The Downing Street Years

by Margaret Thatcher

  More generally, there was the question of how to treat children within the tax and benefit system. At one extreme were those ‘libertarians’ who believed that children no more merited recognition within the tax and benefit systems than a consumer durable. At the other were those who would have liked a fully fledged ‘natalist policy’ to increase the birth rate. I rejected both views. But I accepted the long-standing idea that the tax someone paid on his income should take into account his family responsibilities. This starting point was important in deciding what to do about child benefit. This sum was paid — tax free — to many families whose incomes were such that they did not really need it and was very expensive. But, as I reminded the Treasury on a number of occasions, it had been introduced partly as an equivalent of the (now abolished) child tax allowances, so there was an argument on grounds of fairness that its real value should be sustained. As a compromise we eventually decided in the autumn of 1990 that it should be uprated for the first child but not the others: but this did not settle the larger question of what the future of child support should be. I would have liked to return to a system including child tax allowances, which I believed would have been fairer, clearer and — incidentally — extremely popular. But the fiscal purists in the Treasury were still fighting a strong action against me on this at the time I left Downing Street.

  All that family policy can do is to create a framework in which families are encouraged to stay together and provide properly for their children. The wider influences of the media, schools and above all the churches are more powerful than anything government can do. But so much hung on what happened to the structure of the nation’s families that only the most myopic libertarian would regard it as outside the purview of the state: for my part, I felt that over the years the state had done so much harm that the opportunity to do some remedial work was not to be missed.

  THE ARTS

  Perhaps nowhere were the proper limits of what the state should do more hotly disputed than in the world of the arts. The proponents of subsidies would stress that the state today was only performing the role of generous private patrons of the past, that access to artistic treasures must not depend on personal wealth and — more practically — that every other country subsidized the arts and therefore we must too. Against that — and this was significantly the view of Nick Ridley, the only member of the Government who could really paint — it could be argued that no artist had a right to a living from his work and that the market should be left to operate as with any other activity. My own attitude was somewhat different from either of these. I was not convinced that the state should play Maecenas. Artistic talent — let alone artistic genius — is unplanned, unpredictable, eccentrically individual. Regimented, subsidized, owned and determined by the state, it withers. Moreover the ‘state’ in these cases comes to mean the vested interests of the arts lobby. I wanted to see the private sector raising more money and bringing business acumen and efficiency to bear on the administration of cultural institutions. I wanted to encourage private individuals to give by covenant, not the state to take through taxes. But I was profoundly conscious of how a country’s art collections, museums, libraries, operas and orchestras combine with its architecture and monuments to magnify its international standing. It is not just or even mainly a question of revenues from tourism: the public manifestation of a nation’s culture is as much a demonstration of its qualities as the size of its GDP is of its energies. Consequently, it mattered to me that culturally as well as economically Britain should be able to hold its head up in comparison with the United States and Europe. And indeed we did. London is one of the world’s great centres of culture. We have, in the West End, the most vibrant commercial theatre in the world. We have probably the widest variety of museums of any city, ranging from the intimate and yet magnificent Wallace Collection to the glories of the British Museum. The performing arts, whether theatre, music or opera are represented in astonishing diversity.

  But there is always more to be done — if it can be afforded. I certainly did not regret — though from the chorus of complaints about ‘cuts’ you would not have known it — that central government spending on the arts rose sharply in real terms while I was in Downing Street. Greater stability was provided too: from 1988 the Arts Council budget was set for a three-year period. Government funds were, wherever possible, used to attract private sponsorship for developing existing museums and galleries. For example, in March 1990 we announced the establishment of a new Museums and Galleries Improvement Fund — a joint initiative with the Wolfson Foundation. A succession of budgets included provisions to encourage covenanted giving. The most potentially significant of these was the introduction in October 1990 of a new tax relief for one-off gifts to charities from individuals and companies.

  My greatest disappointment was my inability to secure for Britain the magnificent Thyssen Collection. In February 1988 my old friend Sir Peter Smithers wrote to me from Switzerland to tell me that his neighbour, Baron ‘Heinie’ Thyssen-Bornemisza, was keen to have his collection of Old and Modern Masters come permanently to Britain. Fifty of the Thyssen Collection pictures were on show at the Royal Academy and I had been to see them like so many others — and they were just fabulous. I asked for a report on the full Thyssen Collection and learned that it contained some supreme masterpieces including a Van Eyck Annunciation, Dürer’s Christ Among the Doctors and Holbein’s Henry VIII, as well as paintings by Carpaccio, Caravaggio, Cézanne, Degas and Van Gogh. I was determined to do all that we could to secure it for Britain. I had been to Portugal in 1984 where I had seen the Gulbenkian Collection which had been offered to Britain in the 1930s but, sadly, was let slip.

  The project would have been very costly. We thought that it would require at least £200 million to satisfy the Baron’s requirements: but for this we would receive a collection valued at Sotheby’s at $1.2 billion. The cost would have had to be met by a combination of public and private funding to go towards the building in which the collection would be housed. It would have caused an outcry from some of the British arts lobby, who understandably thought that such sums would be better spent on them and their favoured projects. But it was worth it.

  Nick Ridley and I took charge of the negotiations. Cabinet agreed the allocation of money. The international legal problems were all ironed out. Within a matter of six weeks the formal offer was taken personally by Robin Butler (the Cabinet Secretary) to Baron Thyssen in Switzerland. Alas, the real problem — insuperable as it turned out — was that it was not clear who precisely had the final say about the disposition of the collection. Nor was it clear what the status was of a loan agreement reached with the Spanish Government to the effect that the collection would go there for a period of years. In the end, it did indeed go to Spain on loan. But I had no regrets about having made the attempt to win it for Britain. It was not only a great treasure but a good investment — in every sense.

  BROADCASTING

  The world of the media had in common with that of the arts a highly developed sense of its own importance to the life of the nation. But whereas the arts lobby was constantly urging government to do more, the broadcasters were pressing us to do less. Broadcasting was one of a number of areas — the professions such as teaching, medicine and the law were others — in which special pleading by powerful interest groups was disguised as high-minded commitment to some greater good. So anyone who queried, as I did, whether a licence fee — with non-payment subject to criminal sanctions — was the best way to pay for the BBC, was likely to be pilloried as at best philistine and at worst undermining its ‘constitutional independence’. Criticism of the broadcasters’ decisions to show material which outraged the sense of public decency or played into the hands of terrorists and criminals was always likely to be met with accusations of censorship. Attempts to break the powerful duopoly which the BBC and ITV had achieved — which encouraged restrictive practices, increased costs and kept out talent — were decried as threatening the ‘qu
ality of broadcasting’. Some of Britain’s television and radio was of very high quality indeed, particularly drama and news. Internationally, it was in a class of its own. But the idea that a small clique of broadcasting professionals always knew what was best and that they should be more or less immune from criticism or competition was not one I could accept. Unfortunately, in the Home Office the broadcasters often found a ready advocate. The irony that a Reithian rhetoric should be used to defend a moral neutrality between terrorism and the forces of law and order, as well as programmes that seemed to many to be scurrilous and offensive, was quite lost.

  The notion of ‘public service broadcasting’ was the kernel of what the broadcasting oligopolists claimed to be defending. Unfortunately, when subject to closer inspection that kernel began rapidly to disintegrate. ‘Public service broadcasting’ was extremely difficult to define. One element was supposed to be that viewers or listeners in all parts of the country who paid the same licence fee should be able to receive all public service channels — what was described as the concept of ‘universality’. More important, though, was the idea that there should be a proper balance of information, education and entertainment offered through a wide range of high quality programmes. More recently, the public service obligation had been extended to cover particular ‘minority’ programmes. The BBC and the IBA — which regulated the independent television companies — mainly gave effect to this public service obligation by their influence over scheduling.

  So much for the — somewhat nebulous and increasingly outdated — theory. The practice was very different. BBC1 and ITV ran programmes that were increasingly indistinguishable from commercial programming in market systems — soap operas, sport, game shows and made-for-TV films. To use Benthamite language, the public broadcasters were claiming the rights of poetry but providing us with pushpin. Good fun perhaps. But did our civilization really depend on it?

  Furthermore the duopoly was being undermined by technological developments. Scarcity of available spectrum had previously determined that only a very few channels could be broadcast. But this was changing. It seemed likely that ever higher-frequency parts of the spectrum would be able to be brought into use. Cable television and direct broadcasting by satellite (DBS) also looked likely to transform the possibilities. There was more opportunity for payment — per channel or per programme — by subscription. An entire new world was opening up.

  I believed we should take advantage of these technical possibilities to give viewers a far wider choice. This was already happening in countries as diverse as the United States and Luxemburg. Why not in Britain? But this vastly increased potential demand for programmes should not be met from within the existing duopoly. I wanted to see the widest competition among and opportunities for the independent producers — who were themselves virtually a creation of our earlier decision to set up Channel 4 in 1982. I also believed that it would be possible to combine more choice for viewers and more opportunity for producers with standards — both of production and of taste — that were as high as, if not higher than, those under the existing duopoly. To make assurance doubly sure, however, I wanted to establish independent watchdogs to keep standards high by exposing broadcasters to public criticism, complaint and debate.

  The Peacock Committee on Broadcasting, which had been set up by Leon Brittan as Home Secretary in March 1985 and reported the following year, provided a good opportunity to look at all these matters once again. I would have liked to find an alternative to the BBC licence fee. One possibility was advertising: Peacock rejected the idea. Willie Whitelaw too was fiercely opposed to it and indeed threatened to resign from the Government if it were introduced. I felt that index-linking the licence fee achieved something of the same purpose — to make the BBC more cost-conscious and business-like. In October 1986 the ministerial committee on broadcasting which I chaired agreed that the BBC licence fee should remain at £58 until April 1988 and then be linked to the RPI until 1991. But I did not drop my long-term reservations about the licence fee as the source of its funding. It was agreed to study whether the licence fee could be replaced by subscription.

  At least as important for the future was the need to break the BBC and ITV duopoly over the production of the programmes they showed. My ministerial group agreed that the Government should set a target of 25 per cent of BBC and ITV programmes to be provided by independent producers. But there was a sharp division between those of us like Nigel Lawson and David Young who believed that the BBC and ITV would use every opportunity to resist this and Douglas Hurd and Willie Whitelaw who thought that they could be persuaded without legislation. Douglas was to enter into discussions with the broadcasters and report back. In the end we had to legislate to secure it.

  I also insisted, against Home Office resistance, that our 1987 general election manifesto should contain a firm commitment to ‘bring forward proposals for stronger and more effective arrangements to reflect [public] concern [about] the display of sex and violence on television’. This produced the Broadcasting Standards Council of which William Rees-Mogg became the very effective chairman and which was put on a statutory basis in the 1989 Broadcasting Act.

  After the election there was more time to think about the long-term future of broadcasting. Apart from the opportunities for more channels which technology offered and the continuing discussion about how to achieve the 25 per cent target for independent producers, we needed to consider the future of Channel 4 — which I would have liked to privatize altogether, though Douglas Hurd disagreed — and the still more important matter of how the existing system of allocating ITV franchises should be changed. The Peacock Committee recommended that the system be changed to become more ‘transparent’ and I strongly agreed with this objective. Under the Peacock proposals, if the IBA decided to award a franchise to a contractor other than the highest bidder it should be required to make a full, public and detailed statement of its reasons. This had the merit of openness and simplicity as well as maximizing revenues for the Treasury. But we immediately ran into the morass of arguments about ‘quality’.

  In September 1987 I held a seminar to which the main figures in broadcasting were invited to discuss the future. There was more agreement than I might have thought possible on the technical opportunities and the need for greater choice and competition. But some of those present took a dim view of our decision to set up a Broadcasting Standards Council and to remove the exemption enjoyed by the broadcasters from the provisions of the Obscene Publications Act. I was entirely unrepentant. I said that they must remember that television was special because it was watched in the family’s sitting-room. Standards on television had an effect on society as a whole and were therefore a matter of proper public interest for the Government.

  We had a number of discussions during 1988 about the contents of the planned white paper on broadcasting. (It was eventually published in November.) I was pressing for the phasing out of the BBC licence fee altogether to be announced in that document. But Douglas was against this and a powerful lobby on behalf of the BBC built up. In the end I agreed to drop my insistence on it and on the privatization of Channel 4. But I made more progress in ensuring that Channel 3 should be subject to much less heavy regulation under the new ITC (Independent Television Commission) than under the IBA.

  Of course, one could only do so much by changing the framework of the system: as always, it was the people who operated within it who were the key. The appointment of Duke Hussey as Chairman of the BBC in 1986 and later of John Birt as Deputy Director-General represented an improvement in every respect. When I met Duke Hussey and Joel Barnett — his deputy — in September 1988 I told them how much I supported the new approach being taken. But I also did not disguise my anger at the BBC’s continued ambivalence as regards the reporting of terrorism and violence. I said that the BBC had a duty to uphold the great institutions and liberties of the country from which we all benefited.

  The broadcasters continued to lobby fiercely again
st the proposals in the Broadcasting White Paper on the process of auctioning the ITV franchises. My preferred approach was that every applicant would have to pass a ‘quality threshold’ and then go on to offer a financial bid, with the ITC being obliged to select the highest. Otherwise a gathering of the great and the good could make an essentially arbitrary choice with clear possibilities of favouritism, injustice and propping up the status quo. But the Home Office team argued that we had to make concessions — first in June 1989 in response to consultation on the white paper and then at report stage of the broadcasting bill in the spring of 1990, when they said there would be great parliamentary difficulties otherwise. These unfortunately muddied the transparency which I had hoped to achieve and produced a compromise which turned out to be less than satisfactory when the ITC bestowed the franchises the following year ‘in the old-fashioned way’. Still, the new auctioning system — combined with the 25 per cent target for independent producers, the arrival of new satellite channels, and a successful assault on union restrictive practices — went some way towards weakening the monopolistic grip of the broadcasting establishment. They did not break it.

  SCIENCE AND THE ENVIRONMENT

  In 1988 and 1989 there was a great burst of public interest in the environment. Unfortunately, under the green environmental umbrella sheltered a number of only slightly connected issues. At the lowest but not by any means least important level, there was concern for the local environment, which I too always felt strongly about. Indeed, every time I came back from some spotlessly maintained foreign city my staff and the then Secretary of State for the Environment knew that they could expect a stiff lecture on the litter-strewn streets of parts of London. But this was essentially and necessarily a matter for the local community, though the privatizing of badly run municipal cleaning services often helped.