Wednesday, 15 August 2012

Thatcher Legacy

The rumour of her death made me have a look at her Legacy. For those who want the short version just read the paragraph below, more information including sources follow below.

Mrs Thatcher made quite a few people very rich and a lot of people very poor. In war she killed hundreds, cut the regulations that caused the current financial crisis, helped dictators escape prison and caused high unemployment and inflation. She did not believe in society and many communities have not recovered from her actions. Yet the PMs following her have continued her policies, short term profit from privatisation leading to increased long term costs paid for by the society she didn't believe in.

So in more detail.
On May 4, 1979, Margaret Thatcher strode into Number 10 and Britain changed for ever. Standing on the steps, she quoted St Francis of Assisi… “Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there
is doubt, may we bring faith. And where there is despair, may we bring hope.” She brought despair.

What followed was 11 years in which she polarised the country. A few got very wealthy, vast numbers lost their jobs including whole communities.

Thatchers Legacy
The roots of today’s current financial chaos can be traced directly back to October 27, 1986, when the biggest revolution in the financial markets took place. Thatcher saw London being overtaken as the centre of world finance by New York and she decided that its problem was over-regulation. The Big Bang saw an overhaul of the system with a “light touch” approach to regulating banks and trading. Bonuses went through the roof as “greed is good” became the mantra and the markets became a casino. This eventually lead to lhe credit crunch Weak banking regulations led to the irresponsible lending that triggered today’s crisis. World leaders now call for stricter rules.

Thatcher’s market-led policies saw the sale of 20 state-controlled companies including British Telecom. Sales were marked by huge advertising campaigns, like “Tell Sid” for British Gas, which ended with a £5.4billion sell off. She said she wanted to open up share ownership to all. But most people who bought shares in the newly- privatised firms sold quickly to make a quick profit. The proportion of shares held by individuals rather than institutions did not actually increase. The legacy: With the family silver sold off, market forces now set the price. And privatisation is still in the air re the Royal Mail, NHS, schools .... Yet the Government has also had to part-nationalise several banks to save them from collapse. The financial crisis has not led to the three big parties to question if anything is wrong with the current system.

Thatcher seized on right-wing jibes that Britain had become the sick man of Europe to launch an unprecedented attack on the trade union movement. Strikes were a regular occurrence and crippled the country. The three-day week was introduced under Edward Heath. And Callaghan’s Labour government in 1978 oversaw the strikes of the Winter of Discontent. On election, Thatcher used the situation as an excuse to crush the unions. She simply refused to listen to the workers’ representatives,. The legacy: Thatcher weakened worker’s rights to the extent that they had little control over their working
conditions. Labour since introduced the minimum wage but has stopped short of handing over more rights to workers.

Thatcher was determined to break the miners and engineered their crippling defeat. The Ridley Plan detailed how they would fight, and defeat, a major strike in a nationalised industry. In
1984, the National Union of Mineworkers went out on strike for a year over planned pit closures and their defeat marked the end of serious union might. The legacy: The coal industry was sold off and gradually shut down. Communities had their hearts ripped out when the pit closed and many have still not recovered. High unemployment still haunts many former pit villages along with poverty, suicide and depression.

When Thatcher came to power she started a revolution in home ownership by allowing council tenants to buy their own homes. Under the right-to-buy scheme, a discount was given taking into account rent paid over the years. Speculators took advantage of the deals on offer in high demand areas like London and filled their boots by arranging deferred payment deals. The legacy: Increased home ownership led to greater affluence being passed from parents to children. But the disappearance of council homes put great strain on the limited public housing stocks remaining making it harder for poor families to find places to live. And as repossessions soar, there are millions of desperate people on council house waiting lists.

The introduction of the Community Charge for local government sounded the death knell for Thatcherism. Abolishing the old rates system, the charge – quickly dubbed the Poll Tax – was worked out on a flat rate
where the number of people living in a house determined its charge rate. Middle England was incensed that a man living in a semi would end up paying the same as a millionaire in a huge mansion down the road. The legacy: Thatcher’s downfall. The charge divided her party and was an electoral liability which,along with trouble over Europe, led to her resignation. The Poll Tax was replaced by the Council Tax system.

Thatcher tackled high inflation by raising interest rates and slashing public spending. This led to a huge rise in unemployment topping 3.6 million. Recession hit the North and manufacturing industry hardest and factory output dropped by more than 30
per cent. Unemployed workers were told by Norman Tebbit to get on their bikes to look for new jobs.

The legacy: The manufacturing industry was decimated and has never recovered as Britain moved
to a service economy.

You'd never guess after listening to Tories praising her that
average economic growth in Britain in the dismal 1970s, at 2.4% a year, was almost exactly the same as in the "sunny Thatcherite 1980s" – though a good deal more fairly distributed – and significantly higher than in the free-market boom years of the last two decades. Nor would you imagine that there was far greater equality and social mobility than after Thatcher got to work. Or that, while industrial conflict was often sharp in the 1970s, there was nothing to match the violence of the riots and industrial confrontations of Thatcher's Britain. What is true, of course, is that the seventies saw a crisis of economic power, in which the labour movement was strong enough to block attacks on workers' interests but not politicised enough to push through an alternative to the failing model of the postwar years. That's why the assault on trade unionism was much harsher and the lurch to neoliberalism came
earlier in Britain than elsewhere in the advanced capitalist world. Labour paved the way for Thatcherism with the then prime minister Jim Callaghan's public conversion to monetarism in 1976 and the most savage public spending and real wage cuts since the war. Thatcher proceeded to crush the resistance of the unions and solve the "who rules" question that had done for her Tory predecessor, Ted Heath. The result was dramatic, not only in the huge boost to inequality and the income of the well-off, but
also in the US-style decline in the share of GDP going to wages and salaries – which fell from a
peak of 65% in 1975 to 53%
– as corporate profits swelled. That helps explain why Thatcher's cheerleaders and the country's wider elite are convinced her
years in power and her legacy of deregulation and privatisation have been a feast of general
prosperity, even when that's not remotely borne out by the facts. For while the issue of social power was settled for at least a
generation and industry restructured in the corporate interest, the great leap forward
promised for the economy never materialised. It's not just that conventional growth has been
sluggish over the last two decades. So have investment, productivity and manufacturing, while the quintessentially Thatcherite housing and finance boom fostered by her New Labour
successors has driven the economy into a slump, discrediting the ideology that
underpinned it in the process. Who now believes it "had to happen" like this? Certainly not the British people, to judge by
recent opinion polls. But despite the crash, the Tory-New Labour neoliberal consensus that
has been Thatcher's greatest political legacy staggers on. As the former chancellor Geoffrey Howe said on her 80th birthday: "The real triumph was to have transformed not just one
party, but two." as Blair and Brown continued her policies. Even the LD have joined in and are propping up the current shambles in their bid for power.

Odd that together with US presidents Reagan and Bush, she is credited by the right with bringing about the end of the Cold War. No mention of Gorbachev, who surely had a lot more to do with it.

On her legacy; Stelios said " At the very least, she has helped change the way women are perceived in many parts of the world" and yet she is disliked by feminists.

She is praised for increasing the number of house owners but caused a crisis in council housing.

Her popularity increased due to the Falkland crisis yet her diplomats caused it, giving them the impression that they would not be defended. She failed to answer questons about the Belgrano, sunk outside the exclusion zone causing the deaths of over three hundred. And the islands security continues to be costly as no sustainable solution has been achieved. Theres also the dodgy deal she did with dictator Pinochet, protecting him from arrest as he had helped her during the conflict.



howard thomas said...

Well Adrian you got some of that right! I've no doubt the Mrs Thatcher gambled on a succesful war to boost her popularity. The MoD were wll aware of the impending crisis. I happen to know someone who's father worked for a company that had very detailed maps of the islands. Some months before it all kicked of the MoD took away all those maps! In short I believe that she gave the Argentinians the 'come on' to make sure a war would happen.
However you definitely have tinted glasses with regard to the state of the UK prior to her election. The UK was the 'sick man of Europe'.
The miners union was deliberately causing conflict with the government and something had to change. You simply cannot have events like the 3 day week and tyhw winter of discontent and run a successful country. She did something that had to be done when she took on Scargill and co. As you say the Labour governments since have not changed her legislation on striking and pickets. Why not I wonder?
I suspect that she was quite happy for the industrial base of the UK to shrink in favour of the service economy. By getting rid of some of the biggest employers she also helped to kill off union power. However such a small industrial base is the main reason that it is now so difficult for the UK to have a growing economy now.
I'm certainly no lover of greedy bankers and the super rich who pay virtually no tax, but it ought to be the Labour party that offers a proper alternative instead of being virtually another Tory party. That alternative ought to encourage people to work and make sure that working for living pays, which at present is not the case for a significant number of people. Who can blame them for not working if there is no incentive? I fully realise that there are communities, such as the ex mining towns where there are no jobs and little hope . This really should be addressed in some radical and effective manner.
Mrs Thatcher's poll tax was as you say her undoing and in a party where leaders who are a liability will be swiftly removed, her time was up.
Selling council housing was not neccessarily a bad thing , but the money should have been re invested in new stock. Privatising utilities was a monay spinner at the time for the government, but boy are we paying for it now. TWA's customers are currently paying for the purchase by Kemble Water who saddled the company with the cost of the debt.
Back to social housing as we now call it. Allowing housing associations to own the housing stock is madness in itself and the most expensive way possible to provide social housing. Better than that its not even an asset which can be sold off if the need arises.
Mrs Thatcher was very much a 'marmite' politcian, you either loved or hated her. Some of what she did was needed and some was not, but then I suppose that could be said of all PMs.

Adrian Windisch said...

On her vindictiveness you reminded me of het gettin rid of London Council to get rid of Ken. That didnt quite work out. And priceless infornatuon was lost as local councils had to pick up the pieces.

Actually at the time I quite admired her, I was a child and she radical. First woman PM, as you say standing up to Scargale and also Europe. But it turned out she did too much damage. Perhaps a couple of things like Leyland needed sellin but not utilitieis. People now forget we used to lead the world in manufacturing motorbikes for example. Not much left here now