When the Iron Lady Ruled Britain

by Robert Chesshyre

  I found I had returned to a society that was flaunting wealth in a way the rich had considered unseemly in the post-war years. Greed (and with it peacock-like ostentation) had become acceptable. Before his disgrace, American arbitrageur Ivan Boesky told New York business students: ‘Greed is all right, by the way. I want you to know that. You can be greedy and still feel good about yourself.’ It was the saying of 1987. (‘Boesky’ is surely destined for the dictionary alongside ‘Rachman’ as eponymous words for the evils of the late twentieth century.) Such greed, however, had a philosophical/political underpinning in Reaganism and Thatcherism, dignified for public consumption as ‘supply-side economics’. By making vast sums, the rich generated economic activity, which eventually helped everyone, therefore one was performing a public service by becoming (or, in most British cases, already being) very rich and was quite entitled to feel good about it. Those less enamoured with the theory call it ‘trickle-down’ economics, and are frequently cynical about how far the trickle reaches. Supply-siders consider that ‘trickle-downers’ suffer from a further condition – ‘the politics of envy’.

  The consequence of the new philosophy appeared to be the unabashed spending of money, and rewards for certain classes of people that so distorted the value system that they threatened social stability: while young nurses lived on ‘peanuts’, the City of London’s ‘Big Bang’ had propelled a not particularly productive class of young person towards six-figure salaries; while a civil engineer might earn £15,000 a year, a foreign-currency dealer, without any formal qualifications, could earn ten times that much. These were not, as some of the defenders of these high salaries argued, special people like sports or pop stars, but people with quick wits and fairly readily acquired trading skills. The ease with which they made their money devalued it, not least in their own eyes, and commercial morality therefore declined. If money could be come by so easily, it could be no big deal, so cheating to obtain more was scarcely a crime, more a little bending of the rules. The days of ‘my word is my bond’ – suspicious as people outside the City may have been of them at the time – now appeared as a lost age of high probity.

  What seemed to have happened – rather as ‘bad’ tenants on ‘no go’ estates had influenced the good with their anti-social habits – was that the easy accumulation of wealth by the none-too-scrupulous had lowered the standards of those who had always had serious money. The children of people who once believed in noblesse oblige were now happy to get rotten drunk daily on champagne, to indulge in expensive drug abuse, and to flaunt their scorn of the less fortunate.

  There were various straws in the wind shortly after I returned. Four ‘Hooray Henrys’ exposed themselves as sybaritic, spoiled drones in a hilarious television programme entitled ‘The Fishing Party’. They gorged themselves on oysters and champagne beneath the chandeliers of an expensive London restaurant, and went aboard a fishing boat from which they shot seagulls, while crudely expounding their right-wing views of the world. One or two of them worked, but one of the others said bluntly: ‘Work and myself do not get along.’ There were two reasons to get married – to have children, who would naturally be dispatched to boarding school as quickly as possible, and to have a chauffeuse when you were drunk. One said: ‘The loyalty of a dog is fantastic; no matter how many times you kick it, it will always be back. Dogs are more bloody useful than women.’ They regarded the unemployed as a threat – ‘to security, to stability, to law and order’ – and suggested that the armed forces might be concerned if Labour won the next election. They were in favour of capital punishment, even if there was the odd mistake, and one at least was prepared to carry it out himself. They were crude, talking of ‘stuffing hand grenades up arses’, snobbish, boorish, and jingoistic – ‘the English, the English, the English are the best, so up with the English and down with the rest’. And one, at least, earned his money in the City in the commodities futures market – ‘selling something you haven’t got in anticipation of buying it back cheaper. You never, of course, take delivery.’

  At the same time, Rupert Deen, a man of similar ilk as the fishing party, was filmed by Yorkshire Television taking a bubble bath while his butler served him a Bloody Mary. He declared, ‘workers should work for the likes of myself. You shouldn’t give women and workers the vote. Voting should be limited to people like myself. I don’t even pretend to work, though some of my friends do.’ Mr Deen’s life was contrasted with that of a Yorkshire miner, who, asserted Mr Deen, should pay the government for the privilege of digging coal. Mr Deen guyed the part to some extent – he did work as an insurance underwriter – but the Russians, at least, took him at face value, and bought the programme to use as anti-British propaganda.

  Olivia Channon, daughter of Cabinet minister Paul Channon and one of the many wealthy scions of the Guinness family, certainly wasn’t hamming it up. In the summer of 1986 she was found dead from an overdose of heroin and alcohol in Christ Church, Oxford, on the night after finals. Her death revealed the existence of a smallish group of well-connected and very rich undergraduates – centred on the bizarre figure of the German Count Gottfried von Bismarck – who appeared to have no sense of responsibility to themselves or anyone else. I went to Oxford the following day. I found that members of the set seldom took part at the Oxford Union, in drama or university journalism – activities that their fathers’ generation of the well-connected and well-heeled pursued ambitiously. ‘These are not,’ said one activist undergraduate, ‘the baby Cabinet ministers. They are people you don’t know. Their credo is: “we’re rich, and we’ll have what we want.” They represent a backlash against what people expect of students.’ It was a male-dominated culture, centred on dining clubs, dedicated to drunkenness and upper-class yobbishness. Election to one club was marked by the smashing up of the new members’ college rooms. A woman undergraduate who had recently attended a party on the fringes of the set, said: ‘It’s fairly hideous upmarket hooliganism. I was shocked, shocked. There was a lot of cocaine on offer.’ This set, said another student, revelled in illegality: ‘Anything that is the opposite of their upbringing is singled out for reverence. Their fascination with drugs is part and parcel of this. It is a point of honour to show a cynical lack of concern for the problematic aspects of contemporary life.’ The Sun produced some fairly plausible figures showing that a fully participating Hooray Henry would need a tax-free income of £48,000 to maintain the sort of life led by the upper-class hooligans. The Dean of Christ Church, the Very Revd Eric Heaton, rolled his eyes, gripped his sherry, and said: ‘Brideshead! We’re far too near London. Cambridge is jolly lucky to be out in the blasted fens.’

  In London, a few months after Miss Channon’s death, two enterprising teenagers joined forces to make serious money out of the prevailing hedonism. Jeremy Taylor, whose family owns the house featured in the television series ‘To the Manor Born’, and Eddie Davenport, described by a friend as ‘dynamic social gatherings organizer and man about town’, hit on the idea of running balls for the jeunesse dorée that were free of the oversight of the ‘wrinklies’. They hired the biggest venues in London, and publicized the balls through a magazine called the Gatecrasher, which was circulated in public schools – to ‘rich’ young people, Mr Davenport emphasized when we met at the Fulham house that serves as their office. Charging between twelve and twenty pounds a ticket for up to two thousand teenagers a time – one ball grew into three balls on consecutive nights, so great was the demand – they grossed £500,000 in their first year of operation, of which £100,000 was profit. Their dances had such titles as the ‘Terror Ball’ and ‘Chaos at Christmas’, so no one could be under any illusion that mummies would be watching from little gilt chairs. Mr Taylor revealed the spirit of the enterprise in his Gatecrasher notes on the social year 1986: ‘All the Sloanes went on their yearly trip to the Badminton Horse Trials, many were disappointed when the bars closed in the afternoon, and the competition seemed to be to see how few horses you could see during the day, and
how many pints of lager or gin and tonics you could drink.’ After the ‘Midsummer Mayhem Ball’, he reported, ‘most people flew off to their summer villas to tan themselves.’

  The Gatecrasher had a photo feature on ‘Le Snog!!’ and a popular paper reported that the privileged teenagers enjoyed uninhibited sex beneath the dining-table cloths as the evening wore on. But Mr Taylor said that Aids was cramping the young people’s style – ‘they worry about it a lot.’ ‘Did they see themselves in the tradition of past eras of excess,’ I asked, ‘like those written about by Evelyn Waugh?’ He looked rather blank. ‘I don’t do much reading, unfortunately.’ Mr Davenport had to leave, and there was a brief hunt for the car phone. A few minutes later a young woman with ‘CHANEL’ written across her T-shirt came in: ‘Harpers and Queen are on the phone for Eddie. Shall I give them the car phone number?’ The Daily Mirror had contrasted the money spent by the ball-goers with the pittance paid to people on the dole. ‘Did that worry Mr Taylor?’ It was, he said, ‘hard to think of that sort of thing’ when you were surrounded by people in jobs. The ball-goers had lived ‘quite secluded lives in private schools and their parents’ nice homes in the country.’ Everything was good, and they were going to turn out rich like their parents. It was hard to avoid Gatecrasher’s essential snobbery – one of their dances was called ‘The Slough Comprehensive End of Term Ball’. Comprehensive school pupils – or, put another way, ninety-four per cent of secondary schoolchildren – were, I was told by one ball-goer, known as ‘Kevins and Sharons’. Where, I asked Mr Taylor, would most of his revellers eventually earn their living if it came to that? In the City, Mr Taylor supposed. Were they spoiled, like the children of the American rich are increasingly being spoiled? Not usually, said Mr Taylor, though ‘the nouveau crowd, who had just struck it rich, might give their son a Porsche for his eighteenth birthday.’

  It appeared that it was no longer considered either desirable or prudent for the rich not to flaunt their wealth. Messrs Taylor and Davenport were falling in with the prevailing mores. In the months before ‘Big Bang’ some dealers in their twenties had their salaries more than trebled between lunch and pink-champagne time, from £30,000 perhaps to £100,000. Seventy-three people at the ‘lower end of the employee scale’ at one City jobbing firm were paid between £35,000 and £120,000. The firm was reported to believe ‘it right and necessary to ensure that remuneration is fully competitive in the new environment.’ Glossy magazines like Harpers & Queen and Tatler revelled in the wealth and consumption of people about whom they wrote. The Earl of Lichfield edited Courvoisier’s Book of the Best, which told us that the ‘complete house’ should have two swimming pools, jacuzzis in each bathroom, a helicopter pad, a gymnasium, and a ‘perfect couple’ of servants. The book’s recommended champagne, Roederer Cristal, sold at £37.75 a bottle, and the best claret was said to be Château Petrus, a Pomerol costing £280 a bottle. Shrewd public relations operators began to exploit the desire of the new rich to be accepted on the unashamedly opulent London social scene by organizing parties for their clients at which no one could be quite sure who had paid to meet whom. In 1919 a confidential government document, drawn up to assess the possibility of revolution in Britain, listed ‘foolish and dangerous ostentation of the rich’ as a prime cause of unrest. Presumably by 1987, despite three million unemployed, no such danger was feared by Mrs Thatcher’s government.

  ‘Big Bang’ – the wiping away on 27 October 1986 of restrictive practices and demarcations on the Stock Exchange – caught the public attention and the headlines, but the process of ‘liberalizing’ the City had begun more than a quarter of a century earlier when exchange controls were relaxed, stimulating foreign-currency dealing. Parallel markets – in Eurodollars, for example – developed, creating a faster moving financial milieu than in the traditional centres like the Stock Exchange and Lloyd’s. One banker said: ‘Gilt and equity traders stayed on the floor, scarcely recognizing that the telephone had been invented.’ The old institutions became anachronisms, stately galleons, their decks lined with beribboned admirals, while the water around them churned in the wakes of fast-moving frigates. The ‘barrow boy’ dealers – kids with minds like pocket calculators, but otherwise scarcely touched by education – had been around for years already making big money in the newer markets. A senior banker said: ‘There began to appear a new class of trader/dealer/broker, who came from a fundamentally different background, and had an uninhibited approach to business opportunities. They were orientated towards income and excited by trading, and not clouded by much thought and analysis. They were quick-reacting and sensitive to clients’ needs, and, by definition, had to come from a different educational and social background.’ At first in the traditional areas they were under-recognized and underpaid, but, by their skills, kept the old-style City gentlemen in the manner to which such gentlemen had always been accustomed. But, as in all culture clashes, the new inevitably overwhelmed the old. The last bastion of the old snobberies was Lloyd’s, where, ironically, many of the worst City scandals of recent years have broken. The frauds were few, but the consequences devastatingly large – one bunch siphoned off thirty-nine million pounds, and cost their clients £235 million in losses. A few ‘nasties’ – as my banker friend put it – ‘manipulated their positions of power.’

  The new traders had nothing but contempt for the old boy net and the fuddy-duddy ways of their seniors. They revelled in the perils and excitements of unsecured markets. If there was to be capitalism for the people – created on the back of giveaway privatization – these were the men and women for the new world. Big Bang signalled the beginning of the end for the solid, snobbish, traditional stockbroker classes, with their relaxed commuting habits and self-protective paternalism. To compete with the new dealers, the old gang found they had to leave their Hampshire homes at 5.30 a.m., and not return till 10.00 p.m. As the banker said, their way of life was ‘no longer sustainable.’

  As the walls tumbled down and the old guard retreated, the City increasingly became like a bright light to moths for young people who wanted, above all else, to make money. While I was meeting people in the City, the Civil Service Commission reported that it was losing ‘golden graduates’, including those with ‘exceptional skills’, to the City – in 1986 a record number of such graduates, fifteen, had eventually turned the Civil Service down. A man in the Bank of England told me that in the City a bright graduate might be offered a £10,000 joining present, £20,000 a year and a car, while the Civil Service was still concerned whether a recruit ate peas from his knife. Other crucial skilled people – accountants, scientists and surveyors – were being drained away from public service by Big Bang. The report concluded: ‘Analysis shows that salary is one of the reasons for withdrawal given by half of all respondents in the specialist areas.’ In simple English, the Civil Service no longer paid enough, and old-fashioned rewards, like the satisfaction derived from duty, failed to compensate as they once had for comparative poverty. But, as in any gold rush, alongside the admirable entrants, Big Bang drew in those whose avarice outstripped their judgement and morality. Oddly, perhaps, it was an upmarket ‘bookmaker’ who first blew the whistle from inside the Square Mile of the City of London.

  Christopher Hales, who – after a brief period as a professional golfer – had started in the City as a stock jobber and had been a commodity broker, ran an outfit called City Index, which offered odds on, among other things, the movement of the Financial Times and Wall Street indices. His business allowed brokers and others who spent their working days ‘speculating’ with company money to back their hunches with their own: it was attractive because winnings were tax-free. His clients on occasions ran up seven-figure debts, but, until Big Bang, although gaming debts are unenforceable at law, he had always been confident they would settle. Most of his ‘sporting gentlemen’ were brought up in the tradition that you paid the bookmaker before the milkman because betting losses were ‘debts of honour’. But the new young men, said Mr Ha
les, suffered from intellectual arrogance. They were sure they would be right, and, if they were wrong, you were only a bookmaker and they didn’t have to pay you. They were ‘spoiled’ with money, but didn’t know how to take their knocks – they weren’t prepared to part with the Porsche or take out an extra mortgage to settle their debts.

  When he discovered that a number of defaulters worked for Merrill Lynch, he called the firm, and four employees were disciplined. One of them, Justin Tate, was already well known in the Hooray Henry world as a former president of the Oxford University dining club, the Assassins, where he had been dubbed ‘The Baron’. While he was president in 1982, the Assassins caused six hundred pounds’ worth of damage to a restaurant in Thame, near Oxford. Mr Tate owed Mr Hales £57,053. Over a lunch in one of those subterranean wine bars with sawdust on the floor, which are so beloved by pin-striped City types, Mr Hales gave me a talk about City probity that would have done credit to a Department of Trade and Industry inspector. There were not enough good-quality yuppies to go round, he said, so young people were given more responsibility than they could handle. Their ‘monstrous’ salaries were paid because the out-of-touch City headmen ‘didn’t have the faintest idea what these young people were doing,’ a suspicion I had cherished since first writing about Big Bang.