Reginald Maudling on Keith Joseph

“From the start, there was a tendency in the Shadow Cabinet to move away from the Heath line of policy further to the Right: to this I was totally opposed. In particular, I could not support the arguments of Keith Joseph, who was inclined to say that all we had done in the Government of 1970–74 was wrong and not true Conservatism. I totally disagreed with this, because it seemed to me that Keith was fully entitled to measure himself for a hair shirt if he wanted to, but I was blowed if I could see why he should measure me and Ted at the same time. I could not help recalling Selsdon Park, and the swing to the Right in our policies which occurred then, and how long it had taken in Government to get back to the realities of life. I feared that the same thing was beginning to happen again. In particular there was the argument about Incomes Policy and Money Supply, and which was the right way to deal with inflation. I stuck to the view that an Incomes Policy was essential and had been a necessary part of the policies of Conservative Governments since it was first introduced by Peter Thorneycroft when he was Chancellor of the Exchequer. The other doctrine, the monetarist doctrine of which Keith Joseph was the most articulate and intellectual exponent, said that Incomes Policy was unnecessary and unworkable, and that inflation could best be contained by restricting the money supply. This doctrine, based on the teachings of Professor Friedman, seemed to me to be totally divorced from reality. In so far as it was a guide to action at all, it merely was a restatement in new phraseology of the old doctrine of a credit squeeze. But the tide was running strongly in the monetarist direction at that time.”