The hypercautious leader who showered money on the unions was about to get the boot: the Falklands changed all that
'I think on balance Thatcher did for Britain what was needed at the time.' Illustration by Daniel Pudles
Margaret Thatcher was Britain's most significant leader since Churchill. In 1979 she inherited a nation that was the "sick man of Europe", an object of constant transatlantic ridicule. By 1990 it was transformed. She and her successors John Major and Tony Blair presided over a quarter century of unprecedented prosperity. If it ended in disaster, the seeds were only partly hers.
Almost everything said of Thatcher's early years was untrue, partly through her own invention. She was the daughter of a prosperous civic leader who merely began life as a "grocer". She went to a fee-paying school and to Oxford at her father's expense, gliding easily into the upper echelons of student politics.
A Tory party desperate for women helped Thatcher through the political foothills to early success as an MP. Her gender led her into government and the shadow cabinet, despite Edward Heath's aversion to her. It made her virtually unsackable as education secretary. As she said in her memoirs: "There was no one else." When Heath fell, her promoters ran her as a stalking horse because, as a woman, they thought she could not win. Thatcher became prime minister because she was a woman, not despite it.
As leader she was initially hyper-cautious. An unclubbable outsider, she allied herself to another outsider, Keith Joseph, and his free-market set. But she regarded rightwing causes as an intellectual hobby. She was an ardent pro-European, and her 1979 manifesto made no mention of radical union reform or privatisation. It was thoroughly "wet". On taking office she showered money on public sector unions, and her "cuts" were only to planned increases, mild compared with today's. Yet by the autumn of 1981 they had made her so unpopular that bets were being taken at the October party conference that she would be "gone by Christmas".
What saved Thatcher's bacon, and revolutionised her leadership, was Labour'sunelectable Michael Foot – and the Falklands war. Whatever Tory historians like to claim, this was the critical turning point. By delivering a crisp, emphatic victory Thatcher showed the world, and more important herself, what a talent for solitary command could achieve. From then on she disregarded her critics and became intolerant of any who were "not one of us".
But Thatcher was still cautious. By the 1983 election she had sold off only Britoil and some council houses. The battle with the miners and leftwing councils lay ahead, as did the trauma of an IRA assassination bid. It was only in the mid-80s that she became truly radical and remotely comparable to David Cameron in 2010.
She gave Nigel Lawson at the Treasury his head – and was genuinely alarmed when he cut income tax to 40%. She hurled herself into NHS reform, changes to schools and universities, utilities privatisation and, eventually, local government reform. Each was characterised by her attention to detail. Her political antennae refused to allow her to privatise the coal industry, British Rail or the post office.
Thatcher was never insensitive to the impact of her policies on the poor. As she cut local housing budgets, she sent housing benefit soaring in compensation. She refused to reform social security, or even curb its abuse. Many of today's more controversial benefits, such as disability, date back to the 80s.
After the 1987 election, Thatcher cut an increasingly isolated figure. Rows with Lawson and Geoffrey Howe over a European currency (where she was right) presaged the final shambles of the poll tax. Until then Thatcher had shown the strength of her weakness: a dislike of consensus and aversion to debate, leading to decisive action. A senior civil servant said, "It worked because we all knew exactly what she wanted."
The poll tax showed the opposite, the weakness of Thatcher's strength. The cautious tactician was suppressed. She became deaf to all warning. On the crucial morning in November 1990, her colleagues marched individually into her room and each told her to go. It was a Charles I moment in British history. Everyone knows where they were when they heard.
Thatcher's reputation never recovered from the ruthless budgets of 1980 and 1981, or her insensitivity to colleagues. Many hated her. She was always the Spitting Image bully. Howe's "broken cricket bats" speech in the Commons was the killer blow. It was mostly foreigners who could not understand why she fell.
John Major, the "detoxification" successor, was fated to implement many of her unattempted reforms. But perhaps her greatest legacy was New Labour. The most important thing Tony Blair and Gordon Brown did for British politics was to understand the significance of Thatcherism and to decide not to reverse it, indeed to carry it forward. Their reckless private finance of public investment and services went beyond anything she dared dream of. No one noticed, but she was Blair's first guest at Downing Street in 1997.
Thatcher's most baleful influence on government was not on industries and services she privatised but those she did not. She, and Blair after her, brought an unprecedented dirigisme to the NHS, education, police and local government. She was unashamed about this, loathing localism and rejecting calls to diminish the "strong state". She hated what she called "that French phrase laissez faire". Her centralism, unequalled in Europe, descended under Blair into a morass of targetry, inefficiency and endless reorganisation. Only today are we facing the cost.
I think on balance Thatcher did for Britain what was needed at the time. History will judge her, but not a country in Europe was untouched by Thatcher's example. Under Heath and Jim Callaghan the question was widely asked: had democracies become "ungovernable"? Had pollsters and the 24/7 media forced leaders to follow opinion, not lead it?
Thatcher answered that question, re-energising the concept of democratic leadership. It was sad that she had to learn it in war, a grim example to her British and US successors. She was lucky, in her enemies and friends – notably Reagan in the Falklands conflict. She was lucky in surviving the IRA's bomb.
But she exploited her luck. She showed that modern prime ministers can still mark out room for individual manoeuvre. They do not have to charm, schmooze or play tag with the press. Government will respond to clear leadership if it knows what a leader wants. It knew what Thatcher wanted.
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Margaret Thatcher: the lady and the land she leaves behind
Her legacy is public division, private selfishness and a cult of greed that together shackle the human spirit
Whether you were for her or against her, Margaret Thatcher set the agenda for the past three and a half decades of British politics. All the debates that matter today in the public arena, whether in economics, social policy, politics, the law, the national culture or this country's relations with the rest of the world, still bear something of the imprint she left on them in her years in office between 1979 and 1990. More than 20 years after her party disposed of her when she had become an electoral liability, British public life is still defined to an extraordinary degree by the argument between those who wish to continue or refine what she started and those who want to mitigate or turn it back. Just as in life she shaped the past 30 years, so in death she may well continue to shape the next 30. These are claims that can be made about no other modern British prime minister. She was in many ways the most formidable peacetime leader this country has had since Gladstone.
The fact that Mrs Thatcher was Britain's first and so far only woman major party leader, chosen entirely on merit, and then Britain's first woman prime minister, were of course huge landmarks. But her gender, though fundamental to her story, was in the end secondary. It was at least as significant, in the evolution of the late 20th-century Tory party, that she came from a petit-bourgeois background, a shopkeeper's daughter, though the man she overthrew in 1975, Ted Heath, had similarly middling origins and John Major an even humbler start. There was something of the rebel and outsider about her, as well as much that was stultifyingly conventional.
Mrs Thatcher's transcendent quality, however, was that she was a political warrior. She had a love of political combat, a zealotry for the causes she believed in, a reluctance to listen to advice, a conviction that she was always right and never wrong, and a scorn for consensus that set her apart from almost all her predecessors and, with the occasional exception of Tony Blair, from those who came after.
Mrs Thatcher was proof positive that personality matters in politics. As a young minister she did not seem destined for greatness. Even her election as Tory leader was something of a surprise, though her audacity in going for the top job while so many more senior figures hesitated was an indication of what was to come. Early on in her leadership, she was much patronised by male colleagues and adversaries. But as the social democratic consensus faltered in the 1970s and then cracked in the 1980s she rode the wind of history with an opportunist's brilliance. A Britain led by Willie Whitelaw or Michael Heseltine would have faced most of the same challenges that the one led by Mrs Thatcher faced. But the response would have been completely different. For good or ill, she made a difference.
The late Guardian columnist and Thatcher biographer Hugo Young, reflecting on her overthrow in 1990, identified five large events that would not have happened the way they did without her.
The first was the Falklands war of 1982, which Young described as "a prime example of ignorance lending pellucid clarity to her judgment". Surrounded by sceptical men who had fought in the second world war and knew what combat involved, she went for it. The result was an astonishing and absurd military triumph followed by an electoral one, which elevated Mrs Thatcher from the ordinary to the extraordinary.
A second, which would not have been possible without the authority conferred by the first, was the dethroning of trade union power. Once again, against the instincts of ministers – and the grandest of grandees, Harold Macmillan – who all preferred compromise to confrontation, she fought the miners' strike to the bitterest of finishes, in a contest that was always about industrial strategy rather than just coal.
Arguably even more important than these headline events was the third example, the conduct of economic policy. There had been a New Right before Mrs Thatcher, but it was the ideas of Friedrich von Hayek, as articulated to her by a series of domestic rightwing ideologues, on which she seized. It was Mrs Thatcher, abetted by her chancellors Sir Geoffrey Howe and Nigel Lawson, who drove the policy that the public sector was an unproductive burden on the wealth-creating sector and on taxpayers, and must therefore be reduced and privatised. It was she who insisted that the chief aim of government economic policy should be price stability, and that it should not give priority to reducing unemployment or to stimulating demand.
And it was she again who seemed to believe, far more than those around her, that the market economy required not a minimal state to protect it but a strong state, marked by everything from the abolition of local government autonomy to the enhancement of police powers, intolerance towards gay rights, the broadcasting ban on Sinn Féin, and increased defence spending. She made enemies without flinching, and they reciprocated. Her rule was marked by the most serious urban riots of the 20th century, one of the most divisive strikes in recent times, and the century's most audacious prime ministerial assassination attempt, which thankfully she survived.
Mrs Thatcher's unique mark was also felt in the two confrontations that ultimately undid her. The first was the poll tax, which was disastrous, unjust and was her policy alone. The poll tax came to embody a prime minister who ruled from conviction not sense, and who did not care about, indeed gloried in, a confrontation that destroyed the Tory party in Scotland and may indirectly come to destroy the union she otherwise championed. Similarly, and less easily disposed of after her fall, was Europe. Mrs Thatcher began her prime ministership as a pragmatic, if often acerbic, European. But as she became a bigger figure on the world stage, feted both by Mr Reagan and by Mikhail Gorbachev, she became increasingly strident and disruptive towards Europe. Her style became the policy, cementing the love affair with an already overmighty press but with disastrous effects for her leadership (which was ended by Sir Geoffrey's resignation over the issue), her party (which became obsessed with the subject) and for Britain. Except for Mr Blair in his early years, every British leader since has felt Mrs Thatcher at his shoulder in dealings with Europe, to the lasting national loss.
When she arrived in Downing Street in 1979 she talked about replacing discord with harmony. She may briefly have meant it, but the harmony she sought in the long term was one whose terms were set overwhelmingly in the interests of the British business class as she perceived them. She disdained the public realm and presided over the growth of the cult of marketplace success as the foundation of a good society – a low-tax, home-owning, privatised, high-carbon, possessive, individualist, winner-takes-all financial model whose failure haunts the choices still facing this country today. Much was wrong with the Britain she inherited in 1979, undemocratic union power among them, and many things, though not wrong in themselves, were unsustainable without radical change, including some nationalised utilities. Britain would have had to alter radically in the 1980s and 90s, and the process would have been hard and controversial. But, as Germany and other northern nations have shown, economic dynamism has been possible without the squandering of social cohesion that Mrs Thatcher promoted.
In the last analysis, though, her stock in trade was division. By instinct, inclination and effect she was a polariser. She glorified both individualism and the nation state, but lacked much feeling for the communities and bonds that knit them together. When she spoke, as she often did, about "our people", she did not mean the people of Britain; she meant people who thought like her and shared her prejudices. She abhorred disorder, decadence and bad behaviour but she was the empress ruler of a process of social and cultural atomism that has fostered all of them, and still does.
The governments that followed have struggled to put a kinder and more cohesive face on the forces she unleashed and to create stability and validity for the public realm that yet remains. New Labour offered a first response. The coalition is attempting a second draft in grimmer circumstances, and there will be others. There can certainly be no going back to the failed postwar past with which Margaret Thatcher had to wrestle. But there should be no going back to her own failed answer either. She was an exceptionally consequential leader, in many ways a very great woman. There should be no dancing on her grave but it is right there is no state funeral either. Her legacy is of public division, private selfishness and a cult of greed, which together shackle far more of the human spirit than they ever set free.