On the day when Margaret Thatcher is to be buried at great cost to the taxpayer, a nation reflects upon her legacy.
As the residents of Belgravia mourn her death, the residents of Brixton party to the strains of “Ding Dong The Witch is Dead” and debates rage about whether her funeral should have been put out to private tender and the contract awarded to the cheapest bidder.
Europe but by
Although there may be some truth in the Spitting Image caricature of the so-called Iron Lady, the relevance of Thatcher lies not in the cult of the individual nor in the fact of her being Britain’s first (and to date only) female Prime Minister, but in the long-term significance of her government’s policies and of the disputes that were fought during her time in office.
Arguably the worst excesses of “Thatcherism” occurred not on her watch but under later governments, not only Conservative but also New Labour. Yet it is undeniable that the seeds of the current neoliberal consensus in mainstream politics were planted during the Thatcher years. The 1980s were a time of intense polarisation – the class war was waged openly and the subsequent shift to the right of all the mainstream parties can be traced back to the outcome of the battles of that decade.
Thus an analysis of those years is vital in order to put the current political situation into context. Here we take a closer look at the legacy of the Thatcher period in some key areas.
One of Thatcher’s flagship policies was the “right to buy” enabling council tenants to buy their house or flat at greatly reduced prices (discounts of up to 70%) thereby attempting to create what was referred to as “a property-owning democracy” (a phrase she had taken from 1920s Tory MP, Noel Skeleton) so that working class families could achieve what for many was a previously unrealisable dream of owning their own place.
Unfortunately the stock of council properties was not replenished to replace those sold off (indeed Thatcher refused to allow local authorities to use the money raised from the sale of houses to build more, instead instructing them to pay off their debts) meaning that acquiring a council property, and with it reasonable rents and security of tenure, became an unrealistic dream for many.
Around this time, homeless people sitting on the pavement begging for change became a common sight in many cities.
soared to around
15% in the early
1990s, thousands of
families ended up
defaulting on the
losing what had
a home for life
When interest rates soared to around 15% in the early 1990s, thousands of families ended up defaulting on the mortgage, having their house repossessed and losing what had previously been a home for life.
For those who were able to pay the mortgage, many subsequently moved up the property ladder, buying private housing and selling their previously council-owned house, many of which ended up in the hands of buy-to-let landlords. Recent figures show that around a third of the council properties that have been sold are now owned by landlords, some owning a number of properties.
As a consequence, properties that had previously been rented out by the local authority for reasonable rents were now being rented out by private landlords for anything but reasonable rents. Where the tenant is in receipt of housing benefit, this constitutes a redistribution of public money into private pockets.
Today the idea of property ownership seems a distant dream for an entire generation, particularly in London, where many are unable to raise the huge deposit required to obtain a mortgage and have no alternative but to rent privately given the current shortage of social housing.
The most right-wing members of the Thatcher government were heavily influenced by economist Friedrich Hayek, an advocate of the unrestrained free market who argued against government involvement in business. British Telecom, British Gas, British Aerospace, Jaguar, British Steel, British Petroleum, Rolls Royce, British Airways and the water and electricity companies were all sold off.
Rather than renationalise, Tony Blair’s government chose to continue the project of privatisation. The only nationalisation that took place was that of several beleaguered banks, more out of desperation than as part of a strategy.
The Private Finance Initiative (PFI), originally a Tory policy, was taken up with ardour by New Labour and applied to NHS, schools and London Underground. Essentially public money is paid to private companies, usually over a period of around 25 years, in order for them to build, for example, a hospital. Of course this means that there is little initial outlay from the public purse, but the overall cost is far greater than if the infrastructure had been paid from public funds in the first place, and therefore represents another redistribution of public money into private hands.
shares traded on
the London Stock
Exchange owned by
individuals in the
UK peaked in 1963,
long before the
In addition to wishing to cut the state owned sector, the selling-off of the utilities under Thatcher was also promoted as creating a share-owning democracy with television advertising campaigns encouraging people to buy shares. In reality, most shares ended up turning a profit for the wealthy and there was no long-term expansion in the number of people in Britain owning shares. The proportion of shares traded on the London Stock Exchange owned by individuals in the UK peaked in 1963, long before the Thatcher years, when it represented around 54% of shares. By 2010, only 10% of shares were owned by UK individuals.
Thatcher was a discipline of Monetarist economics, as promoted by the likes of Milton Friedman, which preached that restriction of the money supply was the effective way to curb inflation. Monetarism proposed cutting spending and reducing borrowing in order to curb inflation with the belief that increased unemployment was a necessary price to pay for economic stability.
This was a sharp contrast with the previously accepted Keynesian economics which argued that public spending was the best way to get out of a recession, through increasing demand for goods and services which would in turn increase employment. Huge amounts were made from North Sea oil during Thatcher’s time in office but rather than being invested in public services, it was used primarily for tax cuts.
Of course a major aim of the Thatcher government was to crush the power of the trade unions and increased unemployment was an effective way of furthering this aim. Indeed the obsession with the money supply was used as a justification for achieving her Hayek-style ideological goals to promote the free market and reduce the role of the state.
term in office,
During Thatcher’s first term in office, unemployment more than doubled, reaching over three million. It was not just the number of people unemployed but also the rapidity of the increase that had such an effect. In 1981, ‘One in Ten’ by UB40 and The Specials’ number one single, ‘Ghost Town’ expressed the mood amongst disaffected young people, who were particularly hard hit.
Over 15% of Britain’s industrial manufacturing base was wiped out, with the Labour heartlands of Northern England, South Wales and Scotland most intensely affected. Whole mining communities were destroyed due to the pit closure programme following the defeat of the miners’ strike. Towns and villages which had relied upon the coal mines as the main source of employment were devastated as the shops, pubs and other facilities were boarded up (as nobody had any money to spend any more).
In former pit communities where there was now little prospect of permanent employment for the next generation, rates of heroin addiction shot up.
Even amongst those fortunate enough to keep their jobs, there was a growing sense of insecurity and a feeling that the days of a job for life were over. The new jobs were in the service industries – more unstable, more likely to involve working flexible hours, less likely to be unionised, lower skilled, therefore workers were far more easily replaced, and so on. The Iron Lady had destroyed the ironworkers and replaced them with customer service assistants and workers in the deregulated finance sector on short-term contracts.
one in seven
children were living
figure had risen
to one in three
The rise in poverty, in both absolute and in relative terms was striking. In 1979 around one in seven children were living in poverty, by the time the Conservatives (by that time headed by John Major) left office in 1997, the figure had risen to one in three. The percentage of pensioners living below the poverty line rose from 13% to 43%.
During the same period, the net income of the top 10% went from being five times to ten times that of the poorest 10%. The trend has not been reversed since and last year a study by Sheffield University reported that the richest one per cent of people in the UK take home 15% of all income, compared to 6% in 1979. Until 1979, the gap between the incomes of the richest and the poorest had been closing.
The famous Margaret Thatcher quote, “There is no such thing as society,” together with Norman Tebbit’s remark about his father getting on his bike and finding a job, best illustrated the attitude of the Thatcher government towards the unemployed. There was a sea change away from the post-war welfare state consensus set up by Clement Attlee and adopted by subsequent governments. The unemployed were seen as responsible for sorting themselves out rather than victims of the economic decisions taken by the government.
Rather than being something to be embarrassed about, greed was now reclassified as a worthy aim, with the poverty of the former manufacturing towns starkly contrasted with the champagne quaffing “yuppies” celebrating the “Big Bang” in the City.
Without the culture change set in motion then, it would be unthinkable that the current Com-Dem coalition could succeed in pushing through their current round of cuts in welfare benefits.
with the money
used as a
The main battles were won and lost not during Prime Minister’s Question Time, but far away from the echoing corridors of Westminster. The high youth unemployment, rising inequalities and discontent with discriminative policing saw riots on the streets of London, Birmingham, Leeds and Liverpool in the early 1980s. As we know, riots took place in the summer of 2011, barely a few months after the Coalition government took power, starting in Tottenham after the death of Mark Duggan, but then spreading throughout the country.
The year long miners’ strike of 1984-85, perhaps the most significant event of the 1980s, saw pitched battles on the picket lines including the deaths of several striking miners. Following the ‘Battle of Orgreave’ in June 1984, 95 miners were charged with riot and other public order offences. The first fifteen were acquitted at trial and the prosecution dropped the charges against the rest after it became clear that the police had lied and in fact, the miners were the ones who had been attacked.
There were further high profile industrial strikes, notably the Wapping dispute between Murdoch’s News International and the print workers.
lied and in
fact, the miners
were the ones
who had been
Despite the defeat of these strikes and the structural changes in the economy, particularly the decline in those sectors traditionally associated with the high union membership such as manufacturing and public services, although trade union membership has declined significantly, it has not been totally decimated and around six million workers in the UK are members of a trade union.
Ultimately Thatcher was brought down not by Cabinet colleagues bickering over Europe but by the anti-poll tax movement. A mass campaign of non-payment by ordinary people, most of whom had never broken the law before (which resulted in court summonses, bailiffs knocking on the door and even prison sentences in some cases) and local demonstrations outside council meetings and court hearings throughout the country. It culminated in the national demonstration which famously turned into a riot in Trafalgar Square, and a police officer admitting, “We lost it” on the television news.
The events led to Thatcher’s popularity plummeting to such an extent that her own Party decided that they were for turning (on her) as she became, in those profit/loss terms that she lived by, a liability rather than a asset.
Rather than being voted out by the British public, Thatcher was ousted as a consequence of their direct action. For the next generation, increasingly disillusioned with the mainstream political parties, taking direct action has become a more effective way of protesting against injustice than putting a cross on a ballot paper.
People are getting on their bikes, not to look for a non-existent job, but to protest against climate change, defend the welfare state and oppose the bedroom tax. Her ultimate legacy could be the one that ended her reign and has the potential to destroy all that she stood for.
Thatcher is dead but Thatcherism lives… for now.
Photo: Jay Galvin