Original article by Andrew Kersley
The suffering caused by Margaret Thatcher’s policies is often justified with the argument that they saved Britain from ruin – but 30 years after she left office, it’s clear that she left the economy weaker and more unequal.
On 28 November 1990, Margaret Thatcher left Downing Street for the last time. Speaking to a crowd of journalists, she described how she was proud to have left ‘the United Kingdom in a very much better state than when we came here’. As last month marked the 30th anniversary of that day, the never-ending debate on Thatcher’s legacy revived itself again. Many of her actions have been discussed to death; one area that goes broadly untouched, though, is her economic legacy.
It seems to have been widely accepted that Thatcher was the saviour of the economy. The narrative tends to go something like this: she might have caused damage to communities across the country, from coal miners to LGBT people, but that can be excused given how well she managed the economy. That narrative is far from the truth.
It’s undeniable that the UK economy had its fair share of problems when Thatcher came to power. Inflation had risen above 25%, which forced Britain to seek a bailout loan from the IMF, and the government and trade unions were constantly at odds. Change was needed. But it’s easy sometimes, when looking at history, to assume that what did happen is what needed to happen. Thatcher’s policies in fact had a disastrous effect on the UK’s economy and its workers, both then and to this day.
For one, economic growth slowed under Thatcher. Annual real GDP growth per capita in the UK fell to 2.09% during the 1980s and early 90s. Since Thatcher’s rule, each subsequent government has underperformed its predecessor in terms of growth. Household income lagged behind GDP for most of the country, with incomes falling for the poorest. Household debt increased from 37% to 70% of GDP as people began to rely on credit to spend money; this same household debt would go on to worsen the effects of the 2008 financial crash. Unemployment hit 9.5% by April 1984 – the highest joblessness rate in postwar history and far above some of the highest estimates for the unemployment likely to be caused by Covid. None of this suggests a healthy economy.
Thatcher’s policies also helped to wipe out 15% of the UK’s industrial base in just a few years. Previously stable jobs in mining, manufacturing, steel and more disappeared, and with that came the deaths of the communities that relied on those jobs. In Thatcher’s first two years in power, Scotland lost a staggering 20% of its workforce. De-industrialisation disproportionately hit the North, the Midlands, and the home nations other than England – places that the Prime Minister then failed to invest in or support to develop new industries. It goes without saying that abandoning whole swathes of the country has dire consequences. These regions were on the receiving end of soaring poverty and deprivation that has lasted for decades. They’re the same areas being promised the tenuous chance to ‘level up’ by Boris Johnson.
In addition, Thatcherite policy caused a huge rise in inequality. In 1979, Britain was at a postwar peak of economic equality, with just 21% of total income going to the top 10% of earners. By 1991, the gap between the richest and poorest had hit a record high. You could defend this kind of inequality if it meant everyone was getting richer, just at different rates, but under Thatcher incomes soared for the wealthiest and fell for the poorest…………….
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