Well I have bitten my tongue and maintained my silence until the funeral is over, out of the respect and compassion we should all show toward any relative of the recently-deceased, but by God it has been hard! In the case of Margaret Thatcher, compassion and respect are the last things she deserves. Listening to the sycophantic eulogies of the past week or so, and the creeping beatification of Thatcher, I have found all the feelings of loathing and hatred I lived with during the 80s resurfacing. Feelings I thought had been put to bed post-1997 with the advent of a government with a more refreshing, progressive, liberal, tolerant, forward-looking, cooperative agenda. But the ugliness returned to haunt me and it was not pleasant - hopefully now that she has finally been laid to rest it will be gone for good, but before consigning her soul to eternal torment I would like to counter some of the more popular myths that form her legacy.
There seem to be two kinds of people currently heaping praise on her - one is those who appear to hold her in something close to sainthood, who believe that everything she did was wonderful and will brook no criticism of her; the second is those who acknowledge her flaws and yet maintain that what she did was necessary at the time and ultimately beneficial. Of these two, the former are beyond help, while the latter group are simply wrong. It's worth looking at a number of her supposed achievements from an alternative point of view.
First, the UK's economic performance under Thatcher. I have spent some time looking at the UK's annual trade balance figures for 1970 to the present day. In that entire period the UK has had an annual balance of trade surplus in goods for 2 periods only - 1970 to 1971, and 1980 to 1983. The period following the end of Thatchers first term of office right through to the current Coalition are characterised by a steady slide into an increasing trade deficit. If services are included in the numbers then the picture is only marginally better, going slightly into surplus from 1995 to 1996 but otherwise following the same trend of an increasing deficit. It is this trade deficit in goods which is the root of our current troubles (something the Coalition has correctly identified) - it has meant that since 1983 we as a nation have been spending more on imported goods than we have been earning from exports. This money is ultimately lent back to us at low interest rates by foreign banks and sovereign wealth funds, and we snap it up to buy more stuff we cannot afford. The period 1983 to 2013 has seen a tide of imports accompanied by a tide of borrowing to enable us to buy them. As a result we have mortgaged our futures, and the result has been to drive up house prices as more and more debt was created. The rot started when Thatcher slashed investment in her first term of office and decimated our manufacturing industries in the belief that liberated private enterprise would come to the rescue, which it failed to do. Though there has been inward investment our exports have never recovered. An alternative approach would have been to copy the Germans and invest in infrastructure and modernisation of the economy to enable business to make productivity improvements so the UK could remain an exporting nation. Instead, due to a combination of ideology and ignorance we got tax cuts the country could not afford and the windfall of North Sea oil was squandered; the tax that was returned to taxpayers sucked in more imports, inflated house prices and worsened the balance of trade. In the early 1980s 10% of all tax revenues were coming from oil, and subsequently there were the revenues from privatisations and council house sales; these were all cynically wasted to buy election victories. This gives the lie to any thought that she had performed some kind of "economic miracle" on the British economy - it's total nonsense. Her government diminished the manufacturing base which had previously maintained a roughly even trade balance since the war. Looked at in absolute terms it looks like a steady slide from Thatcher through to Cameron with a slight levelling off under Major (it didn't materially deteriorate much further anyway), but looked at as a percentage of GDP the numbers tell a far worse story - under Thatcher the trade deficit 'peaked' at -5% of GDP in 1989 down from a surplus of +2% in 1982. The trade balance to GDP ratio has been better under all governments since Thatcher and that degree of deficit has not been repeated, but it has still always remained in deficit. The trade deficit has again been growing under Cameron to reach -3.5% of GDP - not as bad as the Thatcher nadir but the third worst performance since 1960. Incidentally the second worst trade deficit as a percentage of GDP since 1960 was achieved at the end of the Heath administration in 1974, following the Barber boom sucking in imports. Anyone see a pattern developing here?
Another of Thatcher's 'triumphs' was the apparent 'conquering' of inflation. People appear to believe that the high inflation of the 1970s was quelled by Thatcher's policies alone. They do not appear to take into account that due to the oil price shocks of the early 1970s inflation was high in all developed economies and would abate naturally. They also neglect to take account of the impact of globalisation and technology in enabling production to be moved to where it can be most cheaply deployed - in this case the shift to Asia and the Far East where cheaper labour led to lower prices and falling inflation; there are far fewer inflationary risks today despite massive QE, precisely due to intense global competition. They also neglect to mention that Thatchers attempts at controlling the money supply (a policy started, incidentally, by Denis Healey under the previous Labour administration) were abandoned subsequently as a failure. Inflation has come down and stayed down due to mainly to globalisation and freer movement of capital. This is a global process not attributable to Thatcher. As a side note, her record on inflation is not even that good - when she came into office it was 13% and when she left 11 years later it was back up to 10%, due to the Lawson boom caused by irresponsible tax cuts at a time when the economy was already overheating. Those tax cuts of course also led to the subsequent house price bubble and bust, with its associated negative equity in the early 90s. As a consequence of this poor record in managing inflation, her record on interest rates is also poor - bank base rates were 14% in 1980 and finished higher, at 15%, when she left office. Where is the economic miracle in the above? In between times, North Sea oil tax receipts, revenues from privatisations and from council house sales were given away in unsustainable tax cuts while the public infrastructure fell into disrepair and our industry withered. If that's a miracle I'm an egg-whisk.
In general though people tend to ignore Thatchers poor economic record and concentrate on her supply-side reforms. These were undoubtedly beneficial - liberalisation of employment laws, reduction of union influence on the wider economy, removal of trade barriers, elimination of the closed shop. All good things. The question though is whether it needed to be so painful - the same changes were happening the world over in every developed economy but only in Britain was it pursued in such a divisive and destructive manner. These changes would have happened whoever was in power, in the same way that command economies would have crumbled with or without Thatcher - the rise of technology and consumerism required a more efficient allocation of resources and capital in order to compete, so diminution of union power and a lessening of state involvement in enterprise were an inevitable evolution. Other nations didn't have a Thatcher and they seem to have managed just fine.
In my view Thatcher frequently showed poor judgement more influenced by bigotry and prejudice than any kind of rational thought process - for example, by backing the South African regime by resisting sanctions and condemning Nelson Mandela and the ANC as terrorists (as did members of the loathsome Federation of Conservative Students) she put herself on the wrong side of history. The Poll Tax was another example - how could anyone be so stupid as to think that was ever going to work, or was even a good idea. Well, she believed it and it is because her peculiar view of society reduced it simply to financial relations; no concept of the common good or common cause, or the strong looking out for the weak. She seriously thought it was just and fair that everyone pays for the services they use regardless of ability to pay. She once famously stated that "there is no such thing as society, just individuals and their families". That single quote tells you all you need to know about her thought processes and her sad, narrow view of our country. How must someone view their friends, colleagues and fellow citizens to discount them so blithely - to feel they have no obligation to them or dependence on them; to reduce every relationship to a financial transaction. To those who are shocked by the reaction her death has received I would ask "What did you expect? You reap as you sow". To my mind she represented the worst kind of small-minded, lace-curtain-twitching suburban Conservatism - for example, on gay rights she must have thought she was living in a bygone era when she introduced Section 28; how utterly ridiculous that looks today. Another example of a mistaken but frequently lauded policy was that of council house sales; the sale of council houses to tenants was a previous manifesto proposal of the Labour Party and also previously of the Tories under Heath, but in both cases it was to be mandated that new social housing would be built to maintain the level of stock. This was obvious and sensible. However, Thatcher in her private-ownership obsession banned councils from replacing the lost housing stock. We can trace the current housing crisis and the huge housing benefit subsidy to private landlords back to this perverse decision, though it has to be said that Labour did little to rectify this while in office. It does illustrate though how her policies were frequently formulated based on prejudice rather than on thought and common sense.
She is also often praised for her "strength", but I just can't see it. A strong leader would show some magnanimity in victory, would see both sides. They would realise they govern for all of the people not just "our people". They would recognise the efforts and concerns of opponents doing their job in defending the interests of their constituents whose local economies and communities were being destroyed. But she showed none of these qualities. Instead we got triumphalism, gloating, ridicule and an utter lack of compassion. She made her appeal to the basest instincts of avarice, greed and self-interest. I personally will never believe that self-interest is the only force that can propel society forward; but then she didn't believe in society anyway.
My judgement on Thatcher is that she was in the right place at the right time to take advantage of a period of major political, economic, technological, and social upheaval taking place the world over. She didn't cause these changes, she didn't even create the conditions for them. In fact her contribution was to make their consequences worse than they ever needed to be and to ruin millions of lives in the process. Hopefully now we can all look back and agree that in retrospect the Tories in the 1980s, led by Thatcher, were an absolute disaster for this country. Now that she's dead and buried let's move on.