Bang!: A History of Britain in the 1980s (16 page)

The reshuffle did not make the prime minister safe. She knew she could count on the loyalty of the Home Secretary, Willie Whitelaw, and an unspoken understanding meant that she effectively gave
Lord Carrington a free hand to run foreign policy in return for accepting that his world view did not include domestic politics. With Prior immersed in the troubles of Northern Ireland, the two
colleagues who might prove the most dangerous to her were Peter Walker and Michael Heseltine. Neither was yet in a position to strike a fatal blow.

Thus it fell to Edward Heath to denounce the government’s economic policy from the platform of the party conference in October 1981. It was an extraordinary spectacle, the ex-leader of the
Conservative Party publicly declaring his successor was fundamentally in error. Blackpool’s serried ranks were treated to a performance that may have reminded more elderly delegates of
Khrushchev’s 1956 denunciation of Stalin at the Twentieth Congress of the Communist Party. But except in the jowls, Heath was no Khrushchev. He represented not the expectation of a new
generation but what the latter regarded as the failure from which escape was being sought. His own midterm U-turn had not prevented his premiership from ending in ignominious defeat, first at the
hands of the miners and soon after from the electorate – twice. It was the memory of those humiliations that helped persuade apprehensive Conservatives to give Thatcher’s experiment the
continued benefit of the doubt. But that benefit would not continue indefinitely if she carried on regardless and the economy showed few meaningful signs of recovery. In November, she appeared
close to despair when privately taking into her confidence the sympathetic editor of the
Sunday Express
, John Junor. Her colleagues were all ‘in an utter funk’, with only
‘Willie, Geoffrey, Cecil and Norman I can count on’.
⁴²
In her memoirs, Thatcher wrote: ‘I had said at the beginning of the
government, “give me six strong men and true, and I will get through.” Very rarely did I have as many as six.’
⁴³

Breadline Britain

At the trough of the recession in 1981, the aggregate valuation of the largest UK companies was lower than it had been, adjusted for inflation, at the time of the British
evacuation from Dunkirk in 1940. As Oxford’s leading Marxist economics don, Andrew Glyn, pointed out, capitalists had seen more grounds for optimism at the moment the country appeared on the
brink of succumbing to Hitler than they did in looking forward to a few more years of Thatcherism.
¹

It was particularly the manufacturing sector that bore the brunt of the bleak expectations. As a share of total UK output, it had already slid from 34 per cent to 30 per cent between 1970 and
1977.
²
Between 1978 and 1981, it fell from 29.3 per cent to 25.0 per cent, its access to affordable credit curtailed by high interest rates and (a
related consequence of high interest rates) the soaring sterling exchange rate, which cut into export competiveness. Manufactures had comprised 83 per cent of total UK exports in 1973, but
accounted for only 66 per cent by 1983. Over the same period, manufactured imports rose from 39 per cent to 51 per cent.
³
That the country was no
longer the workshop to itself, let alone the world, was made manifest in 1983 when, for the first time on record, the value of manufactures imported exceeded those exported. By then, the share of
the workforce engaged in manufacturing was down to 26 per cent, having stood at 35 per cent only a decade earlier. Thereafter, as the economy recovered, the rate of the manufacturing sector’s
contraction slowed. Indeed, some manufacturing firms that had survived the onslaught of 1979–82 were, or had become, sufficiently lean and competitive to enjoy strong growth. Nevertheless,
although total manufacturing output recovered and by the decade’s end was 12 per cent higher than its 1979 level, it continued to shrink in proportion to the rest of the economy. By 1989,
manufactures represented only 22.2 per cent of national output.
⁴

Optimists looking for evidence that traditional manufacturing’s contraction was part of a process of economic restructuring in which new technology-driven companies at the higher-value end
of the market (though
employing fewer staff) represented a brighter future latched on to specific success stories. Technology companies setting up in and around
Cambridge’s ‘science park’ caused the area to be referred to as ‘Silicon Fen’ (while a concentration of electronics firms in central Scotland ensured the inevitable
coining of ‘Silicon Glen’). During the early eighties, the prospect of Britain seriously rivaling California’s Silicon Valley seemed far from ludicrous. In particular, two
Cambridge-based companies, Acorn Computers and Sinclair Research, developed home computers at such affordable prices that they all but created the vast domestic market for these products.

In 1980, the Sinclair ZX80 became the world’s first computer priced under £100. Even greater success followed with the ZX81 and, in 1982, with the Spectrum, whose first version alone
sold into five million homes and became not just the bestselling personal computer in Britain but also helped make Sinclair Research – fleetingly – the market leader in the United
States.
⁵
In 1983, with the prospect of global domination beckoning, Clive Sinclair was given a knighthood. At the same time, his former sales manager
and, by then, rival at Acorn, Chris Curry (who, like Sinclair, had not been to university) was reaping the benefits from public funds, Acorn having won the contract to make the BBC Micro in
association with the corporation’s computer literacy television series. Ignoring the temptation to leave it to the market, the government became so convinced that microcomputers represented
Britain’s future, and (erroneously) that an ability to understand and write computer programs would become an essential core skill for the next generation, that between 1981 and 1986 the
Department of Education heavily subsidized schools’ purchasing of, in particular, BBC Micros and the training of teaching staff to go with them. In 1983, Acorn floated, allowing its founders,
Chris Curry and his Cambridge-graduate colleague, Herman Hauser, to see a company they had started in 1977 with only £100 of capital increase its value one million-fold. Acorn looked poised
to grow into a British Apple.

Unfortunately, it was only Apple’s period of commercial difficulties that Acorn soon resembled. In launching the Electron (its rival to the Sinclair Spectrum), it initially proved unable
to meet the high demand with supply and then compounded matters by eventually exceeding an appropriate quantity of supply after the demand had evaporated. Sinclair Research faced comparable
problems. A licensing agreement in the United States with Timex resulted in delays to the release of an improved Spectrum model and the American market was lost. In 1984, Sir Clive’s next
computer, the QL, was unveiled for the professional market, potentially offering British competition to the Apple Macintosh launched in the same year. But like the Electron, the QL also suffered
supply problems and, additionally, proved to be riddled with glitches. Faith in Sir Clive’s entrepreneurial genius was
dented further when in 1985 he unveiled the C5, a
futuristic-looking tricycle with backup power from an electric battery. With a maximum speed of 15 miles per hour and an inability to conquer going up gradients, the C5 better resembled a
luxury-end children’s toy than the future of transport. In a matter of months, Sir Clive went from being portrayed as the British economy’s great white hope to a national laughing
stock.

These commercial misjudgments shattered the ambitions of Britain’s two most promising computer companies to become globally dominant in their field. In 1985, Acorn had to be bailed out by
the Italian firm, Olivetti, which bought a majority stake but thereafter failed to sustain Acorn as a computer-making company, while Sinclair’s computers, sold to Alan Sugar’s Amstrad
for only £5 million in 1986, ceased production four years later. Flickering brightly from 1981 until 1984, Cambridgeshire’s challenge to California had been brief and – in its
quirky brilliance and erraticism – all too characteristically British. For all the hopes, what was achieved was never enough to compensate for the decade’s job losses in more
traditional manufacturing sectors.
^EN11

From the vantage point of his new academic post in West Germany, Britain’s leading economic historian, Professor Sidney Pollard, surveyed what had been a decade of decline between 1972 and
1982 and lamented: ‘After having led the world for two hundred years, Britain is no longer counted among the economically most advanced nations of the world. A wide gap separates her from the
rest of industrialized Europe. The difference as measured in national produce per head between Britain and, say, Germany, is now as wide as the difference between Britain and the continent of
Africa. One short generation has squandered the inheritance of centuries.’
⁶
Both Labour and Conservative administrations fell within the scope
of Pollard’s indictment, though Thatcher’s Chancellor had set the scene for his first budget speech, in 1979, by emphasizing how far the country had already sunk by the time the Tories
returned to office. ‘Only a quarter of a century ago – within the memory of almost every member of this House,’ Sir Geoffrey Howe stated:

The visible manifestations of decay were not confined to the factory floor. Summing up cross-Channel differences in 1979 at the end of his term as ambassador in Paris, Sir
Nicholas Henderson felt compelled to point out: ‘You only have to move about Western Europe nowadays to realize how poor and unproud the British have become in relation to their neighbours.
It shows in the look of our towns, in our airports, in our hospitals and in local amenities; it is painfully apparent in our railway system.’
⁸
Henderson’s sense of national inferiority did not improve following his relocation to Washington, DC. In July 1981, he confided to his diary: ‘I find that the hopes I entertained
exactly two years ago that we might be going to turn over a new leaf under Maggie have been dashed. Our plight is worse than two years ago because we appear to have tried something new and it has
failed.’
⁹

In terms of urban appearance, the United Kingdom had certainly reached a nadir. The worst of the old brick back-to-back slums, with their high, imprisoning backyard walls and outside privies had
been demolished during the three preceding decades, but by the early eighties the ‘brave new world’ sheen of their prefabricated tower-block replacements was already visibly tarnished,
the shoddiness of their construction revealed by uncompromising concrete exteriors streaked by the weather and interiors disintegrating through rising damp. Investment in improving – or
demolishing – these failing housing schemes lay years ahead, as, for the most part, did the effort to clean those older buildings that had survived ‘comprehensive redevelopment’.
In 1980, much of the Victorian civic grandeur – whose proud and ornamental exteriors restoration would subsequently revive – was still veiled in a thick layer of funereal cinders (a
deindustrializing economy did at least bring with it cleaner air), while the once majestic proportions of their interiors were too often concealed by the installation of cheap partitions and false
ceilings, strip lighting and supposedly protective layers of asbestos.

Unsurprisingly, the urban population voted with its feet. The exodus from Britain’s cities was a marked demographic trend by the time Thatcher came to power. Despite continued national
population growth during the 1970s, only two of England and Wales’s twenty-one largest towns and cities (Plymouth and Dudley) saw an increase in the number of their inhabitants. During the
seventies, Greater London suffered a net loss of three quarters of a million citizens. Birmingham, Liverpool and Manchester each leaked over one hundred thousand inhabitants. In Scotland,
meanwhile, Glasgow, which
earlier in the century had been the ‘second city of the Empire’, appeared to be in terminal decline, a city of over one million
inhabitants in 1961 was down to nearly 880,000 by 1981. The long process of slum clearance there had hardly transformed the quality of the housing stock. In 1981, 40 per cent of those Glaswegians
who remained were graded as being poorly housed. It was difficult to avoid the conclusion that the past twenty years, in which the wrecking ball had been the harbinger of comprehensive
redevelopment, had failed to make Britain’s cities more attractive places in which to live.

Indeed, planning blight’s urban disfiguration left large patches of land – often in the heart even of prosperous cities – as a weed-growing wilderness. At best, these gap sites
found a use as car parks – the fate, for instance, until the mid-eighties of a large stretch of what ought to have been prime real estate stretching along Lothian Road at right angles to
Edinburgh’s celebrated retail boulevard of Princes Street. The city centres of Hull, Nottingham and Bristol still contained sizeable undeveloped sites where German bombs had fallen forty
years previously. Incredibly, even in the high-property-value square mile of the City of London, the last bombsite from the Blitz was not developed until 1998. The area of London next to Tower
Bridge – one of the most photographed sights in the capital – also remained a gap site, while the long stretch of Docklands on both sides of the Thames beyond the bridge to the east had
degenerated into a vast zone of desolation, the rapid decline of the Port of London symbolized by miles of disused warehouses, pocked with broken window panes and bordered by stagnant canals,
plugged by boluses of litter. Developers had yet to sell the benefits of warehouse living, a solution that, by the end of the eighties, was to transform the Docklands (and other areas of crumbling
Victoriana like it) into a desirable domestic haven for new money. Thirty years on, it is necessary to have recourse to a wide collection of photographs and film footage to appreciate the extent of
Britain’s urban shabbiness at the moment the seventies gave way to the new decade.