Simon Heffer

Like the Roman

Conservatives in 1955 would have been more incredulous than indignant had anyone told them that, in seven years' time, their political platform would consist of national economic planning, regional economic planning, planning of incomes ('incomes policy'), rationalisation of industries by state intervention, more subsidised housing, and higher public expenditure generally. Those whom these policies shocked could be heard to say that Harold Macmillan had 'debauched the Tory Party.' Debauch or not, he certainly performed one of the largest mass baptisms in history.

Over the next twenty years Powell would be much in demand by literary editors to review memoirs by and biographies of Macmillan, and, if anything, he became more vicious as the memories faded. Noting, in 1982, Nigel Fisher's observation in his life of Macmillan that there was 'no truth' in the claim that he had married Lady Dorothy simply because she was the daughter of a duke, Powell added, 'One envies the ability to be so sure—and so innocent.'

He moved back into the economic field. In a speech in his constituency on 6 September he advised the trade unions, meeting for their annual conference at Blackpool, that any moves by the Government to force them to acquiesce in a pay freeze would be illegal. The Prices and Incomes Act, which would have made such compulsion legal, had been enacted but had not come into force; and Powell told the unions that until the Government had the courage to invoke this controversial measure, they should seek whatever rises they wanted. Then, on 8 September, he published a second edition of Saving in a Free Society, in which he once again questioned the point of the National Savings movement. As in 1960, his view was that the movement encouraged no additional saving, but merely redirected a level of saving that would have been made anyway. He also called on the Government to stop trying to influence the interest rate, an unspeakably radical doctrine for the 1960s.

The director of National Savings, Sir Miles Thomas, was incensed by Powell's thesis, describing his conclusion as 'absurd.' Hoping to land a killer punch, Thomas quoted Powell's address to a National Savings assembly 'a few years ago' in which he had spoken warmly of the benefits of individuals participating in the scheme. Powell replied to Thomas immediately, saying that he had made the speech as Financial Secretary in 1957, and had undertaken his research into the question of savings in 1959-60, before writing the first edition of his work: 'Which seems to show that even politicians sometimes learn.'

On 24 September, addressing Young Conservatives at Blackpool, Powell sought to destroy the notion that the economic problems were a moral question. At least, he said, they were not a question of personal morality, rather the morality of the Government ministers executing the policy. He denounced the 'moralising sermons' being preached at the British public, rebuking them for 'idleness, fecklessness, inefficiency, greed and selfishness.' His attack on politicians cited actions by Labour ministers, but did not exclude Conservatives who shared the consensus view. He condemned Wilson for allowing public expenditure to grow at 4 per cent a year—twice the rate of the increase in national income—thereby causing inflation; to blame it on workers, employers and manufacturers was simply dishonest. 'The individual citizen cannot help himself,' he said. 'The flood of rising demand which the Government has fed and maintained left no option to customer and supplier, to employer and employee. The prices and incomes policy and the prices and incomes freeze are cynical manoeuvres designed to transfer blame from the guilty to the guiltless, by pretending that inflation happens because people are 'greedy' and put up prices, or 'selfish' and obtain more wages.' He added that the Government had spent £354 million more than it had earned in 1965, all of it borrowed abroad and subject to interest payments. That was not the fault of the workers either.

Then, at Bristol on 29 September, Powell condemned both employers and employees for boosting state socialism by participating in the incomes policy. He lambasted the 'trooping off to Whitehall' by workers' and managers' representatives 'to work out with a socialist Government the principles on which the prices of people and things are to be controlled in a socialist Britain. The people had been made to feel guilty about the inflation, which had really been caused by the Government, and in order to assuage their guilt made themselves quite willing to co-operate with the socialist plan of control. The next day, at Bridgwater, he ridiculed the recent National Productivity Conference, saying there was no point striving to produce with maximum efficiency things no one wanted to buy. 'Look after profits,' he said, 'and productivity will take care of itself.' However, all the Government manipulation and regulation of the economy in the preceding two years had made profits difficult to achieve and profitability an apparently unhealthy concept.

Powell's conference speech was more low-key than the previous year's. He confined himself to two main precepts: that expenditure on defence had to be related to returns in terms of security; and that only military obligations that could and should be performed should be undertaken. He pledged the Opposition to watch that the Government honoured its NATO commitments, on which 40 per cent of the defence budget was spent. There was one hint at a return to his speech of 1965, when he warned against Britain's taking on more than she could successfully manage in the East. Capabilities there, he said, had to be looked at 'realistically.' In a nod to his colleagues, however, he did specify that just because Britain's physical presence in the world might be shrinking, that did not mean her influence had to shrink too.

He saved his most controversial outburst for the evening the conference closed, when he spoke at Lancaster. He returned to his point that the prices and incomes policy was still being implemented on a voluntary basis, the Act of Parliament that would have enforced it still not having been invoked. He urged the country to wake up to this, and to stop rolling over whenever urged to reverse some act deemed contrary to the policy—as the directors of Great Universal Stores had done the previous week when told by the Treasury, without any right in law, to rescind a dividend. It was a speech made in the knowledge that many Conservatives, inside and outside the parliamentary party, still saw little wrong with the policy.