By the spring of 1982 Mrs Thatcher and Thatcherism were thus faced with a rising tide of unpopularity which threatened the whole experiment with early extinction. Abruptly and unexpectedly, in April that year she was rescued by Argentina’s invasion of the tiny Falkland Islands. Although the islands are 300 miles off the coast of Argentina, the 1,800-strong population is entirely British and has continued to be British since it became part of the empire in 1833. On the orders of the military dictator General Galtieri a small force of Argentine soldiers overpowered the seventy-nine Royal Marines on the main island. With the governor of the Falkland Islands, Sir Rex Hunt, they were flown to Montevideo. Twelve thousand Argentinean troops were then landed on the islands, which were claimed for Argentina as Los Malvinas.
Britain had a choice of either giving in to Argentina or defending British nationals, even though they were 8,000 miles away. Under the warlike Mrs Thatcher, who was now compared by admirers to Boudicca, Britain chose to defend them. In a last gasp of imperial power a hundred ships of the Royal Navy steamed to Argentina accompanied by two aircraft carriers, one of which contained the queen’s second son, Prince Andrew, a daring helicopter pilot.
By the end of June the Argentineans had been defeated (their military dictatorship was later overthrown as a result) at a cost to Britain of hundreds of millions of pounds. Mrs Thatcher said that what had been at stake was the safety of British nationals abroad. Nevertheless Britain no longer had the power, money or effectiveness to wage colonial wars in this fashion. It would have been impossible to go to war on such principles over Gibraltar or Hong Kong. Nor could Britain have won a war in the distant southern hemisphere without the support of the American administration in tackling the many logistical problems that arose.
The Falklands War made Mrs Thatcher a popular heroine at home. A fever of patriotism and traditional British xenophobia killed the beginnings of a revolt against her methods. At the June 1983 election, the ineffectiveness of Callaghan’s successor as Labour leader Michael Foot, and by a left-leaning Labour manifesto later described as the ‘longest suicide note in history’, the Conservative party’s majority rose from 43 to 144. As if to celebrate, a month later, £500 million of public spending cuts were announced.
Labour’s share of the vote shrank to just over 25 per cent, a record low for a main opposition party. It had been split by the formation of the Social Democrat party in 1981 by four prominent members of the Labour shadow Cabinet, in protest against the influence of the hard left and the destruction of independent opinion within the Labour party. They included the former Labour foreign secretary Dr David Owen and Roy Jenkins, the former home secretary and chancellor. They believed that Labour was no longer a party dedicated to achieving its programmes through Parliamentary means. New rules allowed the deselection of sitting MPs if they offended grass-roots members, and gave trade union and other organizational blocs 40 per cent of the vote in the electoral college to choose the party leader. Labour had become backward looking and primitive in its anti-Common Market views and irresponsibly unrealistic in its adoption of nuclear unilateralism, the decision to rid Britain of nuclear weapons without asking others to do the same. A dramatic series of by-election wins parachuted the SDP leaders, known as the Gang of Four, into Parliament and made it clear that the Social Democrats were a force to reckon with.
But history was still with Mrs Thatcher. With such huge electoral approval, by 1984 Mrs Thatcher had begun limbering up to take on the miners. Having failed to close twenty-three unproductive pits in 1981, this time she was determined to win the war to reform the coalmining industry, whose subsidy cost the government £800 million a year. In some pits coal cost £20 a ton more to extract from the ground than it could be sold for. Since its heyday in the 1920s, when the industry employed a million and a quarter miners, British coal had been rapidly declining as a source of power and was being replaced by alternative methods that were cheaper and cleaner–nuclear-powered electricity stations, Middle Eastern oil, and now oil and gas from the North Sea. By the 1980s only 300,000 miners remained, 400,000 having taken advantage of excellent early-retirement deals to leave voluntarily in the 1960s and retrain.
In March the government announced that twenty pits had to be closed and 20,000 jobs lost. The leader of the National Union of Mineworkers Arthur Scargill, an old-fashioned Marxist, was determined to prevent it. For a year he kept the miners out on strike, but he did so without a national ballot, so he never had the entire industry’s support. Moreover, under a new Trade Union Act in July, unions lost their legal immunity if they struck without a ballot. By October 1984 the High Court had ordered the sequestration of the NUM’s funds. The NUM was penniless, and it was not going to be able to keep the strike going for long without money.
Despite the anti-union feeling among many Britons after years of being at their mercy, there was a great deal of sympathy for the plight of the miners and their families facing unemployment in areas where whole communities centred round the coal pit. At the same time the level of violence and intimidation on the picket lines against miners who wanted to work–in one incident a taxi-driver was killed by a concrete block being dropped on his cab–disgusted many. So did Scargill’s financial links with the pariah terrorist state of Libya. That very year Gaddafi’s diplomats had horrified their British hosts by firing at and killing WPC Yvonne Fletcher when she was escorting a demonstration against the People’s Bureau of Libya in London’s St James’s Square.
Determined not to repeat Heath’s mistakes and resort to a three-day week the Thatcher government stockpiled coal at power stations and made plans for non-union drivers to deliver it. It had also arranged for the mechanisms of many power stations to be adapted so that they could fire on oil as well as coal, and it organized the police so that they could be sent at a moment’s notice to any trouble spot. Support for the strike within the mining industry itself was never unanimous: less than two-thirds of the pit supervisors voted in favour. Productive pits in the Nottingham area created a breakaway union, the UDM, whose members wished to continue to work.
By March 1985 the year-long strike was over. Under Ian McGregor, a Scot who had emigrated to Canada and who promised to re-examine decisions on pit closures, the National Coal Board succeeded in bringing the strike to an end. Neil Kinnock, the Labour leader who, after Labour’s poor showing at the polls in 1983, had replaced Michael Foot, weakened his public standing by not condemning the picket-line violence. In fact he personally believed that Scargill was doing more to destroy the coal industry than the Tories were. Many pits, once closed, would cost too much to reopen. The strike cost the British government £3 billion, but the Labour party conference and the TUC had both backed it.
The miners’ strike epitomized the conflict between old industries and the Thatcher government’s determination to modernize British industry, between old-fashioned, obstructive unionism and progress. It had ended in a definitive victory for Thatcherism. It was followed the next year by the global tycoon Rupert Murdoch’s successful defiance of the print unions in moving The Times and his other newspapers from Fleet Street to Wapping. There he established union-free presses using the new technology and indirectly paved the way for the Independent newspaper, which was set up by journalists reluctant to cross the picket line. Thatcherism had begun to seem like the norm.
The defeat of the miners caught Labour at a low point in their electoral fortunes. The resounding Thatcher victory of 1983 was a sign that many in Britain were turning their backs on the trade union movement, partly because the working class (in the sense of manual workers) had shrunk to a third of the employed population. Though Mrs Thatcher’s methods seemed insensitive at first, it was hard to deny and would become harder to deny that they were also very successful. She had broken the stranglehold of the unions and had made slimmed-down British industry an example to the rest of the world. Her success made it increasingly difficult for Labour as the client of the trade unions to be taken seriously as an electable
party. Few people believed any longer that the trade unions could be relied on to create a viable wages policy. State capitalism had proved too expensive to work. Mrs Thatcher, who had drastically reduced government borrowing and inflation seemed to be proof that the free market first enunciated 200 years before by Adam Smith was the cure for Britain’s ills.
The left-leaning progressive thought that had dominated the values of educated Britons was beginning to look obsolete. Yet left-wing extremists’ control over Labour in the mid-1980s ensured that the party continued to insist that the way forward was through higher and higher spending. Each Labour party conference demanded more rather than less nationalization–though where the money was to come from was not discussed. As the British economic miracle took hold, it became as fashionable to hold right-wing views as it had been odious since the 1960s. Public schools and conspicuous consumption came back into fashion. The generation known as Thatcher’s Children did not seem to have one atom in their bones of the old British yen for social reform that had been such a powerful legacy of the nineteenth century.
The final blow for all varieties of left-of-centre opinion seemed to have been dealt when Thatcherism contributed to the demise of Russian communism. Mrs Thatcher’s success in privatizing state industries, in replacing stagnant state monopolies by economic competition, made the state planning of Warsaw Pact countries look old fashioned and ridiculous. Known in the Soviet Union as the Iron Lady, Mrs Thatcher was to achieve fame abroad comparable to that of Winston Churchill. For she continued on a roll. Her courageous conduct of the Falklands War cemented her warm personal relations with President Reagan. The special relationship with America sought by so many British post-war premiers genuinely existed in the 1980s thanks to the personal chemistry between Mrs Thatcher and President Reagan. She was a key player from 1985 onwards during the extraordinary period in east–west relations when under Mikhail Gorbachev the Cold War was ended and the Iron Curtain dividing Europe was put aside.
Gorbachev came to power as general secretary of the Soviet Communist party at a time when the economic and political contradictions of Marxism–Leninism were reaching crisis point. Given overwhelming moral force by the backing of the Polish pope John Paul II, the Solidarity movement in Poland was demanding greater autonomy, as were other Soviet bloc countries. Russia herself desperately needed European and American capital if she was not to sink into the dark ages just when the advances in telecommunications were remaking the modern world. Gorbachev understood that the almost bankrupt Russian state needed to be opened up to the same market forces that had benefited Britain under Mrs Thatcher. Russia no longer had the resources to compete in an arms race in space with America and maintain her increasingly ramshackle Iron Curtain empire. Twenty-five per cent of her national income was going on her armed forces. What had become known as the Brezhnev Doctrine of armed intervention in Warsaw Pact countries was no longer practicable.
Both superpowers agreed to arms reductions. Gorbachev allowed Mrs Thatcher to talk about democracy and human rights on Soviet television, which had never been done before. Mrs Thatcher’s force and conviction were greatly to the taste of the Russian people (rather more by now than to that of her fellow countrymen) and she attained iconic status in many former Iron Curtain countries. In 1988 President Reagan’s visit to Moscow was followed by a profound shakeup in Russia’s institutions. A Parliament was elected and Gorbachev became president instead of general secretary; in 1990 the seventy-year-old communist dictatorship came to an end when the Soviet Parliament removed the party from the constitution and multi-party democratic politics were allowed. Gorbachev had also allowed free elections in the Soviet bloc countries. In November 1989 the Berlin Wall was torn down by the East Germans with disbelieving joy–not a tank moved to stop them and German reunification began.
But there were still more astonishing things to come. At the end of 1991 the Soviet Union was abolished after an attempted coup against Gorbachev by Russian conservatives. The new president of Russia, Boris Yeltsin forbade the Soviet Communist party from continuing in Russia, and the fifteen Soviet republics led by Russia, Ukraine and Belarus announced that they were forming the Commonwealth of Independent States. Gorbachev was no longer Soviet president because there was no Soviet Union.
These momentous events sounded the death-knell of the Marxist system and heralded a new post-ideological age. They have had endless international repercussions, not least of which is that they have left the United States the only superpower in the world. America immediately agreed a series of arms-limitation treaties, as there were around 27,000 warheads in the new republics. Many eastern European countries applied to join the European Union, and ten who were accepted as members after signing the Treaty of Accession in 2003 are set to join the fifteen existing members on 1 May 2004. Former Soviet-bloc countries also joined NATO, the organization originally set up to counter the threat they presented as members of the Warsaw Pact.
In Britain the break-up of the Soviet system only underlined to the small group of Labour modernizers the desperate need for change if the party wanted to avoid becoming a dinosaur like the Soviet Communist party. Neil Kinnock saw that Labour must become more moderate if they wanted to return to office. Alarmed by the success of the SDP, whose electoral pact with the Liberals began eating away at the Labour vote in the mid-1980s, he spent the rest of the decade cleaning out the hard left from the Labour party. With the help of a communications director of genius, a young television producer named Peter Mandelson, grandson of the 1945 Labour home secretary Herbert Morrison, Kinnock began changing Labour’s image. In 1986 at the party conference the outmoded revolutionary Red Flag was swapped for a softer red rose as the party’s emblem. The next few years would see Labour abandon CND, nationalization and punitive taxation.
Kinnock’s greatest challenge was the Trotskyist organization Militant, which had become entrenched within the Labour party. Militant believed in permanent revolution rather than Parliamentary democracy and were especially powerful in local government. They would prove extremely difficult to dislodge. Kinnock found an unexpected ally against Militant in Mrs Thatcher. In her second term of office, she embarked on her great experiment of controlling expenditure at local government level.
Militant had given town-hall funding a bad name by insisting on giving money to increasingly esoteric projects which suited their extremist beliefs, and this began to infuriate taxpayers. In 1984 with the introduction of rate-capping–enabling central government to ‘cap’ the rates if it considered them to be too high–Mrs Thatcher hoped to put an end to Militant’s activities. Councils which overspent had their grants reduced, while those which kept within their limits would also have their grants reduced–it was a late-twentieth-century version of Morton’s Fork and just about as popular. Although Britons were getting tired of strange projects belonging to what was now being called the loony left, they also disliked the way rate-capping limited local services. School buildings suffered, as did social services, housing and homeless shelters. In 1985 Faith in the City, a report by a Church of England commission, urged emergency action by the government to relieve the plight of inner cities.
In areas like Liverpool where many of the councillors were members of Militant, they refused to accept rate-capping and went on spending. This had been made illegal so that council leaders would be personally liable for costs, but Liverpool Council elected to go bankrupt when central government withheld its funds. The council had to borrow the unheard of sum of £30 million from a foreign bank to cover its debts. But the council still could not pay many of its workers. Militant’s irresponsible behaviour enraged ordinary Labour supporters.
In June 1987 Mrs Thatcher won her third successive election with a reduced but still substantial majority of 101. Her final push to control local expenditure demonstrated that she had rather lost her political touch. She had already outraged liberal opinion with an attack on local freedoms in the form of Section 28 of the 1988 Local Governmen
t Act which forbade the promotion of homosexuality by local authorities. This provision was her response to media reports that local councils were promoting the idea of families with two gay parents.
Moreover in the late 1980s the gilt had begun wearing off the economic miracle of Thatcherism which had so mesmerized the world, with inflation reduced to 2.5 per cent in 1986. What had been boom was turning to bust. In 1987 the pro-European chancellor Nigel Lawson slashed interest rates as the economy soared. He was shadowing the European Monetary System, the first step on the way to a single currency for the whole of Europe. At the same time a huge tax cut took the basic rate of income tax from 27 per cent to 25. Lawson believed the boom would last forever but low interest rates, low tax rates and double tax relief sparked a property-buying frenzy and house prices suddenly started rising by 34 per cent a year. Interest rates had to be sharply raised to cool the overheating economy as retail price inflation rose to 10 per cent in 1990–and the Lawson boom was over.
In an excess of centralizing zeal Mrs Thatcher had abolished the Greater London Council in 1986 when it refused to reduce its expenditure. Now as Labour councils carried on raising the rates to counter the squeeze from central government, she decided that the only solution was to abolish the rates. In their stead she introduced the poll tax–poll being an ancient world for head. This tax had caused a revolt in the time of Richard II. It would have the same sort of effect in the reign of Elizabeth II.
Like many aspects of the Thatcher Revolution, the poll tax made logical sense to the Thatcherites but was hard for unbelievers to grasp. This time the Thatcherites’ proud reputation for thinking the unthinkable was simply unthinkable, and a public-relations disaster. Mrs Thatcher and her researchers had hit on the fact that only a minority of the population were paying local taxes, less than half of the electorate of thirty-five million. Every man and woman able to vote would pay the one-off poll tax (its formal name was actually the community charge). That would soon keep council taxes down as voters hit in their pockets would vote for lower-spending (and so no doubt Conservative) councils.
The Story of Britain Page 97