The right will deny it but Thatcherism’s day is done

Only Labour has the values and the vision to respond to the public appetite for an end to market fundamentalism and gross income inequality.

Always an overachiever, Margaret Thatcher has managed something in death that evaded her in life: she united Britain. The unity is not, of course, over the individual acts of her tenure, the cold-eyed dismantling of the coal industry or the privatisation of public goods, but in the acknowledgement, by left and right, that hers was an historically significant part in our politics and public life. Thus the adulation and rage that has been heaped on her memory in equal measure, have shared that assumption that her policies, and the political economy and philosophy she came to embody, were defining of their age and have overshadowed those that followed. 

However, amid the avalanche of comment that has followed her passing, one further, common conclusion should be discerned, though many on the right will deny it: her day, Thatcherism’s day, is done. And the politician or party that most closely grasps that essential fact and frames a future predicated on its truth will shape the next chapter in our public life, as she shaped hers.

Her era ended definitively, not in 1990 when she left office, nor even in 1997 when Tony Blair entered Downing Street and ushered in a period of Labour government which ameliorated the settlement left by Thatcher, but failed to fundamentally transform it. No, the moment the music stopped for Thatcherism was on 15 September, 2008, when Lehman Brothers filed for Chapter 11 bankruptcy, its foundations fatally undermined by the forces of financial liberalism and the selfish, greedy culture she legitimised, indeed sanctified. 

Some have been slow to recognise that fact, unsettled by the 'strange non-death of neo-liberalism', even in the teeth of its evident failure. I suspect, however, that Thatcher would have sniffed the wind and been among the first to sense its turning, to note the public discontentment with an era just ending and the demand for a vision of what might replace it. That, in part at least, was her great skill: her ability to sense that frustration with the economically constrained world of 1970s Britain could be translated into support for a dynamic, if destructive, mandate for change.  For our modern Labour Party, that lesson is perhaps the most important of all to be drawn from the legacy of Margaret Thatcher: that radical change is possible, even within our innately conservative, democratic culture, but only when the people are ready for change and only if the prescription on offer looks set to meet their demands.

For Thatcher, those demands were for economic security through price stability and industrial harmony, for a return, if you like, to the era of consistent growth, rising prosperity and cultural innovation which evolved through the 1950s and 1960s but which seemed to falter, then stall, in the stagflation and stultification of the 1970s. Her prescription was not so much new, of course, as new to Britain. Right wing economists and politicians, from Hayek, through Friedman to Minford and Joseph, had long advocated a radically liberalised, market-driven economy with a shrunken state counter-balanced and energised by powerful, individual consumers and asset holders. In this respect, Thatcher was not so much progenitor of the philosophy to which she lent her name but rather a sharp-witted vector for ideas whose time she thought had come.

What is the core demand of our age? And who is beginning to frame it? Not David Cameron, that’s for sure, with his millionaires’ tax cut laying bare his warped priorities. His economic strategy of reducing public spending as stimulus to hitherto ‘crowded out’ private investment is planted in the arid soil of Thatcherism, and is predictably failing to take root – as £750bn of corporate hoardings bear incontrovertible testimony. Nor indeed, in truth, is the issue of deficit reduction the only defining malady of our age. It is a symptom, and it must be treated, of course, but the British patient is far sicker, and the cure must be further reaching and longer lasting than any Thatcherite quack can prescribe.

No, deeper than debt and deficit  is a fundamental issue of economic injustice, the debilitating condition of gross income inequality and the yawning social, class and cultural divisions that are calcifying in modern Britain. And though reducing the deficit is a vital step towards creating the circumstances in which a more holistic cure might be administered, it alone is not enough to bring about the fundamental fairness in our economy that would mark its sustainable return to health.

Even some among those who marched for Thatcherism and who advocated trading equality for freedom in the name of economic reward are beginning to accept that the price was too high. As Ferdinand Mount, once policy director in Maggie’s Den, poignantly puts it: "it no longer seems adequate to excuse inequality as the inescapable consequence of market forces. For we were told that over time market forces would trickle all the way down to reach the worst off. That is not how it looks to the worst off today."

In a Britain where 'Sids' in Surbiton have given way to Hedgies in Mayfair, where the new right’s promise of regional renaissance in our post-industrial heartlands is bitterly broken, the dream of a property owning democracy has become a deception  for those priced out of the market or onto the street. And where a decline in the union strength she once has held up as the disease of her age has mirrored the rising inequality that scars our own. The people know that, as Thatcher once put it herself, enough is enough.

Ed Miliband knows it too. That’s why he describes David Cameron as the last gasp of the old politics. That’s why he’s talking about reforming capitalism to reinstate fairness. That’s why he wants to build a Britain in which people earn a wage that allows them to live a life worth living, a Britain that competes abroad but also provides opportunity and equality at home, a Britain informed by our past mistakes of economic planning and statist solutions but one also aware of the crucial, modern role for public investment and renewed social solidarity. A One Nation Britain which heals the scars of the past by setting us on the path to a more equal future, in which everyone has a stake.

Labour is setting out clearly the policies we need to change our economy and realign finance towards productive deployment in the real economy, leading to living wages, high employment and long-term investment and to supplant the culture of flexibility, corporate cronyism and short-term return that have become the norm. We need a progressive tax system and strengthened representation for the people – in the boardroom, on the shopfloor and in Parliament too. We need to show the confidence and the conviction in our politics that the woman whose passing we mark today always had in her own. Inequality is the scourge of our society today, a society we believe in just as strongly as she repudiated it. Only Labour has the values and the vision to do something about it and in Ed Miliband we have a leader with the faith and the strength to get it done. In that respect, if in no other, he’s a true heir to  Thatcher and the right man to finally consign her legacy to the past. 


Owen Smith is shadow secretary of state for Wales (@owensmithmp

David Cameron leaves at the end of the ceremonial funeral of Margaret Thatcher in St Paul's Cathedral. Photograph: Getty Images.

Owen Smith is a Labour leadership candidate and MP for Pontypridd. 

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Commons Confidential: Fearing the Wigan warrior

An electoral clash, select committee elections as speed dating, and Ed Miliband’s political convalescence.

Members of Labour’s disconsolate majority, sitting in tight knots in the tearoom as the MP with the best maths skills calculates who will survive and who will die, based on the latest bad poll, observe that Jeremy Corbyn has never been so loyal to the party leadership. The past 13 months, one told me, have been the Islington rebel’s longest spell without voting against Labour. The MP was contradicted by a colleague who argued that, in voting against Trident renewal, Corbyn had defied party policy. There is Labour chatter that an early general election would be a mercy killing if it put the party out of its misery and removed Corbyn next year. In 2020, it is judged, defeat will be inevitable.

The next London mayoral contest is scheduled for the same date as a 2020 election: 7 May. Sadiq Khan’s people whisper that when they mentioned the clash to ministers, they were assured it won’t happen. They are uncertain whether this indicates that the mayoral contest will be moved, or that there will be an early general election. Intriguing.

An unguarded retort from the peer Jim O’Neill seems to confirm that a dispute over the so-called Northern Powerhouse triggered his walkout from the Treasury last month. O’Neill, a fanboy of George Osborne and a former Goldman Sachs chief economist, gave no reason when he quit Theresa May’s government and resigned the Tory whip in the Lords. He joined the dots publicly when the Resolution Foundation’s director, Torsten Bell, queried the northern project. “Are you related to the PM?” shot back the Mancunian O’Neill. It’s the way he tells ’em.

Talk has quietened in Westminster Labour ranks of a formal challenge to Corbyn since this year’s attempt backfired, but the Tories fear Lisa Nandy, should the leader fall under a solar-powered ecotruck selling recycled organic knitwear.

The Wigan warrior is enjoying favourable reviews for her forensic examination of the troubled inquiry into historic child sex abuse. After Nandy put May on the spot, the Tory three-piece suit Alec Shelbrooke was overheard muttering: “I hope she never runs for leader.” Anna Soubry and Nicky Morgan, the Thelma and Louise of Tory opposition to Mayhem, were observed nodding in agreement.

Select committee elections are like speed dating. “Who are you?” inquired Labour’s Kevan Jones (Granite Central)of a stranger seeking his vote. She explained that she was Victoria Borwick, the Tory MP for Kensington, but that didn’t help. “This is the first time you’ve spoken to me,” Jones continued, “so the answer’s no.” The aloof Borwick lost, by the way.

Ed Miliband is joining Labour’s relaunched Tribune Group of MPs to continue his political convalescence. Next stop: the shadow cabinet?

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 27 October 2016 issue of the New Statesman, American Rage