Sir Keith Joseph and the Market Economy

Tuesday, 21 May 2013 - 6:00pm
Museum of London





Overview

Sir Keith Joseph was the most articulate and powerful of the postwar exponents of the market economy at a time when it was distinctly unfashionable. He it was who provided the ideological dynamic for what came to be called Thatcherism. Indeed, Margaret Thatcher dedicated a volume of her autobiography to him, and declared that her reforms could never have been achieved without him. But he has also been an important influence on Tony Blair’s New Labour. We still inhabit a world largely created by Keith Joseph, and we will probably continue to do so for a long time to come.

This is a part of the lecture series, Making the Weather: Six politicians who shaped our age.
Winston Churchill wrote of Joseph Chamberlain, Colonial Secretary at the beginning of the 20th century, that, even though he never became Prime Minister, he 'made the weather', meaning that he played a crucial role in shaping the political agenda of his day. These lectures discuss six postwar politicians, none of whom became Prime Minister, but who, like Joseph Chamberlain, also made the weather and so helped to shape the age in which we live.

The other lectures in this series are as follows:
    Aneurin Bevan and the Socialist Ideal
    Iain Macleod and Decolonialisation
    Roy Jenkins, Europe and the Civilised Society
    Enoch Powell and the Sovereignty of Parliament
    Tony Benn and the Idea of Participation






Transcript of the lecture

21 May 2013
 
Sir Keith Joseph and the Market Economy
 
Professor Vernon Bogdanor FBA CBE
 
 
Ladies and gentlemen, this is the last of six lectures on post-War politicians who “made the weather”, that is, who set the political agenda even though they did not become Prime Minister. It is the last lecture, but for those who want further punishment, I will be giving a new series in the autumn on a very topical issue, on Britain in Europe since 1945.
 
Today’s lecture is on Sir Keith Joseph, the intellectual guru behind Thatcherism, and a main influence, perhaps the main influence behind Margaret Thatcher.
 
Now, most people who met Keith Joseph found him, I think it is fair to say, just a little strange, rather tense and humourless, and he had a habit of asking disconcerting questions.  
 
For example, when he was Education Secretary and visited a school, he was shown a bird sanctuary, and he asked, “How do the birds know that it is a sanctuary?”
 
When he was Secretary for Industry, he visited a high-tech company and asked one of the directors “Do you think that television has really come to stay?” and he refused to have a television set in his own house. Perhaps he was mocking himself.
 
Certainly, few politicians have been mocked as much as Sir Keith. He was generally known during the late-1970s and 1980s as “the mad monk”, and Denis Healey, from the Labour Party, said that he was “a mixture of Rasputin, Hamlet and Tommy Cooper”. But, of course, Healey was in the Labour Party, and you may say most politicians are mocked by the opposition, but Keith Joseph was mocked by his own colleagues. Lord Hailsham called him dotty; Reginald Maudling said he was “nutty as a fruitcake”; Ian Gilmour, a leading Tory wet, said he was “a Rolls Royce brain without a chauffeur”; and Harold Macmillan said, “He is the only boring Jew I’ve ever met – the only thing missing is the swivel-eyed loon.”  
 
In my opinion, Keith Joseph achieved more than those who mocked him, and indeed, in my view, he is one of the most influential politicians of the twentieth century. His influence, unlike that of some of my previous subjects, Aneurin Bevan for example or Roy Jenkins, lies not in what he did in government, because he was, on the whole, a failure as a Minister, but as with Enoch Powell and Tony Benn, in what he said in his ideas.
 
It is interesting that only one of the six people I have talked about, Roy Jenkins, held any of the three major offices of state, that is Chancellor, Foreign Secretary or Home Secretary. None of the others did. But I think that Keith Joseph was more influential than most of those who did hold those great offices.
 
There is another major difference that marks off Keith Joseph from all the previous politicians on whom I have lectured, indeed from almost every politician. All of the others on whom I have lectured wanted to be leaders of their party and Prime Minister, and all of them, except Iain Macleod, stood for the leadership of their party, albeit unsuccessfully. Iain Macleod would have stood if the opportunity had presented itself.
 
Joseph, by contrast, deliberately rejected the chance of becoming leader of his party in 1974, and he said, in words one cannot imagine any of the other five using, that if he had been Prime Minister, he said, and I quote, “It would have been a disaster for the party, for the country, and for me.”  I cannot imagine many other leading politicians would say that.
 
The same self-deprecation prevented him from writing his memoirs. He is the only leading figure of the Thatcher years who did not write his memoirs.
 
Joseph is remarkable in yet another way: he was the first Jew to have become a Conservative Cabinet Minister. Now, Disraeli of course had been Prime Minister in the nineteenth century, but he had been converted to Christianity, or rather had been converted by his father, who had been involved in disputes with the Jewish religious authorities, and had Disraeli not converted, he could not have entered Parliament when he did in 1837, since MPs at that time had to be members of the Church of England and Jewish disabilities were not removed until 1858.
 
In the 1930s, Leslie Hore-Belisha, who was also Jewish, served in a Conservative-dominated Government, but he was a National Liberal, so Joseph was the first Conservative.
 
He was born in 1918, and his background was very different from that of most British Jews, because most Jews born in the early-twentieth century were children of refugees from Russia or Poland, fleeing from discrimination, and they were born in rather poor circumstances and tended to be on the left. Most Jews who lived in London were to be found in the East End of London. Keith Joseph was not born in the East End of London. He was born in the billiard room at 63 Portland Place, to a very old-established and wealthy Jewish family who were Conservatives.
 
He was born in 1918 and I always think something symbolic about his birth: just after the Bolshevik Revolution in Russia, and the year when the Labour Party adopted a socialist constitution, committing itself to the nationalisation of the means of production, distribution and exchange, and the whole of Joseph’s life, during the whole of Joseph’s life – he died in the 1990s – the whole of his life was devoted to that ideological battle between socialism and, if you like, capitalism or liberalism or whatever you call it. That provided the context of his political career.  It is fair to say that communism collapsed near the end of his life, in Europe at any rate, with the fall of the Berlin Wall in 1989, and that socialism, of the 1918 variety at any rate, collapsed when Tony Blair introduced New Labour in 1994 and altered the Labour Party constitution. It is symbolic I think that his life spans that conflict between socialism and liberalism, private enterprise, capitalism, whatever you call it, in which I think it is fair to say socialism was defeated.
 
Keith Joseph’s father, when he was born, was on active service from the Royal Irish Regiment and was twice mentioned in despatches for bravery, and after the War, he became a leading figure in the City of London, and, in 1933, was elected a Sheriff of the City of London, defeating A.L. Bateman, the Conservative MP for North Camberwell. Bateman did not take his defeat like a gentleman. He said, “I am not complaining; I am going to the House of Commons to tell the Attorney General and Ramsay MacDonald that I will stand again next year, even though they put another two Jews against me. The position is getting serious. I tell you, we have lost the City of London to the Jews – they will hold it. Before long, we shall have to declare war on them, as they have in Germany. Do you realise they had 100-odd cards against my 28? Do you realise the whole of the jury was organised against me? If things do not change, I am going to talk as Mosley talks, and if necessary, I shall change my party, but mark you, I am not complaining at losing.”
 
The City press was outraged at this and said it could have only one effect, of increasing the feeling of indignation, and another Conservative MP, Walter Greaves-Lord, asked the City to re-elected Joseph and his colleague to show that “…whether a man be Jew or Gentile, as long as he is a true and loyal citizen, he is equally entitled to civic rank”.  
 
Bateman was defeated again by Joseph in 1934, and Conservative Central Office sought to prevent his reselection as an MP, and failed to do that, but, as it happens, Bateman lost his seat in 1935, even though his nomination papers had been signed by Lord Allenby, who was the liberator of Jerusalem in the First World War, and by six Conservative MPs.
 
But Joseph’s father proceeded to civic grandeur and, in 1942, he became Lord Mayor of London, the sixth Jewish Lord Mayor and the first since 1902, despite the opposition of Montagu Norman, the Governor of the Bank of England, who thought it unwise to elect a Jew at that time. Nevertheless, Winston Churchill, who was a great admirer of Keith Joseph’s father, was present at the inauguration of Joseph as Lord Mayor and made him a hereditary baronet, which is why Keith Joseph, when his father died in the 1940s, became Sir Keith Joseph.
 
So, you have two sides of the reaction to Joseph’s father, both anti-Semitism and philo-Semitism, and it is for you to judge which was the stronger.
 
Joseph’s ancestors were also of some distinction. His great-grandfather, Samuel Gluckstein, made a living by selling cigars, and he had a motto, “The more you smoke, the more you save”.  One of his customers was a Jew who was, in his way, as subversive as Joseph was to be: Karl Marx was a regular purchaser of his cigars.
 
Joseph’s father was Montague Gluckstein, who founded Lyon’s teashops. He noticed a gap in the market of people who wanted a meal with their families but either could not afford or did not want an expensive restaurant, did not want to go to a pub, so he founded respectable teashops, and, by another irony, it was Lyon’s who, in the late-1940s, hired Margaret Thatcher to work as a research chemist in their food laboratory. So there are all these coincidences.
 
Now, Keith Joseph’s family were not particularly observant Jews, and they, as he later put it, denied him a Bar Mitzvah, that is a confirmation ceremony, something he regretted later on.  
 
He never had much sympathy with Zionism or with the Conservative Friends of Israel. Indeed, if anything, he was mildly hostile to Zionism and it may be – this is speculation – that his lack of a secure and grounded identity contributed to his somewhat nervous and tense disposition, which people noticed when they met him. He always regarded himself and was regarded by others as Jewish.
 
One of his favourite novels was by a now very unfashionable novelist, C.P. Snow, called “The Conscience of the Rich”, about a wealthy Anglo-Jewish family, a rather underrated novel, in my opinion, but anyone who wants to read the novel, “The Conscience of the Rich”, will get a good idea of the family background which produced Joseph.
 
His education was very different from that of most English Jews. He went to a grand public school at Harrow, where he did not do particularly well, but like a later Conservative leader, David Cameron, he flourished when he got to university, and at Oxford, he gained a First in Law, one of just six in his year.
 
Then the War intervened and he was wounded in the War, but, like his father, mentioned in despatches for bravery.
 
In 1946, he won a prize fellowship at All Souls and he intended to do a thesis on toleration but, rather characteristically, it was never finished, even if it was ever started – it was not clear.
 
In 1948, he joined the Young Conservatives, saying later “It never occurred to me to become a member of any other party,” and he was elected to Parliament for a constituency in Leeds in a by-election in 1956.
 
Shortly after being elected, he showed his courage because he had to determine his reaction to the Suez expedition. It might be thought that, as a Jewish MP, he would be quite sympathetic to the Conservative Government, which was working together with Israel attacking Egypt, but in fact, he was opposed to the Suez expedition and was one of seventeen MPs to demand that British troops in Suez be placed under the order of the United Nations. He was a rebel over Suez.
 
Unfashionably for most Conservatives at that time, his interests were not primarily in foreign affairs or defence, but in social welfare matters, and he said, “My main motivation was then, as it has been since, the escape of society and of individuals from poverty, and I had arrived anxious to eliminate poverty – I simply arrived in Parliament full of goodwill, with passionate concern about poverty.”
 
He was made, in 1962, by Harold Macmillan, Minister for Housing & Local Government, with a position in the Cabinet, and he was seen at the time as one of the young hopes of the Conservative Party. He made a great impact, partly through his looks, and some people said he was the Tory Jack Kennedy, but the film we will see in a minute I think shows he lacked the self-assurance and natural confidence of Kennedy, and also, it is fair to say, he was a man of great integrity who would never have countenanced the sort of tricks by which Kennedy advanced in politics, and nor would he have dreamt of using his wealth, as Kennedy did, to buy his way to power. But you will see from the film in a moment a rather tense, uneasy stance, and you will see him making points – it is from the Conservative Conference in 1963. He was making an argument that he was later, rather characteristically, to repudiate, if the IT people can get the film…
 
[Recording plays]
 
KJ: The only answer is more houses. The Government are looking to increasing the productivity in the building industry and are basing all their plans during the following five years on reaching and maintaining a level of 400,000 houses a year.
 
Presenter: With this speech, the then Minister of Housing, Sir Keith Joseph, is generally credited with starting what became known as the Numbers Game…
 
KJ: And here I come to a very strange omission from the socialist proceedings last week…  In all their official speeches condemning us and our efforts, in all their official speeches, they never mention the target of their own. The Liberals, at least, disagreed about one: their Conference wanted 500,000 houses, the platform settled for 375,000 houses. But the Labour Party never had an official target at all – that seems very odd for a party that is so sure it can do better.
 
Amongst the houses that he encouraged as Minister for Housing & Local Government were high-rise flats. He later came to think that was a terrible mistake and said of his period as Minister for Housing: “I was at that time a statist. I went along with the then fashionable policies. I was just a “more” man. I used to go to bed at night counting the number of houses I had destroyed and the number of planning approvals that had been given – just more. Heaven help us! I used to think myself a public benefactor in all that slum clearance and all those high blocks of flats which were then fashionable. Looking back, I think that these were all understandable shortcuts which went in the wrong direction. We broke up communities. We broke up longstanding architecture and relationships, and all with the best of intentions.” When, later in his career, he was travelling with his civil servants in a car past high-rise flats, he would hold his hands to his head and say, “May God forgive me for having sanctioned those!” In the 1980s, he said to a junior Housing Minister taking up office, “You will find lots of problems in your new job. I caused many of them.”
 
This was very characteristic of Keith Joseph, again marks him off from most politicians, the note of self-deprecation and apology. Indeed, he became noted for his many apologies for the previous policies that he had supported, which led many to think he was an unusually honest politician.   
 
In 1978, at the Conservative Party Conference, he delivered a speech one day after the Jewish Day of Atonement, and the journalist Simon Hoggart said, “It is a sign of Sir Keith’s grow in confidence that this is thought to be the first time he has atoned for a speech before making it.”
 
In 1965, he was a supporter of Edward Heath for the Conservative leadership and, ironically perhaps, persuaded Margaret Thatcher to vote for him. She was originally going to vote for his opponent, Reginald Maudling, but Keith Joseph convinced Margaret Thatcher that “Ted has a passion to get Britain right”, and in 1970, when Edward Heath won the election, Keith Joseph became Secretary of State for Social Services.  
 
One of his first policies was to reorganise the National Health Service, a familiar move from new Ministers, and the first of many such reorganisations producing little obvious benefit. He said the aim was to secure maximum delegation downwards and maximum accountability upwards, but his critics said he caused maximum confusion everywhere, and they said it was not Edward Heath but Heath Robinson!
 
One commentator said that he created a Byzantine structure in which there were too many tiers of administration and in which senior executive officials were responsible to authorities which might include among their members one of their own subordinates. Keith Joseph later disowned that as another bureaucratic mistake.
 
Secondly, in 1970, he was a high spender, and in the Conservative Manifesto of 1970, he said in a statement he again later repudiated: “The fundamental problem of all Britain’s social services is the shortage of resources.” In the 1973 Conservative Conference, he boasted: “The real buying power of the National Health Service and the Local Authorities’ Social Services Departments in our current four years is rising from year to year at a rate of 40%, higher than it was in Labour’s central four years, year by year. In other words, we are spending more in real terms as Labour ever managed to do, and increasing our rate of spending on these services faster than Labour did.” In other words, he was a “more” man, “Let’s have more”. He again repudiated that later on.
 
Two things he did not repudiate, which I think are to his credit: he was the first to use the phrase which has now become fashionable of the “cycle of depravation”, of the problems of one generation appearing to reproduce themselves in the next – what has become perhaps called the under-class; and, secondly, he emphasised for the first time what he called the “Cinderella services” in the National Health Service, namely care for the very old and the mentally ill, which were not fashionable, and he diverted spending to those services. He said, “This is a very fine country to be acutely ill or injured in, but take my advice and do not become old or frail or mentally ill here.”
 
At the time, despite Heath’s later reputation as a wet or liberal Conservative, the Heath Government at the time was seen as a rather hard-faced government, but Keith Joseph escaped being called hard-faced. He was thought of, in the words of one critic, as “the statutory humane Minister”, and one of his Labour Shadows said he was “a compassionate man who cares about the problems of the underprivileged,” and the Sunday Mirror said he was “a man of strange contradictions: the Tory Minister who really cares”. Later, oddly enough, he came to be thought of as particularly inhumane, at the time of Margaret Thatcher’s Government, but at this time, he was thought of as exceptionally humane. So, when the Heath Government was defeated in February 1974, his reputation was very high.
 
It was after the Heath Government that Keith Joseph found himself, as it were, and made a series of major speeches which helped to alter British political discourse and became the foundation stones of what came to be called Thatcherism, and the years 1974/5, when he was in opposition, I think are the years of his greatest influence in politics.
 
His fundamental position was an attack on the middle ground of politics, the post-War settlement, the mixed economy with a large nationalised sector and an important role for the State, buttressed by a statutory incomes and prices policy. Joseph said that each successive Labour Government had expanded the role of the State, but Conservative Governments had not diminished the role of the State but they had accepted what Labour Governments had done, and therefore, he said, there was a ratchet effect by which the role of the State constantly increased.  
 
Keith Joseph was perhaps the first, to perceive that this post-War settlement had run into the sand and was beginning to collapse. He wanted to replace the middle ground with what he called “the common ground”. Rather typically, he used a phrase which was easily confused with “the middle ground”. But what the “common ground” was, was a new consensus based on the recognition of the creative role of private enterprise, of the entrepreneur, and a drastic reduction in the role of the State.
 
After the Conservative defeat in the General Election of February 1974, there was an intense debate within the Conservative Party about its future. The view of Heath and the Party leadership, the Party establishment, was that there was no need for a fundamental rethink - the Conservatives needed to stick to the centre ground to win over the Liberal vote. The Liberals, in February 1974, had won six million votes, the first sign of a Liberal revival, and Heath and supporters believed that Liberal voters would not vote for a Conservative Party which had shifted to the right and therefore you needed to win over the centre vote, so, gather round all the centre forces to defeat the extremists on the left, and particularly Tony Benn, on whom I lectured last time.
 
Keith Joseph took a different view. He said Benn was not the fundamental problem; the fundamental problem was the Conservative Party itself for not challenging head-on the expanded role of the State. Conservatives, he said, should be seeking to reduce the role of the State, and he said of himself, “It was only in April 1974 that I was converted to Conservatism. I had thought I was a Conservative, but I now see that I was not one at all.” Like two other politicians I have discussed, Enoch Powell and Tony Benn, he underwent a political conversion in mid-career.  Some of you may think you should have a Damascus roadblock society to stop these middle of the road conversions. He said the role of the State was not to resolve economic and social problems, but to provide a framework through which individual enterprise and community spirit could be brought into play, and it was this fundamental theme which gave the Conservatives something they had not enjoyed since the beginning of the twentieth century, since the time of Joseph Chamberlain, namely, intellectual self-confidence, a counter-ideology to that of the Labour Party and a conviction that the left could be defeated in the battleground of ideas.
 
In 1974, he began a series of speeches that transformed, first, the Conservative Party, and then the country. It began with a speech at Upminster on 22nd June 1974. Joseph said: “This is no time to be mealy-mouthed. Since the end of the Second World War, we have had altogether too much socialism. There is no point in my trying to evade what everybody knows: for half of the 30 years, Conservative Governments, for understandable reasons, did not consider it practicable to reverse the vast bulk of the accumulating detritus of socialism which on each occasion they found when they returned to office, so we tried to build on its uncertain foundations instead.”  And then he characteristically added: “I must take my share of the blame for following too many of the fashions.” Again, not many politicians would have said that, I think.
 
This was significant because, for the first time, a senior Conservative Minister was saying that both political parties were responsible for Britain’s economic decline because both political parties were responsible for the interventionist policies which led to the mid-1970s. An orthodox Conservative would have said it was only the Labour Party. He said both parties were to blame.
 
Then, in a second speech, at Preston, on 5th September 1974, he said the key evil in Britain was not unemployment but inflation – the key evil was not unemployment but inflation, and that should be combatted not through incomes policies, which gave too much power to the trade unions, but by control of the money supply. He said, “Inflation is threatening to destroy our society,” and he said had not dealt with it because of our fear of mass unemployment. He said: “Our post-War boom began under the shadow of the 1930s. We were haunted by the fear of long-term mass unemployment, the grim, hopeless dole queues and towns that died. We talked ourselves into believing that those gaunt, tight-lipped men in caps and mufflers were round the corner, and tailored our policy to match those imaginary conditions, for imaginary is what they were.” This was absolutely crucial to Margaret Thatcher’s Government because, once you removed the constraint, as they saw it, of full employment, you could control public expenditure and concentrate all your energies on combating inflation, and Joseph was the first to say that the aim of securing full employment was misguided.
 
He made a third speech, at Luton, on 3rd October, just seven days before a second General Election in 1974, the first having resulted in a Hung Parliament and a minority Labour Government. In this third speech, he went further because he linked his economic critique with a social critique. He said the post-War consensus had not only impoverished Britain, it was also destroying, in his view, the moral foundations of society.  
 
He said: “It was not long ago that we thought that utopia was within reach. What has happened to all this optimism? Has it really crumbled under the weight of rising crime?” In fact, crime was falling. “Has it really crumbled under the weight of rising crime, social decay and the decline of traditional values? Have we really become a nation of hooligans and vandals, bullies and child-batterers, criminals and inadequates? Our loud talk about the community overlies the fact that we have no community. We talk about neighbourhoods and, all too often, we have no neighbourhoods. We go on about the home, where we only have dwelling places containing television sets. It is the absence of a frame of rules and community, place and belonging, responsibility and neighbourliness that makes it possible for people to be more lonely than in any previous stage in our history. Vast factories, huge schools, sprawling estates, skyscraping apartment blocks – all these work against our community and our common involvement, one with another. There is, moreover, a commercial exploitation of brutality in print and in film which further debases the moral climate, and how is it that a generation that rejects the exploitation of man by man and promises the liberation of women can accept the exploitation of women by pornography? The left, usually so opposed to profitable commerce in trades beneficial to the public, systematically defends the blatant commercialism of the pornographic industry.” He ended by praising Mary Whitehouse as “a brave woman who stood against fashionable views”.  
 
He was here attacking both public collectivism and private individualism, and he said they were linked by what he called socialism. He was mounting a fundamental attack on the post-War settlement, which seemed to many, even at that time, to have brought full employment and rising standards of welfare. But, as I said last time, he and Tony Benn both agreed it was a disaster.  He met Tony Benn on a train in 1981, and they agreed the past 35 years had been a disaster, the post-War period, for different reasons of course: Joseph because there had been a period of national decline, decline in productivity and wealth and inflation. 
 
Keith Joseph called for a new settlement based on state withdrawal from micromanagement of the economy, the policies of fine-tuning. The main task of the State was to control the money supply and provide the framework in which business can prosper. The entrepreneur, he said, was “the character who works the magic, the Aladdin who creates the jobs”.
 
Oddly enough, some in the Labour Party seemed to be agreeing with Joseph. In 1976, James Callaghan, Labour Prime Minister, uttered what became these famous words to the Labour Party Conference, an admonition. He said: “We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that, insofar as it ever did exist, it only worked on each occasion since the War by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment – that is the history of the last twenty years.” So, Labour was beginning to accept the Joseph critique, that counter-cyclical policy, Keynesian policy if you like, had failed, that inflation was corroding British society, and that something needed to be done about it. All this was evidence of a new mood beginning to spread in British politics, which Joseph had noticed, predicted perhaps, with the seeming failure of Governments of both left and right.
 
Now, alienation and disillusionment with British politicians had seemed to begin in the late-1960s, and some of the signs of that were radicalism on the left, attacks on the Vietnam War, the student revolt, and so on, but the real revolutionaries, it may be argued, were not from the London School of Economics or from Essex, but from the right-wing of the Tory Party. It was there that politicians tried to come to grips with the fear of inflation, the fear of trade union power, frustrated patriotism, resentment at the so-called permissive society – all these things which affected what you might call “middle Britain”, the self-employed, the C2s, aspiring members of the working classes, and so on, the sort of people who had formed the backbone of a Thatcherite electoral constituency.  
 
Perhaps that is partly symbolised that studies at the time showed that Jewish voters in those classes were swinging particularly strongly to the Conservative Party as they were becoming upwardly mobile.   
 
All this was a sign, for those who could see it, that popular discontent was undermining the consensus, but not from the left, as Nye Bevan and Tony Benn would have hoped, but from the right. In other words, you had a manifestation of a social mood that was radical, but radical not from the left, but from the right, and that both Margaret Thatcher and Keith Joseph were radicals, dealing with an economic frustration, but also a cultural frustration, and in particular, the frustration of people who were weakened by inflation – those on fixed incomes, the self-employed, small businessmen and women, without strong trade unions to protect them. These formed the basis of a Thatcherite constituency. They were left out of what you might call the corporate arrangements of the State. It was difficult for people on the left and Liberals to understand it, and nor did traditional Conservatives, the so-called wets, understand it,  because Conservatism, which had been until this time an elite philosophy, was becoming a popular philosophy, the aim being not to defend the status quo, as previous Conservative Governments had done, but to subvert it. It was a radical idea to change the culture. After all, the Conservative Party was part of that culture – it had helped create what Britain now was, so that new ideological and cultural fault-lines were being created.
 
To go back to 1974, one has to remember the Conservative Party was facing a second election in October, and Joseph’s interventions were seen, and indeed were, tactically inept, because it divided the Party with a second election coming and it made voters think – and certainly the Labour Party made a lot of it – that if you elected the Conservatives, unemployment would go up.  In the second election of 1974, in October, Labour managed to win an overall majority, only three, but that was sufficient, given the large number of minor parties, to keep them there for five years.
 
Nine days after the election, Keith Joseph made a fourth speech that finally destroyed all chance he might have had of winning the Conservative leadership. He made a speech at Birmingham, Edgbaston, in which he again lambasted the permissive society, in even more apocalyptic tones.  He said: “Are we to be destroyed from inside, a country which successfully repelled and destroyed Philip of Spain, Napoleon, the Kaiser, Hitler, are we to be destroyed by ideas, mischievous, wrong-headed, debilitating, yet seductive because they are fashionable and promise so much on the cheap?”  He again praised Mary Whitehouse, who had spoken out against the BBC, the educators and the false shepherds.  
 
But then came the crucial passage. He said our “…human stock was threatened by the relatively large proportion of babies being born to women from social classes four and five”. What particularly struck people was that phrase “human stock”, which had indications of eugenics. He again said, alter in the speech: “The balance of our population, our human stock, is threatened.”
 
Many people said that these were not Keith Joseph’s words but the words of one of his advisors, Sir Alfred Sherman.  Keith Joseph, rather typically – most politicians would have said, “Yes, they were, I did not read them very carefully…” Keith Joseph said, “No, no, they were my words.” In fact, they were not his words. It was later discovered they were the words of another right-wing advisor called Jonathan Sumption, who is now a Justice of the Supreme Court, which shows something about the non-partisanship of judges and the tricks of time.
 
There was a further twist to the story. The stuff about the large proportion of babies being born to women from classes four and five had been taken from a research paper written for the Child Poverty Action Group by two people called Arthur and Margaret Wynn. Later on, these two were exposed as spies for the Soviet Union, but even more than that, both Keith Joseph and Sumption had misinterpreted the research because it was shown that women from these social classes were in fact beginning to limit their families – it said roughly the opposite to what he implied.
 
The situation was made worse because Joseph, when he had been Secretary of State for Social Services, had opposed free prescriptions for contraception, and that decision had been reversed by his Labour successor, Barbara Castle, who had made contraception free. Also, Joseph, as compared with his officials and professional advisors, had much less sympathy for abortion on demand than they did.
 
The implication drawn by some people from the speech, though Joseph did not say it, the implication was that the poor were immoral and therefore benefits should be withdrawn from them. Frank Field, a Labour spokesman, said it had “…all the marks of deliberately attempting to unleash a national backlash against the poor”. 
 
Now, Joseph, rather plaintively, said, “I thought my record of initiative and concern for problem families and for what I have called the cycle of depravation when I was Secretary of State for Social Services would have protected me from misunderstanding.” But, for the first time in his life, and almost the only time, he became a popular figure, well-known outside the normal circle of people who took an interest in politics. He received 2,000 letters of support, including one from the actor, Sir Lawrence Olivier, but many of the letters misunderstood what he was saying. One of the letters to him, “Yes, you are right, too many Irish are breeding.”  
 
He also became an obvious target for attack because he had brought together two unmentionables in one speech: sex and social class. The headline in the Evening Standard said: “Sir Keith in Stock Babies Sensation”. The miners’ leader, Joe Gormley, said that Joseph was saying we should “…put down the kids produced by what he called ‘the lower classes’”. It was the subject of a lot of misunderstanding. Perhaps the best comment on the speech was by Private Eye, which had Sir Keith in a hat, under the headline “Sir Sheath” and the caption underneath “If the cap fits, wear it!”
 
Keith Joseph, a rather sensitive man, simply could not cope with the criticism and ridicule which the speech aroused, and he withdrew as a candidate for Party leader, saying, as I said, that, “Had I become party leader, it would have been a disaster for the party, country and for me.”
 
He continued with his critique, and he said he wanted to replace the “middle ground” by “common ground”. When asked at the Conservative Conference of 1975 what he meant by that, he hit his head and said, “My God, I have failed again!”
 
He was the only member of the Shadow Cabinet to support Margaret Thatcher as Leader of the Conservative Party. Everyone else supported Heath. He became her closest advisor, and it became a remarkable political partnership, they were complementary to each other. Hugo Young, a journalist, said that it was on the most formative political relationships of modern times. Joseph said, “My eyes light up at the sight of her, even though she is hitting me about the head, so to speak.”
 
The Conservatives won the General Election of 1979, although Keith Joseph said his influence was always greater before that, before he became a Minister again. 1979 ended a decade of decline, confusion and economic failure, and also I think closed a distinctive chapter of post-War British history, which had included the Attlee Government’s social reforms, the independence of India, the brief life of One Nation Conservatism, and our accession to the European Community.  The national leadership now passed to a new generation, with new ideas and new values, and to many people’s surprise, the right was a beneficiary of this, and again to many people’s surprise, the Election of 1979 ushered in a period of political stability, which some would say was a precondition of our return to economic strength.
 
But Joseph, perhaps not strangely in view of his previous record, did not play a creative role as a Minister during the Margaret Thatcher Government. He was in fact a failure in office and, as you will see, he himself accepted that he was a failure in office. Like many perhaps intellectuals, or people with intellectual tendency, he was tough and ruthless in stating principles, but rather soft-hearted in following or not following them up – indecisive. He was said to be “a lion in opposition, and a lamb in Government”.
 
In 1979, Margaret Thatcher appointed him Secretary of State for Industry, and when he entered the Department, he asked whether such a Department should exist at all, and he said, “Do you really want me to do for the engineers what I did for the National Health Service?” He did not do the sort of things that Conservatives wanted him to do: to sell off the nationalised industries. In fact, he continued to provide public funds to British Steel and British Leyland. He did comparatively little, and by 1981, a Conservative journal called Crossbow said that he was “the most dismal disappointment of this Administration” and that transfer to a less demanding post is clearly long overdue. He was transferred in 1981, whether to a less demanding post is not clear, but he became Secretary of State for Education.
 
There, he did try and pursue some of the themes of his speeches. He tried to introduce educational vouchers, but got nowhere. He proposed, rather innocently, a reform, which later Tony Blair introduced, of top-up fees for students, arguing that since university education benefited the students who went there, it was unjust that those who did not go to university should contribute in taxation to help them, and therefore it was a redistribution of wealth to the less well-off and a removal of unnecessary subsidies to have top-up loans. He assumed that Conservative constituency associations, largely composed of middle class people, would agree with him, but the middle class supporters in Conservative constituency associations were, in theory, in favour of the market but not when it meant the removal of their own subsidies, and there was a howl of rage and he was disowned by Margaret Thatcher, who said he had been misunderstood, though he had been understood only too well.
 
He did herald some themes for the future in speeches, in particular his concern for non-academic children. He said far too much attention had been given to those who were going to do well out of the education system, “But there are a large number of children,” he said, “who gain little from their eleven years of compulsory schooling.” He said that schools should encourage much more than they did vocational skills and practical subjects, and he introduced GCSEs in 1986 for that reason and he hoped that schools would compile records of achievement for children so that even those who were not good at passing exams would have something from their schooling.
 
In higher education, he produced a Green Paper in 1985 called the Development of Higher Education into the 1990s, in which he said that universities should be, and I quote, “concerned with attitudes to the world outside higher education, and in particular to industry and commerce,” and should therefore, and I quote, “go out to develop their links with industry and commerce”.
 
His Parliamentary Private Secretary, George Walden, remembers a Conservative backbencher putting the same point more pithily. He said, “We cannot we just make them give up this Shakespeare nonsense and do something useful?!”
 
Three MPs spoke out against the White Paper. They made a strange trio. There was Enoch Powell, the former Professor of Greek, who said it was, and I quote, “barbarism to attempt to evaluate the contents of higher education in terms of economic performance or to set a value upon the consequences of higher education in terms of a monetary cost-benefit analysis”.  Gordon Wilson, who was the SNP Leader at the time, called Joseph a philistine, while Eric Heffer, a left-wing Labour MP for a Liverpool constituency declared that “Man does not live by bread alone.” Now, Eric Heffer had left school at fourteen, so the House of Commons was treated to the strange spectacle of a Fellow of All Souls being rebuked for his lack of understanding of education, you may think appropriately rebuked, by a man who had left school at fourteen.
 
It is only fair to say that, perhaps remarkably, Margaret Thatcher was not impervious to this criticism. In her autobiography, “The Downing Street Years”, she says that: “In higher education, many distinguished academics thought that Thatcherism meant a philistine subordination of scholarship to the immediate requirements of vocational training. That was no part of my kind of Thatcherism.” But she said her critics were genuinely concerned about the future autonomy and academic interests of universities, and she said, “They had a stronger case than I would have liked.”
 
Shortly before leaving office, she asked Brian Griffiths, the Head of her Policy Unit, who is now Lord Griffiths, to prepare a scheme to give the leading universities much more independence, freedom from the state and demands of vocational education, but she was removed from office before any schemes could be prepared or implemented.
 
In 1986, Keith Joseph retired from politics and left office, and he gave an interview to a teachers’ union paper. The journalist asked Sir Keith if he looked back over his period at Elizabeth House, which is where the Department was, with a sense of achievement. Keith Joseph’s Press Officer was trying to tell him what to say, but Keith Joseph replied with one word: “No.” Very remarkable…
 
In 1987, he became Lord Joseph of Portsoken.
 
Most politicians exaggerate their achievements, boasting about non-existent achievements. Keith Joseph was the opposite, with characteristic self-deprecation. He said of himself, reflecting on his political career: “I was a joke, a useful joke, a convenient madman.”
 
Margaret Thatcher took a different view. She called him a “political giant” and dedicated a volume of her autobiography to him. She said, “You, more than anyone else, were the architect who, starting from first principles, shaped the policies which led to victory in two elections. Our debt to you is great indeed.” The reason being, as she put it, he gave us back our intellectual self-confidence. She said it was Keith who really began to turn the intellectual tide back against socialism. “If Keith had not been doing all that work with the intellectuals, all the rest of our work would probably never have resulted in success. He played a similar role to left-wing intellectuals who, during the 1930s and the War years, paved the way for Labour’s election victory in 1945.”  
 
It is fair to say that Joseph reciprocated that admiration for Margaret Thatcher. He used the same words about her: he said she was a giant, “a beautiful giant” he said.
 
Keith Joseph’s influence was not just on Conservatives. Some could claim that he is the intellectual godfather of New Labour, of Blair. Indeed, he hoped to achieve that. He said in the 1975 Conservative Conference, “We are only trying to achieve by argument what many European Social Democrats have long understood: that you cannot make the mixed economy work at all effectively if you cripple the private sector and lose control of the public sector.” I think Blair would agree with that, Gordon Brown, and probably Ed Miliband as well.
 
The 1997 Election was the first General Election since the Labour Party was formed where nationalisation was not on the agenda. The question people were asking was not which industries Labour would nationalise but which they would privatise.  
 
Douglas Herd said, fairly I think, “The Conservatives lost the Election, having won the arguments.”
 
The importance of the role of the entrepreneur is recognised now by all parties. Indeed, the official document produced by the Blair Government in 1999 to support Britain’s bid for the 2006 World Cup said “Britain is a nation of entrepreneurs.”
 
Peter Mandelson said, under the Blair regime, that he was relaxed about people becoming, as he put it, “filthy rich”, so long as they paid their taxes.
 
Gordon Brown’s first term as Chancellor was marked, as forgotten now, by prudence and monetary continence – he was known at the Treasury as “Prudence”.
 
The Welfare to Work Programme, the cycle of depravation, all these, we owe to Joseph. Indeed, by the year 2000, even Joseph’s speech about the number of children born to women in class four and five was becoming the conventional wisdom. The Guardian, in an article in April 2000, said: “Girls are nine times more likely to become teenage mothers if they come from a low-skilled background,” which was what Joseph had meant to say.
 
The main weakness of Joseph’s thinking, I think, was that there was disparity between the two parts of his thought: the economic regeneration and the social regeneration. There was a fundamental conflict between the kind of dynamic capitalism that he was trying to secure and a society in which the old verities survived, a stable society, “back to basics”, if you like, because capitalism undermines stability. 
 
Keith Joseph ran a trust called the Mulberry Trust, providing housing for those on waiting lists.  He was rather innocently surprised that the divorce rate was higher amongst people who obtained houses than amongst those on the waiting lists. It did not occur to him that security of the home gave some couples the chance to re-appraise their relationships, that prosperity, capitalism, does not necessarily lead to a more stable society. It can lead to a more volatile one, that capitalism is radical and destabilising, undermining the props of a traditional society. Are entrepreneurs really heroes? Did he not help create the yuppie culture, the cash nexus, the feeling that human relationships were merely a matter of calculation of economic interest, and a society with no sense of responsibility? Doesn’t the free market undermine social conservatism, most obviously perhaps in support for Sunday trading, introduced by Margaret Thatcher’s Government?
 
The journalist, Peregrine Worsthorne said, rather unkindly, that Margaret Thatcher wanted to create a society in the image of her father, but in fact, she created a society in the image of her son…  and that the Lawson boom was not “save and invest” but “borrow and spend”, so that if markets were to work, we needed a moral framework.
 
Joseph, to be fair to him, realised this. In 1975, he said this: “It is characteristic of the past two decades that almost exclusive obsession with economics by Government and competitive claims to usher in utopia have coincided with economic failure. A healthy economy is possible only in a healthy body politick, with self-reliance, thrift, respect for laws, and confidence in a system of rewards and sanctions.” But how do you get it? That is the paradox. What Joseph seemed to be saying was you should keep the man in Whitehall away from the economy, away from the adjustment of price and incomes, but he should be given a free hand when looking at people’s social behaviour and regulating that, “back to basics” if you like, a great State intrusion into private life. It is a problem that Joseph never resolved, but, it is fair to say, nor did the Labour Governments that succeeded the Conservative ones. It is a key problem which no Government has solved: how do we maintain values of community, trust and responsibility in a dynamic private enterprise society which seems to brush these values aside?  
 
It is for this reason that Michael Foot said of Joseph that he was “…like the conjurer of a fair: he takes your watch, he wraps it up in a handkerchief, he smashes it with a hammer, and then says, “Oh dear, I have forgotten the second half of the trick…”!” Because Keith Joseph, and I think Margaret Thatcher, created a new economy but not a new society.
 
I do not want to end on a negative note. Joseph was fond of quoting the following lines from a now forgotten poet, Arthur O’Shaughnessy:
 
“One man with a dream, at pleasure,
Shall go forth and conquer a crown;
And three with a new song’s measure
Can trample a kingdom down.”
 
Joseph helped to trample a kingdom down, the kingdom of statism inherited from the War years and he also helped to conquer a crown by helping to create a society based on the tenets of economic liberalism. So, I think he is crucial to an understanding not only of Thatcherism but also of New Labour, itself a product of the consensus which Keith Joseph, more than anyone else, has helped to create. He sought to construct a new common ground based on the market economy and in this, his fundamental aim, he did not fail, so his heirs are not only Margaret Thatcher and Geoffrey Howe and Nigel Lawson, but also Tony Blair and Gordon Brown, who sought to combine economic efficiency with social compassion.
 
A lot of people said, upon the death of Margaret Thatcher, that her legacy was divisive, and there is a good deal of truth in that in terms of inequality, both geographical and economic – there is a lot of emphasis on that. But there is perhaps not sufficient emphasis on that part of her legacy which is not divisive: firstly, the end of nationalisation, no more nationalisation, a private enterprise economy; secondly, lower taxation. We are arguing about whether the top rate of income tax should be 45% or 50%; in the 1970s, the argument was whether it should be 80% or 90%. Thirdly, targets to deal with inflation; fourthly, that the trade unions should be within the framework of the law – in 1979, the year Margaret Thatcher came to power, 29 million working days were lost through strikes; in 1990, when she left power, two million working days were lost through strikes. Now, none of these things were altered by Labour during thirteen years of government, so you can argue that Keith Joseph helped create a new consensus, and what I mean by that is that certain political questions were closed and settled.  
 
Attlee’s Government closed and settled various questions about the Welfare State, the National Health Service and state education - no one reopens those questions now. Keith Joseph settled questions about the end of nationalisation – no one now proposes further nationalisation. No one proposes an 80% or 90% rate of direct taxation. No one now proposes incomes policies to deal with inflation. No one proposes again that the trade unions should be free of any legal regulation and have widespread immunities. So, in that sense, although part of what Margaret Thatcher did divided society, part of what she did united the country.
 
I have previously quoted Tony Benn, who said that he produced a motion in Parliament which would, at one stroke, repeal every single measure of legislation passed during Margaret Thatcher’s premiership, but he said, even if it was passed, which it would not, it would not matter because she was a great teacher – her significance was she was a great teacher. Keith Joseph too, I think, was a great teacher. Benn complained the left has not had a similar sort of teacher since Aneurin Bevan, and that, I think, is the final significance of Joseph’s career: for all his faults, he was a great teacher.
 
And I end with a paradox: he was probably the oddest of the six politicians I discussed, thought Powell was pretty odd and perhaps Tony Benn too, and he was without a doubt the least ambition. He actually did not want political power, turned down the chance to stand for his party leadership. One cannot imagine any of the others doing that. But despite all that, or perhaps because of it, Keith Joseph, the most unpolitical in the conventional sense, is in my view the one out of the six who has had the most influence on politics, and I think the world we live in is now, in large part, the world that Keith Joseph helped to create.
 
 
© Professor Vernon Bogdnaor 2013