Our major cities seemed shabby and seedy; our newspapers were full of strikes and walkouts; almost every week seemed to bring some new atrocity in Northern Ireland. Over the course of the s, two prime ministers, Edward Heath and James Callaghan, had been broken by the trade unions, while a third, Harold Wilson , descended into paranoia. Who was the best 20th-century prime minister? At first, with unemployment soaring, she seemed certain to go down as a one-term fluke.

But victory in the Falklands changed her political image. The lame duck had become Britannia incarnate; military success had won her the time she needed. By the time she left office, Britain was unquestionably a more open, dynamic, entrepreneurial and colourful society than it had been in the s.

Taxes were lower, strikes were down, productivity growth was much improved and far from fleeing Britain, as they had once threatened to do, foreign investors were now queuing to get in. Of course this came at a very heavy cost, especially in the ravaged industrial north. But in reality, Britain in the s was always facing an immensely painful transition, partly because so many difficult decisions had been postponed for so long, but also because the stark reality of globalisation meant that major industries — notably car-making, ship-building and coal-mining — were doomed even before she took power.

Thatcher became a convenient scapegoat. But she did not deserve all the blame. In the end, you are left with the woman herself. Indeed, the very fact that she was a woman may well have been the most remarkable thing about her. Thatcher herself might not agree. But in the end, the interesting thing about the Iron Lady was not that she was made of iron.

It was that she was a lady. Dominic Sandbrook is a historian who has written widely on postwar Britain and has made several BBC documentaries. Sign in. Back to Main menu Virtual events Masterclasses. Thatcher and Queen Elizabeth II: what was their relationship like? More on: United Kingdom. The uncomfortable truth, for all democratic socialists, is that by not dealing with structural inequalities in either power or wealth, New Labour failed to future-proof the progress we made.

This has failed coalfield communities like mine but, despite this, the potential of our people and places persists. If we are now to unlock this potential, we must see Thatcherism for what it is — a failed experiment. We must return to the post-war consensus of social responsibility and Keynesian economics, and we must strengthen the capacity of our regions to drive economic growth in a way that is responsive to local needs.

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In Section 3, we consider the changing employment and welfare prospects of the British people. In Section 6, we consider her success in promoting the moral society she sought. In Section 7, we consider explanations for her supposed popularity. Conclusions are drawn in Section 8. We will consider, in each case, the inheritance of the s and whether it is reasonable to suppose the UK economy was revitalised by the policies of the s.

However, the data Table 1 , Figure 1 undermine this supposition. Only the first two years of the government elected in is considered for reasons of lack of data. Clearly, the sea-change which occurred in UK economic prospects in the s was not a change for the better; per capita real income growth slowed markedly post Since , each government has underperformed its predecessor in this regard; however, these governments have also adopted broadly free-market policies Dorling, ; Stepney, , including increased labour market flexibility, free-market globalisation, increasing reliance on debt, exploitation of fossil fuels and privatisation of public assets.

This analysis supports that of Cribb et al. They show incomes have stagnated across much of the economy since the s. In their early 30s, for example, the average household comprised of those born in the s is earning less than their elder siblings born in the s did when they were in their 30s. Similarly, the s generation, on average, are earning less than the median households of those born in the s, s or even s, despite these latter are generally retired Cribb et al.

Since the s, there is evidence that each generation is doing less well financially than the one preceding. However, within this, there were significant differences between the impact on rich and poor Dorling, During the —97 Conservative governments, those households with greater disposable income benefited from a greater rate of incomes growth Table 2.

Only households in the top one-third of the distribution saw incomes growing at least as rapidly as GDP per capita. The least well-off households those in the lowest income decile saw their incomes decline on average under Thatcher see also Hills, , figure 9. What growth they did experience during the —97 Conservative government occurred under Major — Annualised increase in real GDP per capita and real UK equivalised household disposable income by decile.

Despite this reduction in income, the economically vulnerable were able to increase their expenditure during the Thatcher years Goodman and Webb, through borrowing. Given that the better-off households experienced the greatest growth in incomes, and the least well-off households experienced the lowest growth of incomes, inequality increased significantly during the s. Such an increase might be justified Rawls, if the increasing inequality was to the benefit of the most economically vulnerable.

Thatcher , argued this was the case; the data undermine this contention. A recent analysis published by the Institute of Fiscal Studies Belfield et al. Neo-liberal policies failed to boost the UK rate of growth across the board. Insofar, as anything did trickle down, it was not prosperity, but debt.

It is also worth noting, the governments of Thatcher and her successors have overseen an increase in health inequalities alongside an increase in income inequalities. We Conservatives hate unemployment.

Thatcher was not alone in implying though not stating that her government would facilitate a reduction in unemployment: It is difficult to find a politician who is in favour of unemployment, at least notionally. It is also difficult to find a politician whose policies have reduced unemployment substantially. In April , the unemployment rate reached its peak of more than double this: 9. By , when Thatcher resigned, headline unemployment was 6. Perhaps the more telling figure, however, is employment Figure 2.

Source : ONS The s are frequently portrayed e. Mirza-Davies, as a time of full employment. Such adults are not in the paid labour force and do not count for the purposes of recorded unemployment. The relative stability of employment rates over the last four decades rather undermines claims there are plenty of good jobs available if the unemployed would only look.

The evidence indicates that employment levels will remain approximately constant, even if the composition of the employed becomes more skewed towards cyclists. A related political mythos is that reducing social security will create employment c. Osborne, by making work relatively more attractive. This again assumes there are sufficient jobs available. However, relative to average consumption expenditure in the UK, unemployment benefit for a single person has approximately halved since the s Atkinson, , yet employment has been stable.

A VECM 2 Johansen, , analysis of the impact of the level of unemployment benefits on the headline unemployment rate indicates that there is no significant long-run effect—there is no evidence that higher benefits cause higher unemployment. There is, however, evidence of a relationship in the other direction—higher unemployment is related to lower benefits.

This supports the proposition that politicians, wrongly diagnosing the impact of welfare, are inclined to reduce social security when it is most needed. These policies are associated with an increasingly polarised and divided society Stepney, a , but not with an increase in employment.

The seeming paradox arises because the proportion of working-age people entering the labour force becoming economically active has been roughly matched by the proportion leaving the labour force.

In general, those of working age who leave the labour force, or defer joining, have two major destinations, higher or further education and disabilities benefits soon to be transferred to universal credit. Students, even if they work full- or part-time, are not considered members of the labour force. This increase in enrolment for higher education has therefore reduced the size of the labour force by one-and-two-third millions. At the time of writing, there are approximately two and a half million members of the workforce who are not counted as unemployed while receiving such benefits Figure 3.

Beatty and Fothergill, ; Beatty et al. Despite welfare reform, it was dependency, not employment, that increased during the s. To most people ownership means first and foremost a home of their own. Conservative Party, One of the tools utilised by local government to address the lack of affordable housing in the mid-twentieth century was to build and rent so-called council houses of an appropriate quality and quantity.

Not all public housing was sold, of course; not all tenants could afford to buy, and not all council houses were desirable properties to own. In practice, the better public properties were sold to the more affluent tenants House of Commons, Thatcher thus generated a substantial amount of goodwill towards her government amongst some members of the electorate, even amongst former opposition supporters Stepney, Right to Buy was also good for central government financially, at least in the short term.

The bulk of public proceeds went to national, rather than local, government Disney and Luo, The local government saw little, if any, financial benefit from the policy. Furthermore, it retained the statutory duty to accommodate the homeless despite its much-reduced stock of housing. This proved problematic as the number of applicants for council housing more than doubled during the s Disney and Luo, Unsurprisingly, home building by local authorities collapsed after Right to Buy; however, the private sector did not make up the shortfall Figure 4.

Of the housing which was built, an increasing proportion became owned by foreign interests Dorling, ; Valentine, ; Atkinson et al. Permanent dwellings completed, by tenure per 1, of the UK population. The data indicate Figure 5 that part of the increased prosperity the British enjoyed in the immediate post-war years was invested in property prior to Right to Buy.

Insofar, as Right to Buy contributed to the continuation of this trend, it was a one-off effect as it facilitated privatisation of existing housing, but did not promote the building of additional housing.

If anything, by discouraging councils from building, Right to Buy may have decreased the supply of homes. GB housing stock including vacant , by tenure per 1, of the GB population. Forced through globalisation to compete in the housing market with the international super-rich while UK housebuilding per capita declined, the average Briton has found housing less affordable since the s Dorling, The rate of owner occupation including vacant properties is currently declining.

The vacancy rate is itself an issue: In England alone, it is estimated that over , potential homes were empty in October ; more than , of these for a period in excess of six months Wilson et al. Neither is renting more affordable; in the three decades from , rents increased at a greater rate than median household incomes less direct taxes ONS Online e. Over the same period, the real housing benefit rent subsidy required by median households more than doubled. Home ownership, other than through inheritance, amongst younger generations is becoming ever more rare.

According to the Institute for Fiscal Studies Cribb et al. Increasingly unable even to afford rent, many young people are simply living with their parents ONS, Right to Buy generated funds and goodwill for central government, and boosted home ownership amongst the more affluent former council house tenants in the short run. The amount paid in housing benefit has increased at more than twice the rate of inflation since , implying the taxpayer is increasingly subsidising, not affordable home ownership, but high rental costs.

Why have we allowed people to buy shares in nationalised industries? Only to improve efficiency? There were three main motivations for privatisation Rhodes et al.

A primary motivation was the need of the government of the day for ready money to boost the economy in a time of recession, while at the same time keeping a lid on public sector debt and taxes. However, as the programme developed, the underlying theory was also developed. Privatisation was promoted to the UK public also as a means of making the UK more efficient and as a means of developing democratic capitalism, under which some citizens would have a capitalist stake in the nation.

Privatisation was also, of course, pursued for purely ideological reasons; many held to the belief that the public sector simply ought not to own industry, irrespective of its relative efficiency. This was far in excess of the more measured approaches of other OECD nations. Funds raised, along with the billions raised from North Sea oil and gas revenues and further billions raised from Right to Buy gave central government the means to spend its way out of the recession of the early s while maintaining the narrative of cutting taxes and reducing borrowing.

As a windfall means of gaining access to short-term financial resources, the policy was a limited success; limited in the sense that more money could have been raised. The fact that the fortunate few who bought shares could cash them in at a substantial premium may have generated a lot of goodwill towards the government; although it has been argued that most of those benefiting from the windfall gains of privatisation were Conservative voters already Stevens, A second supposed objective of privatisation was to promote economic efficiency in the UK.

This is no straightforward objective. We must bear in mind that what is efficient for an individual business is not necessarily efficient for the economy as a whole. It was for this reason many of the free-market economists of the s and s supported nationalisation of key utilities and transport. They considered only democratic accountability—that is, public ownership—will prevent natural monopolies from exploiting the public c. Recent history indicates that these concerns had some merit.

Such is the strength of the current narrative of overcharging by privatised utilities sectors and railways, the cold-war political-economic policy of a price cap has recently been resurrected by the UK government May, Notwithstanding, overall, there is scant evidence of efficiency gains Hart, ; Hall, or of benefit to the customer arising from privatisation Parker and Martin, ; Letza et al.

Thatcher had also supposed that privatisation would increase investment in British business. In this, she would likewise be disappointed. There is no evidence that UK business invested more as a result of this innovation. Privatisation generally has not delivered, therefore, in improving efficiency or promoting business investment.

Howe et al. Percentage of total market value of UK quoted shares by sector of the beneficial owner. Source : ONS b , a. Although the proportion of shares held in an individual capacity by UK citizens was declining before the Thatcher years, approximately halving from to , clearly the Thatcher reforms did little to address this decline. Conversely, the proportion of UK quoted shares in foreign hands approximately quadrupled during the Thatcher years, and has quadrupled again since ONS, b , a.

Alongside of outright privatisation, recent UK governments have also pursued a policy of marketisation. This initiative, based on the ideological assumption of the relative efficiency of the private to the public sector, involved introducing quasi-market mechanisms into public services through a separation of the purchaser and provider functions of state agencies.

This facilitated a plethora of private organisations entering the market to sub-contract to government particularly in health, social care and housing Buchanan et al. The introduction of quasi-markets in the NHS for example has led to a confusing array of independent and private sector organisations available to commissioning groups to deliver health care services often with no clear lines of accountability Klein, Similarly, welfare clients have found it difficult to operate as active and effective consumers in the new care markets, as these favour the more articulate and affluent service users Clarke, Some would argue the privatisation strategy itself was undemocratic, given the hostility of the British people towards the policy.

The majority of the British people remain of the opinion key public services—including utility companies, public transport, schools, the Royal Mail and the NHS—should be in the public sector, not the private sector YouGov, It has often been said e.

Spending the proceeds arising from the sale of public assets may have been politically more acceptable, and more popular, than increasing taxes, further borrowing or cutting public expenditure Brittan, Neither is there any evidence privatisation led to efficiency gains which benefited the British people. Thatcher , , , , argued that making the UK great again required, not economic policy, but the re-establishing of the moral spirit of the British people. She further argued that promoting liberal free-market economic values would motivate the adoption of conservative moral values c.

Cameron, , in a similar vein. If her policies failed in the major economic dimensions, we might regard her policies as a success by her standards if she had improved the moral economy of the nation. There is no agreed metric against which this might be judged. Thatcher was convinced that the public share of the economy must be reined in. Yet, insofar as she set herself the goal of reducing these, she failed; neither taxation, borrowing nor spending declined over the course of her government.

The total value of central government receipts was In real terms, the total managed expenditure rose by 7. The story is, however, rather better with regard to debt, in the short run at least. The billions of pounds arising from privatisation and North Sea oil and gas revenues temporarily reduced the public sector borrowing requirement. As a percentage of GDP, though not in nominal terms, public sector debt fell from to Figure 7. Source : Cecchetti et al.