Lord Taverne KC interview

Torrin Wilkins: My name is Torrin Wilkins, Director of Centre Think Tank. Today, I am joined by Lord Taverne. He was the founder of the Democratic Labour Party, Member of Parliament for Lincoln between 1962 and 1974, a member of the National Committee of the SDP and was also the first ever Director of the Institute for Fiscal Studies. So welcome to the podcast.

Lord Taverne: Welcome, I am glad to be here.

Torrin Wilkins: Do you consider yourself a centrist -and in a wider sense, what do you think that centrism as an idea means?

Lord Taverne: I do regard myself as a centrist – I have never been a fundamental socialist. And in fact, I very strongly supported Hugh Gaitskell. I have never regarded myself as a fundamentalist socialist and have always regarded myself as a social democrat.

I was very much impressed by the monumental book by Anthony Crosland about ‘The Future of Socialism’, in which he said the Labour Party should not just be there to promote nationalisation. I made a speech at a Labour conference after the 1959 election in which I said Hugh Gaitskell was right; I was the only person at that stage who raised the question of Clause 4 and supported Hugh Gaitskell.

So much so that I was booed! And that was one of the reasons I became a Member of Parliament later, because when they were choosing a candidate for a by-election sometime later, Hugh Gaitskell and a group said it was very important to find the right candidate for this – what about that chap who got booed at the Labour Party conference? Which was me! That is how I got recommended by the Gaitskellites for the time when I was finally selected, then as a social democrat.

Torrin Wilkins: So, one of the reasons that you originally fought that 1973 Lincoln by-election was because you supported the European Economic Community. So, what would you say were the fundamental reasons that you supported the European Economic Community as it was then?

Lord Taverne: First of all, I think there was a fundamental question which was asked by Dean Acheson. He said that in a certain period of post-war politics, Britain had lost an empire, but it had not yet found a role. I think the answer to this question was that we had not found a role because our role was Europe. Europe was the centre of new developments: freedom, democracy and the rule of law, which all became very much central to the argument for Europe – an argument which became the great issue between the left and the right.

Torrin Wilkins: My next question then is, how have you seen the European Union evolve? It started as the European Economic Community, then became the European Union and has since expanded – so what are your thoughts on its expansion, and the UK leaving as well?

Lord Taverne: First of all, it was one of the most extraordinary developments in post-war history! Because here were old enemies, France and Germany, suddenly linked in very close friendship and gradually developing a political community as they wanted. I think that was something we should have been wholly encouraged about, but we were always a bit doubtful about it. We were not too keen to commit ourselves – we were half-hearted members.

Although we did make one of the biggest contributions to the development of the European community, which was the single market. A very, very important development – and that was a British proposal which was pushed forward by Margaret Thatcher and her appointed commissioner. I think the argument has strengthened over time and is very strong at present because the world has changed. We now face a very real crisis: a very aggressive Russia, a strongly expansive China, and a somewhat uncertain United States. We depend very much on the future of Europe. And I think this is where our leaving Europe weakened Europe, and where our possible eventual re-approachment with them is vital because we will make Europe stronger. Mrs Thatcher put it this way: she said that when European nations can do things together, they can do better together, which makes Europe stronger and is something we should support. On the other hand, where people can do things, where nations can do things better on their own, they should do them on their own. A perfectly reasonable statement, which is part of the Bruges speech, something people have forgotten about.

Torrin Wilkins: So, do you think the UK will ever rejoin the EU? Do you think that’s a possibility, or is it just a case of some sort of closer relationship at this point?

Lord Taverne: I think it is a possibility because of events, but it will take time. I can quite understand, though I do not sympathise with, the attitude that Keir Starmer has taken, who said that Brexit is irreversible and we should concentrate on making it work. You cannot make Brexit work. It does not work. And I think attitudes will change, and are changing all the time, because of Brexit. At the time, of course, we got a small majority at the referendum. Howeve,r Brexit is now a very unpopular concept, and the popular vote now feels that Brexit was a mistake, with the support for the view that leaving was a bad, dire mistake strengthening all the time.

What I think will happen is if Labour wins the next election, which I think is quite likely, and I certainly hope it does because I am not a great supporter of the Conservative government. But if Labour wins the election next time, it will find that it has to deal with the great problems of poverty, equalisation, and levelling up, and those problems cannot be separated from Brexit because Brexit has led to a decline in our living standards. It has led to a decline in our trade and a decline in our influence. And for all these reasons, Britain has no longer become something whose opinion matters in the world.

I think that both from the European point of view, which wants a stronger Europe, and from the British point of view, which wants to solve these problems, our future relations with Europe will grow. I do not quite know when or how. I think that if the Labour government is formed as a Labour government, they will find that it makes an awful lot of sense for them to join the single market because we have lost 15% of our trade with our biggest and most profitable market. I think it would be very important, and you will see the increasing advantage of joining the single European market and indeed the customs union.

Well, now if we have joined those two, then we are getting very close to being members of the European Union again. But that is not an argument for the future. The Conservatives would love to fight the next election on that again. And also because in the meantime, there are problems about immigration, etc., in joining the single European market. It is a great advantage from the point of view of trade and for so many other reasons, but it does still create the immigration problem for people who are worried about it. And we must all be worried about it because a shortage of labour is one of our great problems now – f you take the health service, when we left the EU, the European doctors and nurses went home. However, we still have had an increase in immigration, but less of the skilled immigration we need. So there are lots of reasons why I think the relationship will change, but it will take time.

Torrin Wilkins: So, you later on created the Democratic Labour Party before the Social Democratic Party was later formed.  What was the process of starting a new political party, and where did you envisage it going? Did you see it as just a local movement or one that might one day expand into something more national?

Lord Taverne: Well, it was a local movement.  I was not at that stage in the position to launch a great national movement, but whether or not it developed into a bigger movement depended entirely on Roy Jenkins. And it was a long argument as to whether or not he should join me, or whether that was an immature request for him to do so. And I discussed it with Roy Jenkins.

My local Labour Party, which had become a very left-wing militant local Labour Party, was very anti-European. At least it changed. But at one stage, the Labour Party, with Wilson as prime minister, was rather militant after Charles de Gaulle first vetoed our entry – it was in favour of our rejoining. Wilson and Brown, the foreign secretary, went on a tour of Europe to try to win support and persuade de Gaulle to change his veto – they did not succeed. It was not a very successful tour, and Brown did not always behave very correctly.

As later happened, Charles De Gaulle was asked what you made of Mr Brown, the Foreign Secretary. Oh, said this very dignified figure of General Charles de Gaulle and President Charles de Gaulle, “Oh, I rather like little Brown, but I wish he would not keep calling me Charlie”. So that was not a great success. And of course, de Gaulle continued his veto.

And the party, having been at one stage very pro, saw a chance when Heath became prime minister to revert. Heath wanted us to join: Charles de Gaulle had died, the veto had gone, and there was a chance that they would vote for us to join. And Labour, which had been strongly in favour of joining, hence the tour of Wilson and Brown, suddenly decided, ‘ Oh, we have got a chance of overthrowing the government’. So it did a disgraceful thing and said, ‘Oh no, we are now going to vote against joining Europe’. And in fact, ‘we are going to have a three-line whip to make all Labour Party members vote against Europe’. They voted for it before, but this time they voted against it, to vote a three-line whip against it. Well, I was not going to have that. I mean, I have always been a pro-European.

And why should I reverse my opinion? The local party said, “Oh, well, the party is more important than principle”. And my view was no, principle is more important than party in the end. You cannot just say every time I change my principle, I am still sticking. Disraeli used to put it this way. He said the golden rule of the British parliamentary government is that you stick to your party, damn your principles. And I think that is a thoroughly pernicious, corrupting doctrine. My view was to stick to my principles and, if necessary, abandon the party if it abandons my principles.

Torrin Wilkins: In general, do you think there is any way that we can solve that problem? The issue is that Members of Parliament often end up going along with what their party says and wants rather than actually what their own, in some cases, their conscience or what they believe is best.

Lord Taverne: Well of course, the Labour leader is not making very strong noises about getting rid of Brexit in the short term, but by and large, the Labour leader is pro-Europe.

The Labour Party, I think at the moment, is by and large a pro-Europe party – especially because the Conservatives have turned the other way round. They have become the anti-Europe party, whereas they were usually the pro-Europe party. It is crazy, but I think there should be a certain consistency and a certain regard for principle. So what do you do? If you believe in your principles, do you then say, ‘I will stick to them and damn the party’? Or do you, as Disraeli says, ‘stick to the party and damn my principles’? Well, I think it is a clear choice for anybody who cares about honesty in politics.

Of course, this led me to form a local party, but I did not think that the local party at that stage would have a lot of support and depend crucially on Roy Jenkins. Roy Jenkins led the pro-European revolt inside the Labour Party, a person of the highest integrity and one of the most successful ministers in the Labour government after the 1960s. He was so firm and gave such firm leadership, but he did not think that the time was right at that stage because we would have needed the moderates of the Labour Party to support us, the social democrats. However, the trouble with that is that the moderates were the councillors.

And we were about to have council elections for everybody – it happened to be after local government reform. So if the councillors needed an organisation, which they did need for fighting council elections, they would have had to stay with Labour. Therefore, that was the reason Roy Jenkins said, ‘I cannot go and join you now’. Another reason I think was that everyone expected Labour to lose that election, and had they lost the election, it would have been much easier for a party to change when it is in opposition. After all, the SDP was formed after a disastrous defeat for the Labour Party. So I think that he felt, and I felt also to some extent, that a better time to try to create a new national party would have been after a Labour defeat and when the SDP was formed.

Torrin Wilkins: So what attracted you to join the SDP? I mean, of course, you had the Liberals there at that point as well. So what was the thing that attracted you towards the SDP rather than another political party?

Lord Taverne: Well, because I was always a social democrat. The SDP was a sensible approach to nationalisation, not making it the ark of the covenant and abiding by Clause Four. Yes, in certain circumstances, nationalisation is right, and in others it is not; however, it should not be a dogma. That was part of what the SDP stood for, and part of what I have always argued for. I mean, as an admirer of Crosland and his book, The Future of Socialism, this was something he argued for at that time.

So yes, the SDP was natural for me. I had one difference with the SDP when it was formed. I think that at that stage, a lot of the old Labour stalwarts saw that what they needed was a new Labour Party. They wanted an undogmatic Labour Party, and that is why it was called the Social Democratic Party, the SDP. A lot of them were somewhat uncertain about the Liberals. I mean, David Owen hated Liberals. He thought they were a load of softies and were not tough like him. So David Owen was at it, and quite a few of the Labour Party members said no – ‘we want a new Labour Party, but we do not want to be too close to the Liberals’.

My argument was plain – there is only room for one centre party in British politics. It is difficult enough for them as it is. If you have a Liberal Party and a Social Democratic Party, the centre will be split. They will not be effective.

In the end, of course, that doctrine prevailed. But it was quite a struggle to have an alliance between the Social Democrats and the Liberal Party, which was the eventual Liberal and Social Democratic alliance and party.

Torrin Wilkins: One of the reasons that the SDP struggled was, of course, you had first past the post, you had the Falklands War, and there are a huge number of different reasons that in the end it struggled and did not quite make the headway that they wanted to. So, what do you think was the reason for the eventual decline in the party and then the merger?

Lord Taverne: First of all, I think we were unlucky about the Falklands War because at that stage they were ahead of the Labour Party in the opinion polls. If they had been ahead in the opinion polls, that would have been the replacement of a militant Labour Party by a social democratic party. But the Falklands did an awful lot to help Mrs Thatcher. And she was triumphant, and I have to admit she was very brave.

However, in the end, I think the logic that you cannot have a divided party prevailed. At the moment, what we will likely have, I think, in the next election is tactical voting – lots of evidence of tactical voting. And the tactical voting at the moment, as the pattern appears, is that it would lead to some 40 to 50 Liberal Democrat seats and a sizable Labour majority. And I think that would be an alliance between the two.

I have always seen it as a need for an alliance. Going back to the early 20th century, when the Liberal Party was the opposition and then split into the Socialist Party and the Liberal Party, the Liberals disappeared in the middle. The other reason, of course, which I think you just mentioned, is proportional representation.

I think it is essential that our system be reformed because, at the moment, a small minority of Conservatives would really like to be perpetually in government because of the unfairness of the electorate. It takes a tiny proportion of the vote to elect a Conservative Member of Parliament compared to a Labour Member of Parliament, let alone a Liberal Democrat Member of Parliament. So the system is wholly unfair. Most countries have a proportional system and think it is fairer, and I hope we move that way. But again, I think Starmer needs a bit of convincing – he does not terribly like major changes.

Torrin Wilkins: So what did you think about the attempt by David Owen to keep the SDP alive? We did speak to him as part of this series. He was talking about how he never wanted to work with the Liberals and that his main project was the SDP. So, how did you deal with that? He was trying to keep the party going, even though it eventually failed.

Lord Taverne: Well, it was a lunatic attempt. He ended up in a by-election with fewer votes than the Monster Raving Loony Party. And that was the end of it. No, David Owen is a very odd character. However, I have some respect for him because he is not a glad-hand dog.

There is a pro David Owen story on how he got his first job. He was one of the youngest Members of Parliament, and was one of three very bright young Labour Members of Parliament who, after the big victory in 1966, wrote a pamphlet called ‘Change Gear’ saying that Wilson was on the wrong economic path. Wilson was furious with these upstarts. Who were they, these young upstarts, telling him how to run the economic policy? So he was very hostile. And he also thought that they had had an unusually friendly relationship with the Observer correspondent Nora Beloff. And he made some very rude remarks about it.

So, David Owen, one day, stepped into a lift with Wilson. And he turned to Wilson, and he said, “Harold, I do not give a damn who you are. I have read what you said about Nora Beloff. It is an absolute disgrace. And if you say that openly in future, I will sue you. I do not give a damn who you are”. Quite an impressive performance from the youngest Member of Parliament against the very successful Prime Minister of a very large majority. But Wilson thought, ‘Oh God, this chap is tough. He is dangerous. A week later, he had a job.

I mean, I am not a great admirer of David Owen because I think his attitude was wrong, and he has often been too unreasonable. But I do respect his toughness – he is not an easy pushover.

Torrin Wilkins: So, to move slightly away from party politics, and especially as someone who runs a think tank myself, you helped to found the Institute for Fiscal Studies and stood as their first Director. So what was it like in your situation, helping to create a think tank? It is especially of interest to me, having been in the same situation.

Lord Taverne: I ended up, first of all, a junior minister to Roy Jenkins in the Home Office, and then I became a junior minister in the Treasury. I ended up as Financial Secretary to the Treasury, which I was when Labour lost the election in 1970. I was out of the office and wondering what to do, and three people who were very upset at the way in which our financial legislation was created said that what we need is a new institution. So they formally founded the Institute for Fiscal Studies, but it had no money, no staff, and no Director. I was approached, and they said, ‘Would you like to set up and start a new Institute for Fiscal Studies?

I thought about it, consulted people, and I decided it was needed. This was because when I was in the Treasury, I noticed the difference between the approach of the people concerned with administration, the lawyers and the accountants, who had a different attitude to the economists who had grand plans. I mean, there was a wonderful economist called Nicky Kaldor. Hungarian is a lovely man and very bright. He was very much in favour of a wealth tax. So when I became a Treasury Minister, I said, I am in favour of the wealth tax too – what can we do to promote it? He said okay, let us have an argument with the Inland Revenue, and we will see what they say about it. But I will strongly argue for it, as I am sure you will be in favour of a wealth tax. We argued with the Inland Revenue, but we lost it because there were technical objections. ‘What do you do about works of art? Are they wealthy? Well, if they are wealthy, everybody will avoid it because they do not want to pay the tax on it. If they are not as cheap as wealth, everybody will buy art because that is a way of avoiding tax.’

There was a need for a new institute, but it needed to combine the expertise of the practitioners, the lawyers, the accountants and the economists. And I was very lucky that I got a Nobel Prize winner, James Meade, who was a friend of mine, to be the chairman of a commission which I thought would be of interest, namely one which looked at what a sensible system of direct taxation would look like.

And I got a lot of very bright young economists on it, including John Kay, a brilliant young economist who was a future Governor of the Bank of England and also Nicky Kaldor. Anyway, this report created a great sensation; it was treated with all the respect of a Royal Commission because it was a completely new outlook combining the skills of different parts of the professions, and it was a great success.

Then I managed to persuade the very young economist John Kay, who was the star of this profession, despite us even having a Nobel Prize winner as chair, to join. Kay was 25, and he was being offered various chairs, but I persuaded him by saying, “Look, if you become the director of this, I will see you get enough finance because I have been very successful raising money from business, which also wants a more sensible tax system. I will raise the finance. You can choose your staff. And I have a lot of contacts in government, because I was the former Financial Secretary, and you will have far more influence if you become a professor in Bristol,” – and I was right.

He was a star, and the success of the IFS was not due to me, except in the appointment of John Kay, the setting up of the Mead Commission, and the bringing together of different members of it. But after a while, I thought it was now time to hand it over. John Kay knows all about economics, the way I do not, and all these other lawyers will help him. So I persuaded John Kay to become the director.

And every director of the IFS since then has been a star. It is still regarded as a linchpin of detachment and objectivity –  a very successful institute. It is one of the things I have done in life which I have left a legacy for. And the other thing that caught my interest in science was that they started a new science foundation called ‘Sense About Science.’ Those are my achievements, and I think they are far more important than my achievements as a minister.

Torrin Wilkins: Well, thank you so much for talking to me today and for answering all of my questions, so thank you so much for coming on.

Lord Taverne: Well, I enjoyed it, thank you.

Note: This interview has been edited for grammar, clarity, and flow. The original recording is the final and definitive version