Thatcher’s real legacy: rule for the rich

The Iron Lady
Directed by Phyllida Lloyd
In cinemas now
Margaret Thatcher was a ruling class warrior whose policies created record unemployment and misery in Britain. Thatcher’s destructive legacy is obscured in the new biographical movie The Iron Lady.
To quote the film’s blurb, Thatcher, Prime Minister from 1979 to 1990, is a woman, “who broke through the barriers of class and gender”.
In truth she did more to entrench sexism and class inequality than just about anyone else in 1980s Britain. Thatcher extended the power of the rich, cut back the welfare state, and created millions of unemployed men and women.
Women who supported the miners’ strike against Thatcher protested outside the first screening of the film in Britain. Jean Innes, who joined the protest, told the media:
“In the film, Thatcher is made out to be some sort of wonderful woman who helped the women’s cause, but in reality she put it back 100 years. We’re still suffering for what she did now, and it shouldn’t be trivialised in a film.”
Along with Ronald Reagan in the US, and Hawke and Keating here in Australia, Thatcher led an attempt to restore corporate profits following the 1970s economic crisis. In their own countries each pioneered what are now known as neo-liberal policies. They were so strongly identified with Thatcher that in Britain the new policies were often referred to as Thatcherism.
Following the radicalism of the 1960s and 1970s, Thatcher wanted to crush worker militancy and the idea there was any alternative to free market capitalism.
In her biography she described a key part of her legacy as the emergence of New Labour—the transformation of the British Labour Party after its acceptance of her own policies into a party that denounced socialism and supported the free market.
Our own Gillard Labor government is another example of this legacy. The leadership of the Labor Party here is committed to the market and hence consistently disillusions its working class supporters, dragging politics to the right.
It was the British Labour Party’s devotion to running capitalism that saw Thatcher elected in the first place. In government, British Labour started pushing public sector job and welfare cuts in response to the 1976 recession. Widespread strikes, famously dubbed the “winter of discontent”, broke out in 1978-79. Disillusionment with the Labour government opened the door for Thatcher to win power in 1979.
Thatcher attempted to undercut the idea that government could tame the excesses of capitalism. She famously stated that there was no society—if you had problems in life or were unemployed this was your own fault not the government’s or the system’s.
Alan Bund, a former economic adviser to Thatcher, explained Thatcherism in an unusual moment of honesty: “The 1980s policies of attacking inflation by squeezing the economy and public spending were a cover to bash the workers”.
The effects were devastating. The poorest were made to pay through cuts and doubling VAT, the British version of the GST. This allowed the Tories to cut the top rate of income tax from 60 to 40 per cent and reduce corporate tax from 52 to 35 per cent. Inequality rose substantially. A UN development report in 1997 stated that in no other country had seen poverty increase faster since the 1980s.
Thatcher privatised two-fifths of government-owned industries. The new private owners sacked staff and forced those remaining to work harder for less.
Thatcher’s conservative political ideology also combined individualism, anti-Communism and nationalism, aiming to direct blame for the crisis away from the market and onto unions, state bureaucracy, social welfare spending and the decline of “British values”.

But Thatcher’s rule was never secure. Polls in the 1980s indicated that the majority of people supported increased public spending and were willing to pay higher taxes for it. Her approval rating fell to 23 per cent in 1980—lower than any previous British Prime Minister. High unemployment fuelled mass resentment, as it increased from 5.4 per cent in 1979 to 12 per cent in 1982, the highest level since the 1930s.
However Thatcher was able to win again at both the 1983 and 1987 elections. Her policies did start to have some effect as growth picked up in 1982. While they increased inequality and unemployment the wealth of a section of the British middle and working class did rise, giving Thatcher a support base.
The privatisation of public housing was a crucial factor to sustaining Thatcher’s popularity. This allowed people to buy homes at lower than market prices. It also led to speculation on property prices, allowing families to borrow against their property assets, giving the illusion of increasing living standards.
But Thatcher was only able to secure repeat election victories due to the conservatism of the British Labour Party and their failure to offer an alternative. In the 1987 election Labor leader Neil Kinnock argued the Labour Party was “Thatcherism with a human face”.
The Labour Party leadership accepted the need to maintain business profitability, so that they were incapable of presenting an alternative to Thatcherism, disillusioning their working class supporters. In the 1983 election remarkably only 39 per cent of union members voted for Labour.
Thatcher’s 1983 election victory came following the Falklands War with Argentina. Thatcher launched the war to drum up patriotism and distract people from the misery her policies were creating. Labour disgracefully supported the war.
The Falkland Islands off Argentina were a relic of the British Empire and of little economic value to Britain. But when Argentina occupied the islands Thatcher spent millions to send a fleet to South America.

Taking on the unions
After 1983 Thatcher intensified her attack on the unions. She aimed to crush union power to keep wages down and allow economic restructuring to continue unopposed. Thatcher had learnt from the defeat of Tory governments in 1972 and 1974 by the miners. The Tories planned to pick off and defeat weaker unions first, before isolating and attacking stronger unions, using fines, scab labour and police repression.
Thatcher faced enormous resistance. In 1984 she announced the closure of 20 of the 174 state-run mines—leading to an immediate 20,000 job losses. The miners’ strike of 1984-85 was the biggest and longest mass strike in British history. Around 165,000 miners, two-thirds of the mining workforce, struck for a year.
Thatcher was ruthless. She organised fuel stocks, paid for oil to provide electricity in place of coal and decked out police with riot gear.
She was assisted by the weakening of activist networks among the miners and their replacement by full time union officials. The Labour Party had itself promoted this as a way of reining in worker militancy.
Joe Henry, a miner in 1984, explained that: “When miners struck in 1972 there were 80,000 miners out each day on active picket duty. In 1984 there were perhaps 4000 involved out of 170,000.”
But it was the failure of other unions to take any solidarity action in support of the miners that left them isolated and ensured their defeat.
In March 1985 the mining union conceded, calling off the strike. Thatcher was lucky to claim victory—she would later admit in her biography that there were times it had looked like the miners would win. The coal and electricity industries lost £3 billion fighting the miners—all of which was covered by the government.

Thatcher’s defeat
The mass movement against the poll tax finally defeated Thatcher in 1990.
The poll tax aimed to replace a variety of property taxes with a flat rate—so that regardless of the value of your property everyone paid the same. Large numbers refused to pay the poll tax and anti-poll tax demonstrations took place across the UK.
In London 200,000 marched against the poll tax. When protesters rioted, lashing out at banks and luxury cars following a vicious police attack on the demonstration Labour Party Deputy Leader Roy Hattersley condemned the protest and called for mass arrests.
Councils sent summonses to millions of families for non-payment. Thousands of people showed up to court, bringing the legal system to a halt when judges were overwhelmed by the number of cases. In December 1990 the first non-payers of the tax were sentenced to prison time. Amongst them were students, Labour MPs and single mothers.
The government admitted the tax was finished in 1991. Public hatred of Thatcher led the Tory party to remove her from the leadership. It was fitting that after the tragic union defeats at the hands of Thatcher, it was mass united resistance that brought her downfall.
Thatcher’s legacy is twofold. On one hand are her destructive neo-liberal policies. But her defeat showed that mass working class resistance, led by socialists against the wishes of the Labour Party leadership, could stop the attacks on workers.
As we face a new crisis this lesson is crucial. The potential for the working class to fight back remains, in the face of economic crisis and the Labor Party’s capitulation to big business.
In Australia we face a Labor government just as committed to the market and to increasing corporate profits at the expense of the rest of us. Building working class resistance, through mass strikes and protests, along with a larger Left, can defeat austerity and win a new world.
Eliot Hoving


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