The new Tory-Lib Dem coalition government claims to be heralding in a ‘new politics’. But a large layer of workers throughout Britain have recoiled in horror at the prospect of a Tory-dominated government, because of the vivid memories of the devastation caused in the years when Margaret Thatcher was prime minister. Here Robin Clapp, south west Socialist Party secretary, assesses Thatcher’s legacy.
She stood in Downing Street after her first election victory in May 1979 and spoke the soothing words of St. Francis of Assisi: “Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. Where there is despair, may we bring hope.”
Nine years later, after a ferocious assault upon the living standards and democratic rights of the working class, the mask of healer had slipped revealing the real face of Margaret Thatcher. Once again she sought religious guidance, but this time the words came from St Paul: “If a man will not work he shall not eat.”
Thatcher’s reign was a nightmare for workers. Even before she became leader of the Tory Party in 1975 she earned the title ‘milk snatcher’ for withdrawing free school milk from school students when she was minister for education.
To those women who thought a female prime minister might be a step forward in the battle for equality, her anti-working class actions quickly shattered their illusions. Over half of Britain’s working women were denied the right to maternity benefits, paid maternity leave and shorter working hours. Publicly funded childcare fell to the lowest level in western Europe.
Thatcher’s legacy was industrial devastation and increased poverty. Between 1979 and 1981 manufacturing output fell by a staggering 15%. The country was convulsed by rioting in 1980 and 1981, triggered by poverty, police repression and a widespread feeling that the government was hostile to ordinary people. Thatcher’s comment after the Liverpool Toxteth riot was confined to “oh those poor shopkeepers”.
Unemployment rose from 1.09 million in May 1979 to 2.13 million two years later and peaked at 3.13 million in 1986. Welfare rights and benefits were slashed, while the real scale of joblessness was hidden, with 28 changes in the way unemployment was calculated during the Thatcher years.
“Victorian values were the values when our country became great” she thundered in 1982 and in order to demonstrate her commitment to the social policies of the regressive 19th century, she presided over a bulging prison population, which by 1988 was the highest in the EU both relatively and absolutely.
The first Thatcher-led government was elected in May 1979. Britain had the lowest growth of productivity of any major industrial economy, falling profits, and an eight-fold increase of strikes compared to the 1930s.
With the Tory Heath government of 1970-1974 having been bloodied and eventually brought down by the National Union of Mineworkers (NUM) and other trade union struggles, Thatcher’s coterie decided that they needed to launch a major offensive against the working class and its organisations.
The Labour government of 1974-1979 had faced both economic and political crises, being forced to call in the International Monetary Fund for financial help in 1976 and then embarking upon the first sustained cutbacks to public expenditure witnessed since 1945. Forcing a rigid incomes policy upon the unions had resulted in growing industrial unrest, culminating in a series of public sector stoppages in 1978-1979.
Thatcherism
As early as 1977 the seeds of what became known as Thatcherism were sprouting. In a pamphlet called The Right Approach to the Economy, controlling money supply was emphasised, alongside lowering taxes, loosening pay differentials and removing ‘unnecessary’ restrictions on business expansion.
Monetarism, or supply-side economics, argues that inflation results when the government pumps money into the economy at a rate higher than the nation’s economic growth rate. Thus, government should keep a tight rein on the money supply and cut public expenditure. Supply-side economists maintain that this permits the economy as a whole to grow with business prosperity allowing a ‘trickle down’ effect throughout society.
Resorting very selectively to her bible, again she justified this stance in 1980 with her infamous comment that: “No one would have remembered the Good Samaritan if he’d only had good intentions. He had money as well”.
Thatcher’s government intended to abandon the post-war consensus of commitment to full employment, stating this was the responsibility of employers and employees. The government would no longer be a universal provider of services. This would be done by the market, the voluntary sector and self-help.
The Tories’ 1979 victory was a day of jubilation for the rich. On polling day the stock exchange enjoyed a record day as £1,000 million was added to the share index.
Alongside her Tory colleague Sir Keith Joseph who was a convert to the monetarist, pro-free market ideology of Friedrich von Hayek and Milton Friedman, Thatcher identified her mission as weaning Conservatives away from the corporate state and Keynesian panaceas, which she believed had helped bring about Heath’s downfall.
Attacking the unions
Hayek argued that liberty under a minimalist state was the ideal and that trade unions were the enemy of the free market. Thatcher echoed this prejudice in 1984 when she commented to the Financial Times: “I don’t believe that people who go on strike in this country have legitimate cause”. Neutering the unions became an obsession for the Tories. She was later to smear the heroic miners as ‘the enemy within’.
The crude application of monetarism was a disaster for the British economy. Manufacturing output fell sharply in 1980 and unemployment rose by more than any year since the 1930s. By 1981 output had fallen by 5.5% in two years. Crazily Thatcher forced through a budget that decreased taxes further while reducing public spending, precipitating an even deeper slowdown.
Most world leaders today have studied this period closely over the last two years and have learned that applying voodoo supply-side policies in a slump massively exacerbates its depth and longevity.
Entire areas of British manufacturing went to the wall in this period. The steelworkers fought a valiant battle to secure better wages and conditions but were betrayed by their leaders in 1980, only to see a massive closure programme unleashed upon their industry in preparation for privatisation.
Reiterating her mantra that ‘the way to recovery is through profits’ the British economy ground virtually to a halt, with imports of manufactured goods exceeding exports for the first time since the industrial revolution in Britain, the former ‘workshop of the world’.
According to Thatcher, the combination of Britain’s North Sea oil receipts and the expertise of the service sector, led by the banks and the City, was the answer to the discredited theory of needing a manufacturing base.
The sale of council houses, combined with the privatisation of profitable sections of state industry gave a big boost to the stock exchange. The City was freed from its ‘fetters’ in the ‘Big Bang’ of 1986, allowing an orgy of financialisation and profiteering to follow.
Big battles broke out between the classes as Thatcher sought to rip up the post-war consensus. By the end of 1981 her government was the most unpopular ever and her personal approval rating slumped to just 23%.
It was an accidental factor of history that saved the Tories’ bacon. Always a crude jingoist, whose conference speeches to the Tory faithful conjured up the image of an imperial Britain, Thatcher, in an interview with the Times, had talked of her belief in “freedom of choice and the British Empire, which took freedom and the rule of law to countries which would never have known it otherwise.”
In 1982 the Argentinean military junta invaded the British-owned Falkland Islands/Malvinas. This was a desperate diversion in order to quell a growing radical social movement across Argentina which could overthrow the right-wing dictatorship.
The invasion gave Thatcher, already delighting in the title of Iron Lady given to her ironically by a Soviet army newspaper, an opportunity to clothe herself in the armour of Boudicea. A vicious two month war left 255 British and 650 Argentineans dead, but her approval rating leapt to 51% as she unashamedly played the patriotic card, infamously justifying the sinking of the Argentinean ship Belgrano with great loss of life even as it was retreating from the battle zone.
US support was crucial in assisting the Tories in defeating the junta in Buenos Aires. In her years as premier Thatcher was always at pains to talk up the Anglo-US relationship.
Right-wing US Republican President Reagan and Thatcher were drawn together by a shared belief in the moral superiority of societies founded on free enterprise and the imperative which followed from that - confronting internationally the menace of Soviet ‘communism’.
The Falklands victory was the platform for the Tories’ victory in 1983, even though their vote fell 2% compared to 1979.
It was time to tackle the unions. Already the Tories had bared their teeth in encouraging Eddie Shah, the anti-union owner of the Stockport Messenger, who sought to break the National Graphical Association (NGA). This dispute presaged a national print workers’ struggle when Rupert Murdoch set out to smash union membership and agreed practices by moving his presses to Wapping. Fines were levied against the unions and the police used brutal force to attack picket lines in scenes that would become commonplace in the great miners’ strike of 1984-1985.
The trade union leaderships retreated in the face of these attacks and the strike was defeated. Thatcher became emboldened, egged on by siren voices from the Neanderthal parliamentary back benches, with Ronald Bell MP shrieking that “strike-breaking must become the most honourable profession of all.”
Extreme Thatcherite Norman Tebbit became employment secretary and started to put the boot into the unions. Eleven separate anti-union measures were unveiled in a decade. First union officials had their immunity removed from legal action by an employer not party to a dispute and secondary picketing was made unlawful.
Later the immunity of the national union was withdrawn too. Secret ballots were introduced for union elections and the minimum period of work after in which an employee could claim unfair dismissal was extended from one to two years.
Next came the removal of statutory support for the closed shop and protection was introduced against dismissal of non-union members. Wages acts were passed which abolished minimum wages for under-21s and added restrictions were placed on the use of union funds.
The big showdown came in 1984 when the announcement of the pit closure programme led to strikes across the British coalfield. The Tories had learned from the 1972 and 1974 miners’ strikes and had drawn up contingency plans to defeat the strike. This involved the building up of maximum coal stocks at power stations and contingency plans to import coal. Non-union lorry drivers were to be used to help move coal and dual coal/oil firing in all power stations was to be rushed forward.
Thatcher had stepped back from confrontation with the NUM in 1981, but by 1984 felt ready. At a cost of £500,000 a day, 20,000 police were employed across the coalfields to break the strike, organised through a central police coordination authority.
Thatcher hoped for an industrial Falklands, a short, sharp victory. In fact the strike lasted for over a year, opening up a chasm between the classes. It also revealed once again the cowardice at the top of the trade union movement as leader after leader squandered opportunities to assist the miners with industrial action, or like the shameful right-wing leadership of the electricians’ union, openly aided the Tories.
Nevertheless, Thatcher’s government came perilously close to being defeated as dockers, rail workers and other battalions stepped into the breach to defend their comrades. At the end, the strike had cost the economy £2 billion, a figure that Thatcher’s chancellor argued was “even in narrow terms a worthwhile investment for the nation”.
Privatisations were now stepped up with gas, electricity, water and BT being sold. Despite the claim that this was creating a share-owning democracy, only 300,000 people ended up owning a portfolio of over ten shares.
Council homes were sold off too. Between 1979 and 1988 home ownership increased by three million with Thatcher explaining: “I want a capital-earning democracy. Every man a capitalist. Housing is the start.”
Opposition
Liverpool City Council became a big thorn in her side in this period, because it actually built 5,000 council houses, leisure centres, etc, but mainly because the councillors under the political leadership of the Socialist Party’s predecessor Militant, refused to carry through cuts. They stayed loyal to the socialist convictions upon which they had been elected. “These people have no respect for my office”, she spat in parliament, for once speaking the truth.
Despite claims by historians that it was policy divisions over Britain’s further integration into the EU that were responsible for her removal in 1990, it was the mighty anti-poll tax rebellion that reduced the Iron Lady to iron filings. 18 million men and women, marshalled in the Anti-Poll Tax Unions with Militant supporters playing the key role, refused to pay the tax and defied all the venom that she threw at us.
In taking on everyone at once she had made a decisive error. Tory back benchers went into panic as the shires revolted and the cities became no-go areas. The Sunday Times’ Robert Harris thundered in 1991 that the Poll Tax fiasco was “a fatheaded, boneheaded, dunderheaded, blunderheaded, muttonheaded, knuckleheaded, chuckleheaded, puddingheaded, jobbernowled wash-out of a cock up…”
Thatcher famously once said: “the lady’s not for turning” but we turned her out. She left in tears, stabbed like Caesar by her panic-stricken Tory friends. But in truth destroyed by the fury of non-paying working class people.
She had closed 286 NHS hospitals and allowed poverty levels to rise to over 9.5 million. Under her watch the richest 1% had grabbed over one fifth of the total marketable wealth of the country.
On one level she was just another provincial Tory, narrow-minded, racist and xenophobic, a barely disguised bigot who once praised a chief police officer for linking the AIDS virus with God’s retribution upon gays.
Every era, however, calls for personalities required by concrete circumstances. If they do not exist in a rounded-out form, it invents them. Thatcher was required by capitalism to put the hatchet into the post-war welfare state and in her the bosses found an eminently suitable candidate. However, she polarised society and the Tory party itself, damaging it for a decade.
Completely blind to the workings of their system the economic experts were almost euphoric throughout the 1990s. Now the revenge of recession has devastated Thatcher’s legacy. The Anglo-American model of free markets has failed, as have all capitalist economic models.
The myth that minimally managed markets are more dynamic than those subject to extensive government has been crushed. In Greece and elsewhere workers and young people are taking action to fight back against the implications of the failure of the market system.
As Thatcher nears the end of her life, the ideology she saw as her worst enemy - socialism - is being looked to with increasing interest by workers and young people moving into struggle to defend their living standards.
New Labour inheritance
Thatcher was to be eventually removed in a Tory coup in 1990, following the poll tax debacle, yet her policies of curbing the trade unions, privatising state resources and deregulating the City of London, intimidated and then entranced the emerging New Labour leadership around Tony Blair and Gordon Brown.
In 2001 Labour’s Peter Mandelson tellingly said: “we are all Thatcherites now”, before enthusing that he was “intensely relaxed about people becoming filthy rich”.
Essentially New Labour represented a complete capitulation to the worst excesses of the capitalist market. Not for nothing did Thatcher praise Blair during his disastrous premiership, while Brown invited her to Downing Street for tea, praising her as a ‘conviction politician’ like himself. He even considered a £3 million state funeral for her, though millions would be happy to bury her for free - anytime.
