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 Just after my finals I received a phone call – the job offer was being withdrawn!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living in a hostel for homeless women behind Victoria Station, being openly challenged – surely a job offer hadn’t been withdrawn – I had failed to get a job.

Later I learned that the Bank had withdrawn my job offer, but they’d kept on the other new graduate they’d recruited – a man.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

Photo: Getty
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Boris Johnson is out of control, but Theresa May is too weak to punish him

Her weary “Boris is Boris” remark after his intervention suggests she couldn’t care less.

Only younger Tory MPs asked last weekend: “Why did Boris do it?” Why did he write a 4,000-word essay on his demands for Brexit, just six days before Theresa May would make a definitive speech on the government’s plans? The older ones knew why: he hadn’t been the centre of attention for a while and wanted to remind people of his existence and that he remained in the game. A charitable fringe of pro-Brexit MPs thought he did it because he is a sincere Leaver, motivated by a desire to ensure the democratically expressed will of the British people is discharged. However, theirs was not a view widely shared.

Others thought they could trace the motivation for Johnson’s intervention back to the events of June 2016. “The reputation of Vote Leave at the moment is a pile of shit,” one told me, referring to the campaign whose figurehead Johnson had been. The metaphor became even more pungent: “Going back to the £350m is like a dog returning to his vomit.” The figure, plastered on Vote Leave’s battle bus, was the amount Johnson and his friends claimed would be available post-Brexit to spend weekly on the NHS. It was quickly rubbished, with Nigel Farage’s Leave.EU campaign dismissing it outright. It was a gross, not a net, figure; it included the EU rebate, which ceases to exist when our contributions stop. David Norgrove, head of the UK Statistics Authority, has repudiated the assertion; and there are many other institutions, such as our tertiary education sector, that will lose EU money and expect the government to make it up. That Johnson should mention this fantasy figure in his article has bemused even some of that dwindling band of MPs who still see him as a possible future leader.

Although the piece was in Johnson’s familiar idiom, others detected in it the influence of Vote Leave’s former director, Dominic Cummings. Further evidence came in a bout of aggressive tweeting from Cummings after the pack turned on Johnson. An MP who worked with Vote Leave told me, “Cummings has returned. He is a narcissist. If he can’t get his own way, then he prefers to destroy: that was how he operated all through the campaign.”

Cummings, a former aide to Michael Gove, is like Johnson a publicity addict: both thirst to see their names in the media. He disappeared from view after Gove’s failed leadership bid, when Gove had to promise supporters that Cummings would not work in Downing Street if he won, so toxic was Cummings’s reputation after Vote Leave. Gove was quoted as supporting Johnson’s “vision”, a further sign of Cummings’s involvement. Within 24 hours, Gove’s friends denied that he supported any such thing but then, as Cummings went into action, Gove confirmed his backing for Johnson.

Johnson’s intervention did not grate with everybody. Some Brexiteer Tories, such as Jacob Rees-Mogg, felt that after a party debate dominated by ministers favouring a Brexit that looks like continued membership of the EU by other means – notably Philip Hammond – it was time the Foreign Secretary spoke out for something representing a cleaner break. Some also felt that, given his office, he had a right to have a public say on the matter, after months in which May had done her best to ignore him.

Her weary “Boris is Boris” remark after his intervention suggests she couldn’t care less, and suggestions he might resign are unlikely to concern her unduly. His remarks were not against party policy, but MPs trusted by Downing Street were at pains to stress that his views would have no effect on the content of the Prime Minister’s Brexit speech, for there had “never been any chance of Theresa going off-piste”.

Johnson’s intervention was, however, unhelpful to him and to May. Colleagues saw it as the consequence of his having spent the summer steaming with frustration because he had lost ownership of the Brexit issue. He has also, according to friends, developed a thinner skin of late, and feels wounded by frequent attacks on him in the media pointing out his disengagement, his laziness, his ambition and his generally poor impression of a foreign secretary. For so long the goût du choix of many younger colleagues, he now finds they take him no more seriously than most of his older ones do. He once took for granted that in a leadership contest MPs would choose him as one of the two candidates for a plebiscite of the membership; now few think that likely.

Too many colleagues have taken the Telegraph article as further proof of his inability to be a team player, and of his unfitness for higher office – which was why Gove dropped him last year. Referring to Johnson’s time as mayor of London, a colleague says: “He was a good chairman, when he had seven or eight deputy mayors. But he can’t do what a minister is supposed to do, which is to grasp a policy and deliver it.” Another highlights his skewed sense of priorities and the lack of a deft political touch. “Isn’t it astonishing that just as he should be sorting out all consular and diplomatic help for our people in the West Indies after the hurricane, he finds time to write a 4,000-word newspaper article? As usual, it’s not about what’s good for the country. It’s what he thinks is good for him.”

Yet, as Ken Clarke swiftly pointed out, Boris Johnson has shown that however much he annoys May, she is too damaged and vulnerable to sack him. When Amber Rudd, the Home Secretary, started mocking him as a “back-seat driver”, May was seen to be presiding over a cabinet whose most senior members were squabbling. Johnson’s self-indulgence also meant that the expectation surrounding May’s Florence speech, already considerable as she struggled to rebuild her credibility and that of her Brexit policy, became even harder to satisfy. 

Simon Heffer is a journalist, author and political commentator, who has worked for long stretches at the Daily Telegraph and the Daily Mail. He has written biographies of Thomas Carlyle, Ralph Vaughan Williams and Enoch Powell, and reviews and writes on politics for the New Statesman

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left