Bang!: A History of Britain in the 1980s by Graham Stewart
Authors: Graham Stewart
Tags: History
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standards came under intense pressure. In place of orderly improvement, corporatist government struggled to cope with rampant inflation and the destruction of savings, thehumiliating circumstances of the IMF bail-out, trade union militancy and the massive dissatisfaction and unrest expressed across the public sector. Levels of taxation far exceeded the
European average, while comparative competitiveness deteriorated alarmingly. Against these developments, Thatcher resolved to fight.
How much of the Britain created in the thirty years before the seventies she also wanted to sweep away was less clear. Some aspects of the wartime and post-war consensus Thatcher claimed to
share. She admired the 1944 Education Act and, having mostly failed to rescue them in the early 1970s, she was now pledged to retain the few remaining grammar schools that were the Butler
act’s legacy. She even accepted such cornerstones of the post-war welfare state as the Beveridge Report and the 1944 employment white paper – while claiming that their proposals had
been perverted by subsequent administrations. 53 With the Attlee government’s major act of foreign policy – subscription to NATO and the
maintenance of the transatlantic alliance – she was in wholehearted agreement. That she went into the 1979 general election promising a smaller state and tax cuts was not, of itself,
distinctively ‘Thatcherite’. Successive Conservative leaders had tempted every post-war electorate with these aspirations and inducements. Her proposed assault on trade union power was
still quite cautious, her privatization programme extremely limited. On 4 May 1979, as Britain awoke to its first day of the new Conservative government, it seemed Mrs Thatcher was aiming to ensure
that the eighties would not be shaped by what she considered as the worst excesses of the seventies. She had won power not with an imaginative and visionary outlook but with a manifesto remarkably
similar to Edward Heath’s statement of intent in 1970. The difference was her determination to deliver on her promises.
3 THE CENTRE CANNOT HOLD
The Joy of Monetarism
The British economy was to be subjected to the shock therapy of monetarism. But what was monetarism? Simplified explanations portrayed it as a needlessly technical term for the
easily understood and long-established tenets of classical liberalism and minimal state interference – the economic doctrine of
laissez-faire
, without the carefree associations cast by
a French expression. In public discussion, monetarism came to embody these values as well as the broader ones rebranded for the new decade as ‘Thatcherism’, for which Nigel Lawson
provided the succinct definition: ‘a mixture of free markets, financial discipline, firm control over public expenditure, tax cuts, nationalism, “Victorian values” (of the Samuel
Smiles self-help variety), privatisation and a dash of populism’. 1 A consequence of equating monetarism with Thatcherism was that Margaret
Thatcher continued to be attacked for being in hock to the theory long after its ideologues were mourning the fact that her government had wandered off the monetarist path.
Reducing the size of the state was a product of monetarism but was not the theory itself. Essentially, monetarism gave primacy in economic policy to the control of inflation, believing that if
it was kept in check, economic equilibrium would naturally follow. Inflation, it maintained, resulted when too much money chased too few goods. Yet this was hardly a revolutionary observation. The
dangers of the cavalier printing of money were well known, both in theory and from the calamitous experience of Germany’s Weimar Republic in the 1920s, where it resulted in hyperinflation and
the destruction of a whole generation’s personal savings, and led to the widespread assumption that the dismal experience was a contributory factor to the rise of Nazism. It did not need a
new generation of
European average, while comparative competitiveness deteriorated alarmingly. Against these developments, Thatcher resolved to fight.
How much of the Britain created in the thirty years before the seventies she also wanted to sweep away was less clear. Some aspects of the wartime and post-war consensus Thatcher claimed to
share. She admired the 1944 Education Act and, having mostly failed to rescue them in the early 1970s, she was now pledged to retain the few remaining grammar schools that were the Butler
act’s legacy. She even accepted such cornerstones of the post-war welfare state as the Beveridge Report and the 1944 employment white paper – while claiming that their proposals had
been perverted by subsequent administrations. 53 With the Attlee government’s major act of foreign policy – subscription to NATO and the
maintenance of the transatlantic alliance – she was in wholehearted agreement. That she went into the 1979 general election promising a smaller state and tax cuts was not, of itself,
distinctively ‘Thatcherite’. Successive Conservative leaders had tempted every post-war electorate with these aspirations and inducements. Her proposed assault on trade union power was
still quite cautious, her privatization programme extremely limited. On 4 May 1979, as Britain awoke to its first day of the new Conservative government, it seemed Mrs Thatcher was aiming to ensure
that the eighties would not be shaped by what she considered as the worst excesses of the seventies. She had won power not with an imaginative and visionary outlook but with a manifesto remarkably
similar to Edward Heath’s statement of intent in 1970. The difference was her determination to deliver on her promises.
3 THE CENTRE CANNOT HOLD
The Joy of Monetarism
The British economy was to be subjected to the shock therapy of monetarism. But what was monetarism? Simplified explanations portrayed it as a needlessly technical term for the
easily understood and long-established tenets of classical liberalism and minimal state interference – the economic doctrine of
laissez-faire
, without the carefree associations cast by
a French expression. In public discussion, monetarism came to embody these values as well as the broader ones rebranded for the new decade as ‘Thatcherism’, for which Nigel Lawson
provided the succinct definition: ‘a mixture of free markets, financial discipline, firm control over public expenditure, tax cuts, nationalism, “Victorian values” (of the Samuel
Smiles self-help variety), privatisation and a dash of populism’. 1 A consequence of equating monetarism with Thatcherism was that Margaret
Thatcher continued to be attacked for being in hock to the theory long after its ideologues were mourning the fact that her government had wandered off the monetarist path.
Reducing the size of the state was a product of monetarism but was not the theory itself. Essentially, monetarism gave primacy in economic policy to the control of inflation, believing that if
it was kept in check, economic equilibrium would naturally follow. Inflation, it maintained, resulted when too much money chased too few goods. Yet this was hardly a revolutionary observation. The
dangers of the cavalier printing of money were well known, both in theory and from the calamitous experience of Germany’s Weimar Republic in the 1920s, where it resulted in hyperinflation and
the destruction of a whole generation’s personal savings, and led to the widespread assumption that the dismal experience was a contributory factor to the rise of Nazism. It did not need a
new generation of
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