Open political warfare erupted within Britain's governing Conservative Party today between supporters of Prime Minister Margaret Thatcher's increasingly unpopular monetarist economic policies and rebellious senior Conservatives who warned that those policies are causing irreparable damage to both the country and the party.
Publicly voicing fears frequently expressed in private by many Conservative members of Parliament and Thatcher's Cabinet, former prime minister Edward Heath and a number of other critics urged Thatcher's government to try alternative policies to reduce record unemployment, avert more business failures and lift Britain out of its worst recession in half a century.
In a dramatic challenge to an incumbent prime minister at the party's usually somnolent annual conference, Heath declared, "We have now reached the most critical point in the Conservative Party in the last 60 or 70 years." Unless something was done, he said, the Conservatives could lose power to a militantly socialist Labor Party that would nationalize more industry and pull Britain out of the European Common Market and the NATO alliance.
Heath was booed roundly by some of Thatcher's loyal supporters as she listened from the leaders' platform.
In well-attended rump meetings here, privately published pamphlets, and open letters in newspapers, Conservative rebels -- including several former Cabinet ministers -- advocated that the government shift priorities from fighting inflation with high interest rates and cuts in public spending to alleviating unemployment with interest rate reductions and investment of about $10 billion in job-creation programs, public works, and tax relief and aid for private industry.
"If the government does not alter course," said Sir Ian Gilmour, a leading party intellectual whom Thatcher recently fired from her Cabinet because of his dissent, "not only will further damage be inflicted on our already weakened economy and social fabric, not only will all the positive aspects of the government's policies be jeopardized, but the whole future of the Conservative Party will be cast in doubt."
The dissidents are laying the ground for policy modifications they believe Thatcher eventually will be forced to make, according to some of them and to sources close to senior Thatcher Cabinet members who also want change but will not say so publicly. They said they are not seeking to replace Thatcher as party leader and prime minister, partly because they believe that would be impossible. They also try to distance themselves from Heath, who is widely seen as seeking revenge for his replacement by Thatcher after he was voted out of office in 1974.
Thatcher's continuing popularity among Conservative Party activists was evidenced by the angry reaction of many of them to Heath's speech at today's packed conference session. At the microphone, several of them derided Heath's economic policy problems during his years as prime minister from 1970 to 1974.
"Both Margaret Thatcher and Ted Heath have vision," said Robert Jones from Stockton-on-Tees, "but the difference is that Margaret Thatcher hopes one day Britain will be great again while Ted Heath hopes one day he'll be great again."
Thatcher's chancellor of the Exchequer, Sir Geoffrey Howe, got a standing ovation after reiterating his, and her, belief that little could be done about unemployment until inflation was brought completely under control. "If we do let total government expenditure rise," Howe said, "the trouble starts all over again."
But the national standings of both Thatcher and the Conservative Party have fallen to record lows in several public opinion polls, which also show that voters now see unemployment as a far more serious problem than inflation. Only those voters who still intend to vote Conservative -- down to 28 percent, according to the Gallup Poll, from the Conservatives' 44 percent vote in their 1979 election victory -- said they want the government's strategy to remain largely unchanged.
In the most specifically detailed of the dissidents' attacks on Thatcher's policies today, Gilmour pointed out that since the Conservatives came to power in May 1979, industrial output (excluding North Sea oil) had fallen 15 percent, unemployment had more than doubled, an unprecedented number of factories and businesses had closed, and inflation had not been reduced.
"We have allowed the pursuit of textbook monetarist goals to override the real objectives of economic policy: growth in employment and cutting price inflation," he said.
"Continuation of the present policy could well lead to a disastrous defeat at the next election" in 1983 or 1984, Gilmour added. "It is frivolous for Thatcher and her economic ministers to go on saying that theirs is a 10-year program if that program is going to be brought to an abrupt stop after five years."
Decrying what Heath called the "immorality" of present high unemployment, Gilmour and other dissidents argued that Thatcher's right-wing policies have diverted the party from its tradition of social concern.
Howe answered that he and Thatcher are "firmly amongst those who see unemployment as certainly the most grievous social evil in our country today," even though they disagreed about how to combat it. He and other loyal Thatcher Cabinet ministers listed what the government already has done to reduce government interference in the economy and increase incentives for private business. Howe also pointed to a 6 percent increase in worker productivity and marked reductions in strikes and the size of pay raises as industries shed employes.
"Despite the problems," he argued, "the clear signs of progress are beginning to come through."