average real wages rose by more than 20 per cent a year between 1983 and 1987. At the same time hire- purchase restrictions had been lifted in 1982, and financial deregulation led to an unprecedented credit boom as banks and building societies competed to offer ever easier loans; credit cards and hole-in-the-wall cash dispensers also took off in the middle of the decade, and shops stayed open longer too, so that opportunities to spend multiplied. Higher disposable incomes created demand for every sort of home improvement. Above all, big salaries and easy credit fuelled a boom in property. Average household indebtedness rose by 250 per cent between 1982 and 1989, and most of this borrowing went into mortgages. While it lasted everyone seemed a winner, and those who had bought their council houses at a discount did best of all. Former tenants who had bought their houses for ?10,000 found a few years later that they were worth four times as much.
All this was exactly what Mrs Thatcher and her Chancellors had dreamed of. But at the same time a lot of people were left out. Unemployment went on rising inexorably until January 1986; and even when it began to fall the shadow did not suddenly go away. Not until 1989 did the headline figure drop below two million, and then it promptly started rising again, back to three million in 1993. The blight was heavily concentrated in the old manufacturing regions which were devastated by the loss of the mills, factories, mines and steelworks which had been their livelihood since the nineteenth century. The 1997 film
In addition to those officially registered as unemployed – and their families – there were many others trapped outside the virtuous circle of success: old people dependent on the shrinking state pension; single parents, mainly unmarried or abandoned mothers, struggling with low-paid part-time jobs to make ends meet; and a growing number of young, rootless dropouts, the victims of unemployment, homelessness, family breakdown, drugs or a self-reinforcing combination of them all: in other words all those dependent on state benefits, whose real value was steadily cut as the cost of living rose. While the average household saw its income rise by 36 per cent over the decade (and the top tenth by 62 per cent), that of the bottom tenth fell by 17 per cent. It was obvious to anyone who walked around any of Britain’s city centres at night that in the midst of rising wealth, poverty was also increasing, creating a new and permanently excluded underclass.
Mrs Thatcher strenuously denied that poverty was growing alongside wealth, insisting that everyone benefited from the increasing prosperity. In one part of her mind she genuinely believed that her purpose was to spread the ownership of wealth more widely so as to create what she called in her memoirs ‘a society of “haves”, not a class of them’, and persuaded herself that council-house sales and wider share ownership were having this effect.46 But at the same time she also believed that inequality was not just inevitable but necessary, indeed positively beneficial, as a stimulus to enterprise, a reward for success and a penalty for failure or lack of effort. At heart she believed that no one remained poor for long except by their own fault: everyone could make a success if only they worked hard and showed a bit of gumption.
The truth was that she had very little understanding of people whose life experience was different from her own. She approved of those she called ‘our people’, the hard-working, home-owning, taxpaying middle class whom she regarded as the backbone of England and correspondingly disapproved of those so lazy, feckless or lacking in self-respect that they were content to live in subsidised housing or on benefits. But this strict moral framework founded on thrift and self-improvement also meant, paradoxically, that she was not comfortable with the culture of unapologetic greed that was popularly associated with Thatcherism in practice. In fact she was extraordinarily ambivalent about the consumerist philosophy which bore her name.
On the one hand she vigorously defended the urge to make and spend money as the essential motor of a thriving economy, and was irritated when sanctimonious church leaders condemned the Government for encouraging materialism. Yet she was personally puritanical about money. She did not really approve of the stock exchange, believing that wealth should be earned by making and selling real goods and services, not by gambling and speculation. For the same reason she refused to sanction a national lottery so long as she was Prime Minister; and she disapproved of credit cards, even as she presided over an unprecedented credit explosion.
The foundation of her political faith was moralistic, derived from the thrifty precepts of her father and her Methodist upbringing. Yet she also believed that the pursuit of wealth was a force for good in the world. ‘Only by creating wealth,’ she argued, ‘can you relieve poverty. It’s what you do with your wealth that counts.’47 She claimed that charitable giving – encouraged by tax relief – had doubled in the ten years since 1979. In this way she hoped that the shortfall in public funding of schools, hospitals, universities and libraries would be filled, as in America, by private benefactions. The trouble was that despite her wishful harking back to the Victorians, that culture of philanthropy did not exist on a sufficient scale in Britain. There were still not enough huge corporations and public-spirited millionaires to fill the gap. As a result over the last thirty years Britain has suffered from the worst of both worlds, with public services receiving neither European levels of public spending nor American levels of private finance. The Blair Government went further than Mrs Thatcher ever dared in trying to attract private money to build public projects; but the level of public resistance is still high, and the legacy is plain to see.
The central paradox of Thatcherism is that Mrs Thatcher presided over and celebrated a culture of rampant materialism – ‘fun, greed and money’ – fundamentally at odds with her own values which were essentially conservative, old-fashioned and puritanical. She believed in thrift, yet encouraged record indebtedness. She lauded the family as the essential basis of a stable society, yet created a cut-throat economy and a climate of social fragmentation which tended to break up families, and tax and benefit provisions which positively discriminated against marriage. She disapproved of sexual licence and the public display of offensive material, yet promoted an untrammelled commercialism which unleashed a tide of pornography, both in print and on film, unimaginable a few years earlier.
Above all, she believed passionately in the uniqueness of Britain among the nations. She still believed that Britain had a mission to ‘teach the nations of the world how to live’.48 Indeed, she came close to believing that the individual’s duty was not to serve the general good by pursuing his own self-interest – the orthodox Adam Smith view – but rather to serve his country. ‘It is not who you are, who your family is, or where you come from that matters,’ she told the 1984 party conference. ‘It is what you are and what you can do for your country that counts.’49 Yet market forces respect no boundaries. While beating the drum for Britain, Mrs Thatcher presided over an unprecedented extension of internationalism – not only in the European Community, where she did try, in her last three years, to slow the momentum towards further integration, but rather in the explosion of American-led global capitalism, eliminating economic sovereignty and homogenising local identities, in Britain as across the world.
Mrs Thatcher rode this liberalising tide and averted her eyes from consequences which offended her deepest values. She enjoyed huge political success by releasing the power of the middle class. Her revolutionary discovery was that the middle class – and those who aspired to be middle class – formed the majority of the population. Labour had assumed that the working class, if properly mobilised, was the majority. All previous Tory administrations had likewise taken it for granted that no Government could hope to be re-elected with more than a million unemployed. Mrs Thatcher demonstrated that, on the contrary, Governments could ignore the unemployed and still win elections so long as the middle class felt prosperous. On this analysis she was not a true liberal at all, but a class warrior who waged and won the class war on behalf of her own kind by using free-market policies tempered with blatant bribes like mortgage-interest tax relief as methods of social reward, switching the emphasis of society from collective provision to individual gratification. While she denied that individualism was merely a cover for selfish hedonism, she was helpless to dictate how the new middle class should spend its money; still less could she control the amoral power of international capital.
The paradox of Thatcherism is piquantly embodied in the history of her own family. Think back to Alfred Roberts in his Grantham grocery, the small town shopkeeper, patriot and preacher, husbanding the ratepayers’ pennies and raising his clever daughter to a life of Christian service, diligence and thrift. Then look forward to the future Sir Mark Thatcher, an international ‘businessman’ possessed of no visible abilities, qualifications or social conscience, pursued from Britain to Texas to South Africa by lawsuits, tax investigations and a persistently unsavoury reputation. Imagine what Alfred would have made of Mark. It is well known that Denis – a businessman of an older generation – took a dim view of his son’s activities.Yet for his mother Mark could do no wrong. The world in which he acquired his mysterious fortune was the world she helped to bring to birth: the values he represents are the values she promoted. Torn between pious invocations of her sainted father and fierce
