Leader's speech, Blackpool 1966
Edward Heath (Conservative)
Commentary:Britain’s economic problems dominated this speech. Investment, productivity, production, wages and redeployment were frozen, and Heath put three proposals before the TUC Conference to address them. He also criticised the Selective Employment Tax, which the government levied on ‘non-productive workers,’ most of whom were employed in retail, on the basis that it would bring hardship to many people. Other key issues were the constitutional crisis in Rhodesia following Smith’s unilateral declaration of independence on 11 November 1965, and the question of Britain’s relationship with Europe.
Mr President, I must first say to you what an enormous pleasure it is for all of us at the last session of this great Conference to have you presiding over our gathering. I am giving away no secrets when I say that you have always been a Conference favourite, and you have been so because all of us have admired immensely both your capacity for carrying out the most arduous and difficult tasks in Government and the courage with which you always saw them through. All of us here want to thank you for the many years of hard work you have carried out for our Party and for everything which you are still doing for us in the House of Commons and also here - which is so important - in the North-West. We are deeply grateful to you.
This has been a very heartening Conference for us all, and I, as leader of the Party, may, perhaps, take this opportunity to thank the whole of the National Union for organising the Conference here in Blackpool. Also, I thank - I do so personally, but I know you will want to join with me - all of my colleagues in the Shadow Cabinet, and some from outside, who have made such admirable, splendid, vigorous, informative, stimulating speeches at the end of each debate. I have listened now to a good many Conference speeches over the last 15 years, and I cannot recall a Conference at which so many of the winding-ups have been of such a high standard as we have had during the past week.
In those words of thanks, inadequate as they are, I join my own for the work which all my colleagues are doing throughout the year in the Shadow Cabinet and in our Party in the House of Commons, as well as tramping up and down the country carrying our flag and speaking for our cause. My thanks are sincere and very grateful.
Mr. President, you have summed up for us the atmosphere of this Conference. It seems to me it has been serious-minded, that it has been determined, that it has been taking the long view, and above all that we have shown ourselves to be confident. In fact, I would sum up by saying we leave Blackpool today buoyant and united. That is my report to our Party up and down the country on this Conference.
However, last year on 18th October the leader of the Labour Party also gave a progress report to his Conference on the first year of Labour Government, and he went on to say, ‘A year from today I confidently look forward to submitting to the Labour movement an even more encouraging progress report.’
That report, Mr. President, is due in three days’ time, but as so often happens there seems to have been a leak. As the Speaker of the House of Commons would say, ‘For the sake of greater accuracy, I have obtained a copy.’
It starts off with this heading: ‘Members of the Labour Party, Comrades.’ Well, you will see in present circumstances it therefore has a somewhat limited distribution. It begins: ‘We have maintained full employment - in the Cabinet.’ It goes on: ‘George Brown announced that he was declaring himself redundant but we devised a scheme of work sharing; we spread the work, Comrades, but we all keep the top pay. Comrades, we are raising our productivity - in the Cabinet: a budget in March, a budget in May, a budget in July. It is true, Comrades, that at this last election we produced only half as many promises as in 1964, but, Comrades, we have broken them in a third of the time. Comrades, we have introduced a proper Socialist discrimination against unproductive services. We have achieved this by a large, continuing, purposive expansion of the Civil Service. Comrades, we are nationalising steel and land and the trade unions. Comrades, we have put prices up; you will hold wages down. Comrades, we have rejected the defeatist doctrine of stop-go: go has gone, gone for good.’ It ends, ‘Farewell, Comrades.’
Enough of that, because although this has been a grim year for our country, yet having listened to this Conference what you would really like is for me this morning to look forward rather than back. I want to take as my theme the great divide which separates the parties today in so many ways, and I want to take with it as well the theme of the greater unity for which we all ought to work in this country as a whole.
We have reached this year what I first called in the House of Commons the Great Divide, and at this Conference the differences have become clearer, they have been sharpened. But this is not for the sake of creating differences. It is because these differences represent the different characteristics, the different approach of Toryism and Socialism in the modern world. The Great Divide between freedom and compulsion represents perhaps the widest, the most dramatic gulf between Conservatism and Socialism today, but that is not the only example of the Great Divide. There is the next one, over how we can rescue this country from its economic difficulties. There is the divide over the determination, the very will to tackle the nation’s economic and industrial problems; the divide how to give real security to those who are in need; the divide on how to advance the hopes and aspirations of those who want better education for their children, better homes for their families, better jobs for themselves. There is now, alas, a dear divide between the parties as to how to bring to an end the Rhodesian tragedy. Even since we debated it in this hall and we heard Reggie Maudling’s moving and magnificent speech, the Government has sent to Salisbury an emissary with what they describe as ‘final terms.’ Mr. President, you know this better than anybody, with all your great experience of negotiations: how could any Government really desiring a settlement be so foolish as to send a man with what they define as ‘final terms’? There remains the Great Divide that separates us from the leaders of the Labour Party, the divide over the genuine desire to go into Europe. These, then, are the issues which are raised between us today, and let no one say that these differences between the parties do not matter.
This has been a serious Conference because we have been wrestling, as we often had to wrestle in Government, with solutions or the real problems of ordinary men and women, and we know and share their fears and anxieties because many of them are the fears and anxieties of us in this hail today, those who are still trying to find homes, those who are worried about their children’s education, those who are worried about their Health Service and the service they are getting, those who are worried about the future when they retire, those who are worried about their country when they see it slipping in the world, when they see it in debt, when they see its influence disappearing. These are our fellow citizens and they are worried, but above all they are worried by the nagging fear of redundancy, of short time working of smaller pay packets, hire purchase commitments, and above all worried about losing their jobs.
This, Mr. President, is going to be a cruel, hard winter for many people whom I met in Scotland, whom I met in Wales and whom I met in South West England and whom I met here in Blackpool and the many like them in the seaside resorts of this country - a cruel hard winter because of the Selective Employment Tax. We always said that if we were going to recover our prosperity and our stability, then some deflation was necessary and change to new industries would involve short-term unemployment. We said it boldly and courageously at the last Election. We still stand by it. ‘Change’ has suddenly become a very fashionable word. Over ten years ago Angus Maude and others of the group to which I once belonged in One Nation, wrote a book called Change is our Ally. Enoch, who spoke yesterday afternoon, was one of the main contributors. Change is our Ally we said, but for Mr. Wilson, who now produces the word ‘change’ on every possible occasion, change is not an ally but an alibi. An alibi for the errors and failures of the last two years.
As Iain Macleod said yesterday in his brilliant speech, anyone who has been Minister of Labour, who knows these problems and has to handle these problems, hates unemployment. It is unavoidable sometimes, as I have described, but what I hate more than anything now is the unemployment which is being caused because the Government failed to act in time. More may he caused now because they have to take action which is much harder and harsher than it would have been before.
This is the thesis I want to put to you. This is the argument which I want to put before this serious Conference. The whole basis of the Labour Party’s policies and doctrines and their actions in the last two Election campaigns were that they had the answer to the problem of how to increase our national wealth rapidly. They said that they could get away from Stop Go. On this depended their economic policy and their social policies. On it they won two Elections. What is now absolutely clear is that with even the most optimistic forecast for the next three years, what the Labour Government achieves, if it survives for five years, will certainly be less than what we achieved in our last five years of Conservative Government. These facts are beyond dispute and at once they destroy the myth that the Labour Party could do better than we have done, that there was some quick, easy shortcut to prosperity without anybody having to trouble himself. Well, they cannot do better than we have done. They have failed. There are some people who draw the conclusion that what we have seen is the failure of the free enterprise system. There are many in important positions and many who comment on our affairs who either consciously or unconsciously have come to that conclusion and are writing it and saying so. They, therefore, say that the Government’s move to controls and compulsion is inevitable. Then they go on to say: therefore, it is justifiable.
Mr. President, I repudiate absolutely the conclusion that this is the failure of the free enterprise system. I repudiate absolutely that it is inevitable and I repudiate completely that it is in any way justifiable. This has been the failure of Socialist economic policy. There was inflation through mounting Government expenditure. They thought that they could control it by voluntary means, which could not possibly succeed in those circumstances, and, of course, some of them sought it to help to win the Election. It has been their failure to manage the free enterprise system, but then how could they? They do not understand its psychology or its motivation, they do not know what makes it tick and, above all, they do not believe in the free enterprise system. That is the real failure, and those who say that because the Labour Government has not been able to manage a free enterprise economy, then abolish the free enterprise system, how foolish they are. Surely the answer is not to abolish the free enterprise system, but to do away with a Labour Government?
The nation as a whole, many of our fellow citizens feeling bewildered, is desperately seeking a way out of its present difficulties. Some of our fellow citizens are still looking for a simple trick such as Mr. Wilson offered them in 1964. Mr. President, I must say again that there is no easy way out. There is no simple solution. There is no short cut to a solution of our nation’s problems. Therefore, and I say this to the country as a whole, it having been shown conclusively that the other major Party in the state has no simple easy solution, let us all, as one people, in national unity at least agree about this, namely, that there is no short cut. The answer will only be found by a combination of measures based on the energy, the hard work, the skill and the enterprise of every single man and woman in this country.
So contrast our approach. Our approach is to say, ‘How can we enable the free enterprise system to work better?’ ‘How can we enable it to be more fruitful?’ ‘How can we enable it to achieve those things which we all want to see?’ The Conservative Party is the Party of free enterprise and let us be proud of it. We accept the obligations which this places upon us, an obligation to understand the nature of modern capitalism and what is required of it. Of course, the changes in technology, about which Ernest Marples talked with such wit and humour, the growing size of our factories and our plants, the cost of these great projects - all of this has changed capitalism today compared with what it was even ten years ago. Therefore, there will be changes in the structure of our industries and firms, differences in size, in manning, in the number of men and women required, in their skills, their education and their training in new techniques as larger markets will mean short-term problems of transition. It is, I believe, the job of the Government to help industry to overcome these problems and to help modern capitalism to work. I sum it up in this way: our task is to remove the obstructions which exist, wherever they may be, to enterprise and competition in our business world. That, then, is our approach - enable it to work better by tackling the fundamental obstructions and obstacles.
However, today everything is frozen - not just wages, production, productivity, investment, even redeployment. In fact, almost all progress is frozen; and the Government turn to us and ask what should they do. They have no answers themselves. I shall briefly tell them some of the things which they ought to do.
I have said that they have almost entirely frozen the redeployment which they say is the purpose of the whole of their measures. Very well; men who want to move cannot change houses because they cannot deal with the mortgage for buying the new house because no one can come into their house because they cannot get a mortgage. This is the practical problem of dealing with policies of this kind; they have made no preparations. Very well, then, let them take special and, if necessary, discriminatory action in order to deal with this problem.
There are quite insufficient training facilities in this country to enable men to be trained for fresh skills and change their jobs. Very well then, do not let the Government sit there supine; let them produce a crash training programme; use the resources which are available in our firms; make extra use of the resources available in our educational institutions. Let them make a special call on the abilities of our firms and our teachers in order to meet what is a national requirement; and let them make it speedily.
And, then, genuine productivity agreements which help the men and help our country - let them exempt these from the present arrangements; they ought to have done so long ago. As soon as possible, let them get back to men and employers carrying out their legal obligations, and let them make agreements enforceable on both sides and not only on the employer’s.
Now, those were three proposals which I put to the Trades Union Congress when they were in conference. How foolish of people to say this was an incitement to the Trades Union Congress to defy the Government or break the law; there was no law to be broken - it was a voluntary agreement; and the Trades Union Congress is just as entitled to try to influence the Government as anyone else. And we as a Party are perfectly entitled to put forward our proposals which we believe are sensible for the industry and the trade unions of this country. Indeed, if the Government had adopted these policies, then the economy (if it had been run properly as well) would not have been facing its present troubles, and the voluntary system would not have broken down.
I shall give you a programme. There are now left nine months under which the Government’s first order in the wage freeze runs. I shall give you a programme for nine months to start to get our basic economic affairs right. It is based, firstly, on confidence; it is based, secondly, on competition; and it is based, thirdly, on constructive trade unions.
There is one thing which would restore confidence not in nine months, but in nine seconds - for the Prime Minister to announce tonight that he is abandoning the nationalisation of steel. Instead of seeing that dreary measure dragging its way through the House of Commons, I give you a programme to replace that.
Let them run the economy, as Iain Macleod said yesterday, on the basis that you have the number of vacancies only equalling the number of men available to fill them. Let us pass a Bill to do a genuine reform of company law and not the half-baked proposals which we have had so far from the Government. Let us have a Bill to stop up the holes in the Restrictive Practices Act, and create greater competition. Let us have a Bill to help the shoppers, both in the hours in which they can shop and with better information to help the housewife buy wisely and well, not turning her into a snooper for Mr. Stewart when he requires. Let us set up a new machinery to help the small firm to grow and to prosper into one of the great firms which will be the foundation of our future prosperity. Let us have a really vigorous policy of regional development, not a facade to cover up the fact that the Selective Employment Tax is damaging every region in the country, as is also their new investment allowances. Let us have the creation of more growth points in these areas where the resources are available. Above all, let us have a budget - a budget next April based not on penalties again but on incentives to every man and woman in the country.
We can tell them what ought to go into it. First of all, abolish the Selective Employment Tax; that is the first thing they have got to do. Let them make the tax system comprehensible; that would be helpful. Let them restore to our businessmen the sort of encouragement in investment allowances which we gave them. But it is no use giving men greater and greater investment allowances if they cannot get the money for the investment itself. This is one fundamental problem with which they have got to deal. Then, let us undo the damage which was caused to small companies by the Corporation Tax and the Capital Gains Tax, which we fought in 1965. A budget which once again makes our company taxation reward the fittest and not the fattest.
Let us give new encouragement to people to save. But, most important of all, a budget which will start the job of making it once again worthwhile for men and women to work harder and to earn more.
I come to my third, and I believe most important, theme – constructive trade unions. Some people - even some members of our Party - have welcomed the fact (and even appear pleased) that what has been ore of the main problems in the last twenty years (the pressure on wages of trade unions and the inflation which followed) should have been dealt with by what I might term ‘the Government just knocking the trade unions over the head,’ dealing with it through fines and imprisonment. I take no pleasure from this; indeed, it saddens me deeply.
I have already warned that this is not only a question of the trade unions. This leads on to the controlled economy and to the control of the businessman – one or two of whom may perhaps be pleased - it leads to the control of investment and controls right through the economy. That means that we shall then find the citizen sinking to subterfuge, the black market rackets, the petty crime, and everything that we know from experience which goes along with controls and regulations and the controlled economy.
I therefore say to you here today that this way of dealing with the problem is not the Conservative way, and let those who may be pleased with it not call themselves ‘Conservatives.’
What I do want to put forward is the choice which now faces the trade unions because this is a matter which is going to be debated up and down the land in these coming months. They can continue to go along the way they are going. If I am frank, I say that I see very little chance of going any other way with the present Labour Government, or they can choose our way. We have put it forward in Putting Britain Right Ahead. We put it forward at the last election. Our approach is this: what we need is a new framework based on law which will be suitable for trade unionism in the modern world, and within that framework the trade unions themselves shall be able to carry on all their proper activities in freedom. That is our approach.
What we have seen in these last few years is that the whole balance of our economic activities has been upset. When that occurs in any form of human life, in any of our activities, there are two courses open. Of course, the natural one for the Socialists is to say, ‘We must control it.’ For us the natural answer is to say, ‘We must right the balance and then men and women can continue in freedom.’
Ours is not the easy way out. In some ways it is much easier to have done what the Government has done. In fact, they were not prepared to reform trade union law. They set up a Royal Commission which is still waiting for the evidence from the TUC. Ours is not the easy way out. It demands courage. But our proposals do show a respect for the place which the trade union movement holds in our national life today. Indeed, I believe it is a compliment to the trade union movement, it is a mark of our respect for them, a recognition of the importance of their place in our national life, that we should believe in giving the highest priority to creating a new, modern framework in which they can carry on all their activities for the benefit of the country as a whole.
Of course, so much of this is based on human relations, but it is also based on law; and just as Parliament never hesitates to legislate for the corporate life of the company, and to safeguard the individual rights of its shareholders, so in the same way, in my view, Parliament should never hesitate to legislate for the corporate life of the trade unions and to safeguard the individual rights of all their members.
But of course this, too, would involve change, and the unions in this arrangement must be prepared to deal with the problems of the restrictions on the shop floor, the demarcation disputes, the rules restricting output, the rules restricting entry. There is room for all who can acquire new skills. We need it. We need it desperately. So I hope that we shall find the trade unions choosing the way of moving into modern times, with a modern legislative framework rather than taking the other way out of becoming more and more out of touch with modern life and finding that the Government is taking over more and more of their rightful functions.
So, Mr. President, I believe that what I have said puts forward a programme, not in detail - that is not our task - but of the main lines which this Government ought to follow today.
But there is one major vital matter on which finally I want to speak: Europe. We have heard the announcement. I must confess it did not disrupt our conference that Mr. Wilson is to have another Chequers weekend on Europe. I must say my heart fell at the very mention of another Chequers weekend. There on TV we shall see innumerable pictures of the long, sleek limousines pouring into Chequers, the long lines of black, sleek policemen all guarding them outside, and from it will come what unforeseeable disaster?
Mr. President, the time has come when this Government must declare itself clearly and firmly on Europe. We have done so. We fought the last election on it. Sir Alec, in his speech yesterday so highly praised by everyone here and in the Press today, dealt clearly and forcibly and persuasively with the position of the European policy. Europe today is restless; Europe wants to know where the British Government stands. Our friends in the Community are restless and want to know. Our trading partners and allies, some of them in the European Free Trade Association, feel the strain of being in their present position with Great Britain. They have the strain of the surcharges. They have the strain of the vacillation of the British Government. The Government must make its position clear. The Community is moving apace to its final state. It will be in that final state by the time that any British Government will be able to negotiate with it.
Certain fundamental facts follow from this which the British Government today must recognise and they are these, that they or any other member who wishes to join will have to accept the European Economic Community as it is for itself. The time has long passed, to my regret, when any member could expect to influence the Community from its outside in its basic beliefs and its basic organisation. So the British Government must recognise that there are some things on which there can be negotiations and others which have got to be accepted; and that includes the Treaty of Rome, the Common Tariff, the agricultural policy, and the institutions. We negotiated arrangements for the Commonwealth. Of course we hope that all of those special arrangements will remain. We believe that they should. There will have to be transitional arrangements negotiated for the change over of a great country like ourselves to a member of the Community. But it is no use any longer Mr. Brown and his friends asking for special privileges in the European Economic Community. It is true that the Six members gave them to themselves, but they were the founder members and, rightly or wrongly, their view now is that that period is over and the privileges are no longer to be extended.
Then it is no use either members of the Government travelling Europe and travelling the world saying that the will to go into the European Community exists. It is no use them saying that unless they are prepared to take the decisions I have outlined. Only when they show that they will accept that as a basis of European membership for Britain can they say that they have the will to carry this policy through.
The Labour Government must weigh up the balance on this issue. They cannot defer it any longer. In fairness to our friends in Europe wherever they may be, in the Community or in EFTA itself, and in fairness to the Commonwealth, they must make up their minds and tell the world. While the period of waiting for negotiation goes on there is an immense amount to be done to change our own internal policies, in order to be able to adapt ourselves more easily and to give us longer time and to work out the problems of the sterling area and to deal with the indebtedness of this country to the International Monetary Fund, and to discuss with those who wish in Europe the question of defence and political developments.
All of these are immense and difficult problems which would face any Government, and I say so quite frankly to all of you here today and to the country as a whole. But Europe will not wait for ever, and unless a decision is taken in principle for this country, unless a solemn declaration of intent is made, then finally, when the Community reaches its full stage of development, it may be too late for any British Government to take that step. So I believe that this is a solemn time for the British Government on Europe.
In that very distinguished speech of Angus Maude’s he said we must show our people that these things are worthwhile, that these immense efforts for which we are calling in pursuing our policies, for which we are asking our Party members up and down the country, are worthwhile. I believe that they are. To people who are worried, as I have said, about jobs and homes and schools, the future of their children, who are worried about the country, then surely we can show them that, in order to produce that fuller life which they want, in order to see our country holding its head high again in the world, these immense efforts are worthwhile. But I have so often felt in the travels I have had to make in these last few years that perhaps we in Britain do not yet fully realise how much life today can hold for our people; how much is possible with all the modern techniques; how much can be achieved by our own efforts when we are given the opportunity. The life of so many people in the Commonwealth, in Canada or New Zealand, in Scandinavia or America; to see so many of the chores of life removed; to see the working conditions they want; to see the educational facilities for their children; to see the opportunities of recreation in every form - this is a life which in many ways is so much fuller than we have yet been able to achieve here in Britain.
Surely it is this vision which we can hold out to them when we demand these vast efforts. This is not just a materialistic society. This is a society in which you have a material basis to enable you to have a richer and fuller life than any generation has ever had before.
There are some who say: ‘But how can you talk about these things during a crisis? Surely this is misleading people.’ Exactly the reverse. I believe that the only way we can move the British people out of this crisis is to show them what is worthwhile; to show them how to make the effort to get out of the crisis and to achieve what we all want to do. It is what we must do as a Party - to show our people what is possible, to show them the way which we ourselves have been charting at this Conference, and to try to achieve a greater national unity upon the means of getting there - a greater national unity than we have had in the past. I believe that our Party must give the lead. In the House of Commons you can rely on my colleagues and myself; and in the country we depend, as you know so well, so much on you - every one of you - and your friends and neighbours who are working with us.
So go out from this great Conference at Blackpool. There is not a moment to spare. Make sure of your objective: go to it to achieve the result we want. Go to it, with that long haul to get rid of this Government. We can do so now in good heart. We know, the country will know, that Labour Government does not work. We can show that our ideals are right, our philosophy is right, our policies are right. We can show them the great divide between the parties, that freedom is at stake. We can show them that, with far greater national unity on our principles and ideals, we have so much to offer. This year will hold a great deal for us. As you have said, Mr. President, we are set for a long haul in national affairs. But in our local affairs the opportunity will already be there.
In Birmingham this year we achieved success, London and Lancashire next year! That is what we want. As we march forward on this path, then let these three - Birmingham, London and Lancashire - be the stepping stones to victory.