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A beginner’s guide to Thatcherism (Tory leadership candidates for the use of)


THE ghost of the 20th century’s longest serving British Prime Minister has hovered over the Conservative Party’s leadership campaign. Several of the candidates mentioned her name approvingly and commentators have highlighted any attempt to burnish ‘Thatcherite’ credentials.

However, with the typical shallowness that dominates so much of the media these days, Thatcherism is being equated to nothing more than a desire to cut taxes. This is a fundamental misunderstanding of the ideology which Mrs T espoused. Low taxes were a consequence of, not the driver of, Thatcherism. The book which the great lady famously threw down on a table in the middle of a party policy meeting saying ‘THIS is what we believe’ was called The Constitution of Liberty by the Austrian economist F A Hayek. The very title is a clue for dimwit journalists. The heart of Thatcherism is freedom.

Hayek was convinced that the huge expansion of the role of the state posed a real threat to freedom and in so doing, could undermine the very principles which had resulted in the incredible flowering of Western civilisation over the last few centuries. Free societies are more successful and prosperous. At a personal level too, a free society is the best environment for individuals to achieve their potential. Hayek is no supporter of unbridled libertarianism, however, and places great emphasis on the rule of law. Interestingly enough, he argues that the influence of socialism reached its peak in the aftermath of the Second World War, the time when the Attlee government launched its widespread programme of nationalisation in this country. However, even though the intellectual arguments in favour of socialism had begun to lose their force by the time he wrote his book, its legacy is still very much with us today in the shape of the welfare state and politicians characterised by a sometimes well-meaning but misguided paternalism.

Interestingly, in spite of Mrs Thatcher’s robust endorsement of Hayek’s work, it ends with a postscript called ‘Why I am not a Conservative’.  While its influence on her political beliefs cannot be understated, she did not swallow every single word. Although she voted in favour of decriminalising homosexuality and legalising abortion in the 1960s, Thatcherism has been associated, with good reason, with social conservatism and a moral stance considerably less liberal than Hayek’s. For instance, her government enacted Section 28, a law that opposed the ‘intentional promotion’ of homosexuality by local authorities and ‘promotion’ of the teaching of ‘the acceptability of homosexuality as a pretended family relationship’ in schools.

Perhaps her thinking changed over the years. This, after all, is another feature of Thatcherism which is often overlooked – it was never a static ideology. It evolved as circumstances changed. The term ‘Thatcherism’ pre-dates her arrival at No 10 Downing Street in 1979, but at that time, no one would have associated it, for instance, with Euroscepticism. I believe that Mrs Thatcher can rightly be regarded as the matriarch of Brexit, even though she died before the 2016 referendum. She has been criticised, however, particularly in some UKIP posters and leaflets, for signing the Single European Act in 1986. Indeed she did, but incredible as it might seem, only afterwards did she fully grasp the political dimension of the European project. Her support for the Single European Act was rooted in the thoroughly Thatcherite belief in free trade and it appears that Lord Cockfield, whom she appointed a European Commissioner, deliberately sought to pull the wool over her eyes, downplaying the aspects relating to closer political integration. By the time she delivered her Bruges speech on September 20, 1988, her eyes had been opened. ‘We have not successfully rolled back the frontiers of the state in Britain only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels,’ she declared. It was her successor John Major who took our country further down the road to closer political integration when he signed the Maastricht Treaty in 1993 and by then, her views were settled. ‘I could never have signed this treaty,’ she declared in the House of Lords.         

For all the evolutionary and indeed seemingly contradictory aspects of Thatcherism, its core belief in freedom never wavered. Thatcherism has always meant treating ordinary people as responsible adults who do not need to be mollycoddled or bossed around by the state. It is perhaps in this area above all where so many of today’s so-called Thatcherites fall so far short. During the recent Conservative leadership campaign, did any of the candidates promise to abolish the obnoxious so-called ‘nudge unit’ set up by David Cameron and widely used by the Johnson government during the Coronavirus pandemic? It is sobering to contrast the deliberate panic they invoked with the response by a relatively poorly regarded Prime Minister to another pandemic. When Hong Kong flu arrived in this country in December 1968, Harold Wilson sought to reassure the public. He ordered large quantities of flu vaccine but essentially left us alone. The idea of locking down the entire country would have been anathema to him.  I have no doubt that if Mrs Thatcher had had to deal with a pandemic during her years in office, she would have adopted the same approach, although given her scientific background I strongly doubt that she would have pressured people to be vaccinated with a far more novel and untried substance than the flu vaccines of the 1960s. The American author Jeffrey Tucker sums up the prevalent attitude towards the virus at the time:- ‘That generation approached viruses with calm, rationality and intelligence….We left disease mitigation to medical professionals, individuals and families, rather than politics, politicians and government.’ How far we have declined from these very Thatcherite qualities and sadly, how much our government has been complicit in the process. Let us cast our minds back to March 2020 when the Scientific Pandemic Influenza Group on Behaviour (SPI-B) produced a report called Options for increasing adherence to social distancing measures which expressed concern that ‘a substantial number of people still do not feel sufficiently personally threatened.’ It recommended that ‘the perceived level of personal threat needs to be increased among those who are complacent, using hard-hitting emotional messaging.’ I can be pretty confident what Mrs Thatcher would have thought of this heinous plan. She would have been aghast. Sadly, her successor fully endorsed the proposal and gave an absolutely appalling speech on the eve of the lockdown (which you can still watch here) which in its talk of a ‘national emergency’ did absolutely nothing to reassure anyone. (As an aside, I can’t imagine Mrs T. knocking back the booze with some mates in Downing Street after telling everyone to avoid social gatherings.)

The Johnson government’s draconian, fear-inducing approach to the pandemic is perhaps the most vivid illustration of the decline from the core Thatcherite belief that most adults are responsible beings who can be left alone to run their own lives. It is not, however, the only example. Why so much surveillance? Why this pushing to ban petrol cars? As I type this, we are currently enduring some extremely hot weather. Fair enough, some people do need to be warned of the risks – particularly if they have underlying health conditions or want to sunbathe for lengthy periods, but does the heatwave really warrant declaring a national emergency? I doubt if Mrs Thatcher would have thought so.            

Another overlooked facet of Thatcherism is its approach to monetary and fiscal policy. The 1970s were characterised in many countries by high inflation. It was a particular problem for the Labour government of Harold Wilson, which saw inflation rise to almost 25 per cent in 1975. Chancellor Denis Healey responded by introducing a target for the growth of the money supply – to be more exact, M3 or ‘Broad Money’ – a measure which included bank deposits. Within two years, inflation fell back below 10 per cent. During the early years of the Thatcher premiership, inflation was on the rise again and once again, her team of ministers turned to monetary targeting to bring it down. Once again, they were successful. By 1987, inflation had fallen back to its lowest level in almost 20 years.

These days, however, monetarism is widely derided in university economics faculties and indeed, within the Bank of England. New Keynesianism, an economic theory far more conducive to those who believe that more state spending is the answer to everything, is very much in vogue, in spite of strong evidence to the contrary. The Bank of England launched into a series of totally unnecessary asset purchases (popularly known as ‘Quantitative Easing’) in 2020 which caused the quantity of broad money to skyrocket. Is it a coincidence that inflation has shot up two years later? I don’t think so.

On the subject of economic policy, one important event which those clamouring for tax cuts seem to be overlooking was the 1981 budget. At the time, the UK economy was in a not dissimilar position then to its current state – suffering from a recession while inflation remained at unacceptably high levels. The then Chancellor, Sir Geoffrey Howe, raised taxes. What? In a recession?  Yes, in a recession. In response 364 economists signed a letter to the Times stating that such a move was crazy. Howe persevered and guess what? Inflation came down and the economy started to recover. There is an important lesson to learn from this. Thatcherism means fiscal responsibility – in other words, it rejects tax cuts that are unfunded and which can be financed only by increased public borrowing. It recognises that racking up deficits as a means of stimulating the economy is dangerous and counter-productive. No one who calls themselves a Thatcherite can be anything other than horrified at a Conservative Government which has raised taxes to their highest level since the end of the Second World War. I do believe that there is a possibility of cutting taxes without increasing public sector borrowing, but it must come through a streamlining of public services – including a drastic reduction in the civil service and local government payrolls – along with the associated benefits which go with these jobs. I heard little from the leadership candidates to suggest that they were prepared to run with its agenda and take an axe to waste and unnecessary expenditure in Whitehall, town and county halls.     

Another overlooked facet of Thatcherism is the almost evangelical zeal of its leading advocates. The absence of such zeal from many of those leading politicians popularly labelled ‘Thatcherite’ has sadly allowed the Left to exert a most unhealthy influence in institutions such as schools and universities. No Conservative Prime Minister since 1990 has given a speech of the calibre of Mrs Thatcher’s so-called ‘Sermon on the Mound’, an address to the General Assembly of the Church of Scotland in Edinburgh.  Here are a couple of extracts which prove beyond doubt that the heart of Thatcherism is something far more profound than low taxes: ‘We are all responsible for our own actions. We can’t blame society if we disobey the law. We simply can’t delegate the exercise of mercy and generosity to others. The politicians and other secular powers should strive by their measures to bring out the good in people and to fight down the bad: but they can’t create the one or abolish the other. They can only see that the laws encourage the best instincts and convictions of the people, instincts and convictions which I’m convinced are far more deeply rooted than is often supposed.’

And again: ‘The only way we can ensure that no one is left without sustenance, help or opportunity, is to have laws to provide for health and education, pensions for the elderly, succour for the sick and disabled. But intervention by the State must never become so great that it effectively removes personal responsibility. The same applies to taxation; for while you and I would work extremely hard whatever the circumstances, there are undoubtedly some who would not unless the incentive was there. And we need their efforts too.’     

What is very apparent is that Thatcherism is far more nuanced and less dogmatic than the extremism of the far left, but at the same time, it is built on clear foundations which it is not afraid to spell out. Can we imagine Boris Johnson expressing his core beliefs with such conviction? His final appearance at Prime Minister’s Question Time concluded with an encouragement to his successor to ‘stick up for freedom and democracy everywhere’, somewhat hollow advice given the way his government seized and misused emergency powers in the coronavirus pandemic.

I am quite sure that if Mrs Thatcher were leading the country today, the idea of outsourcing the management of any future pandemics to the incompetent buffoons of the World Health Organisation would have been given very short shrift. I would imagine that any speech she might have made to Klaus Schwab’s World Economic Forum would have gone down like a lead balloon as her principles are so much at odds with those of the WEF. Yes, she supported free trade but not the predatory behaviour of multinationals hand-in-glove with the globalist politicians who dominate the gatherings at Davos. She would have strongly opposed any form of techno-tyranny and would have unequivocally condemned China’s ‘social credit system’. She would never have encouraged people to mortgage their freedoms and privacy for the supposed security of the nanny state.

In conclusion, the most important takeaway from this brief overview of Thatcherism is that it worked. Her years in office transformed our country at a time when we were in the doldrums – high inflation, militant unions, wasteful government, low productivity and so on. If the Conservatives want to win the next General Election, they will have to up their game in the next two years and convince voters that they have moved on from the sleaze, inertia and heavy-handed paternalism of the Johnson years. It is time for a revival of the bona fide Thatcherism which changed us from the ‘sick man of Europe’ into a nation of which one could be truly proud to be a citizen. 

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John Petley
John Petley
John Petley is former editor of The Freedom Association's quarterly magazine Freedom Today.

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