THATCHERISM Scope and Limits, 1983-87 By the same author POLITICAL PRESSURE AND ECONOMIC POLICY: British Government, 1970-74 *THE LABOUR GOVERNMENT, 1974-79: Political Aims and Economic Reality THE FIRST THATCHER GOVERNMENT, 1979-83: Contemporary Conservatism and Economic Change *A lso published by Palgrave Macmillan THATCHERISM Scope and Limits, 1983-87 Martin Holmes Senior Visiting Research Fellow Mansfield College, Oxford palgrave macmillan © Martin Holmes 1989 Softcover reprint of the hardcover 1 st edition 1989 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright Act 1956 (as amended), or under the terms of any licence permitting Iimited copying issued by the Copyright Licensing Agency, 33-4 Alfred Place, London WClE 70P. Any person who does any unauthorised act in relation to this publication may be Iiable to criminal prosecution and civil claims for damages. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. First published 1989 Published by THE MACMILLAN PRESS L TD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world Typeset by Footnote Graphics, Warminster , Wilts British Library Cataloguing in Publication Oata Holmes, Martin, 1954- Thatcherism: scope and limits, 1983-1987. 1. Great Britain. Economic policies, 1983-1987 I. Title 330.941'0858 ISBN 978-0-333-49233-8 ISBN 978-1-349-20052-8 (eBook) DOI 10.1007/978-1-349-20052-8 CONTENTS ACKNOWLEDGEMENTS VI INTRODUCTION vii PART I THE SCOPE OF THATCHERISM 1 Thatcherism Defined 3 2 The Scope ofThatcherism and Economic Policy 19 3 The Scope ofThatcherism and Trade-Union Power 38 4 The Scope of Thatcherism and Privatisation 59 5 The Scope of Thatcherism and Foreign Policy 71 PART II THE LIMITS OF THATCHERISM 6 The Limits of Thatcherism and the Conservative Party 91 7 The Limits of Thatcherism and the British Left 107 8 The Limits ofThatcherism and Intellectual Opinion 122 9 The Limits of Thatcherism and Electoral Behaviour 138 10 Concluding Thoughts 152 NOTES AND REFERENCES 156 BIBLIOGRAPHY 166 INDEX 169 V ACKNOWLEDGEMENTS Many people have greatly assisted me in the writing of this book, not least the many Cabinet ministers, junior ministers, backbench MPs, civil servants and Conservative Party officials who gave their time to be interviewed. I am particularly indebted, however, to Fennella Morris who was a most diligent research assistant, to Jane Varley who read and commented constructively on an earlier draft, and to my trio of superb secretarial assistants, Jackie Brentnall, Sarah Cramer and Sally Barker. Marie Schulte prepared the index with speed and precision. I would also like to thank the Principal and Fellows of Mansfield College for providing an atmosphere conducive to scholarship and appr~ciative of research. Tim Farmiloe at the publishers handled the manuscript with customary courtesy and efficiency and I am grateful to hirn. Needless to say any errors in the following pages are my responsibility alone. Martin Holmes Mansfield College Oxford vi INTRODVCfION By the time Mrs Thatcher had won her third consecutive election victory in June 1987, she had been Prime Minister eight years, party leader twelve years, and had given her name to an unmistak able political phenomenon - Thatcherism. So much has already been written about the origins, nature and aims of Thatcherism that yet another book about it requires justification. For this author, however, Thatcherism is, and always has been, more than the political career and philosophical statements of Margaret Thatcher. It has embodied the transformation of Britain's post war centre-Ieft consensus into the Thatcherite dream of a property-owning, meritocratic, entrepreneurial, market-oriented society. This development has already been chronicled in this author's three previous books. In the first, a study of the Heath Govern ment,1 the crisis in the Conservative Party as it moved swiftly leftwards under Heath after the 1971 V-turns, was analysed in the context of a party defeated four times out of five General Elections, but still retaining its belief that it was Britain's natural party of government. The events of 1970-4led directly to the overthrow of the Heath leadership by Mrs Thatcher in 1975 and contain the seeds of Thatcherism. The second book,2 traced the agonised, hut temporary, retreat away from Keynesian economics by the 1974-9 Labour Govern ment, culminating in the 1976 IMF crisis which proved an intelIec tual dry run for Thatcherite economic thought. Yet the political agenda of 1974-9 was still essentially corporatist, with the great power of the trade union movement ultimately proportional to its own unpopularity in the 197~9 Winter of Discontent. The 1979 General Election proved that Thatcherism was not unelectable, as the Conservative left had long argued. The third book3 studied the first Thatcher Government in the dual context of the evolution of Conservative philosophy and the economic changes inherent in Thatcherite policy in terms of the vii Vlll lntroduction deli berate break-up of the post-war consensus on full employ ment, trade-union power, and industrial interventionism. In each of the three books, attention was paid to the economic policy machine and the ultimate relationship between economic policy and the electoral prospects for the party in office. And to be sure, these aspects are also present in this book. However, as Thatcherism has developed from a rebellion against Heath to a governmental creed, and finally to a political phenomenon, so many of its mysteries have been c1arified. Thatcher ism is now de-mystified, little of it uncharted politically or unex plainable. This study therefore aims to analyse Thatcherism in the 1983-7 period only in terms of why specific policies were adopted or why more obvious areas of reform were neglected. As such, this is not a general book; its does not aim at a Cook's tour overview of Thatcherism. The intention is to assess the scope ofThatcherism in a number of key policy areas but also to explore what sort of limits have prevented Thatcherism from either totally transforming British society or from radically altering the political system itself. More so than 'Butskellism', or even 'democratic socialism', Thatcherism excites political controversy by wilfully challenging accepted centre-Ieft establishment thinking. Any book on Thatcher ism, therefore, is unlikely to be totally aloof from the policy changes it describes. This book has not attempted any contrived neutralism and while that lays it open to criticism of a certain sort, it also hopes to demonstrate that academic analysis does not lack rigour as soon as controversial topics are tackled. Thatcherism is too important to be left only to those who see it in a vacuum of impersonal political impulses from wh ich lessons can never be drawn. Fully to understand Thatcherism, inc1uding its scope and limits, is to realise that the political passions it arouses are apart of, not separate from, its reality. viii PART I The Scope of Thatcherism