The Path to Power m-2

by Margaret Thatcher

  Rome never seemed so close to Grantham.

  The outcome of today’s ‘culture wars’, as they have been called in the United States, is still in doubt. As with so many other developments, the conflict of ideas and attitudes, which shows no sign of abating on the other side of the Atlantic, is bound to spill over into Britain and Europe. And with good reason. For it is as necessary for conservatives to win the battle of ideas in social as in economic policy.

  Without this the likelihood of even limited initiatives succeeding is remote. But there must be such initiatives in the other three areas of social action — crime, welfare dependency and family break-up — with which I began.

  CUTTING CRIME

  When we turn to our second area, crime, recognizing the scale of the problem is an essential start. But rejecting the counsel of despair that ‘nothing works’ is almost as important. Since 1979 there have been large increases in the resources available to combat crime, including 16,700 more police officers and twenty new prisons. Yet far too often, critics of conservative criminal justice policy are allowed to get away with the argument that since crime has continued to rise, in spite of large increases in police numbers and prison capacities, some other unspecified but more liberal approach should be tried. This is, of course, a non sequitur — unless the critics are seriously arguing (and hardly any even of them would go so far) that extra police numbers and more prison facilities either have no effect or actually result in increased numbers of criminal offences. It is far more likely that crime would have risen still higher if these extra resources had not been provided.

  The limited evidence available, supported by common sense, suggests that most professional criminals make recognizably rational calculations, weighing the likelihood of being caught and the length and discomfort of the sentence on the one hand against the perceived benefits (material and psychological) of crime on the other.[98] It would have to be shown conclusively that this was not the case before the traditional penal approach and remedies were abandoned. Moreover, Ernest Van Den Haag, a criminological expert in the United States, has made the following persuasive and significant observation:

  Whenever the risks of punishment fall, the crime rate rises. The rise in crime since the 1960s is a response to the decline in the risks criminals run, to the rise of their prospective net profit. Crime now pays for many more people than before. Between 1962 and 1979 the likelihood of a serious crime leading to arrest fell by nearly half. The likelihood of an arrest leading to conviction fell more. The likelihood of a serious crime leading to imprisonment fell altogether by 80 per cent… Per 1,000 serious crimes there were ninety people in prison in 1960, but only thirty in 1990.

  As he concludes: ‘one may wonder why crime rates did not rise more’.[99]

  I would not wish to suggest that more police, stiffer sentences and increased prison places are the whole of the answer to increased crime. There are certainly modest but real benefits to be derived from both more effective crime prevention and better-targeted policing. But the fact remains that the most direct way to act against crime is to make life as difficult as possible for the potential and actual criminal. This cannot be done cheaply. Increasing the number of police officers on patrol, providing the most up-to-date technology to assist detection, building and refurbishing prisons are bound to require continuing real increases in spending on law and order services.

  Law and order is a social service. Crime and the fear which the threat of crime induces can paralyse whole communities, keep lonely and vulnerable elderly people shut up in their homes, scar young lives and raise to cult status the swaggering violent bully who achieves predatory control over the streets. I suspect that there would be more support and less criticism than today’s political leaders imagine for a large shift of resources from Social Security benefits to law and order — as long as rhetoric about getting tough on crime was matched by practice.

  CURBING WELFARE DEPENDENCY

  Third, as with formulating an effective conservative approach to crime, so with welfare dependency. We have both to combine forgotten traditional insights with modern techniques and up-to-date research. In an earlier chapter I have described the system inspired by the Beveridge Report and its merits.[100] Beveridge argued for a safety net of universal benefits largely based on and funded by social insurance, with means-tested benefits providing the remainder. The scale and complexity of Social Security nowadays means that a ‘return to Beveridge’ is hardly practical. We can, however, apply the perspective of Beveridge to our present difficulties. First, his Report made the assumption that if the state intervened too much it would reduce the willingness of individuals to provide for themselves — he was a great believer in thrift and the insurance principle. And enlarging the possibilities for individuals to insure themselves against sickness and old age is highly desirable today. Second, he was extremely conscious of the need to see the large extension of benefits he proposed soundly financed. Third, Beveridge described his objective as being the elimination of ‘five giants on the road of reconstruction’: ‘Want… Disease, Ignorance, Squalor and Idleness’. It is significant that his giants are moral, not just material; they reflect behaviour and not just circumstances. Reassuringly, we find that such an analysis fits in very well with the conclusions reached by American writers on welfare policy today.

  If it is the financial burden of welfare spending which is the main concern, universal rather than means-tested benefits may be the main target for savings. If the wider ‘dependency culture’ is the focus, we are likely to be more wary of means-tested benefits, since they reduce the incentive to seek work and practise thrift. Nor will we be concerned with Social Security and tax only. Some means-tested financial benefits may also make recipients eligible for linked in-kind benefits such as free prescriptions, free school meals and cold-weather payments. If the recipient were to lose the original benefit, therefore, he would automatically be compelled to lose others, often a considerable financial sacrifice.

  Moreover, a welfare recipient is likely to find himself and his family experiencing the most run-down local authority housing and the worst local authority schools in a disorderly and crime-ridden environment. The terrible paradox of the dependency culture is, therefore, that it offers people very considerable financial incentives to lead lives of idleness, squalor and despair. And we should especially honour those brave people who make the effort. But it is up to government to help them by removing, or at the very least scaling down, the temptations.

  Some piecemeal measures to erode the dependency culture have already been taken. The 1988 introduction of Family Credit, paid to working families on low incomes, was an important step in dealing with the worst effects of the ‘unemployment trap’ (where people are better off out of work) and the ‘poverty trap’ (in which people lose benefit as their income increases). Alongside the Youth Training and Restart programmes, already mentioned, this has helped alleviate some of the problems of welfare dependency. It has dissuaded people who are fit and of working age from dropping out of the workforce. Whether it would be worth developing further initiatives such as Workfare is an open question. In principle, those who are ready to make heavy demands on society should be equally ready to fulfil some obligations to it. But US experience suggests that Workfare can be both expensive and frustrated in practice by bureaucratic obstruction. In these circumstances, probably the most important task is simply to curb public spending in general and welfare spending in particular, while reducing regulation and taxes, so as to make it more worthwhile to work and earn.

  SHORING UP THE FAMILY

  Our fourth objective, strengthening the family, must begin with the treatment of single parenthood in general and the never-married mother in particular. It is important not simply to concentrate on the financial cost of single parenthood. Even more worrying is the effect on all concerned, above all the child, but also the mother and (absent) father too. It is possible to give a good upbringing to one or more children a
lone, but the dice is loaded heavily against. A girl who has become pregnant and left the parental home — either deliberately in order to get a council flat or because of silliness which went wrong — is suddenly confronted with the demanding, draining task of looking after a baby. And, particularly if the baby is a young boy growing up without a father, the problems are likely if anything to get worse. Of course, some find the inner resources to cope; some are lucky enough to find the right professional or voluntary help. But human nature being what it is, even the instinctive love of a mother for her child is likely to be swamped by depression and difficulties. Nor, incidentally, is it just mother and child who suffer. It is the serious commitment of marriage, particularly marriage and children, which is the making of many young men. Perhaps for the first time in their lives they have to raise their sights and consider their responsibilities to others and the longer-term prospects which will allow those responsibilities to be fulfilled. Without such demands, they often find that the only way they can express their masculinity is through the life of the street, through crime and through getting other young women pregnant. This pattern of behaviour is most clear in the American ‘underclass’; but traces of it can be seen in other classes and other countries.

  Although, as I have suggested, the moral and cultural climate is of overarching if unquantifiable importance, the benefit and local authority housing allocation systems themselves have created the conditions for increasing single parenthood.[101] The argument is sometimes advanced that, given all of the difficulties likely to ensue in subsequent years, no one would make the rational calculation to become pregnant simply in order to receive housing and benefits. But this is in fact an over-simplification of any one person’s rational calculation. There may, for example, be many prior or contributory reasons for taking the decision — misunderstandings with parents, paradoxically a desire for ‘independence’ and, of course, all of the instincts since the apple was eaten in Eden. The provision of cheap (even free) housing and of social benefits removes disincentives and penalties which might otherwise have deterred. The fact that this short-term calculation leads for the most part to long-term unhappiness does not mean that calculation is absent or irrelevant. It merely means that the calculator has a short time-horizon.

  How best can we deal with this? We must first distinguish between the widow and the divorced wife with children on the one hand, and the never-married single parent on the other. Whatever benefits are available to single parents must be paid to the widow or ex-wife in whatever family circumstances she finds herself, as now. The never-married single parent would, however, receive the same benefits under certain conditions: very broadly, if she remains living with her parents or, alternatively, in some sort of supervised accommodation provided by a voluntary or charitable body with other single parents under firm but friendly guidance. In such an environment, young mothers could be helped to become effective parents, young children could be cared for under proper conditions for part of the day if the mother went out to work, and undesirable outside influences could be kept at bay. Together with quicker and better procedures for adoption, this approach would safeguard the interests of the child, discourage reckless single parenthood and still meet society’s obligations to women and their children who, for whatever reason, are in need and distress.

  Of course, strengthening the traditional family involves more than altering the position of never-married mothers. The very large increase in the rate of divorce is also a clear threat to the family. Some divorced women have savings, a substantial marital home and a reasonable income and are consequently well able to provide financially for children. But large numbers receive little or no maintenance and have had to rely on the state. The new Child Support Agency’s attempt to enforce decent levels of provision for an abandoned family, although the Agency’s approach clearly has shortcomings (now being remedied), is a response to the scale of the problem.

  In the circumstances of divorce, as in the case of never-married mothers, the children are disadvantaged. But the main disadvantage to such children is the trauma of family break-up itself and the emotional turmoil involved in subsequent conflicts of loyalty between two separated parents. I have always accepted that in some circumstances the best option for all concerned is to end a bad marriage, particularly one where there is serious violence. But all too often the comfortable notion of a ‘clean break’ for the sake of the children conceals a large amount of adult selfishness. Recent research confirms that divorce itself is bad for children, leading to lower educational achievement, and worse employment and emotional prospects; nor do these consequences just apply to the children of poor parents.[102]

  It would be difficult to reverse the reforms of the 1960s, which in nearly all Western countries made divorce easier. But it is reasonable, knowing what we now do about the trend towards early marriage break-up and the effects on children, to reconsider the whole question. Divorce does not just concern two individuals; the stability of other people’s marriages is affected too. That should certainly count against the Law Commission’s proposals to remove considerations of ‘fault’ from divorce altogether. We ought also to consider whether a clear distinction should be made between divorce where there are no children or the children have grown up, and divorce where dependent children are involved. ‘Putting the children first’ and keeping the home together will sometimes require ‘putting off the divorce’.

  Strengthening the family means more than fending off the most obvious threats to it. If we are serious about the family as the fundamental unit of society, that has implications for economic policy too. It should, for example, be reflected in the tax system. It used to be axiomatic that tax should take into account family commitments. That principle was displaced when tax allowances were abolished and universal Child Benefit, paid at a flat rate, was substituted. Child Benefit at least pays partial tribute to the principle of taking responsibility. But I believe that child tax allowances should be reintroduced as part of a fair and effective system of child support.

  Equally, it is vital that, taken together, other tax changes do not squeeze the traditional family further. And unfortunately this is now occurring. Mortgage tax relief has been substantially reduced. A 3 per cent tax has been placed on insurance, which obviously bears heavily on home owners. The value of the married couple’s tax allowance has been cut by failing to correct it for inflation. To encourage the traditional family means more tax relief and not less.

  Modern Western society has proved more successful than any of its predecessors. It has created political and legal institutions which have extended personal freedom, generated economic ideas and structures which promote prosperity, and given birth to a bewildering array of cultural achievements. Indeed, with only limited accommodation to local traditions and conditions it has ceased in any geographically meaningful sense to be ‘Western’ at all, having penetrated almost every country on every continent. But such large and imposing structures require good foundations: and these are always ultimately moral and social, not material. The task which confronts us now — to keep those foundations well shored up against the tremors and pressures which threaten — is as demanding as any we have ever tackled.

  CHAPTER XVI

  Promoting the Free-Enterprise Revolution

  Economic policy

  BEHIND ECONOMICS

  Economics is too important just to be left to the economists. It is no reflection upon the economist’s expertise or integrity to suggest that his approach will reflect the non-economic values which make him the person he is. John Maynard Keynes famously remarked that: ‘Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.’

  But extant economists are no less the slaves of outside influences. That was true of Keynes himself — a member of the ‘Bloomsbury’ set whose rejection of the Victorian virtues in their own behaviour was subtly but surely echoed in the abandonment of the class
ical liberal rules and restraints in economics with which ‘Keynesianism’ became synonymous.

  So too my own views on economics flowed from personal experience of the world in which I grew up. My ‘Bloomsbury’ was Grantham — Methodism, the grocer’s shop, Rotary and all the serious, sober virtues cultivated and esteemed in that environment. Doubtless, there are a hundred ways of coming to convictions about economics, as there are to convictions about politics or religion. But for me, experience of life in the Roberts household was the decisive influence.

  For the truth is that families and governments have a great deal more in common than most politicians and economists like to accept. Although the consequences of flouting fundamental rules are somewhat different for states than for households, they are still ruinous — indeed, more ruinous in the case of states because they have the power to bring whole nations down with them.

  Nor was it only an understanding of what government could not do that my upbringing and early experience left with me. I also gained a sympathetic insight into what I would later come to think of as ‘capitalism’ or the ‘free-enterprise system’. Whereas for my (usually somewhat older) political contemporaries it was the alleged failure of that system in the Great Depression that convinced them that something better had to be found, for me the reality of business in our shop and in the bustling centre of Grantham demonstrated the opposite. For them capitalism was alien and harsh: for me it was familiar and creative. I was able to see that it was satisfying customers that allowed my father to increase the number of people he employed. I knew that it was international trade which brought tea, coffee, sugar and spices to those who frequented our shop. And, more than that, I experienced that business, as can be seen in any marketplace anywhere, was a lively, human, social and sociable reality: in fact, though serious it was also fun. There is no better course for understanding free-market economics than life in a corner shop. What I learned in Grantham ensured that abstract criticisms I would hear of capitalism came up against the reality of my own experience: I was thus inoculated against the conventional economic wisdom of post-war Britain.