Why I am not a Hagiographer

Margaret Thatcher made some serious mistakes as Prime Minister. But, by and large, the left doesn’t care in the least about that, they hate her for her persona, and her successes. However, that does not mean that we should gloss over her blunders – I think this is particularly important for those of us, like myself, who consider themselves essentially Thatcherite.

The first error was the mistaken targeting of monetary aggregates in the early part of her administration. Not only was this intellectually flawed, it shook the economic underpinnings of the government, and they were never clearly rebuilt. Hence the problems of the late 1980s, where Lawson was setting his own course without reference to the agreed Cabinet policies – that could never have taken place had the government been clearer about what it was trying to do.

If the first error was one of theory, the second error was one of operation – Thatcher should never have allowed the Chancellor the leeway to conduct a secret monetary policy in this way, and it is shocking that her hand was so far off the tiller. And once this was discovered – incredibly, it was journalists who brought the matter to her attention – she should have immediately sacked Lawson. By patching over the matter, she placed her own political survival ahead of the national interest. And this goes double for her agreement to join the ERM in 1990. Ironically, by behaving in this way, she probably hastened her end. It is possible that she could have survived had she dismissed Lawson and stood up to Howe and Major. But she sealed her own doom by acting weakly, because it meant she lost authority.

In addition, on a deeper level, Thatcher left the state dangerously over-centralised. Nowhere is this clearer than the Poll Tax debacle. I believed then, and still believe now, that the Poll Tax was eminently fair. Moreover, the people opposed to it on principle would never have supported the government anyway. But what sunk the policy was the disastrous way it was implemented. The central government had spent the previous ten years turning local government into ciphers, which meant that voters, understandably, no longer paid much attention to the councils’ actions. And this, in turn, made councils unaccountable. So when they were allowed to set Poll Tax levels, they jacked up levels hugely, rightly judging that central government would be blamed for the higher taxes while the councils would get credit for extra spending. As the tax rates spun higher and the government was forced to bring in emergency measures to cap council spending, moderates rightly concluded that the whole policy had been botched.

I think it is no co-incidence that all these blunders took place in Thatcher’s third term, when she seemed to have more of an eye on posterity than the practical task of governing. Some of them did huge damage – the loss of localism is something the present government is still trying to address, and ERM membership of course blighted the British economy in the early 1990s, causing huge misery.

Nowhere, you may note, do I talk about the unemployment of the early 1980s. This is because it was not a “mistake,” it was a painful but necessary part of the economic adjustment. And indeed, people saw it as such at the time. At the height of the unemployment problem, the 1983 general election saw the Conservatives re-elected with a whopping majority of 144. Subsequent attempts to try and rewrite history are ahistorical. Besides, regrettable though that unemployment was, it was truly conquered by the late 80s.

What’s really interesting to me is that none of the blunders here are at all part of the anti-Thatcher mythology so vociferously championed by the BBC et al. That’s for a future post!


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