thatcher reader

. Margaret Thatcher: An Obituary‘Margaret Thatcher: Iron-willed Prime Minister who Promised Harmony Yet Became the Most Divisive Political Leader of Modern Times’ Andy McSmith, The Independent, 8 April 2013There has been no other leader quite like Margaret Thatcher in post-war Britain. No other post-war Prime Minister has been so admired, or so reviled. She was the first woman to lead a major political party in Britain, the longest-serving Prime Minister of the 20th century, and almost the only Prime Minister whose name is synonymous with an ideology. ‘Thatcherism’ remained in political diction when the holder of that name was an elderly frail, lonely widow.She was never much loved, though she would have liked to have been. She believed that she had a direct line to the British people, or at least the section of it from which she sprang: the hardworking, law-abiding, self-denying lower middle class. Although she dominated her party and the government machine, her self-image was of an outsider battling with an inert establishment. Evening visitors to the flat above Downing Street would sometimes find her and her husband, Denis, watching the news, and grumbling about the state of the nation, wanting something done.This outsider’s mentality made her admired – worshipped, almost – by members of the Conservative Party and its core supporters. Others felt grudging respect for her immense willpower. Even the satirists who thrived during the Thatcher years unwittingly enhanced the very reputation that they were mocking. One famous Spitting Image sketch showed Thatcher settling down to dinner with a collection of half-witted Cabinet ministers. Approached by the waiter, she ordered raw steak. ‘And what about the vegetables?’ she is asked, to which she replied: ‘They'll have the same.’ Jokes such as this only reinforced her image as a strong leader. She was also lucky in the choice of enemies that fate threw in her path – the Kremlin, Argentina’s General Galtieri, and the miners’ leader, Arthur Scargill, all unwittingly helped her from success to success.But to a very large minority of Britons – if not the majority – she was an increasingly unappealing embodiment of unfeeling middle-class self-righteousness. While it was her hostility to her fellow Europeans that most damaged her relations with senior Cabinet colleagues, what turned the public against her was the apparent glee with which she rode roughshod over sections of society, such as the miners and the unemployed.Margaret Roberts was born in 1925, the second daughter of Alfred and Beatrice Roberts, in Grantham, Lincolnshire. Her father, a local grocer, was a member of the local council and became Mayor of Grantham in 1945. The family was Methodist, austere, and teetotal. They usually attended church three times on a Sunday. Though Alfred Roberts owned two shops and employed five assistants, there was no hot running water or inside lavatory in the family flat. Later, it would be much commented on that Thatcher’s Who’s Who entry identified her as her father’s daughter, but did not mention her mother. Similarly, neither her mother nor her sister, Muriel, featured in her lengthy memoirs, in which she pays tribute to her father, a shoemaker’s son, as the person from whom she learnt ‘the basis for my economic philosophy’. In all the years she was in Downing Street, she allowed only one other woman a seat in the Cabinet. This was Janet Young, who was leader of the Lords from 1981 to 1983. Thatcher was in some respects very feminine, particularly in the endless care she took over her clothes and complexion, but she was no feminist. She preferred to work with men, preferably men who behaved flirtatiously, like her court favourite, Cecil Parkinson. The politician to whom she owed most was the long-serving, long-suffering Sir Geoffrey Howe – but he had no masculine charisma, and in the end she could hardly bear the sight of him.Educated at Kesteven and Grantham High School, Margaret Roberts entered Somerville College, Oxford in 1943, to read chemistry, and became the first female secretary of the university’s Conservative Association. In 1947, she started work as a research chemist at J. Lyons and Co. She also took up the study of patent law, and passed her Bar exams in December 1953. In 1948, aged only 23, 2 she was chosen as Conservative candidate for Dartford, which she contested in the general elections in 1950 and 1951. Between those elections, she met Denis Thatcher, managing director of a paint and chemical firm inherited from his father. He was a divorcee, which cannot have pleased her Methodist parents, but they approved the match. The Thatchers’ twin children, Mark and Carol, were born in August 1953.In 1959, Mrs Thatcher fought the safe Conservative seat of Finchley, which she held until 1992. In 1961, she was given her first government job as a junior minister for Pensions. Edward Heath never really liked her, but was sufficiently impressed to appoint her shadow minister for education in February 1970. Consequently, the only Cabinet post she held, apart from that of Prime Minister, was as Education Secretary from June 1970 to February 1974. That she was kept there for so long was a sign that Heath had no wish to accommodate her ambition.The major issue in those years was the spread of comprehensive schools, and consequent disappearance of grammar schools. Surprisingly, she presided over the creation of more comprehensive schools than any other Education Secretary, overruling just 326 out of 3,612 proposals to end selective education that crossed her desk. She was also a high-spending minister, successfully fighting each year for an increase in her budget. What brought her national notoriety, however, was a Treasury decision to end free school milk for children aged eight to 11, for which she was demonised as ‘Thatcher the Milk Snatcher’. After the government had fallen, in February 1974, Heath appointed her shadow minister for the environment. He insisted on including three populist ideas in the party manifesto for the October election: to fix mortgage interest, to encourage council tenants to buy their homes, and to abolish the rates. She was uneasy about selling policies that had not been thought through, but did so anyway, with great zeal. It raised her stock in the party, and earned her another promotion after the October election, to Shadow Chancellor.Despite three election defeats, Edward Heath refused to stand down. The first challenge to him came from Thatcher’s friend, Sir Keith Joseph, who had concluded that every government since the 1950s shared the blame for Britain’s decline because they had all overspent. Joseph had been a regular visitor to the think tank the Institute of Economic Affairs, where the philosophy that we now call Thatcherism was gestating. Yet he was a disaster as a candidate and his campaign imploded. On 21 November, Thatcher declared herself a candidate, though with little apparent chance of beating Heath. However, she acquired an astute campaign manager in Airey Neave, an authentic war hero who cleverly did not talk up her chances of success, but persuaded MPs to vote for her on the basis that Heath needed to be sent a warning shot.On the first ballot, declared on 4 February 1975, she beat him by 130 to 119. A shocked Heath conceded defeat, and never forgave Mrs Thatcher; they did not exchange a civil word for nearly 20 years, until 8 October 1998, when they were persuaded to be seen on stage together at the Conservative Party conference. With Heath out, loyalists such as William Whitelaw, Sir Geoffrey Howe and Jim Prior were free to contest the next round – but the Thatcher bandwagon could not now be stopped, and she won resoundingly, with 146 votes to Whitelaw’s 79, making her the first female leader of a major British political party.One of her immediate problems was a shadow cabinet full of old Heath loyalists. She accepted that Joseph was too erratic for a major post and left him in charge of policy development, while major responsibilities were allocated to Whitelaw, Howe and Prior, who had opposed her. In the long run, Whitelaw became so invaluable that Thatcher was once moved to remark that ‘everybody needs a Willie’; and Howe, as treasury spokesman, was converted to free-market economics. In the short term, however, the impression was of business as usual. The Right Approach to the Economy, the key party document published in 1977, with Howe, Joseph and Prior as co-authors, pointed in the direction of tighter management of public spending and looser controls over business, but under Prior’s influence, contained no threats to alter trade union law – although Thatcher’s backbench ally, Norman Tebbit, and the newly formed National Association for Freedom, were calling for anti-strike laws.One public sign that Thatcher was more populist than Heath was her warning that Britain’s white population feared being ‘swamped’ by immigrants, a comment that earned her contempt from 3 the left, but was worth valuable working-class votes for the Conservatives. Her attitudes to immigration, urban deprivation and South Africa attracted accusations of racism.Always fortunate in her enemies, she annoyed the Soviet authorities by attacking communism in a January 1976 speech; the official Soviet news agency, Tass, retaliated by calling her the ‘Iron Lady’ – an epithet that did her nothing but good. Yet there was not much that we would now call Thatcherite about the manifesto that the Conservatives put before the electorate. It barely mentioned the great issues that came to define her as a Prime Minister, such as curbing the unions, cutting public services, privatisation, or reducing income tax. Instead, Thatcher the tactician took primacy over Thatcher the ideologue. Learning from Heath’s past mistakes, she relied on winning the argument without making promises. The famous campaign poster ‘Labour Isn’t Working’, devised by the advertising agency run by the Saatchi brothers, was a classic example of a slogan that undermined Labour without promising anything. Unemployment would in fact be higher through the Thatcher years than it was when that poster was designed. During 1980, it rose by 836,000, the largest rise in any year since 1930.Thatcher badly needed image advisers like the Saatchis, because the public did not warm to her. Even when the Labour Party was 14 points behind the Conservatives in the polls, its leader, Jim Callaghan, was 6 points ahead of Thatcher. By the end of the 1979 election, he was 19 points ahead of her – a graphic illustration that it was the Conservative Party, not Thatcher, who won that contest –aided by the strikes, disunity in the Labour Party, the fragility of the Lib-Lab pact and the failure to deliver devolution for Scotland. But though luck played a part, it remains an unmatched achievement that she overcame all obstacles to emerge in May 1979 as Britain’s first woman Prime Minister.The words she uttered on the steps of Downing Street – ‘where there is discord, may we bring harmony’ – were curiously inappropriate, in that she was to be the century’s least harmonious Prime Minister. One of her administration’s first acts was a lavish gift to the rich: a cut in the top rate of income tax from 83 to 60 per cent, introduced in Geoffrey Howe’s first budget. To meet the cost of this and a cut in the standard rate, from 33p to 30p, VAT was raised from 8p to 15p. This huge transfer of wealth upwards was executed by a cabal of Treasury ministers without consulting the Cabinet; Jim Prior, the Employment Secretary, learnt about it from the CBI. From July 1979 to July 1980, prices rose by 22 per cent, partly because of the VAT hike, and wages by 20 per cent. By the summer of 1980, several Cabinet ministers, including Prior, the Defence Secretary Francis Pym, and the Agriculture Minister Peter Walker, were in almost open revolt; but Thatcher held her ground, and at that November Conservative Party conference delivered one of her best remembered lines, crafted by her speechwriter Ronald Millar: ‘You turn if you want to: the lady’s not for turning.’In January 1981, Thatcher hired the monetarist economics professor Alan Walters as her adviser, and at his prompting insisted that – despite rising unemployment and a sharp fall in output –the March 1981 budget should be deflationary, cutting public borrowing and raising indirect taxes again. It was soon followed by an ominous sign of the social impact of government policy, when a riot erupted in Brixton, in April, followed by another in Toxteth in July, and others around the country. Thatcher adamantly refused to accept that these disturbances might be linked to rising unemployment. While the Cabinet stayed loyal in public, privately the Budget was subjected to scathing attack by a sequence of ministers, led by the Environment Secretary Michael Heseltine, at the last Cabinet meeting before the summer. She responded with a ruthless cabinet reshuffle in September. Her chief antagonist, Prior, was shunted off to Northern Ireland; four others were sacked; and she brought in three Thatcherite stalwarts – Cecil Parkinson, who became party chairman, Nigel Lawson, the new Energy Secretary, and Norman Tebbit, who replaced Prior. From there on, she had a Cabinet she could generally control, but her grip on the country seemed to have been lost for good. By the end of 1981, opinion polls showed her to be the most unpopular Prime Minister since records began; the only apparent uncertainty was whether the next election would be lost to Labour, or to the recently formed Liberal and SDP Alliance. Thatcher’s ally in the Foreign Office, Nicholas Ridley, had been negotiating with Argentina over a proposal that the UK should acknowledge Argentine sovereignty over the Falkland Islands, 4 one of the last British colonies, and in return Buenos Aires should lease the islands back to the UK, to protect the islanders’ way of life. The idea was overruled by Thatcher, who had already risked the wrath of the Tory right by presiding over a process that brought Robert Mugabe to power in Rhodesia/Zimbabwe. She had also recently appointed another ally, John Nott, as Defence Secretary, with a brief to cut the budget, particularly the Royal Navy’s. HMS Endurance, which patrolled the Falklands, was withdrawn in June 1981, six months before Gen Leopoldo Galtieri seized power. When, on 2 April 1982, the Argentinians occupied the islands, Labour politicians imagined that would be the end of Mrs Thatcher. At a rare Saturday sitting of the Commons, she heard Tory MPs cheering the Labour leader, Michael Foot, who demanded that the islands be retaken, and she was warned by Enoch Powell that this was her chance to demonstrate that she actually was the ‘Iron Lady’. She wrote in her memoirs that it was the most difficult Commons debate she ever faced. Overruling MoD advice that the islands could not be retaken, she sent off a Task Force to the South Atlantic.The Foreign Office warned against a confrontation that might upset international alliances, and the Foreign Secretary, Pym, returned from Washington with compromise proposals which she flatly rejected. She knew that her political survival was at risk, and fully intended to retake the islands by force. ‘What was the alternative?’ she wrote in her memoirs. ‘That a common or garden dictator should rule over the Queen’s subjects and prevail by fraud and violence? Not while I was Prime Minister.’The war itself was short but bloody. Argentina surrendered on 14 June 1982 after the death of 649 Argentines and 255 Britons. Thatcher would face some awkward questions about the sinking of the cruiser General Belgrano with the loss of 368 Argentinian lives, but overall the war made her a political star, whose personality roused curiosity and grudging respect around the world.In retrospect, it has become standard wisdom that the Falklands gave her a landslide victory in 1983. Actually, opinion polls had turned before the war began, helped by better economic news and by the policy of giving council tenants the right to buy their homes at a discount, which converted thousands of Labour-voting tenants into homeowning Tories.In January, Thatcher kicked off a long election campaign by descending on the Falklands for a victory tour. The Labour Party, meanwhile, had spent the intervening years as if acting out a death wish; by the time of the election, in May, the Conservatives were 15 points ahead of a divided opposition. Their vote actually dropped by about 5 per cent, to just over 13 million, but this was concealed by the way the non-Tory vote divided equally between Labour and the Alliance, creating a Conservative majority of 144.This stunning victory allowed Thatcher to tighten control over her Cabinet. Her most important promotion was to make Nigel Lawson, a relative newcomer, Chancellor of the Exchequer. Leon Brittan, another relatively young protégé, was appointed Home Secretary. Pym, who had angered her by his willingness to negotiate over the Falklands, was sacked. She wanted to replace him with her favourite, Cecil Parkinson, who had run the election campaign, but he privately confessed that his marriage was in trouble because his former lover, Sara Keays, was pregnant. Instead, she made Howe Foreign Secretary and put Parkinson in charge of the newly merged Department of Trade and Industry, until he was forced out of office.Meanwhile, Thatcher faced a grim economic situation. Despite the reputation she now has as a tax cutter, she had presided for four years of rising government expenditure, which by 1983 had reached 48 per cent of GDP – a figure she would bring down to 40 per cent in the next seven years. Mortgage rates were also rising; unemployment had remained above three million. Against this background, she began simultaneous assaults on trade-union power and loss-making state industries. The latter were given a taste of what was in store when John King was appointed chairman of British Airways in 1980; by 1983, he had sacked 23,000 of its 57,000 employees and turned an annual loss of £140m into a £214m profit. In January 1984, Geoffrey Howe announced that unions were banned henceforth from operating at the GCHQ spy centre, in Cheltenham, whose employees were offered £1,000 each recompense for their lost rights. The resulting uproar produced a memorable attack on 5 Mrs Thatcher, when Denis Healey described her in the Commons as ‘the great she-elephant, she who must be obeyed’. Early on, Thatcher had shown a tactician’s reluctance to confront the National Union of Miners. She praised the ’realism’ of the National Coal Board when, in 1979, they offered the miners a 20 per cent pay rise, and overruled them when they proposed to close 23 pits early in 1981. But in 1983 she told the new Energy Secretary, Peter Walker, to get ready for a fight. She had already decided that the new Coal Board chairman was to be the elderly Scot, Ian MacGregor. He announced a programme of pit closures, which, on 6 March 1984, brought most of the miners – though not those from Nottinghamshire – out on a strike that lasted over a year. Throughout, Thatcher and her ministers intervened strategically to ensure that other unions did not join the strike, if necessary – as in the case of railway workers – by buying them off with generous pay awards; and they covertly encouraged individual miners to legal action against the NUM president, Arthur Scargill, for his refusal to hold a strike ballot.The defeat of the miners reinforced her reputation as the Iron Lady, and for insensitivity –especially when, speaking to Tory MPs in July 1984, she urged them to be ready to fight ‘the enemy within’. This reputation was reinforced by the negotiating style she used in EU conferences.It was clear from the start that relations with other EU nations were not going to be harmonious. Thatcher went to Dublin, in November 1979, with the single-minded intention of reducing the UK contribution to the communal budget by £1bn, an objective she pursued at the risk of wrecking the summit. She was the only EU leader who would willingly see a conference end in deadlock rather than surrender what she considered to be British interests. In June 1984, she at last succeeded in negotiating a reduction in the British rebate, helped by the patient diplomacy of France’s socialist President, François Mitterrand. Like many foreign statesman, Mitterrand viewed Thatcher with a kind of appalled fascination. ‘Cette femme Thatcher!’ he famously remarked. ‘Elle a les yeux de Caligula, mais elle a la bouche de Marilyn Monroe.’But this apparent inflexibility masked a willingness at times to make unexpected concessions. She refused to give way in spring 1981 when the IRA leader Bobby Sands went on hunger strike in H Block prison, allowing him and nine others to starve themselves to death. Thatcher had lost a personal friend to Irish terrorists when Airey Neave was killed by a car bomb in 1979. The IRA came close to assassinating her when they detonated a bomb in Brighton’s Grand Hotel during the 1984 Conservative conference, killing five people, and seriously injuring Tebbit. Yet just over a year later, on 15 November 1985, she shocked Unionist opinion by signing the Anglo-Irish agreement, which for the first time gave Dublin the right to be consulted on matters affecting the north.She was also intelligently flexible in her attitude to the USSR. In December 1984, the Foreign Office invited Mikhail Gorbachev, then a communist party secretary, to London. Gorbachev impressed Thatcher by the forcefulness with which he put the case against Star Wars, the US plan for positioning military hardware in space. ‘We can do business together,’ she told the BBC. Three months later, Gorbachev was President of the USSR. She went straight to Washington from her meeting with Gorbachev. It is arguable that no other British Prime Minister had ever got on so well with an American President as she did with Ronald Reagan, despite diplomatic tension over the Falklands, and over the US decision in October 1983 to overthrow the government of Grenada, a former British colony, without forewarning her. One of many favours Reagan did her was to allow the UK to buy Trident at cost price. At Camp David, she persuaded Reagan to sign up to a four-point statement that answered the most serious objections put by Gorbachev. Thereafter, she defended Reagan against all critics. In April 1986, she allowed the Americans to use British bases for bombing raids on Libya.Her instinctive preference for the US over Europe underlay the first major crisis in her Cabinet. The improbable cause was a disagreement between the Defence Secretary, Michael Heseltine, and the recently demoted Trade Secretary, Leon Brittan, over the future of the Westland helicopter firm. Thatcher supported Brittan, who supported Westland’s shareholders, who preferred a marriage with the US firm, Sikorsky. Heseltine, meanwhile, wanted to put together a European consortium. This obscure disagreement erupted in a clash of strong personalities; on 9 January 1986, Heseltine 6 resigned, claiming that Thatcher had cheated. Brittan was also forced out of office over the leaking of a document damaging to Heseltine, but was compensated with a job as European Commissioner. Westland was the first in a sequence of events that would bring Thatcher down. As she faced a no confidence motion in the Commons on 27 January, she feared it could be the end of her premiership; but any such risk was averted by her superiority over the Labour leader, Neil Kinnock. ‘For a few seconds, Kinnock had her cornered, and you could see fear in those blue eyes,’ Alan Clark recorded in his diary. ‘Then Kinnock had an attack of wind and gave her time to recover. A brilliant performance, shameless and brave.’Westland and the Libyan bombing reduced Thatcher’s personal popularity to a new low in summer 1986. In May she was publicly criticised by one of her former loyalists, the Leader of the Commons, John Biffen, prompting her pugnacious press secretary, Bernard Ingham, to dismiss Biffen as a ‘semi-detached’ Cabinet minister. There followed a remarkable recovery which she owed largely to the self-defeating behaviour of the Labour Party and the soon-to-disintegrate Liberal-SDP Alliance. Having appointed her ally Norman Tebbit as party chairman, she was irritated by his conduct at the 1987 election, and inserted a new favourite, Lord Young, as his deputy chairman. But despite these internal problems, she was returned to power with another commanding majority, an electoral achievement then unmatched by any party leader in living memory.Far from slowing down, Thatcher came back like someone who was only just getting started. The frantic pace that she now imposed on her government would be a factor in her downfall. In this mood of euphoria, she gave an interview to Woman’s Own that contained the most famous – or notorious – quotation she ever uttered: ‘There is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first.’She disposed of three former allies, Keith Joseph, Norman Tebbit and John Biffen, but brought in a couple of new protégés to her Cabinet – John Moore, who seemed to be her chosen successor, and John Major. Schools were put through their biggest upheaval for more than a decade, with the introduction of the national curriculum, though Thatcher was never able to find an Education Secretary who would follow through her most radical notion, to issue vouchers to parents so that they could ‘buy’ places in state schools. The NHS underwent its biggest reorganisation since its foundation, with the creation of health trusts and the introduction of an internal market that separated health purchasers and providers; but the task was too much for Moore, whose career went into nosedive, depriving her of the only health secretary she ever found who would countenance replacing a tax-based NHS with private health insurance.The privatisation of public utilities was at first one of the great political successes of the Thatcher administration. Having stumbled upon it as a means of improving public finances, they discovered a political gold mine that turned hundreds of thousands of people into first-time shareholders. The first major privatisation was British Telecom, in November 1984, which had the additional bonus of giving customers a better service. Four and a half million people bought British Gas shares. When electricity was privatised, in 1988, Labour’s new energy spokesman, Tony Blair, broke with precedent by not promising to renationalise. After the 1987 victory, Thatcher also insisted on the more politically sensitive privatisation of the water industry. This was not popular, and increased suspicions that the government’s reforms to the NHS were also a covert privatisation. However, the single worst mistake that Thatcher made was to revive the old idea of abolishing the rates. The community charge, or poll tax, was not her idea alone, and initially promised to be popular in Scotland, where homeowners were scared by an upcoming revaluation of property for rates purposes; but her name became indissolubly linked to a policy that caused riots on the streets, and was rightly seen as a flagrant breach of the principle that taxes should not fall equally on the rich and the poor.While the poll tax undermined her standing in the country, a revival of old quarrels about Europe split her Cabinet. Sir Geoffrey Howe and Nigel Lawson believed that sterling should join the Exchange Rate Mechanism (ERM), to minimise fluctuations between EU currencies. In 1987, Lawson began to ‘shadow’ the deutschmark, intervening whenever the pound went above 3 DMs. This policy 7 was introduced in secret; her camp would later claim that even she did not know about it, while Lawson was emphatic that she did; after it was abandoned, she blamed it for pushing up inflation, and leading rates.She also refused to countenance setting a deadline for joining the ERM. This provoked a stand-off in June 1989, prior to the EU summit in Madrid, in which Howe and Lawson met her privately and threatened to resign unless the UK made some commitment at Madrid to join the ERM eventually. The result was the so-called ‘Madrid conditions’, which Thatcher believed vague enough to keep the ERM at bay indefinitely, while the press coverage was positive enough to avert the threatened resignations. Four weeks later, she took revenge by moving Howe from the Foreign Office to be Leader of the Commons, with the title of Deputy Prime Minister. Her spokesman, Ingham, made it clear to journalists that the title was meaningless. When Howe first rose to speak in his new capacity in the Commons, there was a loud, prolonged cheer from Tory MPs, which ought to have served as a warning to Thatcher. Lawson was also warning her that her decision to recall Alan Walters from academic life to be her economic adviser again was unacceptable to him, particularly after Walters had been quoted in the Financial Times describing ERM as ‘half-baked’. Yet she seems to have been genuinely taken by surprise when Lawson resigned, on 26 October. Soon afterwards, she faced her first leadership challenge, from a little-known backbencher named Sir Anthony Meyer, whom she beat by 314 votes to 33.Yet by the time of the next Conservative conference, in October 1990, she seemed to have put these problems behind her. Even the poll tax had not produced the disaster that the Tories had feared in the May local elections. Interest rates, which peaked at 15 per cent the previous October, were coming down. Her new Foreign Secretary and Chancellor, respectively Douglas Hurd and John Major, persuaded her that the UK could now join the ERM, which they did the week before the Tory conference, shamelessly upstaging Labour’s conference. Even her opposition to sanctions against South Africa seemed to have paid off, when, on 4 July 1990, Nelson Mandela, just out of jail, lunched with her in Downing Street. The biggest issue hanging over the Tory conference was Iraq’s occupation of Kuwait. Thatcher had been in the US on the day of the invasion, and had been quicker and stronger than President George Bush in her reaction; she wanted an ultimatum sent to Iraq that would mean withdrawal or war. Her conference speech was therefore upbeat, including a joke at the expense of the Liberal Democrats, whom she likened to the dead parrot from the old Monty Python sketch.Barely two weeks later, on 18 October, the ‘dead parrot’ suddenly came to life in Eastbourne, where there was a by-election caused by the assassination on 30 July of Thatcher’s devoted former parliamentary aide, Ian Gow. His huge majority vanished in a 20 per cent swing to the Lib Dems. On 1 November, Sir Geoffrey Howe resigned. Thatcher had humiliated him once too often, though what finally precipitated his departure was her Commons performance after an EU summit in Rome, during which she rejected what she regarded as creeping federalism in the EU by exclaiming ‘No, no, no’. On 13 November, Howe made a resignation speech which, with its telling final phrase, ‘The time has come for others to consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long,’ a more or less open call for her removal. The next day, Michael Heseltine declared that he was challenging her for the party leadership.Her campaign team seemed not to take the threat seriously. She was in Paris for a conference on European security on the day votes were cast. On learning that she had won by 204 votes to 152 –not enough to prevent a second round – she told the waiting cameras that she would fight on. Back in London, however, she was shocked to learn from the whips that Heseltine might win a second ballot. She met her Cabinet ministers, one by one, in her Commons office, on the evening of 21 November; at least ten advised her that she should stand down, though there were others outside the Cabinet, including Michael Portillo and Alan Clark, urging her to fight on.She announced her resignation on the morning of 22 November, and made her final Commons speech that afternoon, when she memorably said ‘I'm enjoying this.’ Her premiership, that 8 lasted 11 years and six months, formally ended on 28 November, after John Major had won the second round of the leadership contest. In retirement, a gulf seemed to open up between Lady Thatcher’s colossal reputation, and the lady herself. In private, she could not come to terms with her dismissal, or what she saw as John Major’s betrayal of her legacy. She gave up her Commons seat in 1992 and entered the Lords as Baroness Thatcher. Lecture tours and the publication of her memoirs in 1993 made her a very wealthy woman, but she was increasingly frail and lonely, particularly after Denis Thatcher’s death, aged 88, on 26 June 2003. He had been made a hereditary baronet in 1990, and his title passed to their son, Mark. As a political name, though, Mrs Thatcher continued to dominate political discourse. Her endorsement, passed on privately, had secured John Major’s place as her successor. The ferocity with which the Tory party tore itself apart under his leadership was the right’s revenge for what they saw as the betrayal of Mrs Thatcher. In 1997, her public endorsement made William Hague the sure winner in the next leadership election. Tony Blair also wanted a share of her prestige and invited her to Downing Street, as Gordon Brown did nine years later. In 2001, Portillo’s supporters made the mistake of claiming that he had Thatcher’s support; the discovery that this was not true contributed to the failure of his campaign. The first party leader elected without first securing her backing was David Cameron, though he took care to praise her as his ‘inspiration’. When, in April 2008, the Daily Telegraph asked readers to name the best post-war Prime Minister, Lady Thatcher received 34 per cent of the vote; the runner-up, Winston Churchill, had 15 per cent. After Denis Thatcher’s death in 2003, Baroness Thatcher of Kesteven, as she now was, withdrew almost entirely from public life. Her last recorded public act was a brief message in March 2010 paying tribute to her old rival, Michael Foot, who had just died. Her last political act was a message to the Sunin September 2007, backing that paper’s call for a referendum on the EU. Many of her admirers were offended by the portrayal of her by Meryl Streep in the 2011 film The Iron Lady, as a confused old woman who thought that Denis was still alive. In reality, according to those who were still in contact with her, she had days when her mind was cloudy, and days when she was still sharp. Whatever she thought of the coalition government, she kept to herself.Margaret Thatcher (née Roberts), politician: born Grantham, Lincolnshire 13 October 1925; MP (Conservative) Finchley, 1959-92; Joint Parliamentary Secretary, Ministry of Pensions and National Insurance, 1961-64; Secretary of State for Education and Science, 1970-74; Leader of the Opposition, 1975-79; Prime Minister and First Lord of the Treasury, 1979-90; Co-Chairman, Women’s National Commission, 1970-74; Chancellor, University of Buckingham, 1992-98; William and Mary College, Virginia, 1993-2000; Chairman, Bd, Inst. of US Studies, London University, 1994-2002; Hon. Fellow, Somerville College, Oxford, 1970; married 1951 Denis Thatcher (died 2003, one son, one daughter); died London 8 April 2013.Source: http://www.independent.co.uk/news/obituaries/margaret-thatcher-ironwilled-prime-minister-who-promised-harmony-yet-became-the-most-divisive-political-leader-of-modern-times-8564559.html# 9 2. Margaret Thatcher’s Economic LegacyNicholas Crafts, ‘The Economic Legacy of Mrs Thatcher’[extracts; references omitted]The policies of the Conservative governments led by Margaret Thatcher between 1979 and 1990 remain highly controversial more than 20 years later. In many respects, they represented a sharp break with the earlier postwar period and this was certainly true of supply-side policies relevant to growth performance. Reforms of fiscal policy were made including the restructuring of taxation by increasing VAT while reducing income-tax rates and, notably, by indexing transfer payments to prices rather than wages while aiming to restore a balanced budget. Industrial policy was downsized as subsidies were cut and privatisation of state-owned businesses was embraced while deregulation, including most notably of financial markets with the ‘Big Bang’ in 1986, was promoted. Legal reforms of industrial relations further reduced trade union bargaining power which had initially been undermined by rising unemployment. In general, these changes were accepted rather than reversed by Labour after 1997.In fact, before, during and after Thatcher, government policy moved in the direction of increasing competition in product markets. In particular, protectionism was discarded with liberalisation through GATT negotiations, entry into the European Community in 1973, the retreat from industrial subsidies and foreign-exchange controls in the Thatcher years, and the implementation of the European Single Market legislation in the 1990s. Trade liberalisation reduced price-cost margins. The average effective rate of protection fell from 9.3% in 1968 to 4.7% in 1979, and 1.2% in 1986 (Ennew et al. 1990), subsidies were reduced from £9bn (at 1980 prices) in 1969 to £5bn in 1979 and £0.3bn in 1990 (Wren 1996), and import penetration in manufacturing rose from 20.8% in 1970 to 40.8% by 2000.Ending the trade union vetoThe Thatcher government saw itself as ending the trade unions’ veto on economic-policy reform, and many of the changes of the 1980s would have been regarded as inconceivable by informed opinion in the 1960s and 1970s. Moreover, the early 1980s saw unemployment return to 1930s levels, which conventional wisdom thought incompatible with re-election. [...]Performance payoffTable 1 reports that under the auspices of ‘Thatcher & Sons’, the UK ended its relative economic decline vis-à-vis France and West Germany and, by 2007, had a slightly higher real GDP per person than either of those countries. In considerable part, this reflected greater employment and longer hours worked as UK labour productivity was still lower than in the other two countries. Nevertheless, by 2007, relative productivity performance had recovered somewhat from the low point reached at the end of the 1970s [...]. The UK's position in 2007 was underpinned by much lower unemployment than in the early 1980s, linked to a fall in the NAIRU (Table 3) which was in considerable part due to reforms to benefits, taxes and collective bargaining made in the 1980s. The improvement in relative TFP performance in the UK appears to have been mainly based on reductions in inefficiency since there is nothing to suggest that the Thatcher reforms promoted stronger R&D. [...]Table 1 Real GDP/person (UK = 100 in each year) [19th-century figures omitted]USGermanyFrance1913107.774.170.81929125.473.6 85.6 1937103.475.372.21950137.861.774.71979142.7115.9111.12007130.295.991.3 10 Note: Estimates refer to West Germany from 1950 to 2007.Sources: Based on estimates measured in 1990 Geary-Khamis dollars reported in the Maddison Project historical database and for West Germany in 2007 calculated from Statistiches Bundesamt Deutschland 2010.[...]End of the easy life for managementThe impact was felt at least partly through greater pressure on management to perform and through firm-worker bargains which raised effort and improved working practices. Increases in competition resulting from the European Single Market, which Mrs Thatcher endorsed, raised both the level and growth rate of TFP in plants which were part of multi-plant firms and thus most prone to agency problems (Griffith 2001). A notable feature of the period after 1980 encouraged by capital market liberalisation was divestment and restructuring in large firms and, in particular, management buyouts (often financed by private equity) which typically generated large increases in TFP levels in the period 1988-98 (Harris et al. 2005). The process of privatisation raised productivity performance appreciably as nationalised industries were prepared for sale (Green and Haskel 2004).Industrial restructuringThe 1980s and 1990s saw major changes in the conduct and structure of British industrial relations. Trade union membership and bargaining power were seriously eroded. This was prompted partly by high unemployment and anti-union legislation in the 1980s, but also owed a good deal to increased competition (Brown et al. 2008). The 1980s saw a surge in productivity growth in unionised firms as organisational change took place under pressure of competition (Machin and Wadhwani 1989) and non-recognition of unions in the context of increases in foreign competition had a strong effect on productivity growth in the later part of the decade (Gregg et al. 1993). The productivity payoff was boosted by the interaction of reforms to industrial relations and product-market competition.For the UK, the 1980s’ deregulation of services that are intensive in the use of ICT (notably finance and retailing) that reduced barriers to entry was important for its relatively successful response to ICT, as OECD cross-country comparisons reveal (Conway et al. 2006). It is also clear that investment in ICT is much more profitable and has a bigger productivity payoff if it is accompanied by organisational change in working and management practices. This would not have happened with 1970s-style industrial relations under conditions of weak competition. Prais (1981) noted the egregious example of the newspaper industry, where these conditions precluded the introduction of electronic equipment in Fleet Street although an investment of £50 million could have reduced costs by £35 million per year. Success in ICT diffusion was an unintended consequence of the deregulation and reform of industrial relations achieved in the Thatcher period.There is, of course, an important qualification that has to be made regarding the ‘success story’ rehearsed above. Deregulation was central to the growth of an unusually large financial services sector in the UK, amounting to about 8% of GDP in 2007, and a banking system that was very highly leveraged by previous standards. This left the UK exposed to a very costly financial crisis which may well have permanently reduced the sustainable level or even the trend rate of growth of real GDP, possibly substantially. In time, it will be possible to reassess the growth performance of the late 20th and early 21st centuries with these issues in mind, but at present it is too soon to tell.ConclusionIn sum, Thatcherism was a partial solution to the problems which had led to earlier underperformance, in particular, those that had arisen from weak competition (Crafts 2012). The reforms encouraged the effective diffusion of new technology rather than greater invention and worked more through reducing inefficiency than promoting investment-led growth. They addressed relative economic decline through improving TFP and reducing the NAIRU. At the same time, the short-term implications were seriously adverse for many workers as unemployment rose and manufacturing rapidly shed two million jobs while income inequality surged, to no small extent as a result of benefit reforms. Indeed, any judgement on Thatcherism turns heavily on value judgements concerning the relative importance of income distribution and economic growth as policy objectives. The 1980s saw a very rapid increase in the Gini coefficient by about nine percentage points, which has turned out to be 11 largely permanent. Ultimately, the Thatcher experiment was about making a liberal market economy work better. There will be those who think a German-style coordinated market economy is preferable. That was not really an option available to Mrs Thatcher but in any event it was hardly a vision of which she approved.Source: http://www.voxeu.org/article/economic-legacy-mrs-thatcherJohn Van Reenen, ‘Mrs Thatcher’s Economic Legacy’[extracts; references omitted]As a student I was not a fan of her government, but in retrospect I believe it is clear that the important changes in economic policies that began at the end of the 1970s contributed to the reversal of a century of UK relative economic decline. Her macroeconomic policies have a mixed record, but the microeconomic policies have had a more enduring success. In particular, the supply-side policies she launched to make labour and product markets more competitive and flexible have been broadly continued under subsequent Conservative (under John Major) and Labour (under Tony Blair and Gordon Brown) administrations.The economic recordAlthough the UK has enjoyed significant improvements in material wellbeing for well over two centuries, UK GDP per capita was in relative decline compared with that of other leading countries, such as France, Germany and the US, from at least 1870 onwards [...]. The UK’s relative decline reflected an almost inevitable catchup by other countries whose institutions created the right kind of investment climate. [...]Figure 2. GDP per capita, 1950-2011 (1980=100)Figure 3. Trends in real GDP per working-age adult,1980-2011 (1995=100)Note: GDP is US$, constant prices, constant PPPs, base year 2011.Note: GDP is US$, constant prices, constant PPPs, base year2011. The number of working age adults, which is obtainedfrom the US Bureau of Labour Force Statistics, includes thecivilian population aged over 16. Data for unified Germany is from 1991.Source: LSE Growth Commission (2013)Figure 2 shows trends in UK GDP per capita since 1950. After falling behind for most of the postwar period, the UK had a better performance compared with other leading countries after the 1970s. This continues to be true even when we include the Great Recession years post-2008. Part of this improvement was in the jobs market (that is, more people in work as a proportion of the working-age population), but another important aspect was improvements in productivity. Figure 3 illustrates this for GDP per worker covering the current downturn after 2007. Contrary to what many commentators have been writing, UK performance since 1979 is still impressive even taking the crisis into consideration. Indeed, the increase in unemployment has been far more modest than we would have expected. The supply-side reforms were not an illusion. The productivity performance in the pre-crisis years do not simply reflect the dominance of the financial services ‘bubble’ over all other aspects of the economy like manufacturing. First, the improvements were spread across industrial sectors (Figure 4). Financial services contributed only 12 about 10% of the productivity growth seen since 1979. Second, the way the Office of National Statistics measures GDP places substantial limitations on the potential for the measurement of financial services to bias GDP calculations significantly (Oulton 2013).Figure 4. Finance directly contributed only a small part of market-sector productivity growth.Note: These numbers are for the ‘market economy’. This excludes the sectors where value added is hard to measure: education, health, public administration and property. Source: LSE Growth Commission (2013)Her policies matteredThere is a substantial body of evidence suggesting that a range of important policy changes underpinned these economic gains [...]. These include increases in product-market competition through the withdrawal of industrial subsidies, a movement to effective competition in many privatised sectors with independent regulators, a strengthening of competition policy and our membership of the EU’s internal market. There were also increases in labour-market flexibility through improving job search for those on benefits, reducing replacement rates, increasing in-work benefits and restricting union power. And there was a sustained expansion of the higher-education system: the share of working-age adults with a university degree rose from 5% in 1980 to 14% in 1996 and 31% in 2011, a faster increase than in France, Germany or the US. The combination of these policies helped the UK to bridge the GDP-per-capita gap with other leading nations.Most, but not all of these were initiated by Mrs Thatcher. She was initially against large-scale foreign investment and takeovers in the UK. But the success of new plants, such as Nissan’s car plant in Sunderland (still the most productive in Europe) convinced her of its benefits. The ‘Wimbledon’ economy, where we are relaxed about the nationality of who provides high-quality jobs so long as they are here, has persisted. Her approach to union reform and privatisation was also pragmatic and step-by-step: she was less of an ideologue than often believed. Her failures and the futureNevertheless, there are many important economic and social failures that are part of the Thatcher legacy. First, there was a tremendous growth of inequality both in pre-tax incomes and through changes to tax and benefit policies that favoured the rich. Figure 5 illustrates this for wages showing a dramatic upswing in inequality between the richest and poorest 10%. Some of this inequality was addressed by the Labour governments through tax credits and the minimum wage, but the share of income going to the top 1% continued to rise inexorably, driven by the financial sector. This was the second failure – excessive deregulation of financial services starting with the Big Bang in 1986, but 13 continuing until the eve of the 2007 crisis. Even free markets need to be properly regulated. Third, her early years were marked by a failure to understand that the public employment service needs to be active in helping people find jobs. A major mistake was splitting benefit offices from job centres and pushing many unemployed onto disability benefits (which are much harder to escape from) in an effort to massage down the unemployed claimant count statistics. Unemployment claims peaked at over three million in 1986 when Restart was launched – a policy that finally put more effort into getting the unemployed searching for work and was deepened under the New Deal policies after 1997.Figure 5. Wage inequality 1979-2010Note: Difference in the natural logarithm of weekly wages of full-time (‘FT’) workers at the 90th percentile (richest tenth) and 10th percentile (poorest tenth)Source: LSE Growth Commission (2013), Lindley and Machin (2012) using data from NES and ASHE (1% sample of all UK workers)Finally, and perhaps most importantly, there was been a failure of long-run investment: in infrastructure, in the skills of those at the lower end of the ability distribution, and in innovation. The UK addressed some of its problems, but this failure to invest in prosperity is the main challenge we face as a nation over the next 50 years. [...]Source: http://www.voxeu.org/article/mrs-thatcher-s-economic-legacyIndustrialists Split over Thatcher legacyBrian Groom, Financial Times, 12 April 2013[...]‘What happened to British companies, the ones that were any good, is that they had to specialise and internationalise,’ says Sir Geoffrey Owen, senior fellow at the London School of Economics and former editor of the Financial Times. Sir Geoffrey believes Thatcher’s policies changed manufacturing for the better. ‘They forced companies to compete in a way that had been less pressing before. There was a restructuring of industry which was by no means wholly destructive.’GKN, under Sir Trevor Holdsworth’s chairmanship, focused on exploiting its competitive advantage in ‘constant velocity joints’, a crucial component in front-wheel drive cars – a technology that, following the Mini’s success, was adopted by most of the world’s small carmakers. But much of British industry failed to adapt and survive. Manufacturing accounted for around 26 per cent of economic output when Thatcher came to power in 1979; in 2011 it was 10.8 per cent, up slightly from a low of 10.5 per cent in 2009. It employs 2.6m compared with 6.7m in 1979. 14 Did Thatcher’s policies contribute to the deindustrialisation occurring throughout virtually all developed nations? Manufacturers are divided. ‘She has done untold damage to manufacturing and we are feeling that adverse impact even today,’ says Geoff Ford, chairman of Ford Aerospace and Ford Components Manufacturers, Tyneside-based precision engineers. Mr Ford, who joined his family’s business in 1974 as a member of its third generation in the firm, has done better than many: his companies have £11m in turnover and export to 20 countries. But, he adds: ‘She closed down the mines and let a lot of heavy industry go to the wall. She didn’t encourage manufacturing the way Germany did.’ He argues that the loss of heavy industry led to declining demand for engineered products, which affected the supply chain and depressed the economy. It also affected manufacturing’s image, he suggests, contributing to current skill shortages.But Sir Anthony Bamford, chairman of excavator maker JCB and a Tory donor, says damage to manufacturing was the result of poor management, over-powerful unions and high tax. ‘Thedemise of British manufacturing in our area, the Midlands, was not down to her at all,’ he says. Peter Birtles, a director of Sheffield Forgemasters International, one of the last British-owned steelmakers, says his company would not exist without her reforms. Thatcher’s supporters note that manufacturing declined faster under Labour’s Tony Blair and Gordon Brown. In the Thatcher years, it shrank from 26 per cent of the economy to around 22 per cent. Under Labour, it fell from 18.4 per cent in 1997 to 10.6per cent in 2010.The UK ranks ninth in the world for manufacturing output. Its decline has matched most other developed nations including France, which is only slightly ahead in eighth place despite its dirigisme.[...]Source: http://www.ft.com/intl/cms/s/0/959ebdda-a2cf-11e2-bd45-00144feabdc0.html#axzz2QMWG9fZB3. Thatcher and Foreign Policy3.1 ‘Margaret Thatcher 1925-2013’, Financial Times, 12 April 2013 Simon Kuper on Thatcher Abroad[Extract] But on Germany, she switched too late. Not only did the UK irritate a key ally that had behaved impeccably for 45 years. Worse, by picking the wrong battle, Britain in that crucial winter of 1989-90 missed its best chance to strangle the euro at birth. Few Germans wanted monetary union. Kohl in October 1989 had told Mitterrand the time was ‘not ripe’ for it. However, the French wanted it, and in Strasbourg Mitterrand dropped his own opposition to German reunification in return for Kohl giving him a European currency. France used reunification as a bargaining chip to shape the European future. Thatcher, who never tried allying with the Germans against monetary union, was left impotently shouting, ‘No, no, no!’ The episode is a classic example of how states don’t always cold-headedly pursue their interests but are sometimes misled by past ghosts.A worldview based on the second world war and nostalgia for lost glories was common enough in Britain then. It just wasn’t a very good guide to the late 20th century. Source:http://www.ft.com/intl/cms/s/2/536e095c-a23e-11e2-8971-00144feabdc0.html#axzz2QMWG9fZB3.2 Anne-Marie Slaughter, ‘Thatcher’s Legacy Is Britain’s Isolation’, Financial Times, 12 April 2013 [Extract] She burnished this reputation with her fierce anti-communism, standing with Reagan for the introduction of nuclear missiles in Germany in the early 1980s and facing down the Soviet Union at every turn. She was equally resolute in her determination to use force to push Saddam Hussein back 15 out of Kuwait in 1991, leading to the famous exchange with George H.W. Bush in which she is reported to have said: ‘Don’t go wobbly on us, George.’So there she is. The Iron Lady, the leader who had no time for diplomatic niceties, who was not afraid to stand up for the truth, who would not back down on the global stage. But the starry-eyed supporters of Thatcher who have filled the opinion pages over the past week are themselves besotted with a vision of Britain in the world that is both deeply anachronistic and dangerous. Nowhere is the folly of this view more apparent than in Thatcher’s attitude towards Europe, a view that was less a throwback to Churchill than to her 19th-century predecessors. Like them, Thatcher saw the European continent as a stage for balance-of-power politics, with Britain holding the balance. In the 21st century, however, that view is likely to leave Britain outside global power circles altogether.Thatcher is venerated by today’s Tories for standing up to the EU to ‘get our money back’, but her underlying view of Europe is best revealed in her fierce and deeply misguided opposition to German reunification after the fall of the Berlin Wall. Chancellor Helmut Kohl recalls in his memoirs that Thatcher told a gathering of European leaders: ‘We beat the Germans twice and now they are back.’ French diplomatic notes reveal conversations with President François Mitterrand in which both leaders envisioned a united Germany that would exercise more influence in Europe than Hitler ever had. Although both Thatcher and Mitterrand ultimately came around, and Thatcher stood firmly for the expansion of the European Community to former Soviet states in eastern and central Europe, her instincts were completely out of touch with modern Europe.Thatcher supported the European Community, an economic union, but described the more political EU as ‘perhaps the greatest folly of the modern era’. That is the legacy she has bequeathed to her party. Prime Minister David Cameron’s pledge to hold a referendum on British membership in the EU and his plan to renegotiate the terms of that membership risk relegating Britain to the status of little more than a bit player in global politics.It is not just Maggie who is gone; her entire era is fading away. It is the era of three world wars – two hot and one cold – in which Britain and the US had a special relationship forged out of their alliance during those wars, and in which the Atlantic was the most important economic and political theatre in the world. Today the US needs not Britain but Europe, the largest global economy, with a growing political and military role. In a world in which the US sees the rise of Asia as the most important geopolitical trend, it does not imagine partnering with Britain but with Europe as a whole. In the 21st century it will be possible for London to remain one of the great cities in a world where cities will become ever more important. However, London cannot carry Britain. Unless Britain decisively casts its fortunes with Europe it risks becoming another Singapore – a global financial centre and a useful diplomatic partner in navigating complicated regional politics but hardly a global power. Indeed, should this part of Thatcher’s legacy triumph, she will have done her nation a disservice of millennial proportions. [...]Source: http://www.ft.com/intl/cms/s/0/aebdce1c-a295-11e2-9b70-00144feabdc0.html#axzz2QMWG9fZB3.3 Philip Stephens, ‘Europe, Sterling and Thatcher’s Handbag’, Financial Times, 11 April 2013 [Extract]The guiding emotions of British euroscepticism are superiority and insecurity. The first declares that a nation that has always made its own way in the world has no need to compromise its sovereignty by falling in with its neighbours. The second is fearful rather than confident – seeing Brussels as a dastardly plot calculated to subvert Britain’s freedoms and stifle its ambitions.Thatcher was in the first category. Her confidence about Britain’s global reach was seductive. The 1970s had broken the national spirit. Journalists who travelled the globe with her could not recall a prime minister turning so many foreign heads – whether in Moscow’s Red Square, while boarding a bullet train in Tokyo or visiting her beloved Ronald Reagan in the White House.The Bruges speech – her infamous fusillade against Mr Delors for his supposed plan to create a socialist superstate – had a sweep that would be lost on today’s politicians. The vision of democracy reaching from the Atlantic to the Urals was ahead of its time. Even her concerns about the impact of 16 German reunification were prescient in their way. As for the single currency, she identified many of the innate tensions its authors chose to ignore.What spoilt it all were the underlying delusions. She had seen off the Soviet threat with Reagan, taken back the Falklands from Argentina and got her money back from Brussels. Power had turned her head. When she had campaigned as a pro-European during the 1970s she had recognised the EU as an essential vehicle for British interests. It ‘opened doors to the world that otherwise would be closing.’ A decade in office had blinded her. It was one thing to predict that the return of the German question would destabilise Europe. Another to think, as she seemed to, that by scheming with Mr Mitterrand she could deny democracy to citizens of the liberated East Germany. As for the special relationship with Washington, George H.W. Bush was quick to turn to a united Germany as Europe’s natural leader.At Bruges she insisted she would fight her corner – there would be no sulking on the Brussels sidelines for this particular Lady. David Cameron, under pressure from the now swollen ranks of hardline Tory sceptics, has struck a different pose. Mr Cameron’s government has absented itself from discussions on economic integration. By backing the single market Thatcher showed how Britain could shape the EU. Yet if she was defiant at Bruges, her heirs in today’s Tory party are inclined to defeatism. Britain, they seem to say, is a victim, so it had better leave.The nation, of course, has held on to the precious pound. Nowadays, politicians of all shades congratulate themselves on keeping the Belgians at bay and shunning the euro. Yet to observe the present, sorry condition of the British economy it is hard to measure what good has been done. Source:http://www.ft.com/intl/cms/s/0/446e822c-a1d2-11e2-ad0c-00144feabdc0.html#axzz2QMWG9fZB4. Debates About Values and Priorities4.1 Jason Cowley, ‘ The Left Struggled to Understand Margaret Thatcher. When It Finally Did, the Result Was New Labour’, New Statesman, 8 April 2013 [Extract]‘Economics are the method; the object is to change the soul,’ Margaret Thatcher once said, a saying of hers I like very much and with which no Marxist would disagree. But the paradox of this strange and compelling woman was that her economic liberalism was at odds with her social conservatism: the destructive, amoral market forces she helped unleash and channel undermined her most cherished values. As a religious pessimist, a believer in original sin, she deplored the culture of hedonistic individualism that flourished in the 1980s and beyond. She naively believed the family, private property, the church and ancient institutions would help serve as bulwarks against permissiveness and chaos. She believed the fall of the Soviet Union and the defeat of communism would herald a new order of peace and free market prosperity under the rule of law. It did not happen. It could never have happened.Source: http://www.newstatesman.com/politics/2013/04/liberal-left-struggled-understand-margaret-thatcher-when-it -finally-did-result-was-4.2 ‘Margaret Thatcher: The Lady and the Land She Leaves Behind’Her legacy is public division, private selfishness and a cult of greed that together shackle the human spiritEditorial, The Guardian, 8 April 2013 [Extract]When she arrived in Downing Street in 1979 she talked about replacing discord with harmony. She may briefly have meant it, but the harmony she sought in the long term was one whose terms were set overwhelmingly in the interests of the British business class as she perceived them. She disdained the public realm and presided over the growth of the cult of marketplace success as the foundation of a good society – a low-tax, home-owning, privatised, high-carbon, possessive, individualist, winner- 17 takes-all financial model whose failure haunts the choices still facing this country today. Much was wrong with the Britain she inherited in 1979, undemocratic union power among them, and many things, though not wrong in themselves, were unsustainable without radical change, including some nationalised utilities. Britain would have had to alter radically in the 1980s and 90s, and the process would have been hard and controversial. But, as Germany and other northern nations have shown, economic dynamism has been possible without the squandering of social cohesion that Mrs Thatcher promoted.In the last analysis, though, her stock in trade was division. By instinct, inclination and effect she was a polariser. She glorified both individualism and the nation state, but lacked much feeling for the communities and bonds that knit them together. When she spoke, as she often did, about ‘our people’, she did not mean the people of Britain; she meant people who thought like her and shared her prejudices. She abhorred disorder, decadence and bad behaviour but she was the empress ruler of a process of social and cultural atomism that has fostered all of them, and still does.Source: http://www.guardian.co.uk/commentisfree/2013/apr/08/margaret-thatcher-editorial4.3 David Marquand, ‘The Warrior Woman’, New Statesman, 26 Feb. 2009 [Extracts] Thatcher’s crusade was not only, or even primarily, economic in character. ‘Economics’, she said herself, ‘are the method. The object is to change the heart and soul.’ The Tory nationalist tradition, of which she was the greatest 20th-century embodiment, has always been haunted by the spectre of what an even greater embodiment, Lord Salisbury, once called ‘disintegration’. Tory nationalists are always on the watch for a downward slide into a Hobbesian state of nature, where there would be no authority to check the destructive passions of undisciplined individuals. Thatcher’s frequent hymns to the free market obscured her real purposes. In truth, it was the disciplines of the marketplace that attracted her, not its freedoms. Her objection to collectivism was not so much that it misallocatedresources as that it produced ‘moral cripples’. The changed souls she hoped to see would be those that had reigned in the idealised 1930s Grantham of her later imagination: abstinent, provident, self-reliant and, above all, disciplined. And discipline was learned first in the family, the nursery of self-reliance and the chief bulwark against social chaos.She wanted to free enterprising individuals from the dead hand of the state, but she did not want the individuals she freed to sink back into hedonistic self-indulgence. She wanted them to incarnate the puritan virtues extolled by the champions of the entrepreneurial ideal of the early 19th century: to work hard, to defer gratification, to deal fairly, to respect authority, to live within their means and to put something aside for a rainy day – in fact, to behave as she thought her redoubtable father, Alderman Roberts, had behaved. The 1986 ‘Big Bang’ that opened up the City to an influx of foreign firms and laid the ground for the speculative frenzy that brought us to our present pass occurred on her watch. But she would have been appalled, or at least incredulous, if she had been told that the end result would be an economy and society awash with debts that no one could repay and toxic assets whose extent no one could fathom.‘There is no such thing as society,’ ‘Markets know better than governments’ . . . the mantras of high Thatcherism are no longer heard.The greatest irony of the Thatcher crusade is that its economics pulled against its ethics. I doubt if the idealised abstinent, puritanical, self-respecting Grantham of her imagination ever existed in the real world. It certainly didn’t exist in her Britain. As a quick reading of the Communist Manifesto would have warned her, free-market capitalism is, of its very essence, subversive. It is restless, heaving, masterless, wonderfully dynamic and creative, but, in itself, utterly amoral. The hot breath of the cash nexus dissolves the ties of faith, community, family and tradition. And, as Friedrich von Hayek pointed out more vigorously than any critic of the free market, entrepreneurial success has nothing to do with merit or fairness. It is about satisfying wants and even at times about creating or manufacturing them; and the wants are as likely to be bad as good. The speculative frenzies and spectacular frauds that have studded its history are of its essence, too: among the forces that drive it, 18 greed, credulity and the herd instinct loom much larger than the rationality that most economists celebrate.Thatcher’s tragedy was that she forgot – or perhaps had never learned – these truisms. Under her, the market was freed up, though not as much as she and her colleagues imagined. But the remoralised souls she had dreamed of obstinately failed to appear. The Thatcher years brought immense changes to the culture and the moral economy – the network of moral assumptions and codes of behaviour that tells economic actors high and low how they ought to behave. They were not, however, the changes she had hoped for.Authority and discipline were not restored, either in the state or in society at large; on the contrary, they were further undermined. One reason was that the government’s attempts to use the powers of an increasingly aggressive central state to end what it called the ‘dependency culture’ turned swaths of respectable Conservative opinion against it, notably in the struggle over the poll tax. Another was that nimble-footed cultural entrepreneurs found that mocking authority sold better than sustaining it. A third was that the instrumental, individualistic hedonism of the marketplace increasingly pervaded other spheres as well, overwhelming old barriers of custom and duty. Thatcher may or may not have realised this. If she did, she must have been grievously disappointed. But she had sown the wind, and had to reap the whirlwind. [...]As for the puritan virtues, they were scarcer in 1990 than they had been in 1979, while a coarse-grained consumerism swept through the land. The raucous, ostentatiously vulgar hedonism of the Sunpainted a more accurate picture of social attitudes than Hayek’s hymns to the ‘Great Society’. Perceptive commentators noted the rise of a new, know-nothing ‘plebeian’ culture in place of the self-respecting working-class culture of old days, and the rising tide of football violence during the 1980s suggested that they were right. In a different sphere, the City was rocked by scandal as rough, tough upstarts pushed aside the gentlemanly capitalists who had once given it its tone. An emblematic moment came in 1987, when four private speculators were successfully prosecuted for conspiring to force up the price of Guinness shares during a takeover battle. The bonus culture, like the debt culture of which it was part, was born under Thatcher, not under Gordon Brown. At this point, however, the story takes an unexpected turn. Thatcher and her followers were not the sole authors of the authority-sapping cultural revolution of the age. It had left-wing as well as right-wing antecedents. Of course, the intellectuals of the left loathed her and all her works. They saw her as a tyrannical and philistine harridan, a kind of female Stalin of the right, out to crush the values and interests they most valued. (It was not an accident that one of their most characteristic productions was the journal Samizdat.) They stood – or thought they stood – for solidarity, compassion and social justice, and they did their unsuccessful best to defend the institutions that embodied these from her onslaught. When her party toppled her at last, they felt like dancing in the streets.Yet they deserved much of the credit (or discredit) for the early successes of the Thatcher crusade. The crisis of authority that made it possible owed far more to the left than to the right. The hypnotic oratory of Enoch Powell and the self-flagellating rhetoric of Keith Joseph would have found no audiences, but for the chaotic incoherence of the Wilson-Callaghan government of the 1970s, the lumpen excesses of the trade unions and the left intelligentsia’s blindness to the collapse of the democratic collectivist tradition in which it had been brought up. [...] At first sight, New Labour was different. Tony Blair certainly talked the language of public duty, and even stressed his debts to the once-famous philosopher of community John Macmurray and the charismatic Australian churchman Peter Thomson. Gordon Brown – famously a ‘son of the manse’– spoke eloquently of his moral compass. But though their sincerity is not in doubt, the style of their governments and the content of their policies belied their moral commitments. Peter Mandelson’s famous remark that New Labour was ‘intensely relaxed about people getting filthy rich’ and Alastair Campbell’s throwaway line ‘We don’t do God’ tell us more about New Labour’s economics than Blair’s Christian faith or Brown’s Presbyterian parentage. Under Blair and Brown, as under Thatcher, duty and morality were for Sundays. During the rest of the week, hedonistic consumerism marched on. 19 The results lie all around us. The crisis of renascent capitalism which now engulfs the globe is not solely economic. It is, above all, a crisis of the moral economy. [...]Source: http://www.newstatesman.com/uk-politics/2009/02/thatcher-social-moral-society4.4 Two Accounts of the British Welfare StateWelfare state. There are many theories as to why the welfare state developed, from the radical view of its serving the needs of capitalism by maintaining political stability and providing healthy, educated workers, to the democratic perspective that it arose from the demands of the working class expressed through the ballot box. It has been called ‘an erratic and pragmatic response of government and people to the practical individual and community problems of an industrialised society’.In the laissez-faire, capitalist, self-help ideology of the 19th century fears of dependency and disincentives for the poor resulted in harsh measures based on the workhouse. At the turn of the century Booth’s (London) and Rowntree’s (York) studies, revealing the facts of poverty and showing its origins in social and economic conditions, helped to raise awareness of the problem and set the stage for reform. Measures taken by Asquith’s Liberal government, with Lloyd George as chancellor, represent the foundations of the British welfare state. Non-contributory old-age pensions (1908), paid for by higher taxes (‘the People's Budget’, 1909), and the National Insurance Act— Health and unemployment (1911) were the most important reforms. In the inter-war years the problem of unemployment dominated social policy; the insurance scheme could not cope and in 1931 the dole was cut and a family means test implemented, a return to relief based on Victorian deterrent values.The Second World War threw people together, and in the relative social cohesion of the war years they determined that ‘never again’ should there be a return to the misery of the 1930s. The Beveridge Report (Report on Social Insurance and Allied Services, Cmd. 6404) gave shape to these ideas. Beveridge identified ‘five giant evils of Want, Disease, Squalor, Ignorance and Idleness’ and, to fight each evil, ‘five giants on the road to reconstruction’: social security, a national health service, housing provision, state education, and a commitment to full employment. In July 1945 a Labour government, fully committed to wholesale reform, was elected in a landslide general election victory. Led by Clement Attlee, it lasted until 1951 and founded the modern British welfare state. Poverty was to be conquered by a commitment to full employment together with social insurance. The coalition government’s 1944 Employment White Paper made explicit all-party acceptance of Keynesian demand management to combat unemployment. Social insurance provisions, based on Beveridge, were a move from selectivity to comprehensive coverage. Compulsory contributions to a National Insurance scheme provided for incomes during sickness, unemployment, widowhood, and retirement; there was also a means-tested safety net, national assistance (now income support), and family allowances (now child benefit). The National Health Service Act (1946) provided for free health care for all regardless of means, and the birth of the NHS in 1948 was a triumph for Aneurin Bevan, minister for health. Education reform had been initiated by R. A. Butler, Conservative education minister in the coalition government, in his 1944 Education Act. The school-leaving age was to be raised to 15 and there was free secondary education for all. Finally, council housing was to solve the problem of homelessness and squatting which followed the end of the war.Throughout the 1950s and 1960s there was cross-party consensus on the welfare state. In the 1970s the consensus was challenged from the right by neo-liberals who wanted to ‘roll back the state’. Their arguments, together with rising unemployment, reawakened concern over costs and a ‘dependency culture’. The election of a Conservative government under Margaret Thatcher in 1979 led to debate on the future of the welfare state, but few measures to reduce its scope were taken until after the third Conservative election victory in 1988. The debate continues: broadly there are two interrelated issues: the universalist One Nation approach versus a means-tested safety-net system, and the sustainability of the costs of provision.Source: Margaret Wilkinson, ‘Welfare State’. The Oxford Companion to British History. Ed. John Cannon. Oxford University Press, 1997. Oxford Reference Online. 20 Welfare state. A system in which the government undertakes the main responsibility for providing for the social and economic security of the state’s population by means of pensions, social security benefits, free health care, and so forth. 1942 the Beveridge Report in the United Kingdom proposed a far-reaching ‘settlement’, as part of a wider social and economic reconstruction, once victory in the Second World War was secured, and became the blueprint for the British welfare state. By 1944 a White Paper made full employment the first goal of government economic policy, and the Butler Act provided for universal secondary education. Labour, however, won the 1945 general election, to a considerable extent because they appeared more wholeheartedly in favour of the Beveridge plan. The key measures which followed, largely implementing the plan’s essential features, were the National Insurance Act 1946, the National Health Service Act 1946, and the National Assistance Act 1948. An ambitious programme to build a million homes was also launched. By 1948 The Timesnewspaper proclaimed in an editorial that these measures had created ‘security from the cradle to the grave’ for every citizen.These measures were the foundation of the ‘welfare state’, which was seen as synonymous with ‘social security’. In a specific sense this meant entitlements to benefits under the newly established national insurance and assistance schemes. In a wider sense it referred to the other reforms implemented at the time, particularly the guarantees of full employment and access to a national health service free at the point of use. Underlying all this, however, was a new conception of the relationship between the state and the individual within a market-based society. This was based on an acceptance of the need for extensive intervention to ensure that its worst effects were mitigated, on the grounds that their causes were systemic rather than the fault or responsibility of individuals.Nevertheless, behind the apparent consensus on the need for a welfare state, there was political conflict on its meaning between ‘reluctant collectivists’ in the liberal tradition (such as Beveridge himself) who saw the reforms of the 1940s as a high-water mark, and reformist socialists who saw it as a framework for developing a more concerted shift towards a planned and egalitarian society. A small minority of commentators, such as Hayek, were never convinced of the need for the welfare state in the first place and remained resolutely ‘anti-collectivist’.The growing ‘crisis’ of the welfare state since the 1970s can be seen as due to changed economic and social circumstances, a disintegration of the post-war consensus, or both of these. Undoubtedly, growing economic pressures were making it harder to meet more insistent demands for improved services, and increased social needs due to changes in family patterns, more older people, and growing numbers of unemployed people. On the other hand, the ‘welfare state’ had been increasingly criticized within a more polarized political culture. Critics from the right argued that by removing responsibility from the individual, the welfare state stifled people’s initiative to solve their own problems. Critics from the left agreed in part that the welfare state as it currently stood was often ‘oppressive’, but attributed this to a failure to attack the root causes of class, gender, and ‘race’ inequalities.Even before 1979 there were discernible shifts by the 1974–9 Labour government after the expenditure crisis of 1976 towards retrenchment and ‘restructuring’ of welfare in ways that responded most to right-wing rather than left-wing critics. However, after the Conservative election victory of 1979, this shift occurred in a more concerted way and there have been substantial reforms in all of the services established as a result of the Beveridge Report, though only in one, housing, could there be said to have been significant retrenchment in provision. In other areas, there have been a tightening of eligibility rules and shifts to decentralization of managerial responsibility within tighter centralized control of finance. Perhaps most controversial of all has been the reform of the National Health Service in 1990, against widespread opposition, to create an ‘internal’ market within a socialized system.In a wider sense, there has been a significant shift from Beveridge’s assumptions. Most importantly, there was a shift in economic priorities from maintaining full employment to controlling inflation. The modest redistribution of income and wealth achieved up to the 1970s, was reversed by cuts in income tax and a shift to more regressive forms of indirect taxation like value added tax (VAT). Despite all this, by the end of the 1980s the welfare state had been ‘restructured’ rather than abolished. 21 It was suggested that a new ‘welfare pluralist’ consensus had emerged in which it was accepted that private, state, and voluntary sectors could exist side by side. [...]Source: Mick Carpenter, ‘Welfare State’.The Concise Oxford Dictionary of Politics. Ed. Iain McLean and Alistair McMillan. Oxford University Press, 2003. Oxford Reference Online. 4.5 Margaret Thatcher on ‘Victorian Values’Source: http://www.margaretthatcher.org/speeches(i) 16 Jan. 1983: TV Interview for London Weekend Television Weekend World [Extract, with minor corrections] Brian WaldenAll right Prime Minister, let me swing away from the economy now, to ask you something rather more general but I think very important. Politics isn’t all about promises and pledges and rates of inflation and percentages. A great deal of it is about vision. People have to get a feel of what they’re being offered and why they’re being offered it. Now, in your case, I happen to personally believe that this is rather more important both for good and for ill—as far as the Conservative Party is concerned—than it has been with most Prime Ministers for a long time, so can I ask you—What sort of Britain do you eventually want? —and give you some bench-marks to go at. Am I wrong when I say that what you seem to be looking for is a more self-reliant Britain, a thriftier Britain, a Britain where people are freer to act, where they get less assistance from the State, where they’re less burdened by the State, is that the sort of Britain that you want to bring about at the end of your Premiership? Margaret ThatcherYes, very much so; and where people are more independent of the State. I think we went through a period when too many people began to expect their standard of living to be guaranteed by the State, and so great protest movements came that you could, by having sufficient protests, sufficient demonstrations against Government, get somehow a larger share for yourself, and they looked to the protest and the demonstrations and the strikes to get a bigger share for them, but it always had to come from the people who really strived to do more and to do better.Brian WaldenAll right, now you know, when you say you agree with those values, those values don’t so much have a future resonance, there’s nothing terribly new about them. They have a resonance of our past. Now obviously Britain is a very different country from the one it was in Victorian times when there was great poverty, great wealth, etc., but you’ve really outlined an approval of what I would call Victorian values. The sort of values, if you like, that helped to build the country throughout the 19th Century. Now is that right?Margaret ThatcherOh exactly. Very much so. Those were the values when our country became great, but not only did our country become great internationally, also so much advance was made in this country. Colossal advance, as people prospered themselves so they gave great voluntary things to the State. So many of the schools we replace now were voluntary schools, so many of the hospitals we replace were hospitals given by this great benefaction feeling that we have in Britain, even some of the prisons, the Town Halls. As our people prospered, so they used their independence and initiative to prosper others, not compulsion by the State. Yes, I want to see one nation, as you go back to Victorian times, but I want everyone to have their own personal property stake. Property, every single one in this country, that’s why we go so hard for owner-occupation, this is where we’re going to get one nation. I want them to have their own savings which retain their value, so they can pass things onto their children, so you get again a people, everyone strong and independent of Government, as well as a fundamental safety net below which no-one can fall. Winston [Churchill] put it best. You want a ladder, upwards, anyone, no matter what their background, can climb, but a fundamental safety net below which no-one can fall. That’s the British character. 22 Brian WaldenShall I put to you the argument that I think is most likely to be put against that, and by the way I’m bound to say an extremely frank and revealing statement of your basic attitudes. But a lot of people will say, ‘Well, it’s all very well Mrs Thatcher talking about Victorian values and citing self-reliance and all these excellent things, but that isn’t going to give us equality. If we’re going to have those sorts of values we’re going to have a more unequal, or at least an equally unequal society than the one we’ve got at the moment. Thatcher will never give you equality.’ Now what do you say to that?Margaret ThatcherThose nations that have gone for equality, like Communism, have neither freedom nor justice nor equality, they’ve the greatest inequalities of all, the privileges of the politicians are far greater compared with the ordinary folk than in any other country. The nations that have gone for freedom, justice and independence of people have still freedom and justice, and they have far more equality between their people, far more respect for each individual than the other nations. Go my way. You will get freedom and justice and much less difference between people than you do in the Soviet Union.Brian WaldenAll right, then that’s your view on equality. What would you say to those people who are not necessarily equalitarians, but say, ‘The trouble is, Mrs Thatcher, we don’t find your vision compassionate enough. You’re not—you’re too concerned with various economic regenerations and all the rest of it. You don’t appear to have sufficient compassion, either in your character or in your Government.’ Now what would you say to that?Margaret ThatcherCompassion isn’t determined by how much you get together demonstrations in the street to protest to government that government, which is other tax-payers, must do more. It’s determined by how much you are prepared to do yourself. Of course we have basic social services, we will continue to have those, but equally compassion depends upon what you and I, as an individual, are prepared to do. I remember my father [Alfred Roberts] telling me that at a very early age. Compassion doesn’t depend upon whether you get up and make a speech in the market-place about what governments should do. It depends upon how you’re prepared to conduct your own life, and how much you’re prepared to give of what you have to others.Brian WaldenAll right, now I think we’ve learnt from you this morning in very clear terms what the resolute approach means. It means that your options on the general election are open from June onwards, you haven’t pre-empted them. It means that you feel that the pound may well rally and you don’t think it’s going to have a great impact on inflation. We’ve learnt that you’re still very, very firm on nuclear weapons and that you feel that it’s the Russians that must make the concessions. We’ve learnt on the economy that you more or less intend to adhere to what you’ve been following through. Can I ask you a very last question, for unfortunately a very brief answer. What do you say to those people, and there are some you know, who say, ‘The ends are all splendid, it’s the means, does she have to be so bossy, does she have to be so strident, couldn’t it all be done much more emolliently and consensually?’ What would you say to them?Margaret ThatcherConsensually, anyone who’s had any convictions has always put those convictions. There would have been no great prophets, no great philosophers in life, no great things to follow, if those who propounded the views had gone out and said ‘Brothers, follow me, I believe in consensus.’ No Brian, no.Brian WaldenSo it’s going . . . it’s the tough approach, verbally as in every other way?Margaret ThatcherNo, it’s the sincere approach. Brian WaldenAll right . . . 23 Margaret ThatcherBorn of the conviction which I learned in a small town by a father [Alfred Roberts] who had a conviction approach.Brian WaldenPrime Minister, thank you very much indeed.(ii) 15 April 1983: Radio Interview for IRN programme The Decision Makers [Extract, with minor corrections] PACan I turn from the immediate problems of unemployment to a wider perspective, Prime Minister? I would like to examine what kind of country Britain will become in the next decade. I would like to begin as well by asking what you meant recently when you talked about Victorian values. What values are they? What do you mean?MTWell, there is no great mystery about those. I was brought up by a Victorian grandmother. You were taught to work jolly hard, you were taught to improve yourself, you were taught self-reliance, you were taught to live within your income, you were taught that cleanliness was next to godliness. You were taught self-respect, you were taught always to give a hand to your neighbour, you were taught tremendous pride in your country, you were taught to be a good member of your community. All of these things are Victorian values. PAThe Victorian values also seem to encompass for many people . . .MTThey are also perennial values as well.PAThey encompass as well work-houses and shocking conditions in industry, all sorts of deplorable things that were also part of the Victorian scene.MTThere are some values which are eternal and in fact you found a tremendous improvement in conditions during Victorian times because people were brought up with a sense of duty. I was brought up with a very strong sense of duty. And part of the sense of duty was if you were getting on better, you turned yourself to help others; that as you did better yourself so you had a duty to your community to turn to help others. And so, as you got an increasing prosperity during Victorian times and as you got an immense national pride during Victorian times, so you had a duty voluntarily to help others. And many of the very good things, the improvements that were made, were made voluntarily in those times, for example, people built hospitals, there were voluntary hospitals. Many of the church schools were built during that time. Many people say we simply must do better with the prisons, a better prison system, prison reform but it came from this tremendous sense of reliance and duty. You don’t hear so much about those things these days, but they were good values and they led to tremendous improvements in the standard of living. PASo that’s what you’re trying to get back to. That’s what you would like to see happen, a society where we had those sort of values where perhaps the state steps back again then, and individuals get far more involved. MTI am saying that I think there are some values which are eternal and I think the ones I have indicated are. PAYes, but what kind of society does that result in if people adopt those values then we have . . . MT 24 If I may say so a very good society if people are self-reliant, self-respecting, if they always lend a hand to others, if they were always to improve themselves and work very hard to do it. If they reckon that they have got to be very good members of the community, not because any one tells them to, because that’s the way we live. If they live within their income and save and that saving is there for investment. If they are prepared to take responsibility for their own actions, and responsibility for their own families and to respect other people’s rights, it seems to me that you have the basis of an excellent society. PACan you do anything to help create that excellent society? Do you for instance try to cut back on some areas of state activity so that you generate that kind of atmosphere in which that thing happens?MTThe state can only take things from people. If people take responsibility for the work they do, for working harder, for living within their income, for looking after themselves and their families, then there might indeed be fewer people who in fact need the help of the state and then everyone could have more of their own money, in fact, to choose how they spend it. You asked me how I see life quite apart from those things. I am very keen that every person should have the opportunity to be what I would call a man or woman of property. You start by owning your own house. We are nearly up to60%. It is tremendous, because a man of property isn’t someone else, it’s one’s own self. And so therefore you have a chance to own your own house then it gives you an interest in the future, gives you respect for your own property, it gives you ability to improve your own standard of living in housing and then to respect other people’s property. And you will have something to hand on to your children and grandchildren in years to come. And then your own savings, this is the kind of independence, this is the kind of personal initiative and personal choice which I believe is the kind of independence which used to belong to a few people which I want to extend to the many.PARight, you would like everyone to have freedom of choice to buy their own property, probably to choose the kind of education their children have, to choose the kind of medicine in which their family partakes whether private or National Health. But surely those kinds of advantages, to return to what we said earlier, are only offered to those with; offered to the haves, not to the have-nots, not to people without jobs. They are for the people with money. MTWith all due respect, we unfortunately have just over 3 million unemployed in this country and we have the 22 to 23 million people who are working. Nearly 60% of the houses in this country are now owner occupied. Many, many more people are applying to buy their own homes. The savings ratio is 9, 10, 11 or 12%; and that is good. I’m trying to make certain that people who save, the value of their savings is kept. Wouldn’t life have been better and much different for many of our old folk if the money they had put aside out of very much lower wages in Victorian values years ago had in factkept its value because we had governments which had tried to keep inflation down? We would have a very much better society and we wouldn’t have cheated those old people of the value of their savings. What I am saying is something within the reach of everyone if they wish to take it. Yes, we certainly have to try to get more jobs and I have indicated how we are going to do it, but I want everyone to have these kinds of opportunities. They are opportunities partly of a way of life, but a Government has got to act in such a way that these opportunities are available and that the people who do everything right, in this way, do have the benefits of their own home, have the benefits of their savings keeping their value, have the benefits of a higher standard of living, have the benefits of being able to pass them on to their children, and society has the benefits because you get a responsible society which consists of a society of responsible people. 25 (iii) 5 June 1983: TV Interview for LWT Weekend World [Extract, with minor corrections] Brian WaldenMrs Thatcher, before the break we were talking about the issues of unemployment, public expenditure, the Health Service etc. These are the vital details of politics and nobody denies it. But there’s another side to politics— the broader vision. Now, I want to talk to you about that now. When I spoke to you in January, I suggested to you that you believed in Victorian values, and you agreed that you did and subsequently went on and defined certain values that you thought were terribly important. Let me put to you what a lot of people have said in response to that and I think it’s a vital issue in terms of how you see the future of Britain, assuming you’re going to win on Thursday. People say, ‘Yes, Mrs Thatcher will win. Yes, the majority do agree with her about these things, but isn’t there a much darker side to Victorian Britain, and isn’t there a much darker side to Thatcher Britain? What about the minority? The people who don’t agree with her. The people who perhaps are not always a great success in life. She has no compassion and no understanding towards them at all.’ Now, would you accept that that’s so?Margaret ThatcherNot at all. Are we answering it by reference to the Victorian Age, because one of the characteristics ofthe Victorian Age was they actually tackled these things. And as prosperity grew and automation came in, or mechanisation came in, and industry became more prosperous, they actually tackled the dark side of the age. You'll remember it was during that period . . . Brian WaldenNot that wildly successful at it, were they?Margaret ThatcherWell, let me say, during that period that was when education became compulsory. Look at the number of schools that were built in Victorian times. I know, having been Secretary of State for Education, we were constantly replacing them. Look at the number of hospitals that were built in Victorian times. Look at the way all the great voluntary societies grew. The essence of Victorian times, they said yes, they said there is a dark side, now let’s tackle it. I don’t know of any time when the tackling got faster. The Disraeli period, you’ll remember, yes he did tackle the problems. I say education became compulsory, the hospitals were built, they even tackled some of the dark side of prison life. So as they prospered, so they used their money in voluntary societies and so they used their money to build the schools and hospitals, and that was when the great increase in standard of living began to occur. The point is this; they rose to the challenge of their times as I believe we, in the Conservative Party, are trying to rise to the challenge of ours.Brian WaldenBut whatever its merits, of that age, and indeed some people would say of your age, whatever the merits and I wouldn’t deny some of them, nonetheless it was an unequal and a divided society, a society in which failures knew they were failures, in which in fact the government was not prepared to do a great deal to assist them. Now aren’t you worried about creating—supposing you win big on Thursday and everybody says you will, tremendous celebrations round the Tory Central Office – but aren’t you worried about a society that will have within it the seeds of great inequality, great division, maybe great bitterness. Doesn’t that worry you at all?Margaret ThatcherThe Communist creed set out to be equal for all people. It has turned out to have the greatest inequalities in it of any society today. You cannot have liberty and equality in the sense that you all have the same standard of living. If you go out for liberty you are giving people to use their talents and abilities according to how they have them. In doing so they will prosper not only themselves, but they’ll produce jobs and an increased standard of living for others. So you can’t have liberty and equality in the sense of material equality. You can have liberty and equality in the sense that all have equal rights, all are equally important, all different, all with different talents. What you can have is liberty and fraternity. Now, it is the fraternity, the voluntarily helping people, as well as having your National Health Service and your pensioners. And do you know, if you look back to the Beveridge 26 Report he did not attempt to substitute state help for voluntary help in any way. He gave state help, yes, but added to it there must be plenty of scope for voluntary help and personal self-reliance. So you can have liberty and fraternity. Brian WaldenWell, that’s a most interesting statement and an admission, I suppose admission is the wrong word, a straight statement that material inequalities are bound to arise and that in fact material inequalities are not in themselves damaging because there is a spin-off effect to those at the bottom.Margaret ThatcherIf you don’t have any incentives you really won’t have people going flat out to work. If they don’t, you won’t get the new products, the new businesses or anything.Brian WaldenI follow that line of reasoning. I don’t say I agree with it, Weekend World has no opinion, but I follow the line of reasoning. Let me put this to you. A lot of people say, ‘Yes of course she believed that sort of thing. Margaret Thatcher’s been a great success in life, all credit to her in many ways. She can’t understand that anybody else would fail. She really can’t believe that people wouldn’t take opportunities, but in this vale of tears the world is full of people who don’t take their opportunities, who are failures, who know they’re failures.’ Have you no sympathy for them?Margaret ThatcherNow, look, people who don’t take their opportunities aren’t necessarily failures. I mean, some people may have said, ‘All right, I do not want to take the tremendous dedication and effort that’s necessary to climb to the top in my job, maybe I will be satisfied with a lesser standard of living.’ In our society they are free to do that. They are not necessarily failures. To say that either you succeed brilliantly or you fail I think is totally to misunderstand the nature of our society. And you can’t all be great football men, you can’t all be great sportsmen, great singers, great captains of industry, but many people succeed according to their talents, or they say ‘All right, I do not want to work as hard as some of those who climb to the top. I want to have more time for my hobbies.’ Why not?Brian WaldenBut what I’m getting at is this—and indeed why not? Someone said the other day that maybe it’ll be a wonderful age when we’re all unemployed, present company excepted of course. Margaret ThatcherI think you’re being a little bit extreme.Brian WaldenWell, one takes the line that they’re getting at. But what I want to put to you really is this. That, do you really in your guts feel the sort of sympathy that people, I suppose on the left traditionally, but a lot of people in general in society feel, a certain conscience about a society in which goodness of heart and splendid hobbies don’t produce material rewards, they can’t – you lose out on material rewards and therefore you fall to the bottom of the pile. A lot of people feel a conscience about this, they feel that the society that is that unequal is not a pleasant society to live in. Now, why do you say it is?Margaret Thatcher How in the world can you produce the resources to help those who you say are at the bottom of the pile unless you encourage your wealth creators?Brian WaldenThe government can give it to them.Margaret ThatcherNo, no, where does the government get it from?Brian WaldenFrom the taxpayer. Margaret ThatcherAnd where does the taxpayer get it from? From work. And where do you get the work from? From those who create the new business, the new services, the new shops, distributive . . . . You cannot do without the wealth creators in your society, and if you discourage them you won’t be able to help 27 those who are, as you say, at the bottom of the pile. Look, let me say this. I believe everyone wants and needs some work to do, wants and needs a job. Why do you need it? Because you need to know that you are important in life. You need to know that you are important to your community, that you belong to something. And this is why I struggle so hard with the right strategies to provide those people with jobs, and I shall go on struggling.(iv) 23 Sept. 1987: Interview with Douglas Keay forWoman’s Own [Extract, with minor corrections]Editorial comments:1600-1720. An edited version of the interview was published on 31October 1987 (under the title ‘Aids, Education and the Year 2000!’), pp. 8-10. Douglas Keay faithfully reproduced MT’s reflections on society, although in the transcript the phrase ‘There is no such thing as society’ occurs a few paragraphs below its position in the published text. Most unusually a statement elucidating the remark was issued by No. 10, at the request of the Sunday Times and published on 10 July 1988 in the ‘Atticus’column: it follows the interview transcript.Douglas Keay, Woman’s Own[Question paraphrased for reason of copyright] When I first interviewed you six or seven years ago you used almost the same words. Government statistics show divorce rate under 35 is nearly 50%, abortions have nearly doubled. We seem to have more violence, we have the yuppies of the City sort of violent with money. We have competition and free enterprise and it seems somehow to go together with greed. Prime MinisterNo, it does not go with greed at all. Most of us work so that our children can have a better life than we do. Most of us work so that if grandma needs help we can have something in our pockets ready to help or to give them a treat they might not otherwise have. I remember going round a housing association for older folk and going into a room. It looked absolutely lovely and I said: ‘Oh!’ and she said: ‘Look! I have got fitted carpets throughout my small flat!’ She said: ‘My son is doing very well. He treated me to them!’ Another said: ‘My son is doing very well. He paid for me to go overseas! Aren’t I lucky’ they said ‘to have such good families!’ Now, they could not have done it unless they had worked hard for a higher salary and, yes, for money. There is nothing wrong with doing that. That is the great driving engine, the driving force of life. There is nothing wrong with having a lot more money. Every church which needs to be cleaned will have to appeal for money. If it needs its roof replaced, every historic building will have to appeal for money. You want to help some children to do things they might not otherwise do, you appeal for money. It is not the fact of having money. It is whether it becomes the sole or only thing in your life and you want money because it is money. The exercise of the spirit and the inspiration is what you do with that money. There is nothing wrong in wanting more.Douglas Keay, Woman's Own[Question paraphrased for reason of copyright] . . . in deterioration . . . [mistranscription?] Prime MinisterWhat is wrong with the deterioration [mistranscription?]? I think we have gone through a period when too many children and people have been given to understand ‘I have a problem, it is the Government’s job to cope with it!’ or ‘I have a problem, I will go and get a grant to cope with it!’ ‘I am homeless, the Government must house me!’ and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations, because there is no 28 such thing as an entitlement unless someone has first met an obligation and it is, I think, one of the tragedies in which many of the benefits we give, which were meant to reassure people that if they were sick or ill there was a safety net and there was help, that many of the benefits which were meant to help people who were unfortunate—‘It is all right. We joined together and we have these insurance schemes to look after it.’ That was the objective, but somehow there are some people who have been manipulating the system, and so some of those help and benefits that were meant to say to people, ‘All right, if you cannot get a job, you shall have a basic standard of living!’ but when people come and say ‘But what is the point of working? I can get as much on the dole!’, you say: ‘Look, it is not from the dole. It is your neighbour who is supplying it and if you can earn your own living then really you have a duty to do it and you will feel very much better!’There is also something else I should say to them: ‘If that does not give you a basic standard, you know, there are ways in which we top up the standard. You can get your housing benefit.’But it went too far. If children have a problem, it is society that is at fault. There is no such thing as society. There is a living tapestry of men and women and people and the beauty of that tapestry and the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us prepared to turn round and help by our own efforts those who are unfortunate. [...]Appendix Statement issued to Sunday Times, published 10 July 1988:All too often the ills of this country are passed off as those of society. Similarly, when action is required, society is called upon to act. But society as such does not exist except as a concept. Society is made up of people. It is people who have duties and beliefs and resolve. It is people who get things done. She [Margaret Thatcher] prefers to think in terms of the acts of individuals and families as the real sinews of society rather than of society as an abstract concept. Her approach to society reflects her fundamental belief in personal responsibility and choice. To leave things to ‘society’ is to run away from the real decisions, practical responsibility and effective action