same marginal rate as the middle class. Living
standards rose for all sections of the community,
but unequally – the wealthiest 20 per cent gained
by nearly a third, while the bottom 20 per cent
secured only 1 per cent more income. The most
negative impact of the Thatcher years was the
absolute growth of long-term unemployment
with real poverty more than trebling from 6 per
cent to 19 per cent between 1979 and 1987. And
as unemployment and poverty rose, so did crime.
With unemployment over 2 million in 1990 and
rising, and easy money having fuelled inflation,
Thatcher left an unenviable legacy to her succes-
sor, John Major. As chancellor of the exchequer,
he had tried to remedy the inflationary policies of
1987 and 1988, when Nigel Lawson had held
that post.
Margaret Thatcher’s success has to be mea-
sured in terms of economic growth. After the
recession of 1980–2 there was comparatively
rapid growth until the recession that started in
1990, but manufacturing industry overall saw
little expansion, in contrast to the experience of
other developed nations. It was the service sector
that took up some of the slack, helping to account
for an increase in Gross Domestic Product of 27
per cent during the years from 1979 to 1990. In
1991 to 1992 output declined, and so lowered
the average annual gain. Privatisation was one of
the most striking features of the Thatcher years;
no less remarkable were the increases in produc-
tivity and competitiveness of many industries,
which thus came to match the best of Britain’s
Western neighbours. But the jury is out on pri-
vatised monopolies or near-monopolies such as
telephones, gas and water and how far their new
status benefits the consumer.
Detailed economic and social statistics reveal
the uneven successes of the Thatcher years. Trade
union power had been reined back, but mobility
of labour was still hindered by lack of technical
training and by the differentials in housing costs
between regions of high and low unemployment.
London became unaffordable for the working
man from Liverpool, and the quantity of rented
accommodation and council houses drastically
diminished. Thatcher succeeded in changing
the debate within British politics. It was the
Conservatives who now forced Labour to move
away from certain socialist tenets, such as nation-
alisation. But John Major, in espousing the class-
less society stole some of the socialist clothing.
Under Neil Kinnock’s leadership the Labour
Party entered the April 1992 election with a
firmly pro-European Community policy. With the
abandonment of both unilateral nuclear disarma-
ment and nationalisation, the main socialist plank
was the proposal to redistribute taxes so that they
fell more heavily on the upper-income groups.
This proved to be one reason why Labour lost the
election, the voters fearing that in the end the rich
would not be the only losers. They were, above
all, concerned with financial prudence, to safe-
guard their employment and reduce the cost of
their mortgages. Redistribution to the poor was
not their first priority. There is some parallel here
with the US.
The post-Thatcher years of British politics were
different in style. John Major projected an image
of someone who understood the needs of ordi-
nary men and women. Much was made of the
fact that he had climbed the social ladder the hard
way, and that in his younger years he had expe-
rienced unemployment. He immediately began by
rectifying the poll-tax disaster, which he and Nigel
Lawson (then chancellor of the exchequer) had
opposed when its introduction was debated in the
Cabinet in 1987 and 1988. It was replaced in
1993 with a modified property tax. Poll-tax
burdens meanwhile were softened by additional
government grants to local authorities paid for
by a rise in VAT (value added tax). The Major
government, with Norman Lamont continuing as
chancellor of the exchequer, braved the unpopu-
larity after 1990 of having to squeeze inflation
once more out of the system by raising interest
rates and keeping them high. Britain had entered
the European Community Exchange Rate
Mechanism (ERM) at a relatively high exchange
rate in October 1990, in the hope that this also
would bear down on inflation. The fierce squeeze
led to rising unemployment again and to an
unprecedented drop in house prices after the
boom of the late 1980s. This was intended to
allow an early end to the recession so that the
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