103 104

105 106 107 108 109

110 111

Notes

Hilton argues that this movement in the 1960s, in contrast to earlier (socialist) movements which questioned the basis of the market economy and envisaged consumer-activists operating in service of an openly political agenda, largely accepted the liberal-capitalist system. But it wished to make that system more responsive to the shoppers’ demands by improving choice, enforcing standards, and allowing the customer easier methods of redress against its occasional evils. Rpm was thus a natural target for its ire. (Black, ‘Which?craft in Post-war Britain’, though concentrating only on the CA, offers a more nuanced history of the consumer movement, avoiding the implication that it somehow ‘ought’ to have been more radical.) Douglas to Walker, 11 Feb. 1963, CPA, CCO 500/38/1. The Times, 28 Mar. 1963; WNAC Area Reports, 6 Feb. 1964, CPA, Harvester MFC3. ‘Situation Report’, 17 Apr. 1964, TC, RAB H51. Wiener, English Culture, 163-6, offers some interesting insights into this phenomenon. An early indication of such tension sprang from the Second Reading of the Drugs (Prevention of Misuse) Bill in the spring of 1964. Illustrative of this was the intervention of the Member for South Bucks. “Freedom always imposes a high price,” argued Ronald Bell, “[but] it is quickly a casualty when something like this ‘purple hearts’ controversy blows up.” HC Debs vol. 694 col. 649, 30 Apr. 1964. Carroll, 92 Years, 102. ‘Situation Report’, TC, RAB H51. Taylor, ‘The Conservative Party, Electoral Strategy and Opinion Research’. Paul Addison, ‘The British Conservative Party from Churchill to Heath: Doctrine or Men?’, Contemporary European History, vol.8 no.2 (1999), 289-98. Alexandra Park Ward Committee meeting, Minutes of 15 Mar. 1962, London Metropolitan Archive (LMA), Wood Green and Lower Tottenham Constituency Association Papers, ACC 1158/024. Report on responses to CPC Two Way Topic–‘A Policy for Incomes’, 17 Apr. 1962, CPA, CRD 2/52/4. TUNAC 77th Meeting, Minutes of 9 Nov. 1961, CPA, Harvester MFC2. Quoted in Goodhart & Branston, The 1922, 183-4. David Cannadine, Class in Britain, New Haven 1998, 160; Gamble, Conservative Nation, ch.4. HM’s diary entry for 24 Mar. 1962. Two slightly different versions are available: Horne, Macmillan II, 336 omits Macmillan’s “poujadiste” comment, whereas Macmillan, End of the Day, 58, understandably makes no reference to the Cecil clan’s standard-bearer. Pemberton, Policy Learning, 11-12. Charmley, Conservative Politics, 169-70. It is curious that, unlike in the cases of the EEC, welfare reform, rpm, and so forth, there was little explicit and direct criticism from the constituencies of ‘Neddy’ and the idea of planning. Instead, planning tended to be elided into the Trade Union problem. Thus the NEDC, if it was attacked at all, was seen as having fallen short of delivering the industrial discipline and continence in wage claims that it had initially promised.

Notes

112 113 114 115 116 117 118 119 120

121 122

221

Harvey to Macleod, 24 Jul. 1962, CAC, SELO 5/83. Richard Kelly, ‘The Party Conferences’, in Seldon & Ball, Century, 252. Craig, Conference Decisions, 19. (This motion is discussed more fully in chapter four.) Resolutions passed at the annual meeting of Central Council, Mar. 1963, CPA, NUA 3/2/6. Macmillan to Shepherd, 23 Apr. 1963, CPA, NUA 3/2/6. Macmillan’s introduction to Acceleration: Britain Today and Tomorrow, London 1963. [My emphasis.] Fraser to Butler, 1 Feb. 1964, TC, RAB H51, for example. Fraser to Butler, 25 Mar. 1964, CPA, CRD 2/48/103. Given the difficulty of furnishing the Prime Minister with a technocratic image and the Party’s nervousness after serial quarrels over much of the modernisation agenda (most recently on rpm), the answer to that question was decidedly ‘not very’, as the process of drawing up the manifesto was to show. Gamble, Conservative Nation, 73, makes some germane comments in relation to this dilemma. Z. Layton-Henry, ‘Immigration’, in Layton-Henry, Conservative Party Politics, 56; Cohen, Folk Devils, 134. See Pemberton, Policy Learning, 24-37.

CHAPTER SEVEN 1

2 3

4 5 6 7 8

9

Interestingly, though, one prominent politician quoted by Butler and King in their General Election study claimed that “no party ever behaves as though the cost of living was the main issue. I doubt if many voters make their decision on that basis either.” Quoted in Butler & King, Election 1964, 129n. N.O.P. Bulletin, Nov. 1964, Appendix A. Data provided by Don Aitkin from a random sample of one quarter of all constituencies in England, Scotland, and Wales, cited in Butler & King, Election 1964, 143. 1964 Election address of A. Harvey (Macclesfield), British Library of Political and Economic Science Archive (BLPES), Coll. Misc. 401/476/Con. 1964 Election addresses of H. Nicholls (Peterborough), J. Hay (Henley), and W.H. Loveys (Chichester), BLPES Archive, Coll. Misc. 401/476/Con. 1964 Election address of H. Fraser (Stafford), BLPES Archive, Coll. Misc. 401/476/Con. 1964 Election address of A. Marlowe (Hove), BLPES Archive, Coll. Misc. 401/476/Con. There were a few notable and refreshing exceptions to this tendency. R. Bingham, the member for Liverpool Garston, produced a relatively detailed examination of modernisation’s implications; whilst W. Proudfoot in Middlesbrough used modernisation as his over-arching theme. See BLPES Archive, Coll. Misc. 401/476/Con. Foreword to Prosperity with a Purpose: The Conservative Party Manifesto, London 1964.

222

10 11

12 13 14

15 16 17 18 19 20 21

22 23 24

25 26 27 28 29 30

31 32

Notes

Prosperity with a Purpose, sub-section entitled ‘Britain on the Move’; 1964 Election address of H. Fraser (Stafford), BLPES Archive, Coll. Misc. 401/476/Con. The composition of this committee, from the beginning of Home’s premiership, was: Home, Butler, Hogg, Maudling, Heath, Lloyd, Blakenham, Deedes, Poole, and Redmayne. The CRD provided the secretariat. Hogg to Home, 20 Dec. 1963; Bevins to Home, 19 Dec. 1963, PRO PREM 11/4685. Heath, The Course of My Life, 266. This list represents only a very small selection. The suggestions cited here are taken from two (of many) papers, viz: ‘Some Preliminary Ideas’, 11 Mar. 1963, CPA, SC(63)4; CRD Steering Group Paper: Fraser to Home, 10 Jun. 1964, PRO PREM 11/4685. On the campaign against door-to-door salesmen, see Which?, Jun. 1960 and Aug. 1963. On the desirability of new local radio stations, NOP’s sample in mid-1964 split 44% to 33% in favour of their creation. N.O.P. Bulletin, Jun. 1964. Sunday Times, 17 May 1964. Report on the meeting of the backbench Party Broadcasting Committee of 12 May 1964 by Bevins to Home, 13 May 1964, PRO PREM 11/4645. Home to Fraser, 30 Dec. 1963, PRO PREM 11/5006; ‘Election Manifesto: Some Points for Discussion’, 11 Jun. 1964, TC, RAB H106. Prosperity with a Purpose, sub-section entitled ‘Quality of Life’. Gallup Political Index, no.53 (Aug. 1964). HM’s diary entries for 17 and 23 Jun. 1953. Catterall, The Macmillan Diaries, 237-8; J. Milland, ‘Courting Malvolio: The Background to the Pilkington Committee on Broadcasting, 1960–62’, Contemporary British History, vol.18 no.2 (2004), 76–102; Jarvis, ‘Conservative Party and the Adaptation to Modernity’. ‘Television Hours: Draft Memorandum to the Home Affairs Committee’, 18 Jun. 1964, PRO CAB 21/5121. CM(64)28, 14 May 1964, PRO CAB 128/38. A. J. Beith in Butler & King, Election 1964, 199-200. Mentioned here are only the major daily newspapers, but even those listed had a combined circulation of over 2.4 million. Rippon to Home, 20 Dec. 1963, PRO PREM 11/4685. Joseph to Home, 10 Jan. 1964, PRO PREM 11/4685. Prosperity with a Purpose, sub-section entitled ‘The Housing Programme’. Noble to Home, 17 Jan. 1964, PRO PREM 11/4685. ACP(64)58 and ACP(64)59, Minutes of 29 Jan. and 25 Mar. 1964 respectively, discussions of papers ACP/64/111 and ACP/64/115, CPA, Harvester MFC1. Note on meeting of Ministers, 23 Jun. 1964, TC, RAB H106. At this gathering in June, which was not a regular Steering Committee meeting, the suggestions on decimalisation and a televised Parliament were rejected as unsuitable for inclusion in the manifesto. Prosperity with a Purpose, sub-section entitled ‘Modernisation and Competition’; Which?, Apr. 1964. NCT 68th Annual Report 1965, GL, NCT Papers, MS 29340/9.

Notes

33

34 35 36 37 38 39 40

41 42 43 44 45 46 47

48 49 50 51 52 53 54 55 56 57 58

59

223

ACP(64)60, Minutes of 1 Jul. 1964, discussion of paper ACP/64/116, CPA, Harvester MFC1. The published formula was a typical compromise: “The restrictions on shop hours, which are particularly inconvenient for the growing number of women at work, are being reviewed.” Prosperity with a Purpose, sub-section entitled ‘Modernisation and Competition’. John Ramsden, The Making of Conservative Party Policy: The Conservative Research Department since 1929, London 1980, 236. Quoted in ibid. Lawson to Heath, quoted in Heath, The Course of My Life, 266. CRD file: 1964 Election–Manifesto, quoted in Ramsden, Making of Conservative Party Policy, 229. Fraser to Home, 8 Jun. 1964, PRO PREM 11/4685. Fraser to Home, 24 Jun. 1964, PRO PREM 11/4686. ACP(64)59, Minutes of 25 Mar. 1964, CPA, Harvester MFC1. The Committee was divided on where to put this section of the manifesto, but all agreed that it ought to be given more weight and the Tories’ record ought to be highlighted more effectively. N.O.P. Bulletin, Sept. 1964; Lindsay & Harrington, Conservative Party, 231. Butler & King, Election 1964, 143. ACP(64)61, Minutes of 2 Dec. 1964, CPA, Harvester MFC1. Home, Way the Wind Blows, 210. N.O.P. Bulletin, May & Nov. 1964. N.O.P. Bulletin, Nov. 1964. (It should be noted, however, that Gallup’s figures were more ambiguous.) National Opinion Polls also found that Conservatives were more likely to answer that Britain was “modern enough” to the question of how far the country needed modernising. This response was given by 19% of Tory voters (compared to 13% of all voters). All figures from N.O.P. Bulletin, Nov. 1964, Appendix A. Butler & King, Election 1964, 93. Daily Mirror, 9 Oct. 1964. [My emphasis.] Ibid. Wiener, English Culture, 162-3. Campbell, Heath, 180; Taylor, ‘The Conservative Party, Electoral Strategy and Opinion Research’. The Times, 14 Oct. 1964. CK’s diary entry for 1 Aug. 1965. King, Diary 1965-1970, 26. Daily Express, 8 Oct. 1964. Gallup Political Index, no.44 (Sept. 1963). ‘Manifesto: Outstanding Points’, 3 Sept. 1964, CPA, SC (64)44. Layton-Henry in Layton-Henry, Conservative Party Politics, 58; Leon D. Epstein, ‘The Nuclear Deterrent and the British Election of 1964’, Journal of British Studies, vol.5 no.2 (1966); see also various surveys that indicated this anxiety over crime, immigration, and traditional standards of behaviour in Gallup Political Index, no.51 (Jun. 1964), no.53 (Aug. 1964), no.54 (Dec. 1964), and no.55 (Dec. 1964). Grayson, ‘Mods, Rockers and Juvenile Delinquency in 1964: The Government Response’, makes some shrewd comments on this subject.

224

60 61 62 63 64 65 66 67 68 69 70

71 72 73 74

75

76

77 78 79

80 81 82 83

Notes

Charles Curran, ‘Not So Wonderful’, Crossbow, no.28, Jul.-Sept. 1964, 34-7. For example, both The Economist and New Society ran special issues on crime in British society during 1964. Daily Express, 9 Oct. 1964; Home, Way the Wind Blows, 212; Blake, Conservative Party, 296. Gallup Political Index, no.54 (Dec. 1964). The Times, 5 Oct. 1964. Malcolm Rutherford, ‘Sentence on the Immigrants’, Crossbow, no.33, Oct.-Dec. 1965, 15-6. 1964 Election address of A.E.Clarke (Salford West), BLPES Archive, Coll. Misc. 401/476/Con. 1964 Election address of J.E.Powell (Wolverhampton SE), BLPES Archive, Coll. Misc. 401/476/Con. The Times, 6 Oct. 1964. The New Britain: The Labour Party Manifesto, London 1964, sub-section entitled ‘Commonwealth Immigration’. Roy Hattersley, ‘Immigration’, in McKie & Cook, Decade, 185-6. Some useful comments in this direction in Jarvis, Conservative Governments, 153-4, 167. Campbell, Iron Ladies, 96, 99. D. Butler and D. E. Stokes, Political Change in Britain, 1963-1970 [computer file], The Data Archive: Colchester, 1974. Ibid. The first question was not repeated in 1964, and it must be said that the number of women who mentioned these factors (‘not rash’ and ‘traditional’) was not substantial in terms of the overall sample (2%), yet it was still much greater than the number of mentions given to these factors by men (less than 0.5%). N.O.P. Bulletin, Jan. 1964. In January, women preferred the Tories’ version of modernisation by a margin of 11%; amongst men, Labour’s policy had the edge by 2%. Walsh report on the 1964 general election, n.d., CPA, CCO 60/4/25, quoted in Maguire, Conservative Women, 135; Gallup Political Index, no.55 (Dec. 1964); N.O.P. Bulletin, Nov. 1964, Appendix B. 1964 Election address of J.Hall (Barnsley), BLPES Archive, Coll. Misc. 401/476/ Con. Campbell, Iron Ladies, 297. Ina Zweiniger–Bargielowska, ‘Explaining the Gender Gap: The Conservative Party and the Women’s Vote, 1945-1964’, in Francis and Zweiniger-Bargielowska, Conservatives and British Society, 216; Maguire, Conservative Women, 206. CRD Steering Group Paper: Fraser to Home, 10 Jun. 1964; Godber to Home, 15 Jun. 1964, PRO PREM 11/4685. Minutes of the NEC Campaign Committee, 24 Jun. 1964, LPA, Harvester Microfilm Collection: Part 1. Boyd-Carpenter, Way of Life, 185-6; Lord Hailsham, A Sparrow’s Flight: Memoirs, London 1990, 358; Home, Way the Wind Blows, 213. Findley, ‘The Conservative Party and Defeat’.

Notes

84 85 86

87 88 89 90 91 92

93

94

95

96

225

Gilmour & Garnett, Whatever Happened to the Tories, 207. N.O.P. Bulletin, Feb. 1964. Bligh to Home: Note for the record of an ad-hoc meeting, 26 Mar. 1964, PRO PREM 11/4755. The Ministers present at this meeting, other than Home, were Hogg, Maudling, Lloyd, Butler, Heath, and Blakenham. They were joined by Martin Redmayne and Tim Bligh. Though this meeting was not the one at which the final decision to go for Oct. was made (that took place on April 7th), certainly it demonstrated the trend in that direction, the preference being guided predominantly by the necessity to let rpm die away as an issue. Poole to Blakenham, 2 Apr. 1964, PRO PREM 11/4755. Gallup Political Index, no.54 (Dec. 1964). The New Britain, sub-section entitled ‘Plan for Stable Prices’. TV broadcast transcripts for 6 and 13 Oct. 1964, CPA, CRD 2/48/88; Martin Harrison, ‘Television & Radio’ in Butler & King, Election 1964, 173. Turner in Seldon, How Tory Governments Fall, 348. Specifically, the group found that the “Party’s weakest point was ‘Modernity’… It was [at its] least effective in a young, exciting and modern context.” ‘Voters in the 1964 General Election, Vol.1’, CPA, CCO 180/11/2/1, quoted in Taylor, ‘The Conservative Party, Electoral Strategy and Opinion Research’. This appears to be a contradiction of the poll data discussed earlier which showed the Conservatives leading on the issue of modernisation. However, we should remember that the popularity of the Tory Party’s modernising medicine amongst many of the electorate may have been precisely because it had been diluted. Hence the Conservatives could have scored a lower mark than Labour in terms of modern image, and yet have been trusted by a larger number than their rivals to handle the modernising process in a prudent manner. Naturally, the CRD, as the engine room of modernity within the Party machine, would have been unhappy to draw the conclusion that retrenchment and not radical change was the solution to the Conservatives’ electoral ills. It was certainly one of the reasons for his encouraging attitude towards the women’s section of the Party, for instance, believing that the Tories must take up feminist issues with more alacrity in order to attract the votes of younger, more forwardlooking women. Maguire, Conservative Women, 135-7. ACP(64)61, Minutes of 2 Dec. 1964, CPA, Harvester MFC1. The areas of policy that Heath identified as the most important were: Britain’s place in the world; the development of a sustainable NI scheme (i.e. to fund the social security system); the price of land; future economic policy; the place of trade unions in the economy. See also, Mark Garnett, ‘Planning for Power: 1964-1970’, in Ball & Seldon, Recovering Power, 205. Indeed, one of these independents, Mr J. Paul, stood in Heath’s Bexley constituency as the Anti-Common Market candidate. He polled a respectable 1,263 votes. Had the Conservatives followed a more positive line on the EEC (entry to which remained a vouchsafed long-term goal for Modernising Conservatives), it seems likely that his candidature would have attracted a great deal more support. For poll figures, see The Times, 16 Oct. 1964. Thorpe, Douglas-Home, 375.

226

97 98 99

Notes

‘Situation Report’, 17 Apr. 1964, TC, RAB H51. Mitchell, ‘Conservative Party and the Threat of Rebellious Youth’. Ramsden, Making of Conservative Party Policy, 233-4.

CHAPTER EIGHT 1 2 3 4 5 6 7 8

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

24 25 26

Black, Britain since the Seventies, 220-2. Ramsden, Winds, 158. Bulpitt, ‘Accommodating the Imperial Frontier’. Myers, ‘Harold Macmillan’s ‘Winds of Change’ Speech’. Ashford in Layton-Henry, Conservative Party Politics, 98. Lawson & Bruce-Gardyne, Power Game, 28; Hennessy, ‘‘Quiet, Calm Deliberation’: Harold Macmillan 1957-63’. Butler, Art of the Possible, 197-8. Prime Minister’s Cabinet speech notes, 29 Oct. 1962, PRO PREM 11/4520; Note of ad hoc ministerial meeting, 5 Mar. 1963, PRO PREM 11/4521; Tomlinson in Francis & Zweiniger-Bargielowska, Conservatives and British Society, 283. Edward Heath, quoted in Wiener, English Culture, 162. Alistair Horne, quoted in Hennessy, ‘‘Quiet, Calm Deliberation’: Harold Macmillan 1957-63’. Bernard Levin, The Pendulum Years: Britain and the Sixties, London 1970, 245; Bevins, Greasy Pole, 154. Patten in Layton-Henry, Conservative Party Politics, 15. Alec Douglas-Home, Transcript of Interview for BBC Radio 4 (Interviewer: P. Hennessy), Oct. 1989. BBC Radio 4, ‘A Countryman in Downing Street’, 9 Oct. 1995. Ian Gilmour, Inside Right: A Study of Conservatism, London 1978, 20-1. Gilmour & Garnett, Whatever Happened to the Tories, 241-2. CRD file ‘Briefing 1963’, quoted in Ramsden, Making of Conservative Party Policy, 225-6. Nigel Lawson, speaking on BBC Radio 4, ‘A Countryman in Downing Street’, 9 Oct. 1995. Clark, The Tories, 334. Campbell, Heath, 178-82; Laing, Heath, 169. Douglas to Grierson, 15 Aug. 1952, CPA, CRD 2/7/8. A. Aughey, ‘The Party and Foreign Policy’, in Norton, Conservative Party, 204-5. J. W. Young, ‘The Heath Government and British Entry into the European Community’, in Stuart Ball & Anthony Seldon [eds.], The Heath Government 19701974: A Reappraisal, Harlow 1996, 260-3. Rose, Prime Minister, 34, conducts a fascinating discussion about this. S. A. Walkland, ‘Economic Planning and Dysfunctional Politics in Britain’, in Gamble & Walkland, British Party System, 150. Astrid Ringe, ‘Economic Planning: The NEDC 1961-1967’, Working Paper delivered at the Whitehall in the 1950s and 1960s Conference, Public Record Office, Apr. 1997.

Notes

27 28 29

227

Grayson, ‘British Government, Channel Tunnel and European Unity’; Johnman & Lynch, ‘A Treaty too Far?’. Jeremy, A Business History of Britain, 354, 363. Black, Britain since the Seventies, 12.

INDEX Abrams, Mark, 49, 198n Acceleration, 155 Action Committee for a United States of Europe, 68 Adsega, 148 Advisory Committee on Policy, 25, 77, 82, 160, 163-4, 165, 174 Aims of Industry, 22, 193n Anti-Common Market League (ACML), 95, 144 Ashford, Nigel, 66, 144 Association of British Chambers of Commerce (ABCC), 30, 67, 122, 130, 131 Atomic Energy Agreement (1958), 92 Attlee, Clement, 10, 11, 17 Audland, Sir Christopher, 96 automation, 159, 168 Avon, Lord See Eden, Sir Anthony Baldwin, Stanley, 109 Backbench Committees (Conservative): 1922, 83-4, 88, 124, 129, 133, 153 Broadcasting, 161-2 Defence, 99 Trade and Industry, 28, 122, 123, 129 Bank of England, 37, 40, 41, 51, 91 Barber, Anthony, 60, 114 Barnett, Correlli, 31, 54 British Broadcasting Corporation (BBC), 101, 121, 128, 140, 161-2 Beaverbrook, Lord, 96, 97, 131, 144, 145 Beeching Report (1963), 13, 16, 49, 78, 89, 108-9, 150, 156, 159, 182 Bemrose, Sir Max, 142 Bennett, Donald, 99

Beveridge Report (1942), 18-19, 142 Bevin, Ernest, 33 Bevins, Reggie, 107, 113, 161-2, 179 Birch, Nigel, 40, 41, 45, 90, 141 Black, Jeremy, 177 Blakenham, Lord See Hare, John Bligh, Tim, 7, 65, 88, 197n Blondel, Jean, 124, 138 Blue Streak missile, 97 Board of Trade, 10, 24, 27, 28, 29, 31, 52, 57, 58, 62, 63, 69, 70, 72, 76, 79, 80-1, 85, 86, 100, 103, 104, 105, 114, 115, 116-7, 120, 122, 127, 128 Bonham-Carter, Lady Violet, 20 Boothby, Robert, 73, 202n Bow Group, 8, 83 Boyd-Carpenter, John, 45, 51, 172 Boyle, Edward, 60, 86, 205n, 218n Bretherton, Russell, 104 British Aircraft Corporation, 57 British Empire, 2, 7, 13, 14-15, 32-6, 63, 78, 89, 145, 156, 181-2, 184n, 189n See also Commonwealth British Housewives’ League, 22 British Institute of Management, 104 Brittan, Samuel, 40, 49, 129 Brook, Norman, 94 Brooke, Henry, 127-8 Bruce-Gardyne, Jock, 61, 127 Butler, R.A., 4, 9, 11, 20, 25, 38, 39, 56, 59, 66, 77, 90-1, 94, 96, 97, 111, 113, 114, 120, 123, 130, 138, 139, 142, 150, 154, 156, 174, 175, 179 Cairncross, Alec, 51, 52-3, 57, 91 Cameron, David, 1 Campbell, Beatrix, 171

Index Capital Issues Committee, 40 Carrington, Lord, 191n Carroll, W.S., 137 cartels, 11, 15, 18, 23, 47, 191n Chamberlain, Joseph, 14, 33 Channel Tunnel, 78, 160, 183 Charmley, John, 26 Chataway, Christopher, 131 Chemist and Druggist, 128 Churchill, Randolph, 123 Churchill, Winston, 11, 12, 18-20, 25, 26, 27, 33-4, 54, 116, 152 Clark, Alan, 26, 43 'Clean Up TV' campaign (CUTV), 139, 161, 170, 175 Cohen, Sir Jack, 86 Cold War, 2, 112 Common Agricultural Policy, 95 Common Market See European Economic Community Commonwealth, 14, 15, 33-5, 63, 66, 78, 94, 96, 100, 145-6, 152, 155, 169, 182 Commonwealth Immigration Act (1962), 157, 169 Commonwealth Office, 34 competition policy, 8, 12, 22-3, 27, 31, 32, 36, 48, 56, 78, 86, 104, 106, 116, 119, 120, 122, 173, 181 Concorde aircraft, 78, 103-4, 179, 183, 208n Conservatism, nature and types of, Ch.1 passim, 17-8, 20-1, 22, 23, 27, 33, 45, 73, 77, 83-4, 87, 89, 107-8, 136, 138, 151-2, 155, 175, 179 Conservative Central Office (CCO), 25, 155 Conservative conferences: 1947, 21 1949, 33 1956 (women's conference), 139 1961, 76, 124, 156 1962, 95-7, 144, 155 1963, 111, 142 Conservative Party, 13, 22, 25, 26, 30, 37, 39, 41, 47, 49, 52, 54, 66, 69,

229 73, 77, 79, 90, 94, 96, 99, 107, 108, 111, 120, 123, 124, 131, 134, 142, 147-8, 159, 162, 165, 166, 167, 170, 172, 174, 179, 180-3 anxiety about inter-war image, 12, 18, 20, 24, 25, 28, 122, 143 divided between traditionalists and modernisers, 1-3, 9, 10, 15, 16, 63, 67, 83, 84, 95, 101, 109, 126, 134, 137, 140, 145, 149, 155-6, 164, 167, 174, 181 and empire, 14-15, 31-4, 78, 89, 100, 145 grassroots of, 25, 26, 33, 88, 124, 135-6, 146, 152 historiography of, 17-18, 26, 54 Conservative Political Centre (CPC), 22, 148-9, 153, 219n Conservative Research Department (CRD), 8, 21, 83, 85, 88, 95, 112, 125, 142, 146, 148, 150, 156, 160, 161, 163, 164-5, 168, 171, 174, 180-1, 225n psephology group of, 95, 145, 174 Consumer Council, 87, 88, 110, 119, 182 consumer movement, development of, 22, 87, 117, 119, 149, 150, 183, 219n, 220n consumer protection, 12, 49, 159 Consumers’ Association (CA), 56, 61, 79, 119, 150, 161, 204n Co-operative movement, 24, 56, 117, 127 corporatism See indicative planning Council on Prices, Productivity, and Incomes (CoPPI), 55-6, 74, 75 Cousins, Frank, 74, 125 Couve de Murville, 92 Crathorne Committee on Sunday Observance, 127 crime, increase in, 138, 139, 168, 223n Cromer, Lord, 51, 91 Crossbow, 168 Cuban missile crisis, 97 Cummings, Michael, 111

230 Curran, Charles, 168

Index

Daily Express, 20, 68, 111, 131, 147, 167 Daily Mail, 90, 113 Daily Mirror, 57, 113, 167 Daily Sketch, 140 Davies, Clement, 20 de Gaulle, General Charles, 2, 13, 65, 67, 68, 92-4, 98, 99, 103, 146 decimal currency, 78, 123, 161, 163 decolonisation, 2, 8, 13, 38, 76, 78, 89, 114, 145, 152, 178 Deedes, William, 96, 109, 112, 140 Denman, Sir Roy, 100 depression, inter-war, 17, 18, 23, 25 Diefenbaker, John, 94, 101 Director, 44 Disraeli, Benjamin, 1, 14, 33 Distributive Trades Alliance (DTA), 118 Dixon, Sir Pierson, 92, 93 Dorey, Peter, 42 Douglas-Home, Sir Alec, 2, 14, 15, 66-7, 98, 105, 111-5, 116, 119, 121, 123, 127, 128, 129, 133, 140, 142, 143, 154, 178, 181 appeal to traditionalists, 9, 112-3, 140, 156, 159, 170, 175, 180 becomes Prime Minister, 111-5, 123 and general election of 1964, 15963, 165, 168-72, 174, 175-6 and modernisation, 9-10, 15, 110, 113-6, 117, 134, 156, 174-5, 178-9, 181 Dow, J.C.R., 72 Drugs (Prevention of Misuse) Act (1964), 140, 157, 171, 220n

and modernisation, 5, 8, 13, 70, 76, 78, 81, 82, 87, 89, 116, 121, 130, 153 relationship to price maintenance, 86, 89, 116, 120, 122 'Economic Growth and National Efficiency' Report (1961), 72, 81 Economist, 39-40, 61, 132, 167 Eden, Sir Anthony, 4, 11, 20, 27, 34, 35, 36, 39, 66, 90, 136, 145 Eisenhower, General Dwight, 38 Election Steering Committee, 143, 160, 165, 222n embourgeoisement theories, 48 Emrys-Evans, Paul, 111, 210n Erroll, Frederick, 76, 81, 82, 85, 86, 90, 105, 114 Esso, 132 European Coal and Steel Community (ECSC), 12, 34, 35 European Defence Community (EDC), 34-5 European Economic Community, 2, 5, 7, 12, 13, 34-6, 49, 50, 56, 63, 64-5, 70, 78, 80, 89, 100, 102, 105, 131, 147, 151, 152, 154, 155, 178, 180, 181-2 British attitudes to, 35, 67, 83, 95-6, 112, 138, 143-6, 225n British application to join, 8, 9, 65, 68, 92-9, 101, 116, 153 and modernisation, 13, 14, 15, 16, 99, 178 European Free Trade Association (EFTA), 35, 64, 68, 100 European Movement, 8, 68 Evans, Brendan, 140 Evans, Harold, 92, 100, 103, 208n Export Council for Europe, 67

East Fife by-election (1961), 53 Eccles, David, 3 economic growth, 5, 9, 12, 32, 67, 69, 73, 105, 179 'conversion' to, 58, 72, 81, 89, 108, 151

Fair Price Defence Committee (FPDC), 23, 24-5, 26, 28, 61, 118, 122, 126, 127, 128, 133 Fair Trading Congress (FTC), See Fair Price Defence Committee Family Allowances Act (1945), 19

Index Federation of British Industries (FBI), 2, 8, 24, 31, 33, 51, 52, 53, 126 and EEC, 64, 67, 68 and indicative planning, 70-4, 76 and rpm, 30, 62, 86, 122, 127 Fight for the Tory Leadership, 123 financial sector, 8, 57, 71-2, 100, 187n Financial Times, 46, 61 Findley, Richard, 172 Flanders and Swann, 106, 136 Foreign Office, 12, 33, 35, 38, 64, 67, 80, 100 France, 35, 64, 68, 69, 71, 78, 92-3, 98, 103 veto of British EEC application, 13, 99-101, 110, 175, 182 Franks, Sir Oliver, 197n Fraser, Lionel, 71 Fraser, Sir Michael, 156, 165, 171, 189n Friday, Frank, 79 Future of Social Services Committee (FSSC), 142 Gaitskell, Hugh, 48, 96 Gallup opinion polls, 113, 131, 143, 145, 149, 162, 168, 170, 172, 219n Gamble, Andrew, 14, 221n Garnett, Mark, 141, 172 general elections: 1945, 17, 19, 54 1951, 10, 16 1955, 25, 44 1959, 6, 13, 47-9 1964, 16, 134, Ch.7 passim Germany, 64, 67, 68, 144 Giles (cartoonist), 168 Gilmour, Ian, 26, 141, 172 Gladwyn, Lord, 8, 34, 64-5, 66, 68, 201n Godber, Joseph, 114, 125, 171 Goldman, Peter, 83 Grayson, Richard, 223n Green, Alan, 77 Green, E.H.H., 9, 77, 136 Griffiths, Richard, 35

231 Griffiths, Peter, 169 Grimond, Jo, 84 Growth of the Economy (NEDC, 1964), 122 Hailsham, Lord, 66, 103, 105, 111, 113, 120, 141, 160, 172, 175 Hall, Joan, 170 Hall, Sir Robert, 30, 39, 41, 45, 51, 70 Hare, John, 63, 70, 114, 120, 172 Harrod, Roy, 8, 41, 44, 47, 50, 57, 69, 70, 87, 96 Heath, Edward, 9, 14, 32, 57, 60, 63, 66, 67, 69, 76, 92, 93, 94, 96, 99, 100, 103, 106, 114, 115, 144, 149, 150, 156, 161, 176, 182, 201n, 210n, 214n and 1965 leadership contest, 116, 167, 181 abolishes price maintenance, 11634, 147-8, 172 and modernisation, 7, 10, 15, 58, 119-21, 122-3, 129, 147, 159, 164, 166, 167, 174, 175, 179, 181 Heathcoat Amory, Derick, 46-7, 49-50, 59, 61, 62, 66, 67 Hill, Charles, 47 Hilton, Matthew, 119 Hirst, Geoffrey, 126, 132 Hobson, Oscar, 40 Hogg, Quintin See Hailsham, Lord Holland, Robert, 93 Home Office, 38, 127, 138, 140, 154 housing, 47, 159, 163 Hubback, David, 81, 88 Hutchinson, George, 6, 130 ICI, 132 Illingworth, Leslie, 20 immigration, 168-70 incomes policy, 3, 46, 52-3, 75, 86-7, 89, 91, 106 indicative planning, development of, 7, 8, 12, 13, 50, 53, 58, 69-70, 71-5,

232 76, 78, 91, 126, 131, 154, 159, 182, 188n, 202n, 220n and Commissariat au Plan, 71, 74 Industrial Charter, 11, 20-3, 25, 73, 87 industrial policy See competition policy industrial training, 14, 21, 87, 105, 110, 126, 182, 213n Industrial Training Act (1964), 105, 126, 182 Institute for Economic Affairs (IEA), 79, 140, 152 Iremonger, Tom, 125 Independent Television (ITV), 161, 162 Jarvis, Mark, 2, 216n Jay, Douglas, 122, 132 Jenkins, Roy, 133 John Lewis Partnership, 61, 79, 132-3 Jones, Aubery, 28 Joseph, Keith, 163, 166 Kelly, Richard, 135, 154 Kennedy, John F., 93, 98-9, 101 Kershaw, Anthony, 99 King, Cecil, 113 Kleinwort, Ernest, 57 Kynaston, David, 71 Labour Party, 3, 8, 11, 12, 15, 17, 18, 19, 20, 21-2, 24-5, 31, 48-9, 54, 84, 96, 101, 120, 125, 132, 133, 161, 162, 165-8, 169-70, 171, 172, 173, 180, 182 Lawson, Nigel, 61, 127, 164, 165 Lee, Sir Frank, 7, 29, 31, 52, 65, 72, 74, 78, 79, 81-2, 86, 88-9, 91, 105 Levin, Bernard, 179 Liberal Party, 20, 24, 53, 82, 83, 132, 165, 192n Lichtheim, George, 113 Linstead, Sir Hugh, 132 'Little Budget', 51-2, 73 Lloyd Jacob Committee, 24

Index Lloyd, Selwyn, 3, 13, 24, 38, 50-3, 64, 67, 70, 71, 72, 73-6, 82, 84, 86, 87, 88-9, 90-1, 92, 101, 105, 112, 114, 120, 145, 153, 154 Local Employment Act (1960), 58 local press, 162 Loft, Charles, 108 London Municipal Society, 135 Longden, Gilbert, 77, 131 Lowe, Rodney, 142 Lubbock, Eric, 82, 84 Macleod, Iain, 7, 45, 76, 88, 90, 91, 92, 107, 113-4, 123-4, 125, 142, 153, 154, 166 Macmillan, Harold, 2, 4, 5, 9, 10, 12, 32, 35, 36, 39, 41-59, 61, 65, 66, 67, 68, 69, 71, 76, 91-8, 100, 101, 105, 106, 110, 111, 112, 114, 119, 120, 123, 125, 129, 137, 141, 143, 145, 146, 153, 160, 173, 175, 177-8, 179, 181, 207n becomes Prime Minister, 37-8 on Conservative Party divisions, 21, 73, 74, 84, 107, 155 and 'Grand Design', 65-6 and modernisation, 6-7, 13-14, 53-4, 63-4, 80, 86-8, 102-3, 109, 115, 151, 155-6, 181 and 'New Approach', 85-90, 91 Macmillan, Lady Dorothy, 39 Maguire, G.E., 171 Makarios, Archbishop, 38 Makins, Roger, 41, 45 Malicious Damage Act (1964), 140, 171 management training and practice, inadequacy of, 104-5, 108, 117, 208n Manningham-Buller, Reginald, 30, 63 Marks and Spencer, 132 Marples, Ernest, 108-9 Martell, Edward, 136 Mass Observation, 21

Index Maudling, Reginald, 7, 10, 14, 58-9, 62-3, 68, 70, 76, 80, 85, 105, 108, 111, 115, 120, 156, 167, 174, 181 McKenzie, Robert, 135, 137 McNamara, Robert, 93 Mercer, Helen, 131 Messina negotiations, 34-5 Middle Class Alliance, 22, 136-7, 140, 142, 153 Middlemas, Keith, 9 Middle Way, 6, 21, 46, 186n Miller, Sir Bernard, 61 Mills, Lord, 62, 63, 70 modernisation, Ch.1 passim, 31, 35, 43, 48, 49, 55-6, 59, 61, 63, 66-7, 68, 69, 81, 95, 101, 102-6, 107-8, 113, 114-5, 120, 121, 122-3, 131, 132, 158, Ch.8 passim, 221n and economic growth, 5, 8, 13, 50, 58, 76, 78, 81-2, 87, 89, 116, 121, 122, 130, 153 opposition to, 77-8, 82-5, 89, 97, 100, 104, 128, 138, 143, 147, 149, 151-7, 187n, 209n, 225n mods-and-rockers, 139 Molony Committee on Consumer Protection, 49, 63, 87, 88, 118, 150 Monckton, Walter, 12 Monday Club, 78, 146 Monnet, Jean, 68 Monopolies Act (1948), 24, 29 Monopolies and Restrictive Practices Commission Act (1953), 11, 29 Monopolies Commission, 27-30, 32, 56, 57, 62, 106, 119, 121, 159 Moore, Sir Thomas, 90 More, Jasper, 139 Morrison, Major John, 130, 132-3, 148 Mothers’ Union, 180 Myers, Frank, 178 Nabarro, Gerald, 90 Nassau agreement, 98-9 National Broadcasting Development Committee, 161

233 National Chamber of Trade (NCT), 8, 62, 117, 122, 126-8, 133, 213n National Economic Development Council (NEDC), 8, 13, 74-6, 83, 86, 87, 91, 104, 106, 109, 115, 122, 124, 126, 131, 141, 159, 182, 220n See also indicative planning National Economic Development Office (NEDO), 74, 188n National Farmers' Union (NFU), 64, 95, 100 National Government, 12, 15, 18, 33 National Health Service (NHS), 58 National Incomes Commission (NIC), 76, 87-8, 91, 100, 106, 109, 115, 203n National Institute for Economic and Social Research (NIESR), 71-2 National Opinion Polls (NOP), 84, 95, 113, 131, 146, 149, 158, 165, 166, 170 National Productivity Year, 103 National Union of Conservative and Unionist Associations, 25, 142, 147, 155 National Union of Manufacturers (NUM), 30, 72, 192n Net Book Agreement, 63, 214n Netherthorpe, Lord, 95 'New Approach', the, 85-90 'Night of the long knives', 90-1, 154 Noble, Allan, 163 Norton, Philip, 149 nuclear deterrent, 56, 92, 93, 97-8, 110, 168 Obscene Publications Act (1964), 140 'One Nation' group, 22, 26, 186n Orpington by-election (1962), 13, 53, 77, 82-6, 89, 101, 139, 152, 153 Osborn, John, 118, 124 Osborne, Cyril, 90 Oswestry by-election (1961), 53 Padmore, Tom, 60

234 Pagliero, Leonard, 128 Paish, Frank, 3-4, 40 pay pause, 51-2, 73, 82-5, 87, 123, 152, 153 Pearson, Frank, 139-40 Peel, Robert, 1, 121 Pemberton, Hugh, 3, 157 Pentagon, 98 People’s League for the Defence of Freedom (PLDF), 136-7 Perkin, Harold, 104 Petch, Louis, 104 'Plan G', 35-6, 63, 69, 195n planning See indicative planning Plowden Report, 71 Polaris missile, 98-100 Poole, Lord, 172 Powell, Enoch, 40, 45, 66, 113-4, 141, 160, 169 Powell, Sir Richard, 57, 104 Price, David, 84-5 Price, Henry, 136 Primrose League, 136, 216n Private Eye, 106 Profumo scandal, 14, 106, 108, 112 Proprietary Articles' Trade Association (PATA), 90, 192n Prosperity with a Purpose, 160, 163, 166, 171, 174, 180 Pugh, Martin, 136 Radcliffe Committee, 55 radio broadcasting, 161-2, 179 Radio Caroline, 161-2 Royal Air Force, 99 Rampton, Jack, 104 rationing, 22 Redmayne, Martin, 89, 91, 124-5, 127, 129, 130, 132, 133 Rees-Mogg, William, 113 regional development policy, 102, 103, 114, 115, 116-7, 129, 159, 167, 179, 210n resale price maintenance (rpm), 2, 3, 5, 7, 8, 14, 22, 28, 29, 55, 61, 63, 76,

Index 87, 92, 95, 138, 141, 149, 152, 156, 162, 163, 166, 168, 171, 175, 179, 180, 181 abolition of, 15-16, 30-1, 60, 79, 802, 86, 116-34, 172-3, 183 defence of, 14-15, 24-5, 26-7, 32, 79, 88, 90, 117-8, 122-3, 126-31, 132-3, 147-8, 150-1, 159, 172 and modernisation, 16, 56, 59-60, 62, 81-2, 85, 89, 105-6, 119-21, 122-3, 129, 147, 173, 183 origins of, 23-4 Resale Price Maintenance Defence Fund, 127 Resale Price Maintenance Co-ordinating Committee (RPMCC), See Fair Price Defence Committee Resale Prices Act (1964), 14, 130, 162, 164, 172, 173, 183 restrictive practices, 10, 12, 18, 20, 23, 25, 27, 28, 29, 31, 55, 63, 72, 77, 80, 81, 87, 89, 102, 105, 120, 125, 129, 159, 169, 183 Restrictive Trade Practices Act (1956), 5, 27, 32, 36, 47, 55, 57, 60, 62, 65, 69, 80, 106, 116, 127 section twenty five of, 25, 31, 61, 118 Restrictive Trade Practices Court (RTPC), 29, 31, 56, 80, 129, 133, 204n retail sector, 23-4, 27, 31, 60-1, 79, 117-9, 120, 127, 131-2, 147-8, 150, 164, 183, 189n Right Road for Britain, 22, 23 Rippon, Geoffrey, 163 Robbins Committee on Higher Education, 49 Robbins, Lionel, 19, 40-1 Roberts, Andrew, 54 Robertson, Dennis, 40, 55 'ROBOT' project, 11 Rogers, John, 62 Roll, Lord, 7, 96, 201n Rookes v. Barnard, 125 Rothermere, Lord, 90

Index Rowan, Leslie, 41 Sainsbury's, 61 Salisbury, Lord, 7, 38-9, 42, 46, 84, 140, 153 Sampson, Anthony, 5 Sandys, Duncan, 55, 66 Schuman Plan, 34 Schwartz, George, 40 Second World War, 3, 14, 17 Seldon, Anthony, 11 Selsdon Park ‘manifesto’, 180 Sewill, Brendon, 85, 165 Shanks, Michael, 5, 101, 179 Shawcross, Sir Hartley, 24-5 Shepherd, William, 28 Shone, Sir Robert, 122 shop opening hours, reform of, 127, 148, 164, 223n Skybolt missile, 97-8, 99, 144 Smethwick, racist election campaign in, 169 Soames, Christopher, 66, 85 Spar, 183 Spectator, 90, 123, 126 Speed Report, 80-1, 148 sterling, strength of, 40-1, 44, 51, 59, 74, 91, 199n Stonehouse, John, 118, 119, 120, 121, 127 Street Offences Act (1959), 171 Suez, 4, 5, 12, 35, 36, 37, 38, 39, 41, 48, 54, 57, 60, 63, 67, 69, 101, 178 Sunday Telegraph, 132 tariff policy, 65, 68, 72, 107 and imperial preference, 20, 33, 35, 100 tax regulators, introduction of, 51-2, 73 Taylor, Andrew, 140 Tesco, 60, 79, 86, 118 Thatcher, Margaret, 13, 17, 191n Thatcherism, 7, 45, 129, 184n Thorneycroft, Peter, 7, 27, 35, 39, 40, 41, 42, 43, 44, 48, 51, 66, 69, 98,

235 and passage of 1956 Restrictive Trade Practices Act, 28-32 and resignation as Chancellor, 45-6, 137 Times, 46, 71, 132, 141, 146, 167 Tiratsoo, Nick, 104 Titfield Thunderbolt, 109 Tomlinson, Jim, 5, 32, 138 Tory Reform Committee, 19 trade associations, 24, 117, 183 and sanctions against price-cutting, 23, 27, 29, 30, 192n Trade Union National Advisory Committee (TUNAC), 153 trade unions, 3, 4, 11, 13, 25, 27, 42, 43, 47, 52, 53, 55, 57, 69, 70, 77, 81, 83, 87, 88, 106, 124, 125, 126, 128, 138, 141, 152, 156, 159 reform of, 124-5, 136, 137, 159 Trade Unions Congress, 3, 8, 12, 24, 30, 51, 52, 53, 55, 67, 75, 76, 86, 88, 115, 122, 124, 126, 128 trading stamps, 61, 117-9, 124, 200n Transport and General Workers’ Union (TGWU), 125 Treasury, 4, 7, 11, 12, 19, 25, 39-46, 50-2, 55, 57, 59, 60, 61, 62, 65, 67, 69, 70, 71-5, 76, 81, 82, 86, 88, 91, 100, 103-5, 106, 115, 120, 163 'great reappraisal' in, 5, 58, 72 Treaty of Évian, 93 Treaty of Rome, 35, 68, 80, 116 Trend, Burke, 46 Turner, John, 10 Turton, Robin, 95, 96, 100, 133, 150 Union of Shop, Distribution, and Allied Workers (USDAW), 122, 128 United States of America, 33-4, 38, 49, 65, 66, 92-3, 97, 99 mistrust / dislike of in Britain, 104, 117, 139, 144, 145, 162, 211n University of the Air, 161 Utley, T.E., 85

236 Vaughan-Morgan, Sir John, 123 Vermin Club, 22 Wages Councils, 75 Walker, Patrick Gordon, 169 Walker, Peter, 9, 100 Walker-Smith, Derek, 95, 96, 100 Ward, Dame Irene, 123 welfare state, 3, 11, 17, 22, 23, 136, 138, 140, 142, 143, 152, 156 Westminster model, inadequacy of, 3, 32, 153, 182 ‘What’s wrong with Britain?’ phenomenon, 49, 57, 101, 119 Which?, 61, 119, 150, 164 White Papers: Defence (1957), 55 Employment Policy (1944), 3, 4, 18, 19, 27, 69, 124 Full Employment (1956), 27 Incomes Policy (1962), 53 Whitehouse, Mary, 139, 140, 161

Index Willetts, David, 20 Wilson, Harold, 24, 114, 115, 132, 165, 167, 170, 171, 180, 181 'Wind of change' speech, 89, 145, 178 See also decolonisation women, 161, 164, 171, 198n, 225n preference for Conservative Party, 170 prominence of in consumer movement, 149, 150 'traditional' attitudes of, 139, 170, 175, 224n Wood, Kingsley, 19 Woodcock, George, 52-3, 75 Working Party on Decimal Currency, 78 Wyndham, John, 38 Yamey, Basil, 79 Young Conservatives, 146 Zweiniger-Bargielowska, Ina, 171