Read Bang!: A History of Britain in the 1980s Online

Authors: Graham Stewart

Tags: #History

Bang!: A History of Britain in the 1980s (92 page)

The promotion of free trade and financial deregulation, which precipitated, accompanied and marked the near-worldwide collapse of Marxism–Leninism, allowed China and other low-cost
economies to compete in the global marketplace. The cheaper goods that they exported reduced the cost of living for Western consumers and kept inflation down. One extraordinary consequence of this
legacy came in a form that the eighties free-marketers failed adequately to foresee or warn against. The vast financial surpluses that emerging twenty-first century economic powers like China
(aided by an undervalued currency) were able to generate by supplying the Western world with consumer durables needed to find an outlet, and were duly invested in the international bond markets.
This massive financial injection allowed Western governments to borrow at such low rates of interest (sometimes at negative rates of interest in real terms) that they were encouraged to spend more
than they raised in tax revenues, the cheapness of credit making a ‘spend today, pay later’ attitude appear both attractive and feasible. It also allowed Western governments, including
that of the UK, to pursue what seemed like a vote-winning strategy of increasing public spending without ratcheting up taxes to pay for the public sector’s expansion. Vast budget deficits
resulted – the polar opposite of the firm control over public expenditure that Thatcherism (though not Reaganomics) believed to be essential. Nor were politicians the only ones caught up in
this credit bubble. The same process was driving growth in the financial sector, especially in the United States and the UK, where banks and other institutions took advantage of cheap credit
massively to increase their debt exposure far above the equity they held, leaving them heavily exposed in the event of a downturn. The Victorian values of thrift, of self-help, of building up
savings – what might be termed the Grantham gospel of Thatcher’s faith – were mocked to scorn in this age of leverage. By 2007, the UK’s private sector debt was four times
greater than the country’s entire GDP.
7
This began to look unsustainable
when the sub-prime debt crisis broke in the
United States, sparking a transatlantic ‘credit crunch’, a near-calamitous run on the banks and the recession that began in 2008.

Commentators who marvelled, or despaired, at the way in which the governments of John Major, Tony Blair and Gordon Brown kept the deregulatory supply-side reforms of the eighties in place, the
powers of local authorities constrained, state ownership of public utilities off the agenda and income tax rates at, or below, the level established by Nigel Lawson naturally pronounced
Thatcherism’s enduring triumph.
8
By such yardsticks, any other conclusion would have been perverse. But the assessment was partial, for it
ignored the post-2000 abandonment of Thatcher’s Gladstonian attachment to balanced budgets, low debt ratios and public spending rising less quickly than private spending. In pursuit of these
goals, much of the Treasury’s effort during the eighties had been directed at bringing down the public sector borrowing requirement. A mixture of budget restraint, economic recovery, North
Sea oil revenue and enhanced receipts from privatizations and council house sales brought borrowing down, and by 1987–8 the British government was a net
repayer
of debt. This
achievement might have been expected to be repeated during the unprecedentedly prolonged period of economic growth of the first decade of the twenty-first century. It was not, primarily because the
Thatcherite belief in a smaller state was reversed through a return to borrowing. By 2010, with the long economic boom having turned to bust, the state accounted for half of the UK’s entire
GDP and the country was burdened with the greatest borrowing deficit in its post-war history.

One missed opportunity was that, despite lower unemployment rates in the nineties and noughties compared with the eighties, welfare dependency remained entrenched: the social security budget
continued on its remorseless ascent and consumed one third of all public spending. Here was one dismal eighties legacy to which neither main political party had found a solution. ‘I came to
office with one deliberate intent,’ claimed Thatcher in 1984, ‘to change Britain from a dependent to a self-reliant society – from a give-it-to-me, to a do-it-yourself
nation.’
9
Across large parts of the country there was little sign of this transformation taking place, and widespread evidence of greater,
rather than less, reliance upon the benefactions of the state, particularly where demographic changes and the breakdown of the traditional family unit were most evident. How much these latter
developments were caused by government policy in the eighties is as unquantifiable as the contribution made by changing social attitudes from the sixties onwards – attitudes that Thatcher
showed no discernible ability to reverse. But welfare claimants were only part of a larger picture. The amount of goods and services provided by the state is measured by government final
consumption expenditure.
This fell from 22.4 per cent to 18.2 per cent of GDP between 1982 and 1998, only to be pushed back up during Gordon Brown’s tenure as
Chancellor. By the time Brown moved into his next-door neighbour’s home, government final consumption expenditure was, at 22.3 per cent, again nudging its 1982 level.
10
Judged by this criterion, the eighties rolling back of the state was as temporary as it was selective. In its core objective, Thatcherism has not swept all before it
after all.

The belief that the greatest victim of the eighties was the ‘post-war consensus’ also needs to be qualified. For the reality is that some of that consensus Thatcher attacked, some of
it she kept in place with only modest reform, and parts of it she either left untouched or positively encouraged. Nationalized industries, Keynesian demand management to achieve ‘full
employment’, and the corporatist partnership with the trade unions were dismantled. It should not have been surprising that a grocer’s daughter had little truck with the attitude summed
up by the old, if slightly misquoted, boast that ‘the man in Whitehall knows best’.
11
In contrast, a cornerstone of the post-war
settlement, the 1944 Butler Education Act, with its promotion of academic selection in grammar schools, specialist technical schools and generalized secondary moderns, was far closer to
Thatcher’s personal ideas on education than was the comprehensive system, yet her education secretaries did little to turn back the tide in favour of grammar schools, and only fifteen of the
new-style technical schools, the City Technology Colleges created by the Education Act 1988, were ever opened. Much as the prime minister might not have wished it, schooling in the eighties
represented the triumph not of the post-war consensus but of the sixties progressive, comprehensive ideal, albeit constrained at the decade’s end by the imposition of a national curriculum.
Meanwhile, on foreign policy, the Atlantic alliance and NATO, Thatcher was the devoted disciple of Clement Attlee and Ernest Bevin, leaving Labour under Michael Foot to turn its back on that aspect
of its post-war heritage.

When Thatcher referred to the Beveridge Report it was usually in broadly favourable terms, reserving specific criticisms for the manner in which its insurance principles had been compromised and
its support for additional private provision ignored.
12
Whatever anarcho-libertarian fantasies her detractors imagined she secretly entertained,
judging by her words and deeds it was difficult to dismiss her protestation that ‘our party has no more intention of dismantling the welfare state than we have of dismantling the Albert
Hall’.
13
Despite increasing spending on the NHS by almost one third above the inflation rate, the government’s funding of healthcare
was a constant source of criticism during the eighties – though, in retrospect, what seems more significant is how limited were the reforms to the NHS, and the complete absence of plans to
subject it to fundamental change. In these respects,
it is possible to understand Thatcher’s indignation at suggestions that she was taking her party away from the
principles of the post-war generation. ‘I don’t think I have changed the direction of Conservatism’ from that of the 1950s, she assured the journalist Hugo Young, before pointing
out that as Chancellor and prime minister, Harold Macmillan’s priorities had been to restrain inflation below 3 per cent and to hold public spending at a far lower level than it was at during
the eighties. As she put it to another journalist, under her tenure, in 1984 the state consumed 42 per cent of GDP, whereas during ‘the golden years of Harold Macmillan’ it had
accounted for only 33 per cent.
14
It was not the fifties from which she was trying to extract the country. Rather, she maintained, ‘I think
things started to go wrong in the late sixties’, before degenerating completely in the seventies.
15
Instead of unpicking the handiwork of
William Beveridge or Rab Butler, Thatcherism’s quarrel was with the more immediate past, the ‘management of decline’ presided over by Harold Wilson, Edward Heath and James
Callaghan. And it is in comparison with the seventies that the struggles of the eighties become comprehensible and the achievements more readily discernible.

However, the eighties look like a desperate disappointment if Thatcher’s misattributed quotation of St Francis of Assisi is set as the measure of success. Where there was discord, nobody
brought harmony. Some of the worst picket-line violence in British history was witnessed at Orgreave and Wapping, while the hooliganism afflicting football was the decade’s ugliest youth
fashion. The inner-city riots of 1981 and 1985 were of a ferocity not otherwise seen on the British mainland in the twentieth century. The disturbances in Trafalgar Square against the imposition of
the poll tax were unsettling, but the massive nationwide campaign of civil disobedience by those who refused to pay it represented a greater threat to the social contract. Over in Northern Ireland,
divisions remained unhealed: the Troubles claimed 853 lives during the decade. The only optimistic reflection on this tally was that it represented an improvement on the 2,092 fatalities claimed by
the conflict during the seventies. Yet, for all the bloodshed, the IRA was neither closer to being defeated nor nearer to realizing its aims. In all parts of the United Kingdom, there were
reasonable grounds for looking fearfully towards the future. Year after year, recorded crime reached unprecedented levels, while heroin and Aids wrecked lives and, if the wilder predictions were to
be believed, threatened to increase exponentially. In this unsettling atmosphere, Thatcher’s suggestion in 1987 that there was ‘no such thing as society’ was intended to emphasize
the importance of personal responsibility and the requirement for individuals to support each other, rather than expecting some bureau of the state to do it for them. Nevertheless, that much of the
public appeared to take the phrase, shorn of its context, at face value suggested the extent of unease about the direction in which the country
was moving and distrust of the
underlying philosophy guiding its leader. In the sort of expression that made traditional Tories wonder if their champion actually possessed something of the mind of a Marxist, Thatcher suggested
in 1981: ‘Economics are the method; the object is to change the heart and soul.’
16
She could no more make windows into men’s
souls than Queen Elizabeth I, but if opinion polls and social attitude surveys were any guide, she failed to shift basic attitudes on the value of the public sector over private endeavour.

In terms of greater sexual equality, educational experience and the opportunities and environment of the workplace, society was actually more cohesive in the eighties than it had been in any of
the preceding decades since the war.
EN55
None of these gains, however, could be drawn on by the one in ten who, during the first half of the decade,
found themselves out of work. Except in a few protected corners of the public sector, the expectation of a job for life with the same firm was gone. The loss of security this caused made for
anxious times and for searing hardship, especially among those with few skills or with a specialism that was not easily transferable. For the well qualified or those with broad-ranging aptitudes,
it offered greater opportunities, with so-called ‘headhunters’ and a profusion of recruitment agencies springing up to make labour market mobility as beneficial to employers seeking an
injection of new blood and creative talent as to those who, in this more fluid system, were in demand and finally free to dictate their terms. ‘The whole direction of politics in the last
thirty years,’ complained Thatcher in the same 1981 interview in which she spoke of economics and the soul, ‘has always been towards the collectivist society. People have forgotten
about the personal society. And they say: “Do I count, do I matter?”’
17
Critics of the trends of the eighties usually cited
increased individualism as one of the decade’s principal failings. It undoubtedly contributed towards greater income inequality. Yet it could represent a valuable freedom too – a
liberty that in the labour market made it easier for talented adults to pursue their aspirations and, in doing so, to chip away at rigid hierarchies, outmoded stratifications and class-bound
prejudices.

While liberal – even libertarian – conservatism was boosted by this dismantling of inflexible structures, social conservatism as well as socialist collectivism was undermined, a
process that further makes the popular wisdom that the right won the eighties economic battle while the left won the cultural battle unhelpfully glib. The eighties began with, on average, 70 per
cent of the nation’s television sets switched to one channel (ITV) and ended with a far wider choice delivered through terrestrial, cable and satellite TV. Channel 4 was born with a remit
that, besides high-quality and
sometimes ground-breaking programming, also embraced minority tastes and lifestyles ignored by the BBC and ITV. Sky won the satellite
‘Star Wars’ with a promise to offer subscribers more of what they really wanted and to drive competition forward, while for the terrestrial channels government policy actively fostered
the creation of an array of new and distinctive independent production companies. To sceptics and nay-sayers, this greater choice represented a consumer-led degradation of producer-determined
taste, while increasing the range of options risked diminishing the sense of national cultural homogeneity created when a country of fifty-six million inhabitants could only watch one of three (or
after 1982, four) programmes at any one time. In reality, such eighties creations as
EastEnders
and
Only Fools and Horses
proved just as capable of holding the attention of the masses
and becoming collective cultural reference points as the evergreen
Coronation Street
. There was also much that was of low quality, though this was hardly a novel development. Anyone who
thought the decade’s tolerance of game shows was a new sign of the country’s cultural Americanization or subservience to the zeitgeist of market-driven consumerism could not have
watched much television in the sixties or seventies. The highlights of the eighties, meanwhile, stood reasonable comparison with the best of what came before and after, and the same was true in
cinema, despite the financial constraints of the British film industry. More choice, in any case, did not necessarily mean a wider selection of undemanding commercialism, for, as the alternative
comedy circuit and the indie music labels demonstrated, it could also provide a challenge to it.

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