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 Just after my finals I received a phone call – the job offer was being withdrawn!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in a hostel for homeless women behind Victoria Station, being openly challenged – surely a job offer hadn’t been withdrawn – I had failed to get a job.

Later I learned that the Bank had withdrawn my job offer, but they’d kept on the other new graduate they’d recruited – a man.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

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As the strangers approach the bed, I wonder if this could be a moment of great gentleness

I don’t know what to do. In my old T-shirt and M&S pants, I don’t know what to do.

It’s 1.13am on an autumn morning some time towards the end of the 20th century and I’m awake in a vast hotel bed in a small town in the east of England. The mysterious east, with its horizons that seem to stretch further than they should be allowed to stretch by law. I can’t sleep. My asthma is bad and I’m wheezing. The clock I bought for £3 many years earlier ticks my life away with its long, slow music. The street light outside makes the room glow and shimmer.

I can hear footsteps coming down the corridor – some returning drunks, I guess, wrecked on the reef of a night on the town. I gaze at the ceiling, waiting for the footsteps to pass.

They don’t pass. They stop outside my door. I can hear whispering and suppressed laughter. My clock ticks. I hear a key card being presented, then withdrawn. The door opens slowly, creaking like a door on a Radio 4 play might. The whispering susurrates like leaves on a tree.

It’s an odd intrusion, this, as though somebody is clambering into your shirt, taking their time. A hotel room is your space, your personal kingdom. I’ve thrown my socks on the floor and my toothbrush is almost bald in the bathroom even though there’s a new one in my bag because I thought I would be alone in my intimacy.

Two figures enter. A man and a woman make their way towards the bed. In the half-dark, I can recognise the man as the one who checked me in earlier. He says, “It’s all right, there’s nobody in here,” and the woman laughs like he has just told her a joke.

This is a moment. I feel like I’m in a film. It’s not like being burgled because this isn’t my house and I’m sure they don’t mean me any harm. In fact, they mean each other the opposite.

Surely they can hear my clock dripping seconds? Surely they can hear me wheezing?

They approach, closer and closer, towards the bed. The room isn’t huge but it seems to be taking them ages to cross it. I don’t know what to do. In my old T-shirt and M&S pants, I don’t know what to do. I should speak. I should say with authority, “Hey! What do you think you’re doing?” But I don’t.

I could just lie here, as still as a book, and let them get in. It could be a moment of great gentleness, a moment between strangers. I would be like a chubby, wheezing Yorkshire pillow between them. I could be a metaphor for something timeless and unspoken.

They get closer. The woman reaches her hand across the bed and she touches the man’s hand in a gesture of tenderness so fragile that it almost makes me sob.

I sit up and shout, “Bugger off!” and they turn and run, almost knocking my clock from the bedside table. The door crashes shut shakily and the room seems to reverberate.

This article first appeared in the 12 January 2017 issue of the New Statesman, Putin's revenge