Margaret Thatcher: The Autobiography (99 page)

In the face of these challenges John Moore did not defend his approach very robustly and I too began to doubt whether it had been properly thought through. We had a particularly difficult meeting on Wednesday 25 May. Meanwhile, the Treasury did not have it all their own way. I asked them for a paper on possible new tax incentives for the private sector – an idea which Nigel fiercely opposed.

Nigel’s objection to tax relief for private medical insurance was essentially twofold. First, tax reliefs in his view distorted the system and should be eroded and if possible removed. Second, he argued that tax relief for private health insurance would in many cases help those who could already afford private cover and so fail to deliver a net increase in private sector provision. In those cases where it did provide an incentive, it would
increase the demand for health care, but without corresponding efforts to improve supply the result would just be higher prices. Neither of these objections was trivial – but both objections missed the point that unless we achieved a growth in private sector health care, all the extra demands would fail to be met by the NHS. In the long term it would be impossible to resist that pressure and public expenditure would have to rise much further than it otherwise would. I was not arguing for across the board tax relief for private health insurance premiums but rather for a targeted measure. If we could encourage people over sixty to maintain the health insurance which they had subscribed to before their retirement, that would reduce the demand on the NHS from the limited group which put most pressure on its services.

Nor, of course, were we neglecting the ‘supply side’. The whole approach we were taking in the review was designed to remove obstacles to supply. And in addition the review was considering a significant increase in the number of consultants’ posts, which would have an impact on the private sector as well as the NHS. We had further plans to tackle restrictive practices and other inefficiencies in the medical profession, directing the system of merit awards more to merit and less to retirement bonuses, and we planned the general introduction of ‘medical audit’.
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Nigel fought hard even against these limited tax reliefs but I got it through with John Moore’s help in the first part of July. In other areas I was less happy. The DHSS had been shaken by the Treasury’s criticisms and responded by seeking to obtain Treasury support for their proposals before they presented the review. This gave the Treasury an effective power of veto. Accordingly, the DHSS put forward, with Treasury agreement, a much more evolutionary approach. Though money following the patient and self-governing hospitals remained goals of policy, they were relegated to the indefinite future and ‘top-slicing’ took centre stage in the short term.

I had no objection, in principle, to an evolutionary approach to the introduction of self-governing hospitals. But I was suspicious of the distinction that was emerging between short- and long-term changes, generally worried about the slow pace of the review and thought we were losing our way.

At the end of July 1988, I made the difficult decision to replace John Moore on the review. I took this opportunity to split the unwieldy DHSS
into separate Health and Social Security departments, leaving John in charge of the latter and bringing in Ken Clarke as Health Secretary. As he was to demonstrate during the short period in which he was my Secretary of State for Education (when he publicly discounted my advocacy of education vouchers), Ken Clarke was a firm believer in state provision. But whatever the philosophical differences between us, Ken’s arrival at the Department of Health undoubtedly helped our deliberations. He was an extremely effective Health minister – tough in dealing with vested interests and trade unions, direct and persuasive in his exposition of government policy.

Ken Clarke now revived an idea which my Policy Unit had been urging: that GPs should be given budgets. In Ken’s version GPs would hold budgets to buy from hospitals ‘elective acute services’ – surgery for non-life-threatening conditions such as hip replacements and cataract operations. These were the services for which the patient had (in theory at least) some choice as to timing, location and consultant and for which GPs could advise between competing providers in the public and private sector. This approach had a number of advantages. It would bring the choice of services nearer to patients and make GPs more responsive to their wishes. It would maintain the traditional freedom of GPs to decide to which hospitals and consultants they wanted to refer their patients. It also improved the prospects for hospitals which had opted to leave DHA control and become self-governing: otherwise it was all too likely that if District Health Authorities were the only buyers they would discriminate against any of their own hospitals which opted out.

By the autumn of 1988 it was clear to me that the moves to self-governing hospitals and GPs’ budgets, the buyer/provider distinction with the DHA as buyer, and money following the patient were the pillars on which the NHS could be transformed in the future. They were the means to provide better and more cost-effective treatment.

A good deal of work had by now been done on the self-governing hospitals. I wanted to see the simplest possible procedure for hospitals to change their status and become independent – what I preferred to call ‘trust’ – hospitals. They should also own their assets, though I agreed with the Treasury that there should be some overall limits on borrowing. It was also important that the system should be got under way soon and that we had a significant number of trust hospitals by the time of the next election. At the end of January 1989 – after the twenty-fourth ministerial meeting I had chaired on the subject – the White Paper was finally published.

The White Paper proposals essentially simulated within the NHS as many as possible of the advantages which the private sector and market choice offered but without privatization, without large-scale extra charging and without going against those basic principles which I had set down just before Christmas 1987 as essential to a satisfactory result. But there was an outcry from the British Medical Association, health trade unions and the Opposition, based squarely on a deliberate and self-interested distortion of what we were doing. In the face of this Ken Clarke was the best possible advocate we would have. Not being a right-winger himself, he was unlikely to talk the kind of free market language which might alarm the general public and play into the hands of the trade unions. But he had the energy and enthusiasm to argue, explain and defend what we were doing night after night on television.

In their different ways, the White Paper reforms will lead to a fundamental change in the culture of the NHS to the benefit of patients, taxpayers and those who work in the service. By the time I left office the results were starting to come through.

Family policy, science and the environment

T
HE SURGE OF PROSPERITY
– most of it soundly based but some of it unsustainable – which occurred from 1986 to 1989 had one paradoxical effect: the Left turned their attention to non-economic issues. Was the price of capitalist prosperity too high? Was it not resulting in a gross and offensive materialism, traffic congestion and pollution? Were not the attitudes required to get on in Thatcher’s Britain causing the weak to be marginalized, homelessness to grow, communities to break down?

I found all this misguided and hypocritical. Socialism had failed. And it was the poorer, weaker members of society who had suffered worst as a result of that failure. More than that, socialism, in spite of the high-minded rhetoric in which its arguments were framed, had literally demoralized communities and families, offering dependency in place of independence as well as subjecting traditional values to sustained derision. It was a cynical ploy for the Left to start talking as if they were old-fashioned Tories, fighting to preserve decency amid social disintegration.

But nor could the arguments be ignored. Some Conservatives were always tempted to appease the Left’s social arguments on the grounds that we ourselves were very nearly as socialist in practice. These were the people who thought that the answer to every criticism was for the state to spend and intervene more. I could not accept this. There was a case for the state to intervene in specific instances – for example to protect children in real danger from malign parents. The state must uphold the law and ensure that criminals were punished – an area in which I was deeply
uneasy, for our streets were becoming more, not less violent. But the root cause of our contemporary social problems – to the extent that these did not reflect the timeless influence and bottomless resources of old-fashioned human wickedness – was that the state had been doing too much. A Conservative social policy had to recognize this. If individuals were discouraged and communities disorientated by the state stepping in to take decisions which should properly be made by people, families and neighbourhoods then society’s problems would grow not diminish.

This belief was what lay behind my remarks in an interview with a woman’s magazine – which caused a storm of abuse at the time – about there being ‘no such thing as society’. But people never quoted the rest. I went on to say:

My meaning, distorted beyond recognition, was that society was not an abstraction, separate from the men and women who composed it, but a living structure of individuals, families, neighbours and voluntary associations. The error to which I was objecting was the confusion of society with the state as the helper of first resort. Whenever I heard people complain that ‘society’ should not permit some particular misfortune, I would retort, ‘And what are you doing about it, then?’ Society for me was not an excuse, it was a source of obligation.

I was an individualist in the sense that I believed that individuals are ultimately accountable for their actions and must behave like it. But I always refused to accept that there was a conflict between this kind of individualism and social responsibility. If irresponsible behaviour does not involve penalty of some kind, irresponsibility will, for a large number of people, become the norm. More important still, the attitudes may be passed on to their children, setting them off in the wrong direction.

I never felt uneasy about praising ‘Victorian values’ or – the phrase I originally used – ‘Victorian virtues’, not least because they were by no means just Victorian. But the Victorians also had a way of talking which summed up what we were now rediscovering – they distinguished between the ‘deserving’ and the ‘undeserving’ poor. Both groups should be given help: but it must be help of very different kinds if public spending
is not just going to reinforce the dependency culture. The problem with our welfare state was that we had failed to remember that distinction and so we provided the same ‘help’ to those who had genuinely fallen into difficulties and needed some support till they could get out of them, as to those who had simply lost the will or habit of work and self-improvement. The purpose of help must not be to allow people merely to live a half-life, but to restore their self-discipline and through that their self-esteem.

I was also impressed by the writing of the American theologian and social scientist Michael Novak who put into new and striking language what I had always believed about individuals and communities. Mr Novak stressed the fact that what he called ‘democratic capitalism’ was a moral and social, not just an economic system, that it encouraged a range of virtues and that it depended upon co-operation not just ‘going it alone’. These were important insights which, along with our thinking about the effects of the dependency culture, provided the intellectual basis for my approach to those great questions brought together in political parlance as ‘the quality of life’.

The fact that the arguments deployed against the kind of economy and society which my policies were designed to foster were muddled and half-baked did not, of course, detract from the fact that there
were
social ills and that in some respects these were becoming more serious. I have mentioned the rise in crime. The Home Office and liberal opinion more generally were inclined to cast doubt on this. Certainly, it was possible to point to similar trends throughout the West and to worse criminality in American cities. It was also arguable that the rise in the number of recorded crimes reflected a greater willingness to report crimes – rape for example – which would previously have not come to the attention of the police. But I was never greatly impressed by arguments which minimized the extent and significance of crime. I shared the view of the general public that more must be done to apprehend and punish those who committed it and that violent criminals must be given exemplary sentences. In this regard the measure we introduced in which I took greatest satisfaction was the provision in the 1988 Criminal Justice Act which empowered the Attorney-General to appeal against overlenient sentences passed by the Crown Court.

The fact that the level of crime rose in times of recession and of prosperity alike gave the lie to the notion that poverty explained – or even justified – criminal behaviour. Arguably, the opposite might have been
true: greater prosperity led to more opportunities to steal. In any case, the rise in violent crime and the alarming levels of juvenile delinquency had their origins deeper in society.

I became increasingly convinced during the last two or three years of my time in office that we could only get to the roots of crime and much else besides by concentrating on strengthening the traditional family. The statistics told their own story. One in four children were born to unmarried parents. No fewer than one in five children experienced a parental divorce before they were sixteen. Of course, family breakdown and single parenthood did not mean that juvenile delinquency would inevitably follow. But all the evidence pointed to the breakdown of families as the starting point for a range of social ills of which getting into trouble with the police was only one. Boys who lack the guidance of a father are more likely to suffer social problems of all kinds. Single parents are more likely to live in relative poverty and poorer housing. Children can be traumatized by divorce far more than their parents realize. Children from unstable family backgrounds are more likely to have learning difficulties. They are at greater risk of abuse in the home from men who are not the real father. They are also more likely to run away to our cities and join the ranks of the young homeless where, in turn, they fall prey to all kinds of evil.