How public spending rose under Thatcher

Thatcher squeezed public services but high unemployment meant spending rose by an average of 1.1% a year.

Despite the rhetoric of "rolling back the state", Margaret Thatcher was less successful in cutting public spending than many of her supporters (and opponents) like to believe. As the IFS graph below shows, real-terms spending rose in every year of her premiership apart from two. Only in 1985-86 and 1989-90 did spending fall, by 1.1 per cent in the former and 2.3 per cent in the latter. On average, it increased by 1.1 per cent a year. Under the coalition, by contrast, it is forecast to fall by an average of 0.4% a year in real terms (departmental spending is being cut by 11% but debt interest and high unemployment mean the total reduction is far smaller). 

While Thatcher squeezed spending on public services such as health and education, mass unemployment and the consequent increase in spending on benefits (which, unlike the current government, she allowed to rise with inflation) ensured that total expenditure remained high. 

But while spending generally kept pace with inflation, it did fall dramatically as a share of GDP. When Thatcher entered office, total expenditure stood at 45.1%. It was briefly reduced - to 44.6% - in her first year before rising every year until 1982-83 when it peaked at 48.1%. Spending then fell in every remaining year, totalling just 39.2% in 1989-90 after the economy grew by an average of 4.7% between  1984 and 1988. 

Spending under Thatcher as a percentage of GDP

  • 1979-80 44.6%
  • 1980-81 47%
  • 1981-82 47.7% 
  • 1982-83 48.1% 
  • 1983-84 47.8% 
  • 1984-85 47.5% 
  • 1985-86 45%
  • 1986-87 43.6%
  • 1987-88 41.6%
  • 1988-89 38.9% 
  • 1989-90 39.2% 

Source: HM Treasury

Public spending then rose under John Major, largely as a result of the 1991-92 recession, peaking at 43.7% of GDP in 1992-93. It later fell to a modern low of 34.5% under Labour in 2000-01 before rising in every subsequent year until it reached 47.7% in 2009-10 (the surge was largely a result of the recession, which saw spending rise by 3.2% compared with 2008-09). Osborne's axe will see it fall to 44% in 2014-15 and, if the election goes the Tories' way, to 40.5% in 2017-18. 

Margaret Thatcher making a speech, 22nd May 1980. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Where are the moderate Tories condemning Zac Goldsmith’s campaign?

Conservative MPs are reluctant to criticise the London mayoral candidate’s dogwhistle rhetoric.

Very few Conservative politicians have criticised Zac Goldsmith’s campaign to be elected London mayor. And, amid repeated accusations of racial profiling, Islamophobic undertones, and patronising London’s Indian communities, there has been plenty to criticise.

Ever since describing his rival, Sadiq Khan, as having “radical politics” at the end of last year, Goldsmith’s campaign has come under fire for attempting to sound a dogwhistle to voters for whom racial politics – and divisions – are a priority.

You may feel it’s naïve of me to expect Tory MPs to join in the criticism. Presumably most Tory MPs want their party’s candidate to win the mayoralty. So it is unlikely that they would condemn his methods.

But I’d argue that, in this case, we can’t excuse dodged questions and studied silence as good clean tribalism. Granted, Conservatives only want to see their party make electoral gains. And that is understandable. But trickier to explain away is how willing all of the party’s MPs – many of whom are as moderate and “cotton-wool Tory” (in the words of one Labour adviser) as we once assumed Goldsmith was – are to ignore the campaign’s nastier side.

Why aren’t the Cameroons (or neo-Cameroons) who wish to further “detoxify” the party speaking out? There are plenty of them. There is more enthusiasm on the Tory benches for David Cameron than is generally assumed. Many of the 2015 intake are grateful to him; those in marginal seats in particular see him as the reason they won last year. And in spite of the grumbling nature of the 2010-ers, a number of them are keener than appears on Cameron. After all, plenty wouldn’t be in parliament without his A-list and open primaries (a time when the party was supposed to be opening up to candidates of different backgrounds, something Goldsmith’s rhetoric could threaten).

And we know it’s not just Labour whining about Goldsmith’s campaign. It makes Tories uncomfortable too. For example, the Conservative Group Leader at Watford Council Binita Mehta, former Conservative candidate Shazia Awan, and Tory peer and former minister Sayeeda Warsi have spoken out.

And it’s not just non-MPs who are riled by Goldsmith’s rhetoric. Behind the scenes, Conservative MPs have been muttering for weeks about feeling uncomfortable about the campaign.

“There has been a sense that this is a bad dogwhistle, and it’s a bit of a smear,” one Tory MP tells me. “I don’t think Sadiq Khan’s a bad man at all – I think his problem is, which happens to all politicians, is some of the platforms in the past and the people he shared them with, and maybe he didn’t know – I mean, the number of times David Cameron or Gordon Brown or Tony Blair were shown at some fundraising thing, or just visiting somewhere, shaking hands with somebody who turns out to be a crook; that’s the nature of mass politics.”

There is also a mixed view among London’s Tory MPs about the tone of Goldsmith’s campaign generally. Some, who were frustrated in the beginning by his “laidback, slightly disengaged” style, are simply pleased that he finally decided to play dirty with the more energetic Khan. Others saw his initial lighter touch as an asset, and lament that he is trying to emulate Boris Johnson by being outrageous – but, unlike the current London mayor, doesn’t have the personality to get away with it.

One Tory MP describes it as a “cold, Lynton Crosby calculation of the dogwhistle variety”, and reveals that, a couple of weeks ago, there was a sense among some that it was “too much” and had “gone too far and is counterproductive”.

But this sense has apparently dissipated. Since Labour’s antisemitism crisis unfolded last week, moderate Conservative MPs feel more comfortable keeping their mouths shut about Goldsmith’s campaign. This is because racism in Labour has been exposed, even if Khan is not involved. Ironic really, considering they were (rightly) so quick to condemn Ken Livingstone’s comments and call on Jeremy Corbyn and Labour MPs to speak out against such sentiments. It’s worth noting that Labour’s moderates have been significantly less reluctant than their Tory counterparts to call out such problems in their own party.

There is also the EU referendum to consider. Tory MPs see division and infighting ahead, and don’t want to war more than is necessary. One source close to a Tory MP tells me: “[Goldsmith’s campaign] is uncomfortable for all of us – it’s not even considered a Conservative campaign, it’s considered a Zac Goldsmith campaign. But [we can’t complain because] we have to concentrate on Europe.”

So it makes sense politically, in the short term, for Tory moderates to keep quiet. But I expect they know that they have shirked a moral duty to call out such nasty campaign methods. Their calls for Labour’s response to antisemitism, and David Cameron’s outrage about Jeremy Corbyn’s “friends” in Hamas and Hezbollah, are simply hollow attack lines if they can’t hold their own party to higher standards.

Anoosh Chakelian is deputy web editor at the New Statesman.