The Story of Britain

by Rebecca Fraser

  Mrs Thatcher and her Cabinet believed the poll tax would unleash the angry citizenry on the town halls determined to curb their spending. But the government had badly miscalculated: instead the angry citizenry turned on the government in widespread poll-tax riots. The message which the British people picked up on was that the duke and the dustman were going to have to pay the same tax, and their sense of fair play was outraged.

  Nevertheless Mrs Thatcher would not draw back. Her motto, she had once said, was ‘This lady’s not for turning.’ But many in the Conservative party began to worry about her increasing inability to listen to the electorate or to the Cabinet. In 1989 Nigel Lawson resigned, chiefly because of Mrs Thatcher’s reluctance to join the European Exchange Rate Mechanism, or ERM, although she had signed the Single European Act in 1986 which provided for greater European Community economic and social integration from 1992.

  The poll-tax riots took place in March 1990. In August that year the dictator of Iraq, Saddam Hussein, invaded Kuwait, thus threatening Europe’s oil supplies, and despite a UN Security Council resolution, failed to withdraw. Mrs Thatcher was at her courageous best encouraging the new United States president George Bush to lead a multinational coalition under UN auspices to war against Saddam when he refused to obey the UN. But disaffected Tories were worried by the way their party’s lead was dropping in the opinion polls. The Thatcher revolution was running out of steam, even for her followers. Three months later Mrs Thatcher was to find herself stabbed in the back by a challenge to her leadership. That November John Major became British prime minister.

  Mrs Thatcher had been in power for eleven years. There is no disputing her lion heart. Not only had she changed Britain almost overnight. Under her education minister Sir Keith Joseph, who was responsible for much of her regime’s intellectual daring, she had paved the way for the greater testing and standardizing of education which began with the introduction of the national curriculum system in 1988. Tests for children at seven, eleven and fourteen, designed to show where schools were failing, signalled the end of thirty years of progressive teaching that had derailed into an undisciplined belief that it was more important for children to explore or ‘find themselves’ than to take in information.

  Mrs Thatcher’s Hillsborough Agreement in 1985 setting up an experimental inter-governmental Anglo-Irish Council was the beginning of the political solution that Catholic leaders had warned was the only way of ending the civil war in Northern Ireland. When half of the British Cabinet only just escaped death when their hotel was blown up in Brighton at the party conference in October 1984, Mrs Thatcher accepted that Britain could never win a war against the IRA. She was extremely shaken by the explosion. Even so she insisted that the local Marks and Spencer open early to provide outfits for ministers who had had to leave the hotel in their nightclothes. She was determined to chair a Cabinet meeting that morning. ‘Business as usual,’ she said, though two of her friends were dead and the trade and industry secretary Norman Tebbit’s wife badly injured.

  Despite protests from republicans and loyalists, the British government began to consult the Irish government on an official and regular basis about the administration of Northern Ireland and to hammer out a common policy for border security and justice. Eight years of Anglo-Irish co-operation would lead in 1993 to the Downing Street Declaration by the Irish and British premiers Bertie Ahern and John Major that welcomed Sinn Fein to all-party talks and ushered in an IRA ceasefire.

  But, for all Mrs Thatcher’s great gifts, by the early 1990s members of the Cabinet desired it to be more collegiate, for she had become increasingly dictatorial. There was also bitter disagreement over Britain’s relations with Europe. The Thatcher years coincided with a movement in France and Germany to accelerate the process of ‘ever closer union’ within the European Common Market, transforming it into a European superstate. The movement was led by Jacques Delors, the French president of the European Commission, and assisted by Chancellor Kohl of Germany and President Mitterrand of France. All three were on record as hoping that 80 per cent of legislation would soon be made by the European Parliament instead of at national level.

  Mrs Thatcher fought Britain’s corner on the principle of subsidiarity–a piece of EC jargon proclaiming the belief that all decisions should be taken at the lowest effective level, but used by the British as a euphemism for national decision-making. In October 1990, however, anxious not to lose her new chancellor of the Exchequer John Major and the equally pro-European foreign secretary Douglas Hurd, she took Britain into the ERM, a preliminary to joining the European Monetary System, itself the first step on the way to a single currency for the whole of Europe. The ERM was a system set up to create currency harmonization between EC members at the level of their national banks, and required national governments to intervene in foreign exchange markets to make sure that their currency kept its value within the system.

  With Mrs Thatcher gone, a month later it was left to the new prime minister John Major and his chancellor Norman Lamont to weather the vicissitudes of the ERM. Unfortunately neither man had Mrs Thatcher’s genius or political luck to ride out the two stormy years that followed. The high interest rates of the bust after the Lawson boom had already begun to strike at the heart of the enterprise economy that Mrs Thatcher had brought into being. But after Britain joined the ERM with the pound pegged to the German Deutschmark, the strongest currency in Europe, British interest rates started to go through the roof, with the British economy in deep recession. Germany’s interest rates had to be kept high because of her economy’s problems arising out of the reintegration of impoverished East Germany. By August 1992 her interest rates were forcing Britain’s into double figures, way beyond what the economy could sustain. The economic miracle of the 1980s was on its way to becoming the economic disaster of the early 1990s. And on 16 September, Black Wednesday, Major and Lamont were forced into the ignominious decision to pull sterling out of the ERM immediately. At a stroke Britain’s economy and European strategies were in tatters.

  Despite the débâcle Lamont saw no reason to fall on his sword. But Black Wednesday had not only convinced Eurosceptics that Britain could never flourish in a single currency, it lost the Conservatives the reputation for being the safe managers of the economy which had been their greatest asset. From September 1992 Labour began to overtake the Conservatives in the opinion polls, while the Tories began a civil war over Europe which slowly tore them apart. In fact, after the initial shock, the effects of pulling out of the ERM were beneficial. Britain went on to enjoy ten years of low inflation, steady growth and falling unemployment, her economy grew faster than those of France and Germany, her inflation was lower and her jobless figures were lower.

  Half the Conservative party had become violently anti-European and embarked on an internecine war in the media against pro-European Tories who composed much of the Cabinet. Nevertheless John Major did not pull back from his insistence on having the Treaty of Maastricht, which he had signed that February, approved by Parliament. The treaty revised the European Community’s founding Treaty of Rome and turned the EC into the EU, the European Union–a further step towards ‘ever closer political union’. But Major won the concession that Britain need not ultimately substitute the European single currency for sterling nor need she accept Delors’ social charter (or Chapter, as it became known) guaranteeing minimum EU working standards, which it was believed would increase Britain’s labour costs.

  John Major was the son of an impoverished trapeze artist. He had reacted against his exciting origins and, as one wit said, ran away from the circus to join a bank. Perhaps memories of poverty in Brixton made him more compassionate than his old boss. Benefits were raised in line with inflation, and the poll tax was transformed into a council tax banded according to property values. The radical Thatcherite principles of privatization and reform of vested interests continued as before. But after Black Wednesday many felt that the Conservatives’ day was drawing to an end.


  The sentimental British public harked back to the old consensus politics; they did not like feeling that their country contained what some American sociologists were happy to call an underclass. The Conservative government actually increased the amount spent on the National Health Service each year, but ministers managed to give the impression that the NHS too would soon be a thing of the past, partly because they had introduced the internal market as a way to allow competition to make healthcare more efficient.

  At the April 1992 general election, a Labour victory was widely expected. Middle England had had enough of tax cuts. It felt that the cherished infrastructure of the country was decaying under the Conservatives, and was dismayed by long hospital waiting lists (so many wards were being closed), potholes from underspending councils, poor social services and decaying schools. But ill-advised remarks by John Smith, then shadow chancellor of the Exchequer, made many people fear that the punitive taxation of the 1970s would be reimposed should Labour return to office. The upshot was the fourth Conservative victory in succession, with a modest majority of twenty-one seats. But a shadow still hung over Labour.

  Neil Kinnock bowed out of the Labour leadership after his defeat, leaving the leadership to John Smith. Smith improved the voting system in the electoral college, while warning the unions they could expect no pay increases without productivity. But he died unexpectedly in 1994, and the leadership jumped a generation to the telegenic Anthony Blair, who was then under forty.

  Blair, a former barrister and devout Christian with a formidable QC wife and three young children, (a fourth, Leo, would arrive in 2000, the first baby to be born to a serving British prime minister in 150 years), further modernized the party with the help of Peter Mandelson and Gordon Brown. They believed that people were still frightened of Labour and that it was their job to reassure them that the party had abandoned what had been known as the ‘politics of envy’, its commitment since 1918 to the redistribution of the nation’s wealth by taxation. Blair excised Clause 4 from the Labour constitution, which promised ‘common ownership of the means of production, distribution and exchange’. The unions were kept at arm’s length and Labour embraced the European cause with fervour. Blair and Mandelson believed that New Labour, as they called the party, had to reach out to a wider audience.

  On 6 May 1994, as a sign of closer relations between Britain and Europe, the Channel tunnel was opened. For the first time since the Ice Age Britain was linked to the continent. It had been dreamed of more than a hundred years before, but it was not until the late 1980s that Britain and France had the technology to build the tunnel, which runs 150 feet below the sea. The three tunnels, north, south and a service facility, required the removal of seventeen million tons of earth and cost £15 billion. It now takes just three hours to reach the centre of Paris from the centre of London.

  But the triumph of the Eurotunnel and the excitement that it generated did nothing for the Tories’ reputation. Labour was climbing higher and higher in the opinion polls, while the Tory government was slowly sinking into a self-inflicted mire of sleaze, lying ministers, illicit arms sales and money for votes.

  The Tories even seemed unlucky on the question of Ireland, where by the beginning of the 1990s Mrs Thatcher’s Hillsborough Agreement was having very positive effects. Although some Unionists saw the agreement as a form of betrayal, the Irish government reaffirmed that political union would come about only if the majority of citizens of Northern Ireland wished it. There was a change of attitude within the Sinn Fein leadership, who recognized that many of its supporters were exhausted by the war. By August 1994 the IRA had agreed a ceasefire, and this was followed by a loyalist paramilitary ceasefire in October. It was a great moment after twenty years of war. But decommissioning the IRA’s weapons was the sticking point for the Unionist parties, which insisted that Sinn Fein could not participate in the political process until the Provisional IRA had destroyed their weapons.

  In January 1996 the Major government turned down a proposal from the former American senator George Mitchell, President Clinton’s adviser on Irish affairs, who headed the independent International Body to examine the process of decommissioning paramilitary arms, that the decommissioning should take place in tandem with all-party talks. Instead it began the election process without Sinn Fein. By way of response the following month the IRA bombed Canary Wharf in the Docklands. It was clear that the peace process had been derailed.

  But it was the crisis over the spread of bovine spongiform encephalopathy (BSE, or mad cow disease) from cattle to humans that finally finished off the Conservatives. The public could just about accept ministerial prevarication over the Matrix-Churchill affair revealed by the Scott inquiry into the trial of three businessmen prosecuted by Customs and Excise for illegally exporting arms to Iraq, whose report was published in February 1996. This showed that several Tory ministers had been willing to let three innocent men go to prison rather than reveal that the defendants had been working for the British secret services. But when the Whitehall culture of secrecy endangered the nation’s health, for Conservative ministers refused to come clean about how safe beef was to eat at a time when the television news was filming young people dying of CJD (Creutzfeldt-Jacob disease, thought to be a human variant of BSE), it was the end. As 4.7 million cows were slaughtered at a cost of £3 billion, after British beef had been banned round the world, eighteen years of Conservative rule collapsed. Unlike the Tories, the fluent and sensible Tony Blair, who had moved Labour far from their socialist roots towards the acceptable middle ground, looked like a man who could be trusted.

  In May 1997 the people of England uttered a resounding no to the Conservatives. Labour won 419 seats, 101 of which were held by women, the so-called Blair Babes, and the Conservative vote was wiped out in Scotland. Blair swept to victory with a huge majority of 179 seats and proceeded to carry out extensive constitutional reform. John Major resigned as leader of the Tory party and was replaced by the thirty-six-year-old William Hague, a Parliamentarian of considerable gifts who had been secretary of state for Wales. But despite Hague’s down-to-earth manner, as befitted his Yorkshire ancestry, the Tories failed to make any headway in the polls despite much soul-searching. After another landslide win for Labour at the election in June 2002 (a majority of 167), Hague too resigned, to be succeeded by an ex-soldier, Iain Duncan Smith.

  The Labour government soon showed itself to be a modern administration. It incorporates a Women’s Unit, though not yet a Women’s Ministry, and provided the machinery since 2000 for an elected mayor of London, the capital’s first, who took the place of the Greater London Council that Mrs Thatcher got rid of in 1986. The Bank of England was made independent in 1997 as soon as Labour took office and was given the sole power to decide interest rates, a power previously vested in the Treasury. Interest-rate decisions have thus been taken out of the political arena to avoid the boom and bust of the Lawson years and to create the economic stability required for economic growth.

  After 120 years of delay, in 1999 the House of Lords began the first stage of being modernized when hereditary peers–other than ninety-two elected to oversee reforms–were excluded. This brings Britain well and truly into the third millennium. The reformed Lords will incorporate the best of its ancient traditions as a council of non-partisan professional experts and wise men who act as a delaying and revising chamber in the face of over-hasty legislation passed by the House of Commons. However, four years later, in July 2003, no decision had been reached on the construction of a reformed, representative second chamber which would not be a rival to the elected Commons.

  Labour had promised regional assemblies to Scotland and Wales. After two referendums produced a vote in favour of devolution, the year 2000 saw both the opening of the Scottish Parliament and the Welsh Assembly. Reflecting Scotland’s long history of independence and her separate legal system, the Scottish Parliament has powers to alter taxes raised at Westminster by 3 per cent and to legislate over internal af
fairs–the environment, social services, education and health. As befits a smaller country with a far longer history of being attached to England, the Welsh Assembly does not have the power to make laws though it may alter some designated Westminster legislation. The same number of Welsh and Scottish MPs will be retained at Westminster, leaving some commentators to wonder whether England should not, in fairness, have her own regional assembly too.

  Labour came to power determined to end social division and chronic underinvestment in the public sector and manufacturing sector. Britain no longer has the absolute poverty with which Booth and Rowntree appalled middle-class consciences at the beginning of the last century. Nevertheless the respected charity the Child Poverty Action Group in 2002 estimated that nearly a quarter of the population, including almost four million children, are living in what is defined internationally as ‘income poverty’. That is too high a figure for a civilized country to tolerate. Britain’s infant mortality rates, once the lowest in the world, are on the rise, a sign that conditions among the poor are deteriorating and need to be improved.

  Labour believe that the government has a social responsibility to foster growth in the economy by fighting unemployment, not just to let the market rule and the devil take the hindmost. But the lessons of the past have convinced them that government investment in industry cannot be afforded without the help of the private sector. Guided by the Scottish chancellor of the Exchequer Gordon Brown, the Labour government displayed a fiscal prudence that gained it a formidable reputation. Its auction in 2001 for licenses for the third generation of mobile phones raised the colossal sum of £22.5 billion. The City of London, traditionally a Tory stronghold, was reported, temporarily at least, to have become a Labour bastion. Labour also ended the internal market in hospital care, gave help to pensioners with heating bills and to the poor with tax credits, and introduced their New Deal intended to get people off benefit and into employment as soon as possible.