Whatever the rest of the world may have expected,
the British people did not spend much energy
grieving over their lost empire or hankering after
past glories. Apart from crises in which Britain was
directly involved, such as Berlin in 1948, Suez in
1956 and the Falklands in 1982, little of what was
occurring in the outside world distracted them
from domestic concerns. Their attention was overwhelmingly
fixed on the economy at home, on
wage bargaining and wage restraint, on the trade
unions and their growing power, on whether
Britain could keep pace with, and later whether it
could catch up with, the spectacular progress of its
West European neighbours, above all on whether
people felt confident about better times ahead.
These issues decided elections. Chancellors of the
exchequer had to develop policies that would create
the right economic conditions and the right
mood on election day. Labour and the Conservatives
attacked each other’s economic policies,
though in practice a consensus prevailed on many
aspects of domestic policy at least until 1979: to
sustain full employment, to aid declining industry
and to promote economic growth. There was, of
course, a price to pay; over-manning meant low
productivity, sheltered industries became less
competitive, and steeply progressive taxation to
meet the costs of these policies had to be exacted.
Britain slipped further behind, its standard of living
advancing more slowly than that of its West
European neighbours. Yet economic statistics
alone do not accurately reflect the quality of life.
Home ownership, for example, had spread to relatively
low-income groups, much further than on
the European continent.
Government policies sought a surge in productivity,
growth in manufacturing exports and a
reduction in imports of consumer goods from
cars to refrigerators, from washing machines to
television sets, which were coming to be regarded
as basic requirements. If these needs could be met
from production at home and if Britain could
export enough to pay for its necessary imports,
the economy could develop healthily. Progress
was made but it ran into periodic crises, and what
became known as stop–go economic management
began to typify treasury policy.
Up to the early 1950s the British economy was
still holding its own in manufacturing, and the
city of London was contributing valuable ‘invisible’
earnings by providing banking and insurance
services. Western Europe was still recovering from
the war, but the overall trend is made very apparent
by the statistics set out in the table below.
The British economy suffered from another
problem. The average rate of 2 to 3 per cent
annual growth hides large variations between the
fast-growth ‘go’ years and the slow-growth ‘stop’
periods. The average annual growth rates of
industrial production in the ‘go’ years of 1953 to
1955, 1959 to 1960 and 1962 to 1964 were a
respectable 5.8 per cent annually, but the ‘stop’
periods in between, 1955 to 1958, 1960 to 1962
and 1964 to 1966, raised production by an
annual percentage of only 0.9 per cent. During
the 1970s and early 1980s the gap between the
performance of Britain and its neighbours in
manufacturing grew rather than decreased, and
its manufacturing output fell steeply, creating
large-scale unemployment.
In relative terms, Britain was not doing well;
but people compared their living standards with
earlier years, not with those of their continental
neighbours. During the Conservative years from
1957 to 1964 these standards were rising significantly,
with improved housing, more effective
social services, a National Health Service that
removed financial worries from illness, higher real
wages, better education and better provision for
the old-age pensioner. The blessings of full
employment came to be regarded as the norm.
There were more vacancies for the skilled and new
openings in the professions and the civil service.
More university places and increased provision of
grants made it easier to cross class barriers, especially
for the ex-servicemen. Complete equality of
opportunity did not exist any more then than it
does now, but there were no insuperable barriers
for the talented, the hardworking and the highly
motivated. Compared with before the war, Britain
had become a much better country to live in.
Harold Wilson’s years as prime minister from
1964 to 1970 were remarkable for new thinking
and experimentation to improve Britain’s performance
in a mixed economy, combining state and
private enterprise. Wilson believed that government
had to become more interventionist and to
copy the indicative planning that had proved so
successful in Germany and France. Central to this
aim was the attempt to establish a link between
higher wages and productivity. Prices and incomes
were compulsorily regulated by a governmentappointed
board set up in 1965. In March 1966
Wilson went to the country and succeeded in massively
increasing Labour’s majority. But the following
year the economy ran into severe trouble,
and sterling was belatedly devalued. The attempt
to coordinate national economic planning with a
Department of Economic Affairs (headed by the
deputy Labour leader George Brown) was in
ruins. Britain’s foreign and military commitments
‘east of Suez’ were cut in 1968. Wilson extended
state control and renationalised steel, a move
which in the long term cost the taxpayer dear in
subsidies. Low wages and workers’ discontent led
to many strikes. With the Labour Party financially
dependent on the trade unions, the government
could not put in place effective legislation to curb
their power, which was unbalancing industrial
relations. That was the biggest hole in Labour’s
planning for a more efficient Britain. Direct state
investment was not always successful, though private
industry did not always choose the right path
either. The merger of British car manufacturers
into Leyland only accelerated the downward path
of this once highly competitive and successful
industry. Wilson also tried to obtain Britain’s
entry into the European Economic Community,
but was blocked a second time when de Gaulle
vetoed the application in November 1967.
Labour paid particular attention to policies
designed to equalise opportunities for all Britain’s
young people. Schools were reorganised into
mixed-ability ‘comprehensives’; more successful
was Labour’s continuing commitment to the
expansion of university and higher education first
launched by the Conservatives. But the continuing
flaw was the lack of attention given to technical
education: it was not accorded an academic
esteem equal to that of other subjects – which it
has long received in Germany, for instance. The
privileged private ‘public schools’ were not abolished
and so continued to underpin a class-based
society, though mobility between the classes did
increase significantly. The middle classes widened
and so did middle-class culture. More young
people aspired to own a house rather than rent; by
1970 half of all houses were owner-occupied. In
1961 only 4 million Britons travelled abroad for
their holidays; in 1984 15 million did so. Washing
machines, televisions and cars were no longer the
preserve of the few. Women began to insist on
equal rights: the contraceptive pill gave them full
control over their sexuality. Despite continuing
hardships, especially in the north of England and
Northern Ireland, the 1960s and 1970s were years
of expanding horizons and growing freedom.
Among the dark areas were inner-city neglect,
unemployment, drugs and racial tension aggravated
by youth unemployment. Second- and
third-generation immigrants, nurtured on civil
rights and protest movements, were not as willing
to accept discrimination as their parents and
grandparents had been. The race riot in London’s
Notting Hill in 1958 was a foretaste of what was
to come: Bristol, Brixton, Liverpool (Toxteth) in
the summer of 1981 and Handsworth in 1985,
drew attention to the problems of densely populated,
deprived city areas. In the 1970s and 1980s
a new phenomenon arose to threaten the strong
social cohesion of Britain, that of whole groups
becoming alienated from society, such as the
unskilled black and white youths, whose prospects
of employment had become remote and who now
sought expression in an alternative society while
relying on welfare handouts. To them the politicians
in Westminster were distant and unreal. But
youth unemployment in the 1970s and 1980s was
not just a British problem – it plagued Western
European countries. Although the existence of a
black economy should be taken into account, the
official statistics tell a shocking story of waste and
frustration.
Another black spot was Northern Ireland. The
partition of Ireland in 1920–1 after the bloody
civil war was never fully accepted by the south,
while the Protestant majority in the six counties
of Ulster in the North insisted on the maintenance
of union with Britain. The Catholic minority
in Ulster was discriminated against and
deprived of political influence. A separate government
and parliament at Stormont, under
Westminster’s ultimate authority, allowed discriminatory
practices to continue which would
not have been tolerated in the rest of Britain. The
Irish Republican Army, or IRA, which aims to
coerce the north into a unified Ireland, has successfully
resisted the Protestant-dominated Royal
Ulster Constabulary, or RUC. Economic decline
aggravated the conflict. IRA militancy was revived
by the Provisional IRA offshoot, and Protestant
militancy by the formation of the Ulster Defence
Association. In 1969 British troops were sent to
Ireland to reinforce the police, but the number of
bombings and sectarian killings rapidly increased.
With firearms on the street, calamitous mistakes
were bound to occur. The worst was Bloody
Sunday, 30 January 1972, when British troops
opened fire on a banned Catholic civil-rights
march in Londonderry, killing sixteen. IRA terrorists
meanwhile carried out a series of vicious
murders: on 21 July 1973 twenty bombs indiscriminately
killed eleven people in Belfast; in
1979 Lord Mountbatten and eighteen soldiers
were the victims of attacks. By 1992 some 3,000
civilians and soldiers had lost their lives since
the ‘Troubles’ began. Catholic and Protestant
Church leaders have condemned the killing of
innocent people, but in vain. For a whole generation
of youngsters violence became the norm.
The efforts of British governments to find a solution
failed, even though the province was directly
subordinated to Westminster in March 1972,
under the day-to-day control of a secretary of
state for Northern Ireland.
Attempts to achieve cooperation between
London and Dublin made some progress, but they
did not end the cycle of violence. The first attempt
was the December 1973 Sunningdale agreement,
which proposed Catholic–Protestant powersharing
in the province and the handing back of
control to a Northern Irish executive. But there
was a backlash from Protestant workers and the
agreement was buried. The middle ground of
Catholic–Protestant relations – represented, for
example, by the non-sectarian Alliance Party – has
remained too weak. Hopes of cooperation between
London and Dublin were revived by the
signing of the Anglo-Irish Agreement in November
1985, by Margaret Thatcher and Garret
Fitzgerald. But Protestant opponents in Northern
Ireland denounced the idea of giving Dublin any
role in Northern Irish politics as ‘treachery’,
although the government of the Republic of
Ireland had recognised that Irish unity could be
brought about only by the consent of the majority
in Northern Ireland. The agreement has also been
condemned by the IRA and its political wing Sinn
Féin. Nevertheless, the cooperative institution created
by the agreement, the Intergovernmental
Conference, continues to function, even though its
practical achievements have been sparse.
Despite the difficulties the Wilson government had
experienced economically from 1967 to 1969,
Labour was expected to beat the Conservatives
when the prime minister called the election for
June 1970. To most people’s surprise, the Conservatives
won, and their leader Edward Heath was
in 10 Downing Street. Heath, a grammar school
boy, represented a break with the tradition of
grand Tory leaders of the Macmillan and Home
school. He had a good record as a minister, and
although he had failed to overcome de Gaulle’s
veto of British entry into the EEC, his handling of
the negotiations from 1961 to 1963 had earned
him respect.
Now it was Heath’s and the Conservatives’
turn to try to cure the ‘British disease’ of economic
inertia. The remedy adopted was a marketoriented
approach: a vigorous Britain would
diminish government subsidies and welfare and
reward hard work and enterprise; taxation was to
be reduced, the frontiers of the state rolled back;
wage control was abandoned. Social programmes
were cut, including free school milk. But the doctrine
of non-state intervention and bale-outs of
industry was quickly reversed, the U-turn beginning
in February 1971 when Rolls-Royce was
rescued and taken into public ownership. The
undoing of the Heath government was its bitter
clash with the trade unions. The restriction of
their rights by the Industrial Relations Act in
1971 coincided with an economic downturn. In
1973, the rise in oil prices made the situation still
worse. The Heath government now resorted to
draconian price and wage controls. Government
intervention even came to exceed that of Labour.
In February 1974 the miners went on strike
against the government wages policy. That winter
of gloom the lights literally went out and industry
was forced to work a three-day week. The government’s
confrontation with the miners was
thoroughly mishandled and when Heath called an
election in February 1974 on the issue of ‘Who
governs Britain?’ he narrowly lost.
The major achievement of Heath’s administration
had been Britain’s entry at last into the
Common Market in 1973. In this critical area of
policy Heath and Wilson were agreed, though
both were faced with considerable opposition
within their own parties on the issue. Wilson’s difficulties
were the more serious. In October 1971
the Labour Party Conference had voted against
joining the EEC. It was, therefore, fortunate that
it was under a Conservative government that the
terms Heath had secured were submitted to the
Commons for approval.
The terms of accession allowed Britain a transitional
period of adjustment for a maximum of
six years. By then, with few exceptions, its food
prices would rise above world prices as duties
would be imposed on food imported from the
Commonwealth and the US. The formula for calculating
Britain’s contribution to the common
budget created such a disproportionate burden
that Margaret Thatcher had to negotiate its
reduction, amid much acrimony, during her first
administration (1979–83).
Support for and opposition to ‘joining Europe’
aroused great passions, though more so in
Parliament than in the country as a whole, where
a majority were simply in favour of efforts to find
solutions to Britain’s problems. The opposition in
Parliament could marshal powerful arguments:
the loss of sovereignty and submission to the
bureaucracy of Brussels; the disadvantage to
Britain, with its small and efficient agricultural
sector, of the regressive Common Agricultural
Policy; and the high cost of membership because
of Britain’s large budget contributions. The proponents’
claim that the advantages of the larger
market counterbalanced the cost underestimated
the difficulty of making Britain competitive.
The House of Commons majorities were never
large, but enough Labour pro-Europeans voted
for the bill to cancel out the Conservative antimarketeers
and the majority of Labour members
who voted against. Wilson held his party skilfully
together by promising to negotiate better terms
and then to submit the decision to the nation in
a referendum. The bill passed through the
Commons on 13 July 1972 and Britain entered
the EEC on 1 January 1973.
In February 1974 it fell to a minority Labour
government to try to solve Britain’s problems and
to halt its economic decline. During the election
campaign, Labour had offered the country something
new: the so-called Social Contract between
the government and the trade unions. In return
for repealing Heath’s 1971 Industrial Relations
Act and so freeing the unions from the threat of
legal action, the unions promised voluntary wage
restraint. By the time Wilson called another election
in October 1974 the worst industrial troubles
were over. The need to secure a Labour
victory acted as a restraint on the unions. The
miners’ strike had been settled and the country
was back to a full working week. This time, in
October, Labour gained a small working majority.
But by 1975 inflation had rocketed to 24 per
cent, and wage settlements were even higher. The
Social Contract was not working. Once more
Wilson had to resort to what amounted to a
virtually compulsory pay policy.
Wilson was also confronted with the divisive
European issue. He had promised to renegotiate
the terms of entry to the EEC and to submit
them to a referendum as the best means to reconcile
his divided party. He secured significant
concessions in the negotiations and by a twothirds
majority the electorate endorsed Britain’s
membership of the Community.
In March 1976, Wilson unexpectedly resigned.
After a total of eight years at 10 Downing Street
trying to manoeuvre between the left and right of
his party and the trade unions, he apparently lost
his zest for politics. The economic crisis facing the
country was the most severe since 1947. His
hopes of regenerating British industry from the
left had been dashed. But he had provided a
steadying influence and in his way he had as
unflappable an air as Macmillan. His administration
bequeathed the National Enterprise Board,
whose purpose was to stimulate growth in profitable
new industry through government investment,
in return for a share of the profits. The
government had also established the British
National Oil Corporation, taking a majority stake
in it to ensure that the state would profit from
the forthcoming bonanza of North Sea oil. But
the extension of state intervention in industry was
bitterly attacked by the Conservative opposition.
When James Callaghan took over the reins of
government in April 1976 he found the Labour
majority precarious and the country in deep economic
trouble. He secured his parliamentary position
by entering into a pact with the Liberal
Party, allowing its leader David Steel to exercise
a major influence on government legislation
without entering the government itself. In this
way Callaghan was able to soldier on until 1979.
Once more in the forefront of policy objectives
was wage restraint, and fresh negotiations were
held with the Trades Union Congress (TUC) in
1976. But in trying to maintain for too long sterling’s
dollar exchange rate, Britain faced a serious
financial crisis in its balance of payments in 1976
and had to take a large loan from the International
Monetary Fund on condition that cuts
were made in public spending. The economy
began to fare better, inflation came down to just
below 16 per cent in 1977 and to 8 per cent in
1978, but unemployment stubbornly remained
around 1.5 million (about 8 per cent). Working
people had taken cuts in their living standards
under successive phases of pay restraint; in the
winter of 1978–9 pressure mounted to retrieve
lost ground in past wage settlements. When
Callaghan tried to bring down inflation further
by announcing a wage-rise norm of 5 per cent,
which would have entailed further cuts in
living standards, there was widespread revolt. If
Callaghan had gone to the country in the autumn
of 1978 when the country appeared to be at last
out of crisis and on a steady course, he might have
won the election. The pervasive industrial unrest
of what became known as the ‘winter of discontent’
destroyed his chance of victory. Even the
gravediggers struck. It seemed to working people
that they were being called upon to ‘solve’
Britain’s problems by depressing their living
standards time and time again; a family man could
not live on his wages but was forced to collect a
whole range of state social benefits. The country
was in a mess. Many blamed the unions, others
the government.
Having lost the support of the Liberals and of
the Scottish nationalists after the failure to push
through devolution proposals for Scotland and
Wales, the government was forced to hold a
general election in May 1979 and was soundly
defeated.
A new Conservative prime minister, Margaret
Thatcher, who had ousted Heath as party leader
in 1975, promised radical change. Like Heath she
did not come from a privileged background, but
was the proud daughter of a grocer; she was an
example of what could be achieved in post-war
Britain by hard work, courage and dedication.
Describing herself as a ‘conviction politician’
whose policies and outlook were based on simple
values, she gained the support not only of the
middle classes but also of the working classes,
especially among the skilled workers whose differentials
had suffered. With the austere Sir Keith
Joseph as her intellectual mentor, she promised
to move away from the past compromises of
Labour and Conservative, which had shifted the
centre of politics constantly to the left.
The new policies were designed to allow market
forces to improve Britain’s competitiveness. State
industries would be made so efficient that they
could hold their own without subsidies from the
taxpayers; once profitable, some of them would be
sold back to private enterprise. The power of the
trade unions would be curbed, and they would be
made accountable both to their members and to
the public. According to Conservative thinking, a
better balance between employer and employee
would in this way be restored. Individual responsibility
and independence had to be encouraged;
hard work and enterprise would once again reap
their rewards. Direct taxation was reduced. A popular
electoral move was to promise that councilhouse
tenants would be able to buy their homes at
a reduced price. Social benefits would be restricted
to those who, through old age or sickness, were
not able to help themselves; they would not be
extended to the able-bodied striker for instance.
The government would not finance its expenditure
by printing money and so fuel inflation; sound
money would be its watchword.
During Mrs Thatcher’s first year in office, the
election promise to honour pay awards led to
widespread and substantial wage increases. This,
together with the second oil-price rise of 1979–
80, knocked the economy sideways, as inflation
climbed to over 20 per cent. The government
nevertheless carried out part of its programme by
shifting the fiscal burden from direct to indirect
taxation. The lowering of income tax, and the
promise to reduce direct taxation further, proved
an election winner over the next decade. The
harsh deflation of 1980 and 1981, with a tightly
controlled money supply and high interest rates,
decimated British manufacturing industry and
sent unemployment soaring to over 3 million.
Full employment had ceased to be a priority of
government policy. By the autumn of 1981,
according to opinion polls Margaret Thatcher had
become the most unpopular prime minister since
Neville Chamberlain in 1940. But she now displayed
what was to become her greatest electoral
asset: she stuck to her policies. Within the government
too she asserted her control, gradually
ridding herself of ‘wet’ ministers – former prominent
Heath supporters – and replacing them with
loyal followers of her own views. To the country
at large she declared that there was no other way
to restore the patient to health.
The Labour opposition meanwhile was enfeebled
by internal divisions between its militant left,
the soft left and the right. Its drift to the left led
in 1981 to the formation on the right of an
entirely new party, the Social Democratic Party,
which later concluded an electoral pact with the
Liberal Party, and the Alliance was born. For a
time it appeared uncertain whether the Labour
Party would survive as the main opposition. The
split in the opposition electoral vote rendered
Thatcher’s Conservative government unbeatable
for almost a decade, although the Conservative
share of the vote never exceeded 44 per cent at
the general elections of 1979, 1983 or 1987.
In April 1982 Britain was plunged into a most
improbable conflict with Argentina. When the
Argentinian junta invaded the Falkland Islands,
Margaret Thatcher did not hesitate. Regardless of
the cost of defending a barren island with more
sheep on it than people, a principle was at stake:
Britain had to respond when its territory was
attacked. The Falkland islanders were British and
had rejected any form of Argentine sovereignty.
If Britain allowed itself to be expelled by the
Argentinians its credibility as a significant power
would be gravely damaged. Unlike the Suez
adventure, this was an enterprise that attracted
overwhelming public support.
Just a year later, in June 1983, Margaret
Thatcher fought her second election. Helped by
the Falklands victory, and by the tough leadership
she had displayed, the Conservatives won a landslide
victory with a parliamentary majority of 188
over the Labour Party, whose share of the vote
had sunk to 27.6 per cent. The Labour Party was
severely handicapped by two issues: its promise to
take Britain out of the European Community if
elected, and its adherence to unilateral nuclear
disarmament. The Conservatives had a commanding
majority of 144 over all other parties
combined. The new Alliance, at this, its first test,
was closely behind Labour, with 25.4 per cent of
the vote, but the electoral system gave them only
twenty-three MPs. The question remained open:
would a three-party contest now become the
norm, or would the Alliance or Labour emerge as
the winners in a resumption of two-party politics?
Thatcher’s second administration, from 1983
to 1987, saw no let-up in the attempt radically
to reshape Britain’s economy. Public expenditure
and the budget deficit would be reduced.
Privatisation of state-run industries would be
accelerated: British Telecom, British Airways and
British Gas provided a lucrative sales programme.
The administration was cautious on defence,
increasing expenditure and supporting the
American cruise missile installation on bases in
Britain. Law and order and strengthening the
police were also high on the list, while further
restrictions were imposed on the unions in the
Trade Union Reform Act. Even so, it was from
the National Union of Miners, led by Arthur
Scargill, that the government faced its most
serious threat. The miners had brought down
Heath; could they now bring down Thatcher,
who was not only determined to curb the unions
in general but ready to take on the miners? The
new National Coal Board’s head was Ian
MacGregor, who had gained a reputation for
ruthless efficiency by slimming down and rationalising
the steel industry, in the process defeating
the steel workers; his appointment to the NCB
by the government persuaded the coal miners to
strike for fear of pit closures and job losses. The
strike began in March 1984 and ended in defeat
for the miners a year later. In the course of it,
there were many ugly confrontations between
miners and police. But the government was fully
prepared, with large coal stocks, and in any case
the Nottingham and Derby miners refused to
strike, so dooming the National Union of Miners
to defeat. Despite a great deal of sympathy for
the hardship suffered by the miners and their families,
there was little nationwide support for the
leadership of the NUM or the trade union bosses.
The government’s economic policies, however,
continued to be heavily criticised. Unemployment
rose to over 3 million, and spending cuts put the
government at loggerheads with local authorities.
Admiration for Thatcher’s composure was again
aroused in October 1984, this time after the IRA’s
bombing of the Grand Hotel in Brighton, where
the Cabinet was staying during the Conservative
Party Conference. But her personal style of leadership
was also now meeting mounting criticism,
culminating in January 1986 in the walkout from
her Cabinet of the popular defence secretary
Michael Heseltine. The rights and wrongs of their
quarrel were less important than Heseltine’s accusation
that Margaret Thatcher no longer accepted
the normal practices of Cabinet government, that
her behaviour represented a breakdown of the
constitutional process. These were the first warning
signals that approval for strong leadership
could turn into general resentment of ‘bossiness’
and ‘nannying’. It was also noted that Thatcher
had the irritating habit of referring to herself
with a royal ‘we’.
With an election approaching, public spending
restrictions were eased, a policy made more feasible
by the rise in oil-tax revenues and by industrial
growth since the low of 1981. Inflation had
fallen from 11 per cent in 1981 to an average of
4.4 per cent in 1985–7, and wages for those
in work rose much faster than inflation, while
mortgage-holders benefited from low interest
rates. Council-house sales proved very popular
too. But unemployment, at over 3 million, remained
stubbornly high, though government
training measures had slightly reduced the total.
Manufacturing industry had shrunk, and what
remained was leaner and more productive; but
the 2 million jobs lost added greatly to the numbers
of the long-term unemployed.
In foreign affairs Thatcher was equally determined
to make her views clearly known. She
strongly supported NATO and the American
alliance and established an especially close rapport
with President Reagan, though that did not
inhibit her from making strong protests when she
thought he was wrong, as when the US invaded
Grenada in 1983. But she permitted the use of
US bases in Britain for the American attack on
Libya in April 1986, because she regarded it as
justified by Gaddafi’s support for terrorism. She
continued to show that she deserved the sobriquet
‘Iron Lady’, maintaining her robust opposition
to all communist tyrannies. Yet she was the
first world leader to recognise that Mikhail
Gorbachev was a new phenomenon in Soviet
leadership, a man with whom ‘one could do business’.
At the end of March 1987, she visited
Moscow and had long talks with the Soviet
president which helped to pave the way for the
ending of the Cold War.
The future of the Crown colony of Hong
Kong, much of whose territory would return to
China in 1997, was another problem her administration
tackled. To her it was a practical question
of making the best deal possible. At the time
of the negotiations in December 1984, China was
in a reforming phase, and Britain appeared to
have secured at least some safeguards, preserving
for Hong Kong a high degree of autonomy.
Less happy were Thatcher’s relations with the
rest of the Commonwealth. She opposed any but
innocuous sanctions against the apartheid policies
of South Africa, arguing that they would harm the
black Africans more than the whites. This placed
her in a minority of one. In Western Europe, too,
she frequently found herself isolated. She was no
friend of the Brussels bureaucracy and was
inclined to resist the claims of the Commission to
regulate in detail. As she saw it, she was not about
to free Britons from Whitehall only to subordinate
them to Brussels. She was a free-trader at
heart, believing in the unhindered flow of world
trade as the best guarantee of prosperity. Opposed
to the interventionism of Brussels and in
particular to the featherbedding of French and
German farmers, she made unremitting efforts to
reduce the cost of the Common Agricultural
Policy, which kept food prices artificially high for
the people in the Community, partly by accumulating
butter mountains and wine lakes. But her
tone was often strident and abrasive. It secured
results over such issues as the reduction of
Britain’s excessive contribution to the common
Community budget but was counter-productive
in other ways. Mrs Thatcher was not regarded by
her fellow EC leaders as a ‘good European’, yet
she believed that the policies she pursued were
right not only for Britain but for the Community
as a whole.
When Margaret Thatcher decided to call her
third general election in 1987, the majority in
work were better off than ever before. The economy
appeared to be progressing steadily and the
opposition was split between the Alliance and the
Labour Party. Since October 1983, the Labour
Party had had a youthful new leader in Neil
Kinnock, the son of a Welsh miner. Kinnock, who
belonged to the moderate left, had succeeded in
uniting the party once again but was handicapped
by an electoral pledge to remove all nuclear
weapons from Britain. On the nuclear defence
issue, the Alliance was also in complete disarray.
All three parties made use during the election
campaign of slick advertising-agency promotion.
Television and media consultants were pressed
into the campaign as never before. For Labour,
the red rose replaced the red flag. For the
Conservatives, Thatcher was bathed in blue with
golden hairdos of singular height. The Alliance
sported a ‘battle bus’ vividly decorated with
balloons. On polling day in June 1987, the
Conservatives achieved almost the same level of
support (42.3 per cent of the vote) as in 1983. For
Labour and the Alliance the result was decisive:
Labour had clearly seen off the Alliance’s attempt
to replace it (Labour gained 30.8 per cent of the
vote and the Alliance dropped to 22.6 per cent).
Thatcher’s programme to change Britain would
continue for a further term. Indeed, there seemed
not the remotest possibility that she was even contemplating
retirement. She declared that she was
ready to go on to a fourth election victory and
beyond.
Thatcher was determined to show that though
this was her third administration there would be
no loss of vigour, no retreat from the Thatcher
revolution. The great state-run services – social
security, the National Health Service and education
– would be shaken up by the introduction of
competition, to produce efficiency and responsiveness
to the customer, and better value for the
taxpayer. This was radical conservatism. Just as a
radical Labour administration after 1945 had
been ready to take on the establishment, so Mrs
Thatcher relished doing the same: the British
Medical Association, the National Union of
Teachers, university vice-chancellors, lawyers and
judges. Reforms were indeed highly desirable.
Providing ever more funds was not the answer
to dirty hospitals and cross-infection, to poor
standards in many state schools, to a highereducation
sector unwilling to increase student
numbers without additional cash. But the public
mood was changing; there was a feeling that it
was time to consolidate. Thatcher’s philosophy
was hurting not only the idle, but also the poor.
Benefits from reform were not seen to be coming
through. Privatisation of a whole host of state
enterprises from British Airways to the water
authorities had lost its excitement and seemed
only to be making profits for investors.
The country was split between the rich south
and the deprived manufacturing towns of the
north. Entering the third industrial revolution,
Britain was experiencing much painful readjustment;
unemployment remained above the 2
million mark. Britain’s industrial base had shrunk
but was in a much more competitive position:
that was the positive side. The Thatcher government’s
great achievement was the conquest of
inflation – or was it?
The economy began to go wrong in 1988 after
six years of unprecedented growth. After the
stock-market fall (it was thought at the time
to be a crash), the chancellor of the exchequer
Nigel Lawson had eased money control too much;
then in trying to keep sterling from rising too
high and hurting exports, he over-compensated
and pushed interest rates too low. Difficulties
multiplied: the trade balance slipped, a tax-cutting
budget in April 1988 proved not to be the right
remedy. Income tax cuts had been the most
popular strategy of the Thatcher governments, in
large measure paid for by raising indirect taxes,
reducing central government contributions to
local authority spending and increasing National
Insurance payments. The total tax burden had not
in fact been reduced; and the wealthy benefited
far more than the poor. Inflation began to rise
again and interest rates also climbed to heights
which hurt all homeowners with mortgages. An
excessive house-price boom shuddered to a halt.
Pressured by Lawson and Howe, the prime
minister agreed that Britain should soon join the
European Exchange Rate Mechanism (ERM)
when a number of conditions had been met. But
in October 1989 Lawson resigned, complaining
that Mrs Thatcher was undermining his stewardship
of the economy by turning to an outside
adviser. By then the Thatcher economic miracle
was looking tarnished. But what spelt political
doom for her was the ill-advised introduction of a
new method of financing local government spending,
the community charge, or ‘poll tax’ as it
became universally known. If the total revenue
the local authorities had to raise because of the
declining central government contribution had
not been generally so high, the measure might
have attracted less odium. But it was seen as
patently unfair that the lord in his manor was now
paying less than a working-class family crowded
into a council house.
During 1990 unease grew among the Conservative
faithful. The party was deeply divided
between Thatcher loyalists in an increasingly
smaller majority and the sceptics who thought
that, under Margaret Thatcher, the Conservatives
would lose the next election, which could not be
held later than 1992. When, in November 1990,
Sir Geoffrey Howe became the third senior
Conservative minister to resign from the Cabinet,
in his case incensed by Thatcher’s handling of relations
with the European Community, she knew
she had a real fight on her hands if she was to
remain leader of the party. Although she gained a
majority and almost made it on the first ballot, her
majority under the party’s rules was not quite large
enough to assure her of outright victory. Her
Cabinet colleagues now warned her that she would
lose the second round to Michael Heseltine. On
22 November 1990 she resigned and threw her
support behind John Major, the chancellor of the
exchequer, in a determined bid to stop Heseltine.
Major was elected and healed party divisions by
immediately asking Heseltine to join the Cabinet.
The trend in Britain in the early 1990s, as in
the US, was to present a more caring social
image. The Conservative Party had dropped the
longest-serving prime minister in the twentieth
century, winner of three elections. Despite
obvious flaws as a politician, Margaret Thatcher
succeeded in changing the course of British
politics. When in 1979 she entered Downing
Street it was by no means widely accepted that
state socialism was a dismal failure – she altered
the political agenda. An impoverished country,
after all, cannot care for those in need. The right
balance has to be struck between wealth-creation
and the provision of health and social services for
all those who have a right to expect it.
Fundamentally Thatcherism was about the
rejection of socialism in all its manifestations,
from the public ownership of industry to curing
the problems of poverty through welfare.
Margaret Thatcher destroyed trade union power
and the cartel restrictions of labour, and poured
scorn on the ideal that the care of the individual
from ‘cradle to grave’ was the responsibility of
society. She set out to stop the centre of politics
swinging every few years a bit more to the left.
In socialism’s place she held out a different vision,
of the able-bodied individuals being masters of
their own fate, making their own provision
instead of relying on a welfare state. Welfare was
to be restricted to those who could not help
themselves. The British people were to recapture
the spirit of enterprise, the urge to advance their
own fortunes. Inequalities of wealth were to be
welcomed, as a necessary consequence of motivation.
Conservative governments would therefore
lower direct taxation and seek to reduce government
expenditure as a proportion of the country’s
wealth. They proclaimed that people should be
able to spend their money themselves and not
have the government spend it for them. The freemarket
economy was the way forward for the
country, not state planning and intervention.
In practice many of Mrs Thatcher’s policies
were modified during the course of her own three
administrations. The British people collectively
were opposed to any significant tampering with
free state education, social security and universal
health provision. Spending for these sectors from
1978 to 1990 increased substantially to cope with
high unemployment and an ageing population
with growing expectations of care. The British on
the whole are not given to ideological extremes.
In the face of the electorate’s suspicions of their
aims, Conservative governments, including John
Major’s since 1990, have attempted through
reorganisation and by creating an element of
competition, to achieve better value or money in
the state sector. Health treatment remains universally
free for every patient, while the cost of
medicines and ancillary services have been raised
for wage-earners. Beveridge’s vision of a welfare
state is intact. British society has turned against
Marxist economic organisation, but socialist
ideals of equal opportunity, of a classless society,
of progressive taxation, of help for the disadvantaged
and the poor continue to permeate all political
parties.
The enterprise culture had some successes for a
time, especially in the establishment of a record
number of small businesses. House ownership
rose from just over half to 66 per cent of the population,
the highest in Western Europe. The deep
recession which began in 1990 dented these
achievements, but the trend of increased home
ownership over the decade continued. The same is
true of small businesses, although a record number
failed during the recession of the early 1990s.
Margaret Thatcher also succeeded in increasing
inequality. The higher-rate tax of 40 per cent
benefited most the very rich, who now paid the
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 successor,
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 measured
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 productivity
and competitiveness of many industries,
which thus came to match the best of Britain’s
Western neighbours. But the jury is out on privatised
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 nationalisation.
But John Major, in espousing the classless
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 disarmament
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 safeguard
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 ordinary
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 experienced
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 unpopularity
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
next election in the early 1990s could be fought
with lower interest rates, sound money, a strong
economy and a return of confidence.
Norman Lamont began to talk about green
shoots of recovery in the summer of 1991, but by
the spring of 1992 no recovery had appeared.
Thus the Conservatives were left fighting the election
in April 1992 in the midst of a recession. The
pundits said that the Conservatives would do well
just to remain the largest party, with the Liberal
Democrats holding the balance and Labour not
far behind the Conservatives. It was even possible
that Labour would win outright. When all was
gloom around him John Major fought an upbeat
election campaign, projecting once again a reasonable
and likeable personality, the sort of man
you can trust. Neil Kinnock, the Labour leader,
who had done so much to reunite his party, to
expel the militant extremists and to convey a
moderate, caring outlook, also campaigned with
warmth and verve. But to overturn the huge
Conservative majority was a mountain no party
had successfully climbed before. When the results
of the 9 April election were in, Labour had made
large gains but not enough to become the party
of government. Surprisingly, the total Conservative
vote had not fallen from the number cast for
Margaret Thatcher in 1987.
The Liberal Democrats’ hopes of forcing
through a system of proportional representation
were dashed. Neil Kinnock’s leadership was over.
The new Conservative government expected a
long period of political stability.
John Major’s Cabinet made it a priority to cure
the economy once and for all by reducing inflation
to the same low levels as prevailed in France
and Germany. The discipline of the ERM with its
fixed exchange rates and resulting low pay awards
was among the weapons. At the Maastricht
summit in December 1991 Major scored a personal
triumph in securing for Britain the special
terms it wanted. At home after a short period of
pain Britain was expected to move out of its
longest recession since the war. Inflation came
down sharply in 1992, but unemployment continued
to rise. The green shoots of recovery had
long ago withered and the landscape remained as
desolate as before.
The Labour Party in July 1992 under the leadership
of the newly elected John Smith gained
greater credence by calling for a change of policy.
Everyone blamed the Germans, who were financing
East German recovery by spending money the
government did not have instead of substantially
raising taxes. The result was high interest rates in
Germany and misery all around. But Britain’s ills
ran deeper. Major with his winning personality
and nice smile was elected as a less formidable and
more flexible replacement for the Iron Lady.
But in economic policy Major attempted to act
as the Iron Man. Britain, he declared, would play
a role at the ‘heart’ of Europe. At the centre of
the government’s policy for defeating inflation
and making Britain fully competitive was the
decision to link the pound with the least inflationary
currency in Europe, the German mark,
through the ERM at a fixed rate of exchange. In
September 1992 John Major faced a humiliating
retreat. The exchange rate could be held no
longer and Britain left the ERM. In practice this
led to the devaluation of the pound. It was a
political disaster of a magnitude few governments
since the war had suffered. The credibility of the
prime minister, of the chancellor of the exchequer
and indeed of the whole government was
damaged. The issue of closer ties with Europe,
of moving towards political and financial union
by the end of the century, had already split the
Conservative and Labour Parties. But a majority
in both had favoured the moves towards this
goal embodied in the Maastricht Treaty. Now
the anti-Maastricht groups in both parties took
heart from the debacle. It had become clear, and
the narrow victory for ratification in France confirmed
it, that there were many people throughout
Europe who felt deep misgivings about
European union and the loss of national sover-
eignty. Attitudes were hardening against the
Conservative government and its whole European
strategy.
At home, October 1992 proved another disastrous
month for the prime minister and his
Cabinet. The announcement that thirty-one pits
were to be closed and thousands of miners left
without work, albeit with some compensation,
caused widespread anger well beyond the mining
communities. Facing defeat in the House of
Commons the government had to draw back.
The loss of contact with public feeling, the continuing
recession and unemployment rising
towards 3 million, more than one in ten of the
workforce, brought the public approval rating of
the government to a new low. Most damagingly,
John Major’s leadership and good judgement
were being widely questioned. Rarely had a government’s
fortunes been so quickly reversed after
an election victory.
There were close parallels between Reaganomics
and the conduct of the economic policies
followed by the conservatives. These parallels
included a rising budget deficit as the costs of
unemployment increased while tax revenue fell
during the years of recession, the longest since the
war. House prices dropped steeply, the overhang
of the personal credit binge of the 1980s which
had showered plastic cards on virtually everyone,
and the continuing threat of unemployment
undermined the confidence of the man in the
street to spend money on anything other than
necessities. In 1993 a shift in economic policy had
become unavoidable. The number one problem
was now unemployment which once again was
three million. Special statistical measures and government
training schemes disguised the true total
which was much higher. This time it affected not
just the Midland and northern industrial regions
but also the conservative heartlands of London,
eastern and southern England. The pendulum of
economic and social policies was swinging back
from ‘less government’ to the need for more intervention
and assistance. Thatcherite conservatism
proved to be no more the last word in British
politics than Reaganomics was in the US.
Governments in power during long periods of
recession are unpopular everywhere, blamed for
high unemployment and disappointing expectations
of better standards of living. This was true
for John Major’s Conservative administration too,
but there were added difficulties. The party was
rent by differences over Europe – whether to
accept or reject closer union. The government’s
small majority after the 1992 elections made the
management of policy exceptionally difficult in
the face of the determined anti-European minority
of the party. The rift extended to the Cabinet
itself; Major was left with no alternative but to try
to continue to work with those who opposed
him. Furthermore, the recession led to ballooning
public expenditure. The 1994 budget which,
for the first time, raised taxes on such essentials
as fuel for heating, was deeply unpopular. The
recession was slow to end and the feel-good factor
remained conspicuously absent; job insecurity and
years of falling house prices undermined public
confidence. Although John Major faced down a
leadership challenge in 1995 his majority in the
House of Commons narrowed to one the following
year. His government came close to
having to depend for its survival on the Ulster
Unionist MPs, which reduced his flexibility in
handling the problems of Northern Ireland.
The Major administration’s important achievement
was to bring about the virtual cessation of
violence in Northern Ireland in 1995. Secret contacts
and concessions on the one hand, and the
firmness of Britain’s handling of terrorism on the
other, brought rewards. Major succeeded in establishing
close partnerships with successive prime
ministers of the Republic of Ireland. But in 1996
when the IRA was unable to win by democratic
process, it returned to bombing the mainland.
The problem that continued to split the Conservative
Party was Britain’s future role in Europe.
In straddling the views of the pro- and anti-
Europeans, the government’s policy aims remained
ambiguous and Britain’s influence in the councils
of the European Union weak. The standing
of the government fell precipitously. Mad-cow
disease, and the fear that it could infect humans,
added to John Major’s woes and heightened
tension with Europe. Labour fortunes meantime
revived. Tony Blair, newly chosen leader of the
Labour Party after John Smith’s sudden death,
moved the party towards the centre, rejecting outworn
socialist dogma. The modernisation of the
party, begun a decade earlier by Neil Kinnock, was
bearing fruit. Blair’s leadership revitalised Labour,
his promises not to be spendthrift making it electable
for the first time in years. The ‘enterprise’
economy was to be developed into the ‘stakeholder’
economy, though the general public did
not know quite what that meant. Eighteen years
of Conservative rule had significantly changed
the economic scene, curbed trade union powers,
privatised subsidised state industries and made
Britain safe for a two- (or more) party system by
forcing Labour to drop old-style socialism and to
modernise. Britain had been plunged into recession
earlier than the countries of continental
Europe, but was also the first to emerge after
painful readjustments and high unemployment.
Eighteen years of Conservative government came
to an end on 1 May 1997, when Labour won a
landslide victory, with 419 members of parliament
elected to the House of Commons of 659 seats.
John Major’s Conservatives suffered their worst
ever defeat, winning only 165 seats, and although
the Liberal Democrats, the third party, strengthened
their position, Tony Blair, the new 44-yearold
prime minister, with a majority of 179, was
not dependent on them. After repeated Labour
electoral defeats, Blair, who had become leader of
the Labour Party in 1994, set about shedding the
last elements of the traditional socialist Labour
ideology: nationalisation and renationalisation
were dead; the redistribution of wealth by taxing
the rich and the middle-income groups who had
gained most under the Conservatives was rejected;
the Thatcherite market economy was accepted;
the earlier rights of the trade unions would not be
restored. This was ‘New Labour’. It was difficult
to define what was ‘Labour’ about it: the old ‘left’
and ‘right’ labels no longer fitted a party whose
key claim was to ‘modernise’. ‘New Labour’ came
to look like a pragmatic radical conservative alternative,
a one-nation party bent on equality of
opportunity, determined like Thatcher to promote
the work ethic and change welfare. Benefits
would no longer be provided indiscriminately; a
readiness to work would be rewarded; what was
saved on welfare would be spent on subsidies to
employers who took on the young unemployed.
Blair’s agenda for ‘New Labour’ had much in
common with Clinton’s ‘New Democrats’ and,
given their close links, this was no coincidence.
With such a small majority John Major had
done well to keep going at all until 1997; his
party was split on the issue of monetary union and
closer European integration and further damaged
by some high-profile cases of sleaze. However,
the radical Conservatives approach to the
economy, promoting privatisation and flexible
labour, had led to a dramatic turnaround:
Britain’s comparatively low direct and indirect
wage costs attracted inward investment from
Germany, the US, Japan and Korea; unemployment
had fallen from a peak of over 3 million to
well under a million, inflation was low and the
new expansion was under control with a strong
pound. Britain, once the ‘sick man of Europe’,
was now the model for recovery.
Major’s one success was in Northern Ireland
where he sought peace through negotiation. His
initiative appeared to have failed when the IRA
resumed their bombing campaign in London and
Manchester. But the Conservatives started a
process which, after the elections, a Labour government
was able to revive.
That was the state of Britain inherited by ‘New
Labour’. With tight reins on government spending
there were also large problem areas: education
had been neglected under the Conservatives
until very recently. Schools were underfunded,
teachers poorly paid and undervalued; the
National Health Service demanded ever increasing
resources and struggled to meet basic needs
– waiting lists for operations extended to a year
or more as Britain spent less on health than comparable
developed nations. New Labour had
promised fiscal prudence – a promise it fulfilled.
In 1999 Blair’s support remained high; old-style
socialism had been ditched. Blair urged modernisation
while building on previous Conservative
changes. On 22 May 1998 a momentous change
occurred when the Northern Ireland peace deal,
brokered in April, ‘the Good Friday Agreement’,
was approved by 71 per cent of the Northern
Irish voters and 90 per cent of voters in the
Republic. It marks not the end of all violence, but
the beginning of the end.
While the devolution of government with
Gerry Adams’ Sinn Féin ministers sharing power
with Ulster Unionists had a rocky beginning and
the IRA did not complete its decommissioning,
the military paramilitias on both sides did not wish
to renew ‘the war’ opposed by the overwhelming
number of people Catholic and Protestant in
Northern Ireland. Even the breakaway ‘Real IRA’
suspended bombing after the horrific explosion
they caused in Omagh on 15 August 1998 which
killed twenty-nine and injured many more. An
uneasy peace descended on the province.
Blair scored highly for his firm moral leadership
in urging intervention in the Kosovo humanitarian
crisis in 1997 and 1998 and seeing that
conflict to a successful conclusion. At home he
was equally sure-footed when responding to the
unprecedented outpouring of public grief at the
funeral of Princess Diana in September 1997.
Over Europe the country was still divided but
Blair hoped to lead his reluctant countrymen to
the heart of the European Union. A formula was
found that would leave the economic decision to
join the Monetary Union when conditions were
right to Gordon Brown, the chancellor of the
exchequer; the political decision had already been
made in favour. Blair was attempting to ride two
horses at once.
Though the promise of a better National
Health Service and improved public services did
not materialise, the economy remained in sound
shape. The Bank of England, not politicians, was
now setting interest rates to meet a low inflation
target; unemployment was low and the country
was doing much better than Britain’s neighbours.
Blair’s strong leadership in the crisis in Kosovo in
1999 won him much support (Chapter 78). Blair
asked for a second mandate to complete New
Labour’s promises. The general election was
called in June 2001. New Labour won by a landslide
almost as great as four years earlier. In his
second administration the country expected New
Labour to show the results of its reforming policies.
Trust in the prime minister was at its peak.
At home, the public services, especially the
National Health Service, failed to improve fast
enough; it attracted increasing criticism during
the second administration. Chancellor Brown
until 2002 kept a prudent financial policy going
and opposed the entry of Britain into the European
Monetary Union as the ‘five tests’ had not
been passed. In 2003 Brown massively increased
public spending and accepted that a large deficit
would result. Blair, more keen than Brown to
place Britain fully into the European Union, was
unable to make much progress against a sceptical
British public.
A defining moment for the prime minister was
the decision to back the US in the war against
Iraq in March 2003 (Chapter 79). There was
strong parliamentary and public opposition
though the majority approved driving Saddam
Hussein from power. Blair’s reputation for trustworthiness,
however, received a check when
investigations caused by the suicide of a civil
service scientist Dr Kelly, in the summer of 2003
broadened into questioning whether the case put
by Blair before parliament for going to war had
been sound. That may be a just criticism as it
related to the 45-minute claim, that this is all
Saddam needed to ready weapons of mass
destruction, but not that Blair had deliberately
misled parliament and the British people. Trust in
him was again brought into question when it
became clear in 2004 that there were no weapons
of mass destruction in Iraq. But the Conservative
opposition had to make up much ground to place
Labour into serious doubt of winning a third
term on 5 May, 2005. ‘New Labour’ espoused
‘one nation’ politics and moved to the middle
ground, Michael Howard and his colleagues had
to find a fresh Conservative electoral appeal. The
Liberal Democrats offered an alternative as the
electorate was not enthusiastic about either major
party in the election year.
World History
