Markets and Liberty: Inside Thatcher's Treasury

Helen Goodman MP was a Treasury civil servant during the Thatcher years. Comparing her own experiences with the tributes of Conservative MPs, she wonders what lies behind the impulse to rewrite history.

 

I was a student when Mrs Thatcher was elected Prime Minister. I had voted Labour, but I do remember watching her arrive at No 10 on the telly and feeling a surge of hope – that at last we had a woman and some good must come of this.

Within two months my Dad who was working on a public sector construction was unemployed, an early victim of the cuts. He never worked again.

I was in my final year and had been offered a job at the Bank of England. Just after my finals I received a phone call – the job offer was being withdrawn! I will never forget the look on my father’s face when I told him. One family, two job losses in three months.

The reason my job was taken from me was that one of the government’s first moves was the lfting of Exchange Controls – the first of the big financial deregulations, which the Tories were praising in Parliament yesterday. The Bank had had 600 working on this. I quickly learned that with unemployment came stigma. I found myself living in a hostel for homeless women behind Victoria Station, being openly challenged – surely a job offer hadn’t been withdrawn – I had failed to get a job.

Later I learned that the Bank had withdrawn my job offer, but they’d kept on the other new graduate they’d recruited – a man. That hurt.

Well Mrs Thatcher certainly radicalised me – I joined the Labour Party and went to work for a Labour MP. This was the days before IPSA and allowances – all he could afford to pay me was £30 a week. So it was a short-term opportunity – but life changing. I retook the civil service exams and astonishingly was offered the Treasury.

When I arrived there in September 1980, officials were still reminiscing over Denis Healey and highly sceptical about Mrs Thatcher’s ideals. One afternoon, everyone working on public spending, about a quarter of the department, was called into the large marble columned meeting room overlooking Parliament Street – all wood panelling and busts of Charles James Fox. Mrs Thatcher had decided to introduce cash limits. This was the first time I was really aware of her as a force of nature. The senior official in charge had come straight from No 10. He told us he’d raised all the problems and difficulties but received this riposte “I know it’d difficult Mr L.... but don’t wallow in it.”

I was plunged in at the sharp end – my first job was on social security and I remember we had to take through emergency legislation raiding the National Insurance fund, set up by Lloyd George. My second posting was to the overseas aid desk.

Mrs Thatcher had skilfully managed to condense her philosophy into two key organising principles – markets and liberty. For officials – even the most junior like me – this was tremendously powerful, because you knew that if you pursued these two ideas you were doing the right thing. It was a clear framework and within it there was scope for initiative and flexibility. There was no need to constantly refer up for detailed instructions.

Of course, what it also did was to over-simplify every problem and ignore the costs and downsides of policy. For example in the 1970s a series of international commodity agreements covering crops and metals had been used to stabilise these markets. This had helped the producer countries to predict and stabilise their export earnings. It was difficult to know whether prices were always aligned with long-term value so Mrs Thatcher and Ronald Reagan swept them away. So now we have traders speculating in food stuffs and multi-national corporations suing the poorest countries on earth. I would submit that this is not an improvement.

I can clearly recall her on the TV arguing with the Archbishop of York, John Habgood. “You should be providing moral certainty”, she said. “But have you thought”, he politely inquired, “that moral certainty might be a sin?”.

In the 1980s the Treasury was reorganised. The nationalised industry division was closed down and we started to privatise everything.  This brought us into close proximity with the City. They were riding high on the Big Bang. I was shocked – for doing exactly the same work young men in the City were being paid five times my salary and they were allowed to speculate on the shares being sold. I recall there was some strategic leaking about this – I can’t imagine how that happened.

Listening to the tributes of Tory MPs yesterday two things struck me – first their emotions; a mixture of terror and admiration. This was authentic. I only met her once at a large meeting after midnight when we had to secure an agreement to an urgent tax change. The power had gone so we were lit by candles. She swept in – all whisky and jewels – like a latter-day Empress Catherine II all the clever young men seemed to crumple before her. Only Eddie George – Steady Eddie – whom she later made Governor of the Bank of England could tell her what was needed.

The second thing that struck me was their desire to present her now as a figure behind whom the nation could unite. When the first draft of her 1984 part conference speech was circulated the phrase “the enemy within” was meant to refer to the miners. She delivered it after the Brighton bombing – which gave it a very different interpretation. Quite apart from her political opponents the government she led was one of the most divided in history – far more divided than the famous Blair/Brown splits. In 1987 I was moved to the foreign exchange desk. Here I discovered that the Treasury was engaged in a full scale exercise in deceiving No 10 over the management of the pound, a central part of any government’s economic policy. Mrs Thatcher and her advisers wanted to let the pound float freely, but Nigel Lawson’s Treasury was pursuing a policy of shadowing the deutschmark. Ever week we were buying and selling hundreds of millions to stabilise the pound. It was my task to write a daily markets report for No 10 – this had to explain our intervention in the forex markets without revealing our policy objective. When I suggested that instead of this duplicitous approach, the Chancellor simply raise the matter at Cabinet – he would certainly have had Geoffrey Howe’s support – I was told that if I ever mentioned this again I would be sacked!

Perhaps some of the younger Tories simply don’t know what happened (by the time David Cameron turned up in the Treasury I didn’t even bother to get to know him I was so bored with this endless stream of self-assured young men) but it does seem that this attempt to re-write what happened has more to do with current desperation rather than historical accuracy.

Mrs Thatcher herself certainly had difficulty in adjusting to her loss of power. Sir Michael Richardson, her personal financial adviser told me that he had a big lunch for her when the Queen created her a Baroness. “Margaret, this must be your proudest day” he said. She replied “What is one day of pleasure in a life of gloom?”.

Margaret Thatcher and Geoffrey Howe in 1980. Photograph: Getty Images

Helen Goodman is Labour MP for Bishop Auckland and shadow media minister

Show Hide image

Is our obsession with class is propping up the powerful?

Are we really all middle class now? Lynsey Hanley finds has fresh ideas about old ideas in Respectable: the Experience of Class.

Class is no longer banished from mainstream discussion, but it remains an uncomfortable topic for most mainstream media. The background to this is straightforward. The media all too often discriminate on the basis of parental wealth rather than talent: from unpaid internships to expensive postgraduate journalism qualifications, the routes into the industry are difficult to traverse without parents able to offer financial support. But most of us want to believe that our successes are personal achievements: that if we do well, it is because of our own ability, intelligence and determination. To realise that actually, you have queue-jumped, in effect, because of your parents’ bank balance: well, that would provoke insecurity and defensiveness. And so journalists and columnists are often disinclined to understand why society is stacked in the interests of some, but not others. Even raising the issue of class is felt as a personal attack.

That is one reason Lynsey Hanley is such a crucial voice. When she writes about class, she is writing about lived experience. Her new book, Respectable – the belated follow-up to her seminal Estates, published in 2007 – is a powerful investigation into the psychological impact, and cost, of shifting from class to class. She compares it to “emigrating from one side of the world, where you have to rescind your old passport, learn a new language and make gargantuan efforts if you are not to lose touch completely with the people and habits of your old life”. The case study? Hanley herself. The Personal Is Political would be as appropriate a subtitle for this book as any other.

Respectable compellingly (if sometimes erratically) weaves autobiography with academic research. Hanley grew up on a council estate in Chelmsley Wood, a 1960s ­new-build area of Solihull, in the West Midlands, a few miles from Birmingham. Her childhood, she says, would once have been labelled “respectable working class”: far removed from middle class but not “quite classically working class either” – rather, “foreman class” or “skilled tradesman class”. It feels wrong to infringe on Hanley’s right to self-define, but she does seem to have a very restrictive view of what being working class entails, so much so, that she isn’t entirely convinced she belongs. There has long been a clash between those who define class as a cultural identity and those who believe it has more to do with economic relationships (and those who think it is a combination of the two).

At Hanley’s school, “people didn’t do A-levels”. The high achievers ended up at the gas board or the Rover works and the word “university” evoked “something as distant as Mars”. Her school had 600 unfilled places, “effectively . . . abandoned by the community as much as by the local authority and by central government”. Hanley has always felt like an outsider: she struggled to make friends, found the limits of what was expected of someone from her background suffocating, and when – against the odds – she made it to sixth form, it seemed “one minute I was struggling for air, the next I felt as though I’d entered a large bubble of pure oxygen”. She looks to academics to help explain experiences she found difficult to navigate at the time. Her sense of isolation, for instance, can be illuminated by the sociologist Angela McRobbie’s exploration of “the ‘hermetically sealed’ nature of working-class culture in Birmingham”. The Uses of Literacy, Richard Hoggart’s 1957 classic, is her Bible; she feels he “could have been writing about my own childhood”.

Aged 17, Hanley was juggling five ­A-levels with four jobs: working at Greggs, selling Avon products, delivering newspapers and “making cakes and chocolates and selling them door to door”. But she became a professional journalist. When she was a teenager she visited Aldi to buy margarine and glacé cherries; now she comes back with “cold-pressed rapeseed oil and Pinot Noir”. She says “lunch” where she used to say “dinner”.

This is a well-crafted book full of insights. Hanley is determined to challenge the assumptions of left and right. She refers to socio-linguists such as Basil Bernstein, who examined how middle-class forms of communication were given preference over working-class expression but not because they were innately superior. Those who made the leap from working class to middle class found themselves assimilated by the new world. Many found it increasingly difficult to relate to the world they grew up in, and the people they grew up with.

Hanley thinks the approaches of both left and right to social mobility are problematic. Whereas the right uncritically worships the idea of “social mobility” – of parachuting the “lucky few” into the middle class without challenging the structure of society – the left, she says, believes that “social justice and social mobility are mutually exclusive”. In other words, she is questioning that old socialist maxim: “Rise with your class, not above it.”

Hanley assails those – including me – who place support for populist anti-immigration movements in a broader social context. She believes that we are downplaying the extent of racism in working-class communities, reducing it to fears over housing and jobs. We are robbing people of agency by letting individuals off the hook for their prejudices, she argues, stressing the casual racism she encountered on a daily basis. Disturbingly, she found that racism was often seen as a “sign of respectability”. She remembers sentiments along the lines of “Only common people hang out with darkies” and so on. My parents met through the Trotskyist movement; my father eventually became a white-collar local authority worker, my mother an IT lecturer at Salford University, and I was always by far the most middle-class of my friends. I’m not going to wish away the casual racism I encountered growing up in Stockport (and I’m white), but I’m not sure I’m entirely convinced by Hanley’s argument. Why is there an anti-immigration party with mass support now, yet there wasn’t one in the 1950s, when bigotry was far more open and widespread? Surely something has changed, and rising job, housing and general economic insecurity have had a role to play? And will a strategy of criticising people for voting Ukip – or even for the far right – win them over?

My main problem with Hanley’s book is this. Those of us who want to transform society so that it is not run as a racket for a tiny elite need to build a broad coalition. I’m a political activist who writes; Hanley is someone writing about reality as she has lived it. But her book surely challenges attempts to build unity between the working and middle classes. She writes of how middle-class people both hog and deny their “social and cultural capital”, and believes that those who argue in favour of a “99 Per Cent” under attack by an elite help entrench middle-class privilege. The middle classes pretend they have the same interests as the working class, while using their sharp elbows to keep them down.

I wonder if there is a third way. Abolish unpaid internships; introduce scholarships; invest in education at an early age; automatically enrol the brightest working-class young people into top universities; deal with social crises, such as the lack of affordable housing, which help destroy opportunity for the less privileged; have a proper living wage. And so on. But if those who believe in social justice fail to build a coalition of supermarket worker and schoolteacher, cleaner and junior doctor, factory worker and university lecturer . . . well, we will fail. From the low-paid against the unemployed, to private-sector against public-sector worker, to indigene against immigrant, there are enough divisions exploited by the powerful as it is.

Nonetheless, Respectable is of vital importance: a searing indictment of a chronically unjust society in which our opportunities are granted or denied from the earliest of ages. The book may not offer clear prescriptions, but it is incumbent on all of us to fight for a just and equal society – one that currently does not exist. 

Owen Jones’s Chavs: the Demonisation of the Working Class is newly republished in paperback by Verso

Respectable: The Experience of Class by Lynsey Hanley is published by Allen Lane (240pp, £16.99)

Owen Jones is a left-wing columnist, author and commentator. He is a contributing writer to the New Statesman and writes a weekly column for the Guardian. He has published two books, Chavs: the Demonisation of the Working Class and The Establishment and How They Get Away With It.

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism