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As a British journalist once put it, only two facts are indisputable in Margaret Thatcher’s reign: that she entered No. 10 in 1979, and that she left it in 1990. And everything in between these two facts caused and still causes fierce debates and ambiguous assessments.
Thatcher lifted the British economy from its knees, but killed the British coal industry. She made the British a nation of homeowners, but laid the foundations for today’s housing crisis. She defended the Falklands but crushed the trade unions. She was the most hated British politician – on the day she died, many people cheered and threw raucous parties. But she was the only prime minister (apart from Churchill) whose funeral was attended by Queen Elizabeth II.
Let’s look at least superficially at why she is hated and what legacy she has left to today’s Britain.
Unemployment and budget cuts
Thatcher is often scolded for the fact that the British labor market was hit pretty hard by her cabinet’s economic policies in the 1980s.
In the British popular perception, Thatcher’s image is somewhat reminiscent of Russia’s Gaidar and Chubais. They were two completely different countries and different reforms, which caused shock, but in the end brought benefits. But both in Russia and Britain, in their kitchens, they still curse their initiators.
If we try to explain in three words what it consisted in, it would be this: any British government is always forced to maneuver between two unquenchable fires: unemployment on the one hand and inflation and lack of money on the other. And Thatcher’s cabinet in the 80s directed all its energies to putting out the second fire, stopping subsidies to unprofitable enterprises in many sectors, cutting spending on civil servants’ salaries and curtailing many social programs, as well as raising the basic interest rate.
Compare: today everyone is crying about how high the prime rate of 5% is, while under Thatcher it never went below 7%, and in some particularly dramatic moments it reached 17%. It was in the 80s that Britons first learned what it was like when mortgage payments suddenly doubled by one and a half times because the government decided to fight inflation.
But the voices of discouraged homeowners sounded weak compared to those who lost their jobs under Thatcher. Miners, steelworkers, textile workers, shipbuilders and railroad workers went on strike in the 1980s against government measures that decided to stop funding unpromising industries and condemned many workers to unemployment, especially in the industrial north of England, Wales and Scotland.
All these measures were necessary, and should have been taken earlier. But any politician understood how unpopular they would be – and that is why the predecessors of “Iron Maggie” for many years protected the “sacred cow” of British industry, inherited by the country from the Victorian era.
Thatcher, on the other hand, never chased popularity (which eventually ended her career in 1990), but methodically did what she thought was right for the country without looking back at the disaffected.
Privatization
Privatization was an obvious continuation of Thatcher’s economic policy. In the 80s such state-owned enterprises as British Gas, British Telecom, British Airways went into the hands of private investors, and privatization of British railroads began (although this process was fully launched in the 90s).
On the one hand, the state managed to get rid of unprofitable assets. On the other hand, as it usually happens, the privatized enterprises were taken over by “efficient managers” who closed many areas that people needed and raised prices wherever possible. The consequences of Thatcher’s privatization are indirectly felt today when we complain about high energy bills or expensive train tickets that are constantly cancelled because private companies do not hire enough drivers to run them.
“Big Bang” City
While the “Iron Lady” was destroying industry with one hand, her other hand was building the country’s new economy. It was under Thatcher that the financial sector of Great Britain received a new development. The famous “Big Bang”, which took place in the financial industry in 1986, made London the financial center of Europe. The Thatcher government’s role here cannot be overestimated: it essentially untied the hands of City financiers by abolishing a number of different restrictions, commissions, deregulation and abolishing or reducing taxes. The financial sector, in turn, has spurred the growth of other industries – real estate, service industries. The London labor market as we know it today is the London created by Margaret Thatcher. And, probably, a good half of Russian Londoners live in the UK today because the “Iron Lady” once decided that the country was more important not for coal, steel and wool, but for stock exchange trading.
Actually, even the new financial quarter Canary Wharf, which by the beginning of the new century became a symbol of London as a world trade center, also appeared thanks to Thatcher (we had a separate article about it).
The defeat of labor unions
Few people now remember (especially among Winter’s readers, who mostly came to Britain in the twenty-first century), but before the 1980s the rights of working Britons were much better protected than they are today, at least on paper. This was not least because unions in various sectors had real power and could challenge many decisions by management if they infringed on workers’ rights.
This, of course, prevented Margaret Thatcher from carrying out shock therapy, and she consistently destroyed British trade unions by curtailing their rights and opportunities at the legislative level. Year after year, trade unions became more and more hampered and bureaucratized, they lost power and, as a consequence, people.
By our time, strong unions have remained in only one industry: transport. Yes, the legendary transport workers who still keep Londoners on their toes. Imagine how the British lived when the same turbulent unions ruled in the energy, utilities and other industries? Frankly speaking, one does not even know whether to scold Thatcher for cracking down on trade unions or, on the contrary, to thank her.
IRA hunger strike
A tragic and variously interpreted series of events in the early years of Thatcher’s premiership was linked to Ireland. Many members of the Irish Republican Army, a terrorist organization that advocated the withdrawal of Northern Ireland from the United Kingdom and its accession to the Republic of Ireland, were held in British prisons for many years. But while they used to have a special status close to that of prisoners of war and political prisoners, in 1976, shortly before the Thatcher-led Conservatives came to power, they were downgraded to common criminals.
The IRA fighters were not happy with this and demanded that their status be restored and went on hunger strike in protest. Thatcher personally forbade their special status. “A crime is a crime,” was her position. The IRA fighters did not surrender, and in 1981 ten of them died as a result of the hunger strike. Many politicians and the media have since openly expressed their hatred of the prime minister and have not hesitated to call Thatcher the very last words.
Falklands
In 1982, Argentina decided to give Britain a “little victorious war” and take over the desolate and unremarkable Falkland Islands, which had belonged to Britain since before the sun set over it.
When Argentine fishermen (and later the military) landed on these islands, there were many advisers in London who discouraged the prime minister from armed intervention: “So what, some deserted islands. And war costs money.” But Thatcher was adamant: it’s not about the islands and not in money, but in the national interest. “Today we surrender the Falklands, and tomorrow what, the Isle of Man?” – she asked.
The war lasted ten weeks and ended in total defeat for Argentina and victory for Britain.
Britain then proceeded to lose its overseas territories, without much weeping. In the 1990s it ceded Hong Kong to China, and more recently, just this year, it was revealed that it would give Mauritius the Chagos archipelago in the Indian Ocean. So it really wasn’t about the islands, but about the fact that the country is still capable of biting when its borders are tried to be changed without its consent.
A nation of homeowners
One of the most notable effects of Thatcherism was the rise in home ownership amongst Britons, particularly amongst the working class. This was made possible by Right to Buy, introduced by the Thatcher government, which allowed council tenants to buy their homes at a significant discount.
The move helped increase the number of homeowners in England and Wales from 10 million in 1981 to more than 13 million in 1991 (and then, after Thatcher left, the number of homeowners steadily increased too. Today there are over 28 million).
Thatcher believed in the idea that Britain should become a nation of homeowners, and her policies contributed to that goal. However, it was her reforms that prevented municipalities from investing in new council housing, leading to widespread shortages, waiting lists and a housing crisis that has become particularly acute in recent years.
In lieu of a conclusion
Whatever one thinks of Margaret Thatcher’s personality and her reforms, one thing is clear: in the 1980s Britain, which was mentally stuck in its own past and was gradually turning into an economic outsider in Europe, was in dire need of change, even if painful and unpopular. And Thatcher’s merit to the country is, first of all, that she did not value people’s love and popularity, but always put the interests of the country (as she understood them) above her own career and above party interests.
The latter was the end of her career: in 1990, the Conservative Party felt that Thatcher had become too unloved by the public and could no longer be the “locomotive” of the party in the upcoming elections. And in November 1990, the “Iron Lady” lost the intra-party race. John Major became the new head of the party and prime minister, and Thatcher to the end of her life considered herself loyal to the very party to which she had given most of her life.
