I love argument, I love debate. I don’t expect anyone just to sit there and agree with me, that’s not their job.
– Margaret Thatcher, Prime Minister of the United Kingdom from 1979 to 1990
The blow by IMF in 1976 was perfect timing for the ambitious grocer’s daughter with a degree in Chemistry and Law. Margaret Thatcher who blamed the establishment for allowing the country to decline to its sorry state, was, after two prior disappointing defeats, appointed Parliamentary Secretary to the Ministry of Pensions.
She famously said in 1973, as Education Secretary, “I don’t think there will be a woman prime minister in my lifetime.” She was happily proven wrong, and was elected to be Prime Minister in 1979. And Maggie got cracking to the task of changing the country. She was determined to cut personal taxation, reduce public expenditure, curb trade union power, have less government interference, and get individuals and businesses more independent… through the following.
Pulverising the unions
Margaret Thatcher saw trade unions as inefficient, abusive, restrictive leeches hampering the growth of British manufacturers, and felt that unless they were brought to book, British companies would not be able to thrive in the new, liberal, low-inflation environment she was determined to create.
Unions were holding the country hostage. Rubbish was uncollected on the streets because the binmen were on strike, patients were left in hospital waiting-rooms because the wheelchair porters were on strike, bodies were left in morgues because the gravediggers were on strike. Many of them were sympathy strikes – if the bus drivers’ union of London decided to go on strike, well the fishmongers union of Sheffield could go on strike in sympathy with them. And most of the time, it was just a couple of loud and mouthy union leaders intimidating other members.
Due to this, the country had effectively a three-day working week. Frequent strikes shut down power so companies were forced to close for two days a week. Equally worrying, the unions had tremendous political influence which they would use to cajole and threaten the government of the day. In fact, they were responsible for the fall of Ted Heath’s government in 1974. For a firm believer in democracy like Thatcher, the idea that unelected union leaders could bully and even oust an elected government was obscene.
Thatcher was also very influenced by Friedrich Von Hayek (whom she described once as “one of the greatest intellectual minds of the 20th century”) who wrote in his book, The Road to Serfdom, “The trade unions have become the biggest obstacle to raising the living standards of the working class as a whole; they are the chief cause of unemployment and the main reason for the decline of the British economy. …Britain remains paralysed by the consequences of the coercive powers irresponsibly conferred to her until these special privileges are revoked.”
And so she revoked them. A series of seven progressive and remorseless Acts of Parliament between 1980 and 1990 did it. Margaret Thatcher’s demolition job on the industrial might of the British trade union movement helped to generate an economic revolution, something no Prime Minister before her time had dared to do.
Privatising Britain
Privatisation became one of the most enduring of the Thatcher legacies, not only in Britain but copied in many countries throughout the world. Through privatisation, she pushed people into the competitive market where they had the honour of knowing they could go broke, which in turn had a transformational effect on institutions who had always thought they were too big (or too fat) to fail.
The rationale for privatisation was to reduce the role of the state in the economy, restore the powers of decision to the individual, implement the ideal of the property-owning democracy, improve productive efficiency and encourage employee share ownership, thereby improving industrial relations.
There were many who were horrified, the most famous criticism of the privatisation programme coming from Harold Macmillan, former Prime Minister of UK, when he described asset sales to finance current expenditure as “selling the family jewels!”
To which Maggie famously retorted, “No, it is selling back to the family!”
There was not much point in holding on to the family silver anyway if it was losing you GBP30 a second, as the British Steel Corporation was in 1980. After privatisation, by 1989, British Steel was producing as much steel as in 1979 but with one third of the labour force. By the early 1990s, British Telecom, British Steel, British Gas, British Airways and the British Airports Authorities were all hugely profitable companies in the private sector, whereas in the 1970s many of them were drains on the Treasury.
Between 1977 and 1995, under Thatcher’s privatisation drive, the British government raised GBP97billion from privatisation. Individual share ownership, thanks largely to the privatisation programme but also employee share schemes, increased sharply – from 3 million in 1979 to 9 million in 1988.
Join us in part 3 next week as I show you how Thatcher ‘Brought Sexy Back’ before Justin Timberlake did in his music video. Or well, at least Sexy Global Finance back. And gave Britons the Right To Buy Property while monetising the international education system.
The views expressed here are those of the columnist and do not necessarily represent the views of New Sarawak Tribune. Feedback can reach the writer at beatrice@ibrasiagroup.com
