Industry | 2009.03.15
Simon Jenkins: This Thatcher mythology condemns her strengths and excuses her failings
Twenty-five years after the miners\' strike, a wave of drivel sees Thatcher daftly cast as originator of the financial crisis
Margaret Thatcher is now taking her turn in the stocks as an originator of the recession. On the 25th anniversary of the coal strike, it is the fault of Thatcher and her battle with the miners. It is the fault of Thatcher, the deregulation fanatic. It is the fault of Thatcher and the idolatry of greed. Commentators of the left have pitted her against the noble miners\' leader, Arthur Scargill, in coalition with Karl Marx, socialism and king coal. Can we not see they were right all along? The politics of blame has found its narrative.
This one is drivel. British history is getting like Soviet history under the commissars, a prisoner of the world view of its partisans. To see Scargill\'s miners, of all lost causes, being trundled from their stables to do duty as prophets of the credit crunch is ludicrous.
The 1984 miners\' strike was undoubtedly a climax in an economic revolution in Britain that began with Callaghan\'s 1976 admonition to the Labour party: "You used to think you could spend your way out of recession ... this option no longer exists." The catchphrase was adapted by Thatcher as "There is no alternative." It is forgotten today.
Following the deflation of the 1980 and 1981 budgets, Thatcher\'s battle with the miners did what was intended. It broke the economic power of the big unions at a time when they were weakened by recession. This made privatisation possible, aided by the financial institutions created by deregulation in 1986.
Nobody can seriously hold that Britain would today be better off with the industrial structure and restrictive labour practices of the 1970s still in place. Young people today can have no conception of the collective misery that was the British political economy at the time, of a nation dubbed the sick man of Europe, its commerce enfeebled by subsidies and class-bound management, its government in perpetual funk.
My own industry may have its troubles but, until the Wapping revolution of 1985, it faced a wipeout similar to that which near obliterated the American and European press. As a result of Wapping, the British national press emerged from the Thatcher years with more daily titles than at the start. The Independent owes its existence to her, as its founder, Andreas Whittam Smith, has always accepted.
Where Thatcher - or rather her chancellor, Nigel Lawson - went wrong was in the reformed structure of City finance brought on by the Big Bang of 1986. I remember a director of the Halifax building society saying at the time, "God help us if the bankers get their hands on our mortgages, or if our brokers get their hands on their deposits."
He was right, but that was not for more than two decades. By then the market in mortgage-backed products was a global business. The 1986 reforms were robust enough to survive the recession of the early 1990s and stockmarket collapses before and since. They brought London a commercial pre-eminence that was inconceivable in the 1970s, when Frankfurt, Brussels, Paris and even Amsterdam were bidding to be the financial capital of Europe. Besides, 1986 was necessitated by changes taking place in competition law and in the US and Japanese money markets. London had to change or die. The credit crunch is proving rich in historical irony. No one was more traumatised by the miners\' strike than two young Labour politicians, Tony Blair and Gordon Brown. A year earlier, Blair had been elected for Sedgefield on a leftwing, anti-Europe, pro-union, pro-CND platform, to begin one of the most spectacular U-turns in political history.
By 1989 Blair was shadow employment secretary, and was demanding that his party quietly accept Thatcher\'s labour and privatisation laws. He and Brown visited Australia to study Labour leader Bob Hawke\'s ideal of Thatcherism with a human face. He declared, "We play the Tory game when we speak up for the underclass rather than for the broad majority." Meanwhile Brown demanded that the party "make an almost religious atonement for the sins of Labour\'s past", in the words of his biographer, Robert Peston.
Brown was so frantic to mimic Thatcherism as shadow chancellor that Peter Hain wrote in 1993: "There is little to distinguish Labour\'s macroeconomic policy from that of the Tories." John Prescott, Jack Straw and David Blunkett dismissed Brown in Tribune as a crypto-monetarist. He was against tax rises, for privatisation and an ardent defender of Kenneth Clarke\'s Treasury policies.
This is only relevant since whatever blame attaches to Thatcher for the financial chaos of the last six months attaches even more to Blair and Brown. In truth, Thatcherism was a consensus, built on the experience of the 1970s as the consensus of 1940s welfarism was built on that of war.
The difference is that Brown, in his semi-independence for the Bank of England, was super-Thatcherite. The Financial Services and Markets Act 2000 established the tripartite regulation that has so conspicuously failed. It went far beyond what Thatcher would have tolerated. Her contribution to the political economy remains hopelessly misunderstood; her impact on labour and financial markets was emphatic, beyond anything attempted elsewhere in Europe. To accuse her of "licensing greed" is mere name-calling. She was an exceptionally cautious deregulator. She opposed Lord Howe\'s decision in 1979 to cut income tax from 83% to 60%. She was soft on welfare fraud, indulgent of housing benefit, lavish on health spending and custodian of a public sector that rose in her first parliament from 41% to 44% of gross domestic product.
Meanwhile history is silent on the downside of the Thatcher era. The command structure she created to crush her foes became unrestrained, over-centralised and inefficient. Her evisceration of local democracy bred a cynicism among Britons towards political participation that remains unique in Europe. It also led to her downfall through the poll tax.
Thatcher was one of the great "nationalisers" of all time, taking control of the public housing stock, the rating system, a previously devolved hospital service, the universities, the courts, crown prosecution and, during the miners\' strike, the police. It was Thatcher who turned Whitehall from an elite administrative corps into a demoralised, politicised officialdom which, under Blair and Brown, became besotted with targets, initiatives and useless IT systems.
Thatcher removed former nationalised industries from the state. But ask any doctor, farmer, lecturer, engineer or victim of the health and safety executive if, as a result of Thatcher, they feel less or more liberated from state interference. You will get a sick laugh.
The portrayal of Thatcher as libertarian St Joan in the fight against big government is nonsense. When I once suggested to her that a policy she was proposing was hardly laissez-faire, she exploded: "Never accuse me of that ghastly French word. I believe government should be strong in what it does."
All politicians are creatures of paradox. The electorate expects it of them as part of the democratic compromise. The paradox of Thatcher is that she is blamed for her strengths and excused her weaknesses. She was not the person of current mythology.
• Simon Jenkins is the author of Thatcher and Sons simon.jenkins@guardian.co.uk
For more information, please visit
http://www.guardian.co.uk/commentisfree/[...]t-thatcher-recession-mythology
