Postwar: A History of Europe Since 1945 (108 page)

The modern Conservative Party, from Winston Churchill to Edward Heath, had embraced Britain’s ‘social contract’ almost as enthusiastically as the Keynesian ‘socialists’ of Labour and for many years had kept its feet firmly planted in the middle ground (it was Churchill, after all, who remarked back in March 1943 that ‘there is no finer investment for any community than putting milk into babies’). When, in 1970, Edward Heath brought a group of free-marketers together at Selsdon Park near London, to discuss economic strategies for a future Conservative government, his brief and decidedly ambivalent flirtation with their rather moderate proposals brought down upon him a thunderstorm of derisory condemnation. Accused of seeking to return to the Neanderthal primitivism of the economic jungle, ‘Selsdon Man’ beat a hasty retreat.

If the British political consensus collapsed in the ensuing decade it was not because of ideological confrontation but as a consequence of the continuing failure of governments of
all
colours to identify and impose a successful economic strategy. Starting with the view that Britain’s economic woes were the result of chronic under-investment, managerial inefficiency and endemic labour disputes over wages and job demarcation, both Labour and Conservative governments tried to replace the anarchy of British industrial relations with planned consensus along Austro-Scandinavian or German lines—a ‘Prices and Incomes Policy’ as it was known in Britain, with characteristic empirical minimalism.

They failed. The Labour Party was unable to impose industrial order because its paymasters in the industrial unions preferred nineteenth-century style confrontations on the shop floor—which they stood a good chance of winning—to negotiated contracts signed in Downing Street that would bind their hands for years ahead. The Conservatives, notably Edward Heath’s government of 1970-1974, had even less success, largely thanks to the well-founded, historically-engrained suspicion in certain sectors of the British working class—the coalminers above all—of any compromise with Tory ministries. Thus when Heath suggested closing a number of uneconomic coal mines in 1973, and tried to impose legal constraints on the power of trade unions to initiate labour disputes (something the Labour Party had first proposed, then abandoned, a few years before) his government was stymied by a wave of strikes. When he called an election to decide, as he put it, ‘who runs the country’, he narrowly lost to Harold Wilson, who prudently declined to take up the cudgels himself.

Only under the Labour government of Wilson’s successor, James Callaghan, from 1976 to 1979, did a new policy begin to emerge. Driven by desperation and the conditions of an IMF loan, Callaghan and his Chancellor of the Exchequer (the redoubtable Denis Healey) initiated a retreat from the central nostrums of post-war government practice. They embarked on a restructuring program that acknowledged the inevitability of a certain level of unemployment; reduced social transfer payments and labour costs by protecting skilled workers while permitting the emergence of a disfavored periphery of unprotected, non-unionized part-time employees; and set out to control and reduce inflation and government spending even at the price of economic hardship and slower growth.

None of these objectives was openly avowed. The Labour government maintained to the end that it was adhering to its core values and defending the institutions of the welfare state even as it inaugurated a cautiously planned breakout, seeking to achieve by stealth the sorts of reforms that its predecessors had been unable to legislate in the open. The strategy did not work: Labour succeeded only in alienating its own supporters without being able to take any credit for its achievements. By August 1977, thanks in part to the Labour government’s deep cuts in public spending, UK unemployment levels had passed 1.6 million and kept on rising. The following year, in Britain’s ‘Winter of Discontent’ of 1978/79, major trade unions undertook a series of angry, concerted strikes against their ‘own’ government: rubbish went uncollected, the dead were left unburied.
²⁴⁴

The Prime Minister, James Callaghan, seemed out of touch: in reply to a journalist’s question about the growing industrial unrest, he airily announced that there was no need for concern, thereby giving rise to a famous newspaper headline—‘Crisis? What Crisis?’—that helped lose him the general election he was forced to hold the following spring. It is more than a little ironic that Labour was constrained to fight the historic election of 1979 on the claim that it had
not
engineered a social crisis by its radical departure from economic convention—when this was exactly what it had done—while the Conservative Party was swept back to power under the energetic leadership of a woman who insisted that it was just such radical treatment that the British malaise required.

Margaret Thatcher was not, on the face of it, a likely candidate for the revolutionary role she was to perform. Born in Grantham, a sleepy, provincial town in Lincolnshire, she was the daughter of an earnest Methodist couple who ran a grocer’s shop. She was always a Conservative: her father sat on the local town council as a Conservative; the young Margaret Roberts (as she then was) won a scholarship to Oxford—where she studied chemistry—and rose to be President of the University’s Conservative Society. In 1950, at the age of 25, she was an (unsuccessful) Conservative candidate in the General Elections, the youngest woman candidate in the country. A chemist and subsequently a tax lawyer by profession, she first entered Parliament in 1959, winning a seat in the solidly conservative borough of Finchley which she would continue to represent until she entered the House of Lords in 1992.

Until she successfully beat off much more senior Conservative figures to win her party’s leadership in 1975, Margaret Thatcher was best known in Britain as the Education Minister in Heath’s Conservative government who, in order to meet budget-cutting targets, abolished the provision of free milk in British schools: a decision (taken reluctantly) that led to the sobriquet ‘Maggie Thatcher Milk Snatcher’ and gave the first hint of her future trajectory. Yet this decidedly unfavorable public image proved no impediment to Mrs. Thatcher’s advance—her willingness to court and confront unpopularity not only did her no harm among colleagues, but may even have been part of her appeal.

And she unquestionably had appeal. Indeed, a surprisingly broad range of hard-bitten statesmen in Europe and the United States confessed, albeit off the record, to finding Mrs. Thatcher rather sexy. François Mitterrand, who knew something about such things, once described her as having ‘the eyes of Caligula but the mouth of Marilyn Monroe.’ She could bully and browbeat with less mercy than any British politician since Churchill, but she also seduced. From 1979 to 1990 Margaret Thatcher bullied, browbeat—and seduced—the British electorate into a political revolution.

‘Thatcherism’ stood for various things: reduced taxes, the free market, free enterprise, privatization of industries and services, ‘Victorian values’, patriotism, ‘the individual’. Some of these—the economic policies—were an extension of proposals already circulating in Conservative and Labour circles alike. Others, notably the ‘moral’ themes, were more popular among Conservative Party stalwarts in rural constituencies than with the electorate at large. But they came in the wake of a backlash against the libertarianism of the Sixties and appealed to many of Mrs. Thatcher’s admirers in the working- and lower-middle classes: men and women who had never really been comfortable in the company of the progressive intelligentsia that dominated public affairs in these years.

But what Thatcherism stood for more than anything else was the ‘smack of firm government’. By the end of the Seventies there was much anxious debate about Britain’s purported ‘ungovernability’, the widely-shared perception that the political class had lost control, not just of economic policy but of the workplace and even the streets. The Labour Party, traditionally vulnerable to the charge that it could not be counted upon to steer the economy, was now open to the accusation, following the ‘Winter of Discontent’, that it could not even run the state. In their 1979 election campaign, the Tories made great play not just with the need for economic rigour and proper money management, but with the nation’s ostensible longing for strong, confident rulers.

Margaret Thatcher’s first election victory was not particularly remarkable by historical standards. Indeed, under Mrs. Thatcher’s leadership the Conservative Party never actually gained many votes. It did not so much win elections as watch Labour lose them, many Labour voters switching to Liberal candidates or else abstaining altogether. In this light, Margaret Thatcher’s radical agenda and determination to see it through can seem out of all proportion to her national mandate, an unexpected and even risky break with the longstanding British tradition of governing from as close to the political centre as possible.

But it seems clear in retrospect that this was just what accounted for Margaret Thatcher’s success. Her refusal to be moved even when her monetarist policies were apparently failing (to those Conservatives in October 1980 who begged her to reverse tack and make a U-turn in policy she responded: ‘You turn if you want. The lady’s not for turning’); her happy adoption of the Soviet description of her as the ‘Iron Lady’; her palpable pleasure at engaging and defeating a string of opponents, from the Argentine military junta in the Falkands’ War to the miners’ union leader Arthur Scargill; the handbag waved aggressively at assembled European Community leaders as she demanded ‘our money back’: all these suggest a clear appreciation that her primary political asset was the very obstinacy, the obdurate refusal to compromise, that so outraged her critics. As every opinion poll suggested, even those who didn’t care for Thatcherite policies often conceded a certain reluctant admiration for the woman herself. The British were once again being
ruled
.

Indeed, and for all her talk of the individual and the market, Margaret Thatcher presided over a remarkable and somewhat disconcerting revival of the British state. In administration she was an instinctive centralizer. To ensure that her writ carried throughout the land, she reduced the powers and budgets of local government (the 1986 Local Government Act dismantled Britain’s metropolitan authorities, taking their powers back to London, just as the rest of Europe was engaged in a large-scale
de
centralization of power). The direction of educational policy and regional economic planning reverted to central government departments under direct political control, while government ministries themselves found their traditional freedom of maneuver increasingly constrained by a Prime Minister who depended far more on a small coterie of friends and advisers than on the traditional élite corps of senior civil servants.

Margaret Thatcher instinctively (and correctly) suspected the latter, like their peers in the educational and judicial establishment, of preferring the old state-subsidized paternalism. In the complex conventions of Britain’s class-conscious politics, Margaret Thatcher—a lower-middle class upstart with a soft spot for
nouveau riche
businessmen—was not much liked by the country’s venerable governing élite and she returned the sentiment with interest. Older Tories were shocked at her unsentimental scorn for tradition or past practice: at the height of the privatization craze, former Prime Minister Harold Macmillan accused her of selling the ‘family silver’. Her predecessor, Edward Heath, who had once angrily described the well-publicized undertakings of a corrupt British businessman as ‘the unacceptable face of capitalism’, abhorred both Thatcher and her policies. She could not have cared less.

The Thatcherite revolution strengthened the state, cultivated the market—and set about dismantling the bonds that had once bound them together. She destroyed forever the public influence exercised by Britain’s trade unions, passing laws that limited union leaders’ ability to organize strikes, and then getting them enforced in the courts. In a highly symbolic confrontation in 1984-85, pitting the armed state against a doomed community of industrial proletarians, she crushed a violent and emotional effort by the National Union of Miners to break her government’s policy of closing inefficient mines and ending subsidies to the coal industry.

The miners were badly led, their cause hopeless, their strike prolonged more from desperation than calculation. But the fact that Margaret Thatcher won a battle that Edward Heath had lost (and that successive Labour leaders had ducked) immensely strengthened her hand—as did an unsuccessful attempt by the Provisional IRA to assassinate her in the midst of the strike. Thatcher, like all the best revolutionaries, was fortunate in her enemies. They allowed her to claim that she alone spoke for the frustrated, over-regulated, little people whom she was freeing from decades of domination by vested interests and by the subsidized, parasitical beneficiaries of taxpayer largesse.

There is no doubt that Britain’s economic performance
did
improve in the Thatcher years, after an initial decline from 1979-81. Thanks to a shakeout of inefficient firms, increased competition and the muffling of the unions, business productivity and profits rose sharply. The Treasury was replenished (on a one-time basis) with the proceeds from the sale of nationally-owned assets. This had not been part of the original Thatcher agenda in 1979, nor was privatization as such an ideologically-charged idea—it was the Labour Party, after all, that sold off the nation’s share in British Petroleum in 1976 (at the IMF’s bidding). But by 1983 the political as well as the financial benefit of liquidating the country’s state-owned or state-run assets led the Prime Minister to inaugurate a decade-long national auction, ‘liberating’ producers and consumers alike.

Everything, or almost everything, was put on the privatization block. In the first round were smaller firms and units, mostly in manufacturing, in which the state held a partial or controlling interest. These were followed by hitherto ‘natural’ monopolies like the telecommunications network, energy utilities, and air transportation, beginning with the sale of British Telecom in 1984. The government also sold off much of the country’s post-war public housing stock: at first to its current occupants but eventually to allcomers. Between 1984 and 1991, one-third of all the world’s privatized assets (by value) were accounted for by UK sales alone.