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13 April 2013

In Memoriam: Margaret Thatcher

Tag(s): People, Politics & Economics, In Memoriam
The death this week of Baroness Thatcher has triggered millions of words from thousands of commentators. As she had been in poor health for some time and was 87 no doubt most of these had been written well in advance allowing the writers to think carefully about what they were writing. Those who filed through the studios giving their instant obituaries were no doubt similarly prepared. Many of these people knew her well, either as friends or opponents, and could speak with authority about this extraordinary woman. So why have I chosen this as my subject for this week’s blog when I never even met her? I have written a few of these In Memoriam pieces but usually knew the person well. Only once before have I written a piece on someone I never knew personally and that was Steve Jobs of Apple fame. In that case I felt with my long experience of consumer electronics I had some insight into his impact.

The answer is I do feel I have some insights into the life and times of Margaret Thatcher and while I have obviously not read everything that has been published about her in the past few days I have not seen these insights published elsewhere.

Nearly everyone is agreed on one thing about Margaret Thatcher, that is she was a divisive figure. Whether you think she was a conviction politician or dogmatic everyone says she polarised the British people like noone else in modern times. I see this differently. I have clear memories of the 1970s before she came to power and my memories are not of a united nation. Various governments, both Conservative and Labour, tried to deal with the trade union problem and all failed. The trade unions had come to think they should have a say in the running of the economy. Those who were members of trade unions had little opportunity to change any of this. Their rights were few. If they wanted work they had to join the relevant closed shop. Life was a battle which culminated in the winter of discontent following which Margaret Thatcher won the General Election of 1979 and became Britain’s first woman prime minister.

Her first words as Prime Minister were rather clumsily quoted from St Francis of Assisi where she appealed for harmony rather than discord. There was nothing wrong with the sentiment but it was an appeal which fell on deaf ears. The British people were already divided against each other and to a large extent remain so. That they now articulate that through an expression of whether they will mourn Thatcher or celebrate her death says less about her and more about us. Indeed many of those who seem to be celebrating this week were not even born when she resigned as prime minister in 1990.

Comparisons are unfairly made with other great figures such as Churchill, Ghandi or Mandela who unified peoples. But Churchill united the British as a nation alone fighting the evils of Nazi Totalitarianism, Ghandi used non-violent means to fight against an Imperial Britain and Mandela kept his dignity in the fight against apartheid. Thatcher saw enemies within Britain that had brought the nation to its knees and set out to defeat them and release all Britons from those chains. Many of those commenting this week seem to have forgotten that only three years before Thatcher came to power Britain had been bailed out by the IMF.

On the international stage Thatcher did see an enemy in the Soviet Union and finding a kindred spirit in Ronald Reagan they combined forces to bring it crashing down. Thatcher is remembered fondly in Eastern Europe by people who see her as one of the authors of their freedom from Soviet tyranny and that this happened during her time as prime minister is remarkable.
Thatcher is also commonly described as someone who did not listen or understand ordinary people. But she came from ordinary stock, had to fight very hard against prejudice herself and was never expected to become the first female to lead a major political party in this country, especially the Conservatives. Thatcher was a radical conservative unlike her predecessors. Heath too came from an ordinary background, his mother had been a maid, but his politics were more of the defeatist consensus of managed decline. Thatcher knew what was wrong with Britain and set out to change it. My criticism of her is that she did not go far enough. But this is where again I think the majority don’t quite get it right.

Thatcher was an outstanding politician. She saw that politics is philosophy in action but she also was pragmatic and chose most of her battles carefully. She took on the miners and won by out-thinking them. But she did not take on some other closed shops like lawyers and doctors because she knew that would be a much tougher battle.

This blog is not intended as a eulogy. Thatcher made some critical mistakes. Everyone cites the poll tax. There is nothing intrinsically wrong with a community charge in which everyone is asked to pay a contribution towards the provision of local services like education, policing and refuse collection. However, it ought to be assessed on the means to pay. The rating system it replaced is not well founded in logic. A little old widow on a pension but living in a large family home should not have to pay more than two married professionals earning good money but choosing to live in a flat. But that was how it was and how it is again. Thatcher correctly tried to change that. She incorrectly ignored the unpopularity of the trial in Scotland and failed to reform the tax regulations at the same time. Some criticise her for not bringing more women through to office. But in 1979 there were only 19 women MPs elected including Thatcher and few of these were Tory.

Some criticisms are just factually wrong or unfair. For example, she is accused of privatising the railways when that was one of John Major’s last actions as prime minister. She is accused of closing Ravenscraig steel works but that was still open when she left office. She is accused of closing the coal mines.  It’s true that during her time in office 154 coal mines were closed. However, under Harold Wilson in a shorter time period 251 coal mines were closed so why is he not a hate figure in these former colliery towns? She’s accused of running down British industry but during about the same period President Mitterrand protected French industry with subsidies and exchange controls but French industry declined at about the same rate as British industry, which later declined much faster under Blair and Brown. Spending on welfare under Thatcher rose from 25% to 30% of public spending while expenditure on the NHS increased by one-third over inflation.

Margaret Thatcher won three general elections and in the end was only defeated by her own party. During her time in office only one vote went against her government in the House of Commons. The preceding Labour government had lost hundreds. But at the end she was advised to step down after not winning a sufficient majority in an election for the leadership. Even that vote she won, but not it would seem by enough. Her defeat had been engineered by the Europhile wing of her party who had been working to this end with officials and politicians of the European Community. Thatcher was not against the Community as such, she had signed the Single European Act, but she did so believing the advice she had received that majority voting would not be allowed. Those who gave her these assurances apparently did not mean them, or were themselves misled.

Thatcher had difficulties with her first two Chancellors. Geoffrey Howe was a strong supporter of the European project and Nigel Lawson, a brilliant man in many ways, foolishly insisted on taking Britain into the Exchange Rate Mechanism (ERM) at huge cost to the country, first because of the inflationary bubble it caused and then because of the ignominious exit. Thatcher saw the dangers but gave in when both Howe and Lawson threatened to resign. All this is clearly set out by Bernard Connolly, a senior economist in the European Commission at the time, in his controversial but prophetic book, The Rotten Heart of Europe: The Dirty War for Europe’s Money. (1)

Thatcher was widely resented by the supporters of the European project not for any scepticism but because of her insistence on the rebate which has been worth cumulatively £75 billion. They set out to bring her down. In the process it has become much more difficult for the Conservative Party to win a General Election outright again and Europe has descended into chaos from which we find it impossible to extricate ourselves.

I think Margaret Thatcher was the defining British leader in my lifetime. She gained power at a time when Britain was seen as the sick man of Europe and largely restored its fortunes and gave people cause to be proud again. Her privatisations have been widely copied and gave access to capital markets for many companies that had been founded in the private sector and strangled by nationalisation. On the international stage she was a colossus, it was the Russians who first dubbed her the Iron Lady, and with Ronald Reagan she brought about the end of the cold war and the return of freedom and democracy to Eastern Europe.  Her decision to send a task force to regain the Falklands changed the way that Britain was seen in the world.

My criticisms of her are not those of the pigmies in her own party who brought about her fall, or the losers on the left at that time who set her up as a hate figure to justify their own prejudices. I think she should have stood firm over the ERM even though she would have lost two of her top ministers in the process which would have caused a crisis, but surely nothing like the crisis that resulted. I think she should have set up a sovereign wealth fund with a substantial part of the proceeds of North Sea Oil just as Norway did. I think she should have done more to reduce the burden of regulation on British business particularly smaller companies. And I think she should have done a better job in securing her own succession.

But we may not see her like again.
 
(1) I am indebted for this part of the story to Bernard Connolly, the whistle-blower who was fired from his job as a senior economist with the European Commission. I commend his book The Rotten Heart of Europe: The Dirty War for Europe’s Money Faber and Faber 1996 but updated with a new introduction in 2012 demonstrating that all his forecasts about the unworkability of the euro have been vindicated.

Copyright David C Pearson 2013 All rights reserved



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