by Jeremy Black
Thatcher’s success owed much to the weakness and divisions of the opposition. The Labour Party had drifted to the left in the 1970s and was affected by ‘entryism’ by far-left groups, so that there was little to choose in the 1980s between the views of some Labour MPs and those of Western European Communists. This situation, however, helped to lead to four successive Labour failures in the general elections of 1979, 1983, 1987 and 1992. The attempt to create a collectivist society by means of state action, a new-model society planned in accordance with socialist principles, was rejected by the electorate. Ironically, in law and order, social welfare and education, the Conservatives pursued a more interventionist and regulatory approach.
Labour’s was the most unimpressive record of any political party since the decline of the Liberals after the First World War, and one achieved despite serious economic difficulties for the Conservative governments in the early 1980s and the early 1990s. In each case, unemployment rose greatly. These recessions, however, did not lead to a revival of left-wing radicalism, and the circulation of the Communist daily newspaper, the Morning Star, fell below 10,000. Moreover, throughout the 1990s and 2000s well under 1 million working days per quarter were lost to labour disputes, a figure well below that in the 1980s. Yet, successive public opinion polls in the 1980s and early 1990s also revealed clear support for the welfare state, notably the NHS, which showed that the impact of Thatcher’s ideas on the wider public was limited. Only so much recasting was possible.
If the emphasis is on aggregate national trends, it is too easy to forget the local pattern of economic and social fortunes. In particular, the crisis in mining led to peaks in unemployment. Moreover, it was not simply that unemployment was highest in these areas, as well as in those that focused on heavy industry such as steel or shipbuilding, for example Consett, Corby and Sunderland. An additional problem was that these areas had the greatest percentage of households with a low weekly income, which ensured that per capita expenditure on income support was highest there. Alongside the decline of heavy industry, more recent spheres of growth, such as the chemical and car industries, also decayed. Indeed, British Leyland, which controlled much of the car industry, proved far from robust. Plagued by bad labour relations and poor management, the decline of British Leyland was symptomatic of the failure of corporatist solutions and the decline of much British industry.
The resulting regional contrasts were clear. Average annual household income in Wales in 1991–2 was £22,015, lower than in the north of England or Scotland. Whereas in 1994 the average weekly earnings of a working man were £419.40 in south-east England, they were £327.80 in northern England. The south east also paid a disproportionately high percentage of taxation, and thus benefited from Thatcher’s major cuts in income tax. The standard rate of income tax fell from 33 per cent in 1979 to 25 per cent in 1988. Cuts in other forms of taxation also benefited the south east disproportionately, as did the benefit from the privatization share issues.
Transfer payments to regions with a weaker economy became a key element in public finances, and an important aspect of the dependence of these regions on government. Scotland was a particular beneficiary of transfer payments, thanks to the Barnett formula for such transfers devised for the Callaghan government in 1978. Like Wales, it was also over-represented in Parliament, in both cases to the marked advantage of Labour. The north east of England also became a dependency region, with a particularly high percentage of state employees.
Manufacturing decline was matched by shifts in economic activity and a rise in the service sector, and this process led to a major change in the experience of work, a change linked to cultural and political developments. Management, research and development jobs were increasingly separate from production tasks: the former concentrated not in traditional manufacturing regions, but in south-east England, in areas such as the M4 corridor west of London, near Cambridge, and, to a lesser extent, in New Towns in southern England, such as Harlow, Milton Keynes and Stevenage.
The Establishment in general became more focused on London and the south east, with the world of money and services becoming more important than traditional industrial interests. Despite the attempt at the regional relocation of part of Whitehall, notably with Health and Social Security jobs going to Newcastle and both the Royal Mint and the Driver and Vehicle Licensing Agency moving to south Wales, no other part of the country saw office development to compare with that of London’s Docklands in the 1980s. Its development, notably that of Canary Wharf, became a key image of Thatcherism, so that the IRA attack in 1996 was a symbolic strike at the legacy of Thatcherism. With the creation of the London Docklands Development Corporation in 1981 (abolished in 1998), Docklands’ regeneration was put under the control of central government, rather than the left-wing local government. Governmental support played a role, notably in the development of the transport infrastructure, but the goal was business activity, which contrasted with the Millennium Dome built downstream at Greenwich in the late 1990s.
Yet, as a reminder of the variety concealed within aggregate regional indices – a variety that was central to the very diverse experience of change – there was, and is, also much poverty in the south east, not only in many parts of London, for example Tower Hamlets, but also along the Thames estuary, in the Medway towns, and in some places on the south coast. There were also important and persistent local and regional contrasts elsewhere in England as well as in Wales, Scotland and Northern Ireland.
Thatcher believed strongly in the need to cut (and indeed in the value of cutting) personal taxation, seeing this as a way to return money to those who had earned it and thus to provide economic incentives and to help strengthen personal freedoms. Corporation tax was also cut. A combination of rising real earnings, lower inflation and taxation, and easier and cheaper credit encouraged spending. Spending became a major expression of identity and a significant leisure activity. The move to twenty-four-hour shopping and the abolition of many restrictions on Sunday trading were symptomatic of this shift: the attempts in the 1930s to rally local ratepayers across Britain to oppose the Sunday opening of cinemas seemed long distant. Shopping patterns in the 1980s also reflected social and cultural trends in other respects, contributing to the sense of flux under Thatcher, despite her attempts to strike resonate notes of continuity.
Lax credit controls and low taxes led, however, in the late 1980s, to a consumer boom that resulted in inflation and imports. Simultaneously, the political position of the government came under acute pressure as a result of the Community Charge (commonly known as the Poll Tax), the proposed introduction of a flat-rate local tax, which caused a furore and also reflected the long-standing difficulty in creating a tax system to support local government, a difficulty that still continues. To Thatcher, the Community Charge represented a way to reduce the radicalism of Labour councils by making them responsible to electorates, all of whom would be affected by the financial consequences of their radicalism. The Community Charge also represented a means to reward her supporters, ‘our people’, who paid a disproportionate share of the existing taxation as they tended to own their own homes and to live in more expensive accommodation.
However, public agitation, which included a riot in London’s Trafalgar Square in March 1990, sapped confidence in Thatcher’s ability to guide and respond to the public mood and led Conservative MPs to fear their chance of re-election. Mounting opposition within the Conservative Party took fire over European integration, with Thatcher facing criticism from Cabinet colleagues, notably Geoffrey Howe. She fell as Prime Minister and leader of the Conservative Party in November 1990, to be replaced by John Major after an election conducted among Conservative MPs.
Politics, 1990–2010
Winning a narrow, and partly unexpected, success in the general election of 9 April 1992, a majority of twenty-one on 42 per cent of the vote (compared to 34 per cent for Labour and 18 for the Liberal Democrats), Major remained Prime Minister until defeated by Labour un
der Tony Blair in 1997. In office, Major suffered greatly from a disunited ministry that lost public confidence, and from a sense that he could not control developments, which contributed to a lack of personal authority. The savage recession of the early 1990s, which rapidly sent unemployment up, was followed by serious Conservative divisions over Europe, the humiliating failure in September 1992 to defend sterling’s place in the Exchange Rate Mechanism and, finally, an atmosphere of sleaze arising from MPs receiving money from interested parties in order to raise questions in Parliament. The Major government also ran out of steam. It had no flagship proposals that grabbed public attention and, instead, campaigns, such as ‘Back to Basics’ in late 1993, lacked support. The Community Charge was brought to an end in 1993, although privatization continued, notably with the mishandled splitting up of the rail system between the network and the train companies. However, these and other policies were overshadowed by a sense of failure. Yet, the Conservatives did not replace Major, notably in July 1995 when he was re-elected leader.
In the general election held on 1 May 1997, Labour won a big majority, the Conservatives losing all their seats in Scotland and Wales. Labour won 418 seats on 43.4 per cent of the votes. The geography of the results was particularly striking as Labour made major gains in southern England. Tactical voting for Labour reflected a willingness of voters to trust Tony Blair and his presentation of a reformed Labour. However, although Labour’s share of the vote had risen by 10.8 per cent, and was particularly apparent in the middle class, this rise was among a smaller turn-out. Indeed the Conservatives won more support in 1992 than Labour did in 1997: what was notable in 1997 was the readiness of Conservative supporters not to vote and of a middle-and working-class coalition of support for Labour that had a resonance of its triumph in 1945.
Party leader from July 1994, Blair won on the platform of ‘New Labour’, moving away from collectivist solutions based on interventionism and state planning, and prepared to embrace aspects of Thatcherism, not least the marketplace and modest rates of taxation. In 1995, Clause IV of the Labour party’s 1918 constitution – its commitment to public ownership of the means of production, distribution and exchange – was abandoned at Blair’s instigation after a ballot of party members, and, once in power, the industries privatized under Thatcher and Major were not renationalized, although a measure of public control was reintroduced in the rail industry.
The new government moved rapidly to introduce constitutional change. Referenda in Scotland and Wales in 1979 had not led to devolution, but in 1997 referenda resulted in the establishment of an Assembly in Cardiff and a Parliament in Edinburgh, with the latter wielding powers of taxation. In the 1997 general election 22 per cent of the Scottish votes cast had been for the Scottish National Party (SNP). In 2007, an SNP government gained power in Edinburgh. By then, constitutional judgments and documents such as the report produced by the Calman Commission on the future of Scotland were beginning to talk about shared sovereignty as a constitutional government. Moreover, polls in the late 2000s indicated that about 84 per cent of Scots identified themselves as Scottish not British, if asked to choose.
Devolved government was also reintroduced in Northern Ireland, as part of a settlement that involved the decommissioning of arms by the IRA and the Protestant paramilitaries. In December 1993, talks between the UK and Irish governments had led to the Downing Street Declaration: the two Prime Ministers, John Major and Albert Reynolds (1932–), agreed to a shared sovereignty that would guarantee the rights of Nationalists, while Unionists were assured that they would not be forced into a united Ireland. A paramilitary ceasefire, declared in 1994, breached in 1996 and resumed in 1997, provided a basis for negotiations, and in 1998 the Good Friday Agreement laid the basis for the resumption of provincial self-government. After the Agreement was endorsed by a referendum, an Assembly and a Northern Ireland Executive were both created. Power-sharing between the loyalist Democratic Unionist Party and the republican Sinn Fein worked at the governmental level, while significant transfers of money from Whitehall propped up a very large public sector. However, splinter paramilitary groups continued, with the ‘Real IRA’ killing twenty-nine in the Omagh bombing in 1998, and violent vandalism remaining a problem in many areas. Those who are unemployed in Northern Ireland are far more likely to resort to violence than their British counterparts.
In the event, the ‘New Labour’ project proved superficial and redundant, unable to effect significant improvement in the economy, and contributing, instead, to a serious crisis in public indebtedness, as government borrowing rose to sustain far higher expenditure on the welfare state. Moreover, under Blair, Labour abandoned its caution about economic individualism and personal affluence and its focus instead on state management and public investment. Indeed, under Blair, personal borrowing and indebtedness both rose to unprecedented heights. It was symptomatic of this trend that the Blair government actively supported plans for a change in the gambling regulations and for the construction of a supercasino, a major departure from the Nonconformist roots of the Labour movement.
Blair had sought to temper traditional Labour policies in pursuit of a middle or ‘third’ way that rejected socialism and trade union dominance in reconciling social democracy with the need to work with market economics. In practice, however, the interventionist role of government remained pronounced. Blair’s options were limited by the nature of his parliamentary party, part of which was unconvinced by his policies, and by his focus on foreign policy, especially after the terrorist attacks on the US on 11 September 2001.
However, there was also a serious clash between his talk of self-reliance and the reality of a politics that remained keen to see legislation and government as the solution to problems. Both this and the widespread failure to solve these problems, for example in health and education provision and standards, contributed to a sense of malaise. A combination of self-righteousness and sleaze (if not widespread corruption) on the part of the Blair government did not help, and the sense of mismatch between claims and achievement became increasingly stark. Delivery frequently fell short of New Labour rhetoric, as with the attempt to deal with feral youth through ASBOs (Anti-Social Behaviour Orders) and other law-enforcing mechanisms.
Blair was re-elected on 7 June 2001 and 5 May 2005, in large part thanks to Conservative unpopularity, which reflected the failure to produce an attractive political formula for their own supporters, let alone other voters. Indeed the Conservatives were still greatly affected by the extent to which their supporters did not vote. Their successive leaders, William Hague (1961–), Iain Duncan Smith (1954–) and Michael Howard (1941–), all proved to have politically vulnerable images. Hague proved a brighter leader and better House of Commons performer than Blair, but suffered from an uncertainty over whether to advocate policies that appealed to core supporters or to back a ‘modernization’ approach aimed at winning over uncommitted voters. The Conservatives found it difficult to gain a favourable public image. Their divisions helped Labour to paint them as far more extreme than was in fact the case. Hague’s election call in 2001 to ‘save the pound’ did not excite the country, although it captured the extent to which Blair’s willingness to enter the Eurozone threatened national sovereignty.
The 2001 election left Labour with a commanding majority of 167, even though there had been a 1.8 per cent swing against it in votes as the Conservative share rose. Labour success owed much to support from the Liberal Democrats in marginal seats. Despite the increase in their number of seats in 1997 and 2001, the Liberal Democrats were unable to gain a benefit from Conservative weakness that in any way approached that seized by Labour.
The fall in turn-out in the 2001 election to 59 per cent, the lowest since 1918 (and less than 40 per cent for those aged between eighteen and twenty-four) was a reflection of a sense that there was little difference between Labour and the Conservatives, limited support for change in favour of the latter, and widespread dissatisfaction with politicians; it
was not a testimony to confidence in the government. The sense of alienation felt by ‘Old’ Labour supporters was important, as was dissatisfaction with the Conservatives. Nevertheless, victory meant that Labour did not need to attract Liberal Democratic support by holding out the prospect of proportional representation. This issue became of greater importance with the rise of political extremism in the shape of the British National Party, which had three members elected to Burnley Council in 2002 and two Members to the European Parliament in 2009.
The 2005 election was a reprise of that of 2001. The Conservatives did better, but again failed to achieve a break-through. Moreover, the Liberal Democrats won 63 seats, a major limit to an attempt to analyse politics in terms only of Labour and Conservative, and also a challenge to any Conservative attempt to overturn Labour.
However, confidence in Labour’s intentions, integrity and competence was badly hit by its years in office. War in the Middle East, notably the decision to attack Iraq in 2003, further compromised Blair’s popularity, and Blair’s refusal to condemn Israel’s tactics during its attack on Lebanon in 2006 helped to lead to his promise to leave office, and then to his resignation in June 2007.
