Postwar: A History of Europe Since 1945 (109 page)

Despite this apparent dismantling of the public sector, the share of Britain’s GDP absorbed by public expenditure remained virtually the same in 1988 (41.7 percent) as it had ten years earlier (42.5 percent), notwithstanding Thatcher’s promises to ‘get the state off people’s backs’. This was because the Conservative government had to pay unprecedented sums in unemployment benefit. The ‘scandalously’ high figure of 1.6 million jobless that had so damaged Callaghan’s government in 1977 had reached 3.25 million by 1985 and remained one of the highest in Europe for the rest of Mrs. Thatcher’s time in office.

Many of those who lost jobs in inefficient (and previously state-subsidized) industries like steel, coal-mining, textiles and shipbuilding would never find work again, becoming lifelong dependents of the state in all but name. If their former employers went on in some cases (steel, notably) to become profitable private companies it was less through the miracle of private ownership than because Margaret Thatcher’s governments had relieved them of high fixed labour costs, ‘socializing’ the expense of superfluous workers in the form of state-subsidized unemployment.

There was something to be said for the privatization of certain public industries and services. For many years vital economic assets had been held in the public sector with little thought given to investment or modernization. They had been starved of cash, their performance cushioned against pressure from competition and consumer alike, their managers hamstrung by bureaucratic inertia and political meddling.
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Thanks to Mrs. Thatcher there emerged in Britain a much-expanded market for goods, services and, eventually, labour. There was more choice and (though this took longer and remained imperfect) more price competition. When her successor, John Major, kept Britain out of the ‘social chapter’ of the European Union treaty, Jacques Delors accused him of having made the UK a ‘paradise for foreign investment’: a charge to which Thatcherites could justifiably and happily plead guilty.

As an
economy
, then, Thatcherized Britain was a more efficient place. But as a
society
it suffered meltdown, with catastrophic long-term consequences. By disdaining and dismantling all collectively-held resources, by vociferously insisting upon an individualist ethic that discounted any unquantifiable assets, Margaret Thatcher did serious harm to the fabric of British public life. Citizens were transmuted into shareholders, or ‘stakeholders’, their relationship to one another and to the collectivity measured in assets and claims rather than in services or obligations. With everything from bus companies to electric supply in the hands of competing private companies, the public space became a market place.

If—as Mrs. Thatcher asserted—there is ‘no such thing as Society’, then in due course people must lose respect for socially-defined goods. And so they did, as late-Thatcherite Britain began to take on some of the more unappealing characteristics of the American model that the Iron Lady so admired. Services that remainedin public hands were starved of resources, while significant wealth accumulated in the ‘emancipated’ sectors of the economy—notably the City of London, where investment bankers and stockbrokers benefited greatly from the ‘Big Bang’ of 1986, when Britain’s financial markets were deregulated and opened to international competition. Public spaces fell into neglect. Petty crime and delinquency rose in line with the growing share of the population caught in permanent poverty. Private affluence was accompanied, as so often, by public squalor.
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But there were limits to Margaret Thatcher’s reach. The typical ‘Thatcherite’ voter—caricatured as a thirty-something realtor in the eastern suburbs of London, under-educated but well-remunerated, with material assets (house, car, foreign vacations, a handful of shares in mutual funds and a private pension scheme) of which his parents could only have dreamed—might have entered the world of Thatcherite individualism. But he and his family were still entirely dependent upon the state for the provision of vital services: free education, virtually free medicine, and subsidized transport. Thus when Mrs. Thatcher and her successor John Major so much as hinted that they might begin privatizing the National Health Service or charging fees for state education, public support evaporated—among precisely those newly-prosperous but highly vulnerable sectors of the population that had been attracted to Thatcherism in the first place.

Five years after Mrs. Thatcher’s departure, John Major did indeed succeed in pushing through the privatization of the railway services. The Conservatives were encouraged by the prospect of further profit from the sale of public assets into private ownership; but their chief motive was Major’s need to be seen to be privatizing
something
—Mrs. Thatcher had by then sold off just about everything else, and privatization was the Conservative Party’s sole and only program. But the incompetence and malfeasance of the procedure, and the disasters that followed—culminating in a series of tragic and palpably avoidable train crashes—helped bring about not just the defeat of the Conservative government two years later, but the end of a cycle of privatizations and the retrospective discrediting of the more extreme incarnations of Thatcherism itself.

Among Margaret Thatcher’s chief victims was her very own Conservative Party. By the time the Iron Lady had finished with it, the Tory Party—Britain’s ‘natural’ party of government for nearly a century—had no program, no leaders and, as it appeared to many, no soul. This seems a harsh judgment to make of a woman who led her party to three electoral victories in succession and governed virtually alone for nearly twelve years. But that of course is the point: Margaret Thatcher governed
alone
. In the words of Frederick the Great, ‘The people say what they like and then I do what I like.’ Any colleague who differed from her on any significant issue and who was thus not ‘one of us’, was cast into the outer darkness.

Most of Mrs Thatcher’s Tory contemporaries, not to mention the party’s cohort of elder statesmen whom she thrust aside as soon as she dared, were genuine
conservatives
, old enough in many cases to remember the bitter political divisions of the inter-war years and wary of arousing the demon of class warfare. Thatcher was a
radical
, bent upon destruction and innovation; she scorned compromise. For her, class warfare, suitably updated, was the very stuff of politics. Her policies, often dreamed up at very short notice, were secondary to her goals; and these in turn were in large measure a function of her style. Thatcherism was about
how
you govern, rather than what you do. Her unfortunate Conservative successors, cast out upon the blasted landscape of post-Thatcherism, had no policies, no goals—and no style.
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Margaret Thatcher may have destroyed the Conservative Party but she must be credited with the salvation and re-birth of Labour. In the short-run, of course, she crushed her Labour opponents—indeed, she could not have wrought the changes she did but for their stunning incompetence. While some Labour Party leaders in 1979 understood the problems they faced, they could carry neither conviction nor their supporters. With Thatcher in power, the British Labour movement entered a decade of turmoil. The party’s militant and unionist core saw the world much as Mrs. Thatcher did, but from the other side of the mirror: Britain must choose between a protectionist, collectivist, egalitarian, regulatory state and open markets, untrammeled competition, privatized resources and a minimum of shared goods and services. The choice, thanks to the Iron Lady, was once again clear: socialism or capitalism.

Labour’s traditional moderates, like their Conservative counterparts, were in despair. Some of them—notably Roy Jenkins, a former President of the European Commission—abandoned Labour and formed a short-lived Social Democratic Party that would in due course merge with the Liberals, Britain’s perennial third party. But most stayed, albeit with trepidation. Their pessimism was well-founded. Led by the intellectually appealing but politically ineffectual Michael Foot, the party fought the 1983 general election on a shamelessly anachronistic program committed to undoing not just Thatcherism but many of the compromises of Labour’s own past governments. The UK would retreat from the international economic arena (and from its unswerving fealty to the American alliance). There was to be no truck with privatization, open markets, ‘Europe’ or any other alien project.Safe behind the protective walls of a closed economy, the Little Englanders of Britain’s Left would defiantly build, at last, the New Jerusalem so often traduced by their colleagues.

Labour’s election manifesto of 1983 was succinctly and presciently described by one of the Party’s own dispirited parliamentarians as ‘the longest suicide note in History’. Buoyed by her recent victory in the Falklands War, in which she had established a party monopoly upon ‘patriotism’ and displayed once again her unusual taste for confrontation,
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Mrs. Thatcher won the election of June 1983 by a near-record margin. The Labour Party lost over three million voters, and 160 seats in Parliament. Its share of the vote fell to 27.6 percent, the party’s worst performance since the First World War. Whether the British people wanted what Mrs. Thatcher was selling remained uncertain (the Conservative vote did not rise); but they decidedly did
not
want the alternative on offer.

It took the Labour Party fourteen years and three different leaders to recover from the catastrophe of 1983. Politically, the party had to isolate and destroy the influence of Trotskyites and other ‘hard’ Left activists in some of its regional strongholds (notably Liverpool). Sociologically, it needed to come to terms with its failure to keep abreast with the concerns and aspirations of a new middle class, without whose support it could never again be elected to office, and which outnumbered the evaporating core of industrial proletarians and public sector employees on whom Labour (like all Social Democratic parties) had traditionally relied. Intellectually, Labour’s leaders needed to identify a new set of policy objectives—and a new language in which to present them.

By the mid-Nineties these goals had been reached—if only cosmetically. The party changed its name to
New
Labour in 1996, a year after its incoming leader, Tony Blair, persuaded his colleagues finally to abandon the controversial Clause IV committing the party to nationalization. When Labour at last returned to power in 1997, comprehensively defeating an exhausted Conservative party, there was no talk of unraveling the Thatcherite revolution. Instead New Labour’s campaign, aimed almost exclusively at marginal, ‘soft’ Conservative voters, inveighed against high taxes, corruption and inefficiency—the very objects of Mrs. Thatcher’s own attacks a generation before.

If Tony Blair and his colleagues drew a discreet veil over the Thatcherite era, this was not by chance. Blair’s successes rested squarely upon a threefold inheritance from Mrs. (now Lady) Thatcher. First, she ‘normalized’ the radical dismantling of the public sector in industry and services and its replacement with the ‘privatized’, entrepreneurial Britain whose praises Blair sang with such gusto. Second, and in the process, she had destroyed the old Labour Party and facilitated the task of those who fought to reform it: Blair had merely to reap the rewards of their work. And third, as we have seen, her asperity and her intolerance of dissent and disagreement had fractured her own party and rendered it unelectable.

Riding on Thatcher’s coat-tails, Tony Blair shared many of her prejudices, albeit in a less abrasive key. Like her, he intensely disliked the old political vocabulary. In his case this meant avoiding all talk of ‘class’, an antiquated social category displaced in New Labour’s rhetorical boilerplate by ‘race’ or ‘gender’. Like Mrs. Thatcher, Blair showed very little tolerance for decentralized decision-making or internal dissent. Like her, he preferred to surround himself with private-sector businessmen.
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And although New Labour remained vaguely committed to ‘society’, its Blairite leadership group was as viscerally suspicious of ‘the state’ as the most doctrinaire of Thatcherites.

This, then, is the measure of Margaret Thatcher’s achievement. Not only did she destroy the post-war consensus but she forged a new one. Before she rose to power the default position in British public policy was that the state is the natural fount of legitimacy and initiative. By the time she departed the scene, this was on the way to becoming a minority view even in Britain’s profoundly state-bound Labour Party. For the first time in two generations the role of the state had been put up for discussion and fewer and fewer voices were heard in its defense, at least within the political mainstream. To be sure, there were those who continued to believe that the Thatcherite revolution wrought havoc, and that a return to direct state management of services (if not public ownership of production) was still to be desired. But in the wake of Mrs. Thatcher theirs was a case that had to be made—and except with respect to core social goods like education and medicine, it was no longer guaranteed a sympathetic hearing.

It is sometimes suggested that Thatcher’s role in this change has been exaggerated, that circumstances would have propelled Britain in a ‘Thatcherite’ direction in any event: that the post-war social pact was already running out of steam. Perhaps. But it is hard even in retrospect to see just who but Mrs. Thatcher could have performed the role of gravedigger. It is the sheer
scale
of the transformation she wrought, for good and ill, that has to be acknowledged. To anyone who had fallen asleep in England in 1978 and awoken twenty years later, their country would have seemed unfamiliar indeed: quite unlike its old self—and markedly different from the rest of Europe.