Viewpoints: How did Margaret Thatcher change Britain?
- 10 April 2013
- From the section UK Politics
Margaret Thatcher was prime minister from 1979 to 1990 and is often credited with overseeing a period of great change in Britain: from privatising nationalised industries to allowing council tenants to buy their homes and reining in the power of the unions.
Here some experts and those who were there at the time reflect on the impact she had.
The unions: Nicholas Jones, labour relations expert
Margaret Thatcher's demolition job on the industrial might of the British trade union movement helped to generate an economic revolution. In the late 1970s, millions of days a year were being lost through strike action but at the end of her premiership stoppages were a fraction of what they had once been.
Slowly but surely the unions' strike weapon was emasculated. Strike ballots were required by law; walkouts were no longer possible on a show of hands in a car park; flying pickets and secondary action had been outlawed; and most importantly of all, a union's assets were at risk if there was "unlawful" action, as the NUM president Arthur Scargill discovered to his cost in the 1984-85 pit dispute.
Mr Scargill, like other union leaders of his era, had grown used under the previous Labour governments of Harold Wilson and James Callaghan to employers giving way. But Mrs Thatcher, backed by a largely supportive national press, was able to prove that the disputes of the 1980s would be won or lost not just on the picket line but also on the back of public opinion, and much of the media's coverage was turned against the unions.
The 1986 Big Bang and the deregulation of financial markets in the City of London only served to underline the demise of the trade unions. The end of nationalisation and the take-up of shares by workers in the newly privatised industries was a stark reminder of the shift that had taken place.
Share ownership trebled in the Thatcher decade and so did the growth in home ownership after the sale of council houses. By the late 1980s the all-out strike was history; no union could ask its heavily mortgaged members to contemplate anything more than a one or perhaps two-day strike.
Organisationally the killer blow for the unions was the end of the closed shop and withdrawal of "check-off" agreements that required employers to deduct union contributions.
Today union membership is half what it was: in 1979, when Mrs Thatcher became prime minister, the TUC's affiliated membership stood at just over 12 million, the highest it had ever been.
Privatisation: Gerry Grimstone, former Treasury civil servant
I was in charge of privatisation policy between 1982 and 1986 and oversaw 22 of the big privatisations that took place.
It was a really exciting time when we were breaking new ground. We latched on to the programme of popular capitalism and saw there was a close relationship between the sale of council homes, personal equity plans and employee shareholding. Margaret Thatcher had an evangelical zeal to involve ordinary people in ownership and she took no prisoners.
At the time, I serviced the cabinet committee which was in charge of monitoring the progress of the privatisation programme. We drew monthly progress charts on what each department was doing and she would tear to pieces anyone who was not keeping up. I remember one Number 10 policy adviser saying to me that she was not so much the captain of the ship but the coachman behind a bunch of unruly horses, and the only way to make them perform was to put nails in the whips. It was a very driven policy.
In the civil service, the brightest and the best brains were working on it. There was the old guard resistance at first to the dismantling of big bureaucratic structures. But the younger, more radical officials thought it was a fantastic thing to do. It was amazingly exciting work for people - a strange mixture of social engineering and macro-economic policy - and it was a topic in which Britain led the world.
At the beginning, we were doing the easy ones: the companies that would fit more normally into the private sector, like British Airways, British Telecom and Jaguar. It was very hard to argue that those companies should be in the public sector. It is easy to forget what size the public commercial sector was - it was 15% of GDP. Britain was a very, very socialist country.
After she left, you had various people trying to reignite the evangelical zeal, but the privatisations they then had to look at were less straightforward, like the railways, and it's easy, with hindsight, to let some of these taint the privatisations that happened before.
The Big Bang: Roy Batchelor, professor of banking and finance
Deregulation of the stock market, the so-called Big Bang, had to happen. It was a response to the needs of global business and finance. It did the UK economy a huge service for over 20 years and the benefits have been huge.
In the 1980s, luckily we had a government who understood how the financial world was changing and took steps from the outset to make sure that London caught up and, in time, overtook other competitors like New York.
The Big Bang happened on one day in October 1986 and the result was lots of mergers and hitherto fragmented parts of the City starting to come together - stock brokers, money brokers and banks. It was the start of the creation of financial conglomerates.
In purely GDP terms it was hugely beneficial and since then London has never been overtaken as a financial centre. Global businesses came to London, creating jobs, and the City provided finance to Britain and around the world. The impact on growth and the level of economic activity was a tremendously positive step. London was a leading financial centre and it was a very necessary step to make sure that leadership was sustained.
Enormous financial behemoths were created, but I don't think it was understood exactly how to regulate them and that continues to be the challenge.
Regulation in the City and the financial markets pre-Big Bang was a gentlemen's club. There was a feeling that everyone knew everyone and self-regulation could work, although disasters did still happen then, but on a smaller scale.
After Big Bang, institutions were much larger and more complex financial instruments were created, not because of it but because of the way in which financial products were developing. It is fair to say that regulators did not keep up with this. Generally, regulators have struggled to come up with a system that maintains competitiveness while maintaining sufficient surveillance.
Housing: Nick Raynsford, former Labour housing minister
The right of council tenants to buy the homes they lived in was emblematic of Thatcher's government, as it encouraged people to operate outside the welfare state.
It was very much public bad/private good, very characteristic of her approach.
But it chimed incredibly well with the aspirations of people at the time to be owner-occupiers, which had been growing throughout the 1970s.
That is why Labour was right to adopt it as a policy in the mid 1980s, and it remains valid today.
It was great for those who benefited from it.
The problem was that the Thatcher government did not care about those who lost out as a result of it and did not do enough to replenish the housing stock that had been sold off.
This, coupled with a shift in policy towards treating council housing as an emergency option, rather than homes for ordinary working families, meant the housing stock had fallen into a shocking condition by the mid-1990s.
Labour's priority when it came to power in 1997 was to address a £19bn backlog in repairs. The other problem was that the houses in the best condition tended to be the ones that were sold off.
There was a serious problem in the late 1990s with abandonment. I had to demolish relatively newly built estates in northern towns because they were standing empty and had fallen into disrepair.
Housing was not a priority for Tony Blair, compared to health and education.
A lot of social housing was built during the Blair and Brown years, and criticism that more council houses should have been built misses the point.
The situation could have been far worse if Conservative peers in the House of Lords had not fiercely resisted Thatcher's plans to extend the right-to-buy to housing association properties in the 1990s.
Public services: Stephen Dorrell, former Conservative health secretary
She had very clear views about what she wanted to do but she was also a very practical woman. She was a supporter of the NHS and she was also very cautious about it. She was concerned about the political impact of engaging in major changes in the health service.
When she became prime minister, she certainly had policy priorities and on public services she dealt with education policy first because it was her comfort zone. She was a former education secretary.
But Margaret Thatcher was the prime minister that did facilitate the fundamental change in the way we think about the NHS and the management of the health service. The 1990 reforms - which gave family doctors the power to take control of their own budgets and to buy care under the GP fundholding scheme - are called the Ken Clarke reforms, but she was absolutely involved - as she was in every area of government.
The thing I say about the Andrew Lansley Act [the coalition's recent NHS reforms] is that it is actually based on the same principle of commissioning as the 1990 reforms, and the Thatcher government was the government that first passed this piece of legislation.
The acid test of any policy change is whether it is reversed. The policy has not been reversed. It has been pursued by practically every health secretary since 1990, with the exception of Frank Dobson. The Major years certainly served to allow these reforms to bed in.
Margaret Thatcher's governments set off a series of changes that have been followed through by successive administrations and changes that can be traced back to the Thatcher years. In education, Ken Baker introduced grant-maintained schools and city technical colleges - the precursor of academies, introduced by Labour and extended by Michael Gove.
Poverty and inequality: Victoria Honeyman, lecturer in British politics
Mrs Thatcher was an ideologically driven leader. That's not to say she wasn't pragmatic as well, but for her it was all about the ideology. If you think about what that means, then she was always going to focus on maximising profit and minimising cost.
It was inevitable in Britain in the 1980s that maximising profits meant looking towards the emerging markets like banking and financial services, the repercussions of which we can still see today.
Minimising spending meant reducing the cost of the industries that cost the most money - mining and manufacturing, which were concentrated in the north and in Wales.
If you push this ideology to its logical outcome then the north was losing out and the south was gaining. That's not to say that she deliberately declared war on the north: she was just looking to create a profitable economy and a more powerful country.
But the result was the closing of industries in areas that were then not replaced by anything. In former mining towns and villages in Yorkshire, Newcastle, Durham, Wales and Scotland, communities have died. There isn't really any employment. The service industries that grew up since the 1980s have not reached them. You had generation after generation going into work in the old industries, but now you have generation after generation living in poverty.
There is no doubt that inequality grew and poverty increased under Thatcher. Her response to that, I guess, would be "it's all about the individual. You have to go out there and make things happen if you want them." That sounds very good on paper, but for some people that simply didn't materialise.
New Labour did not abandon the fundamental elements of Thatcherism, particularly economic Thatcherism. They tried to deal with its negative impact in a more socially democratic way, introducing working tax credits and the minimum wage, but the fundamental elements were never abandoned.
They tried to mitigate some of the harshness, but it is very difficult to deal with. Unless you go back to directing industry into certain areas it's very difficult to create employment where the economy has moved out.