The economics of Bob Crow

Frying down in Rio: Union baron Bob Crow soaks up the sun on Copacabana beach

Bob Crow, 1961 – 2014

The reactions to the sudden death of RMT leader Bob Crow from friends and foes alike were unanimous about one thing; he was good for his members. Indeed, most of those who ride London’s underground can only dream of the tube drivers’ basic salary of £44,000 and 52 days holiday a year. But how much of this was due to Bob Crow?

A private enterprise will not pay a worker more than it thinks that worker will add to turnover, if it did it would be losing money on the employment. The private sector enterprise has only three sources of funding; debt (bank loans, corporate bond issues), equity (selling shares), and income. If it loses money and exhausts these sources by paying workers above a level commensurate with their productivity it will go bust. No matter how determined or skilful the union representative, the workers’ marginal productivity sets a cap on their wages.

But the situation is different for public or government backed enterprises, such as those Bob Crow faced across the negotiating table. They have a fourth source of funding; the taxpayer. In these circumstances unions can push pay claims ever higher. If a union seeks to push wages above a level commensurate with worker productivity and the public enterprise exhausts the funds it can raise from debt, equity, or income, it doesn’t go out of business; it receives taxpayer support. For the public enterprise, unlike its private counterpart, on the other side of the bottom line isn’t bankruptcy, it’s a bailout funded by taxpayers. This is why trade unions continue to thrive in the public sector but are largely absent in the private.

Indeed, despite their extravagant remuneration the productivity of tube drivers, what they add to output, is actually rather small. The big value adding inputs into the production of tube travel are mostly capital inputs; boring machines, trains, track, IT systems, ticket machines etc. It is quite possible, in fact, for tube trains to run without drivers at all. Indeed, as far back as the 1960s the Victoria line could have been built to run without drivers. It was only the insistence of trade unions that saw a role created for drivers to sit in the cab and press a couple of buttons – drivers who could become their paid up members. To avoid union headaches Margaret Thatcher built the Docklands Light Railway to run without drivers in the 1980s, which it has ever since with a safety record comparable to manned tube lines. If a factor of production, in this case labour, is being applied to production needlessly it is wasteful and unproductive. It should not be receiving high wages.

If Bob Crow was aware of the economic possibilities for his members offered by recourse to taxpayer’s money he was also acutely aware of the politics of the situation. He knew, as a former RMT employee put it to me, that “Boris wants to get re-elected as mayor and/or become PM. If he screws up the tube his chances of either are lessened. He has to balance the damage caused by, on the one hand ‘giving in to the unions’ and, on the other, chaos on the underground. The fact that he has to balance those factors makes the union’s position a strong one.”

Such was Bob Crow’s terrain and, like a Wellington, he understood it well. But it did not make him a labour relations genius any more than the Mediterranean coast and Qattara Depression made Montgomery a military genius. His membership prospered not so much because of his skills as a leader, but because of their status as public or semi-public employees whose pay claims were underwritten by the taxpayer. Bob Crow played his hand well but he had a strong hand to play. Those hoping for a more emollient approach from his successor ought to remember that they will inherit that hand.


The truth about Thatcher and the steel industry

There’s an old saying: “A lie told often enough becomes the truth”. It’s one ‘comedian’ and former Socialist Workers Party member Mark Steel should know well, it comes from Lenin after all, and he certainly seems to be taking it to heart.

Steel’s recent piece for The Independent is titled ‘You can’t just shut us up now that Margaret Thatcher’s dead’. Oh, that we could! Steel has, after all, built a career out of the sort of dated, unamusing jokes about Thatcher that guarantee you steady work at the BBC. Personally I don’t know why the Indy hasn’t given Tim Vine column inches to opine on deindustrialisation, at least he’s funny.

And it wasn’t long before Steel broke out the Big Lie: “in 1980 Margaret Thatcher’s government shut down most of the steel industry, as part of her plan to break the unions”. You hear this argument a lot, as though repeating it will make it true. But a look at the facts shows that it isn’t.

In 1955 the British steel industry was working at 98 percent of capacity. But, over the following years, this declined as a result of its failure to adopt new methods (such as the basic oxygen steel-making process and continuous casting) and increased steel production in other countries. By 1966 just 79 percent of capacity was being utilised.

The following year a large chunk of the British steel industry was renationalised (it had been nationalised for a few years in the early 1950s). In 1970 the new British Steel had a record output of 23.8 million tonnes (4.7 percent of the world total, down from 25 percent in 1929).

But the industry was now being run for political rather than economic ends and massive over-manning and consequent low productivity became endemic. By 1977 output had actually fallen to 20 million tonnes (3 percent of the world total). By 1978 British Steel was operating at just two-thirds capacity. And by 1979, British steel workers were a third less productive than their French competitors and 40 percent less productive than West German steel workers.

In the fiscal year 1978-1979 British Steel lost £309 million. This rose to £545 million the following year, one in which workers struck for six weeks for a 20 percent pay rise. They got it, but my dad, who worked in a steel works in Sheffield at the time, said that by the time they went back to work their foreign customers had gone elsewhere.

In 1980-1981, British Steel lost a staggering £1 billion on turnover of £3 billion, earning itself a place in the Guinness Book of Records. By contrast the output of Britain’s small private sector steel industry doubled between 1967 and 1979, from 3 million tonnes to 6 million tonnes.

Between 1967 and 1974 employment in the British steel industry fell from 250,000 to 197,000. And by 1990 it had fallen again by 74 percent to 51,000. But other developed countries also saw drastic declines in employment in their steel industries in the same period. In France, for example, employment fell by 70 percent, while in the United States it fell by 60 percent. Even Germany lost 46 percent of its steel workforce.

What happened to towns like Sheffield or Corby was not part of some Thatcherite vendetta and instead was part of a general trend across the industrialised world. It happened in the Rhur Valley and Ohio, was Maggie Thatcher responsible for that too?

And given that the British steel industry’s problem was chronic over-manning, which caused low productivity, it is, sadly, fantasy to suggest that there was some painless cure that didn’t involve a reduction in employment.

Indeed, in the following years British Steel recovered. Whereas in 1976-1977 it had taken a British steelworker 15 man hours to produce a tonne of liquid steel, by 1986-1987 it took just 6.2 man hours and that year British Steel turned a profit of £177 million on turnover of £3.5 billion. When the company was privatised the following year it had made a profit of £410 million on turnover of £4.1 billion. By 1997 British Steel was the most profitable integrated steel company on the planet.

So British Steel was not shut down by Thatcher “as part of her plan to break the unions”; it was privatised because it was an economic basket case. Like the coal industry it was dying by the time she got elected.

This is the truth behind the Big Lie. That industries like steel and coal were ravaged is true. That it was painful for those involved is also true. But that it happened simply because Margaret Thatcher wanted to “break the unions” is false.

But maybe I’m missing the point with all this. That was certainly the opinion of some people I spoke with recently when I explained the advanced state of decrepitude the coal industry was in when Thatcher took over. “Oooooooh facts and figures. Go on then, how many miles have you walked in pit boots?” said one. Another said I was “someone who tries to hide behind certain facts and figures without giving the whole truth of the situation”.

It’s a curious argument to suggest one can get a better view of “the whole truth of the situation” by walking around in “pit boots” rather than looking at the entire industry and the economy as a whole. But then these people were from an area heavily affected by all this. For some the strength of that experience, reinforced by repetition over the years, has compromised their ability to examine the issue rationally. This is not to ignore what they say; experience is valid and should be recorded as such, but it should not be mistaken for analysis.

Perhaps Mark Steel isn’t being deliberately dishonest and this applies to him too. I’ve no idea and little inclination to find out. But you can’t blame a guy who trades on hating Margaret Thatcher for giving his routine one last airing. After all, when Maggie Thatcher died so did half of Mark Steel’s act.

I am indebted to the article ‘The British Iron and Steel Industry Since 1945’ by Alasdair M. Blair

This article originally appeared at The Commentator

Party over? It never got started

Insensitivity: An effigy of Lady Thatcher is paraded through Trafalgar Square during a party held after the death of the former British Prime Minister

The lady’s not for burning

I was wrong.

It does a man good to say that once in a while, so there you go.

Coming from Sheffield I’d always heard that when Margaret Thatcher died “they’ll have to install a turnstile in the graveyard due to the amount of people entering it with their dancing shoes on”. Then came the internet.

The Facebook page ‘We’re having a party when Thatcher dies‘ has over 6,000 likes and another, ‘Is Margaret Thatcher Dead Yet?‘, has nearly 40,000. Given this I’d come to think that the day after Lady T popped her clogs I’d be picking my way to the tube station in the morning stepping over people passed out in party hats. I wrote that “people in places like Sheffield will be celebrating Margaret Thatcher’s death”, even that “the streets of Sheffield will flow with ale.”

And they didn’t. Instead 800 trouble makers, that’s 800 nationwide, many of whom wouldn’t have known Maggie Thatcher from Teri Hatcher, smashed some stuff up.

In Brixton ‘revellers’ trashed a branch of that well known exploiter of the workers, Barnardo’s. Last weekend saw a party in Trafalgar Square which, especially given the anticipation over the years, was a total washout. The revellers brought an effigy but couldn’t manage to set it on fire prompting the wonderful observation: “The lady was not for burning.” And Sheffield was quiet.

I should have suspected that the promises of wild celebrations were overdone. After all, I’ve written before about how Thatcher is actually the most popular post war British prime minister. The Guardian reported that “On the day of her death, half of all respondents, 50%, told the pollster that they look back on her contribution as a positive one for Britain. That is 16 points more than the 34% who say she was bad for the country.” (Ouch, that must have hurt!)

A YouGov poll found that “Opinion gradually becomes less positive as you go northwards, but not drastically so – even in the North 49% have a positive opinion of Thatcher, 35% negative.”  28 percent regarded Thatcher as a “good Prime Minister” and 21 percent as a “great Prime Minister” (the best laugh I had all week was a northern leftie I know explaining that these people meant great in the sense of important, not ‘really good’). The finding is repeated across the country, according to YouGov “Only in Scotland is the balance of opinion negative”.

The YouGov poll found that Thatcher is regarded as “the greatest British Prime Minister since 1945” in every region except Scotland and London where she is pipped by another Conservative, Winston Churchill. It also found that in every region except Scotland more thought that “Margaret Thatcher’s period as Prime Minister” had been “Good for Britain” than thought it had been “Bad for Britain”.

Again, in every region except Scotland more thought that Thatcher’s period as Prime Minister had left Britain “Economically better off”. In every region the most popular view was that she had left Britain “More respected in the world” and a place with “More opportunities for women”.

In the Commons Glenda Jackson blustered “A woman? Not on my terms!” But then the question of whether you’re a woman isn’t decided on Glenda Jackson’s terms and, as the YouGov poll also found, most women disagree with her: 51 percent of women said that Thatcher left Britain a country with “More opportunities for women” against just 14 percent saying “less”.

There was some mixture in the picture. In every region the dominant view was that Thatcher had made Britain a “Less equal society”. This is undeniable. People at the top got very much better off and people in the middle got a bit better off but people at the bottom also got better off, just not by very much. When Simon Hughes put this charge to her in her bravura farewell performance as Prime Minister in November 1990 Thatcher replied:

“People on all levels of income are better off than they were in 1979. The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy.”

As I wrote last week: “Those who profess to hate Thatcher have committed the error of taking something they believe (or claim to, I’m not convinced many of them are actually serious), repeating it loudly and often to other people who also believe it, and assuming from this fusillade of confirmation that everyone else thinks it as well”

It would be wrong to say that there aren’t people out there who deeply loathe Thatcher and all she stood for. But it certainly seems that my friend’s dance floor won’t need waxing so often.

This article originally appeared at The Commentator

Pounds and pence

This meme popped up on my timeline yesterday…


I’m not a fan of state spending generally but I have found it rather difficult to get my knickers in a twist about the cost of Maggie Thatcher’s funeral. Not because I liked her, I did, but because of things like the fact that

“Trade unions received £85.8 million from public sector organisations in 2009-10. That is made up of £18.3 million in direct payments from public sector organisations and an estimated £67.5 million in paid staff time.

The total is up 14 per cent from 2008-09, when trade unions received £76.1 million from public sector organisations.

Direct payments include a total of £13.0 million in 2008-09 and £14.9 million in 2009-10 paid by the Department for Business, Innovation and Skills through the Union Learning Fund and the Union Modernisation Fund.

2,493 full time equivalent public sector employees worked for trade unions at the taxpayers’ expense in 2009-10.”

So, going back to the meme, £10 million could buy 1,190 nurses, 1,411 teachers, or 2,040 soldiers, or it could buy 2,493 union jobsworths.

Welcome to public sector Britain.

The left hated Thatcher because she thrashed them

Margaret Thatcher, 1925 – 2013

On Gee Street in London there is a Stafford Cripps House named after the post war Labour Chancellor. In Fulham there is also a Stafford Cripps House which contains a Clement Atlee Court named after his boss. In East London there is the Kier Hardie Estate, named after the first Independent Labour MP. In Clapton there is a Nye Bevan Estate named after the former Labour minister.

So I was baffled when, today, my various inboxes, feeds, and walls were swamped by left wing friends asking how bothered I was by the passing of Margaret Thatcher. One or two seemed rather put out when I responded that I wasn’t massively. As someone who could be considered a ‘Thatcherite’ I believe in the individual not an individual. I’ll leave the veneration of Dear Leaders to the left with their crumbling municipal buildings.

At 87 Margaret Thatcher lived a long life. Insofar as we can tell about the private life of this most resolutely political of people it was also a rather happy one. The daughter of a provincial, middle class shopkeeper, born during the Depression, she went to Oxford, became a chemist, and then became a lawyer. Elected to Parliament in 1959 after a decade of trying she rose against incredible odds to become the first female leader of a major British political party in 1975 and Britain’s first female Prime Minister in 1979. She was accompanied every step of the way by her beloved husband Denis.

Her period in office was marked by internal division and conflict of a degree not seen under any other prime minister of the century. Thatcher took on the Labour Party (three times), the Argentines, the National Union of Mineworkers, and crushed them all. By the time Thatcher left office even the Soviet Union and its miserable communism were history.

But in 1988 Thatcher gave her famous Bruges Speech in which she stated “We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels.” For the European federalists, including many in the Conservative Party close to Thatcher’s predecessor Ted Heath who had never forgiven the grocers daughter for beating the grocer, this was a step too far.

In 1990 Thatcher was finally brought down, not by a bunch of troublemakers rioting in Trafalgar Square, but by her own Europhile backbenchers, angered by her refusal to sign up to a single European currency. History has proved Thatcher emphatically right.

She brooded on this betrayal in retirement but, judging by her memoirs, she was fully aware of just what she had helped achieve, even if she was typically modest about it. She had taken Britain from an increasingly chaotic, sclerotic, and socialist place, to a place which was on the up again. Internationally she had restored some of Britain’s old standing and seen off the communist threat.

Both in Britain and abroad, with the help of her great ally Ronald Reagan among others, she had shown that the inevitable, onward march of socialism was nothing of the kind.

And, perhaps most uncomfortably for her detractors, she was popular and remains so. She won three elections on the trot. In 2011 a YouGov poll for The Sunday Times placed her firmly at the top of a list of post-war British prime ministers with a whopping 27 percent, more even than Winston Churchill.

The sainted Clement Atlee, architect of the welfare state, nationaliser of industries, and namesake of a court in Fulham, limped home with just 5 percent of the vote behind Tony Blair and, mysteriously, Harold Wilson. The much-vaunted street parties celebrating her demise might be rather more thinly attended than the guests have convinced themselves.

Those who profess to hate Thatcher have committed the error of taking something they believe (or claim to, I’m not convinced many of them are actually serious), repeating it loudly and often to other people who also believe it, and assuming from this fusillade of confirmation that everyone else thinks it as well.

These people can often give you a list of reasons they hate Thatcher, lists which are often so suspiciously similar that you have to question how many are the product of original thought and how many are just being parroted to feign an opinion. Most of them, from the mass unemployment to her supposed destruction of Britain’s industry, are easily dealt with.

But the truth is that she would have been disliked intensely no matter what she did. Owen Jones wrote recently that “Thatcher hate is not kneejerk anti-Toryism, after all, there will be no champagne corks popping when John Major dies, and there was no bunting on display to celebrate the deaths of Ted Heath, Alec Douglas-Home, Harold Macmillan or Anthony Eden.”

But remember that in 1948 Nye Bevan, one of the most venerated and overrated figures in British political history, said, “No amount of cajolery, and no attempts at ethical or social  seduction, can eradicate from my heart a deep burning hatred for the Tory Party.  So far as I am concerned they are lower than vermin.”

Remember also that Bevan didn’t say that about a Conservative Party containing right wing ideologues like Thatcher, Norman Tebbit, or Keith Joseph. He said it about a Conservative Party which contained such Keynesian, welfare-state-loving, consensus-supporting politicians as Harold Macmillan, R. A. Butler, and Alec Douglas-Home.

The left disliked Thatcher because she was a Conservative. It hated her because she thrashed them.

Margaret Thatcher is one of only two British prime ministers to coin an ‘ism’ and unlike the other, Blairism, Thatcherism actually meant something. This is why whether alive or dead she will live on. Her ‘ism’ will be a much more permanent monument than the grey, decayed concrete boxes named after various Labour no marks.

This article originally appeared at The Commentator

Our ever changing moods?


Same as it ever was

Are people more selfish now than they were in the 1970s? It’s often said they are and its just as often said that Margaret Thatcher is responsible. That’s usually said by the people who hold Margaret Thatcher responsible for everything.

But the evidence doesn’t support it. Consider the trade union leaders of the 1970s who plunged the country into darkness and cold, who treated corpses and rubbish the same as they refused to bury either as they were paid to. Consider the representative of the Confederation of Health Service Employees who appeared on television from a picket line outside a hospital the winter before Thatcher was elected; “if it means lives lost, that is how it must be…we are fed up of being Cinderellas. This time we are going to the ball”

Can you imagine anything more selfish than that? Any attitude less concerned with the ‘general welfare’ and more fixated on the ‘personal interest’?

The truth is that men and women have always been able to see what is in their interest as being in everybody else’s interest as well. Indeed, as the Roman poet Virgil wrote in the first century BC “Every man makes a god of his own desire”

Recipient of handouts defends handouts

Writer Angela Epstein with three of her four children

Just £60 a month can keep a journalist’s child in shoes

I have read a great deal of utter rubbish about the coalition government’s ‘cuts‘. But the article in the Daily Mail by Angela Epstein might be the most cretinous, whiny, self interested bucket of bilge I’ve yet come across.

Mrs Epstein and her husband earn well over £100,000 a year. This puts them in the top 15% of earners. Yet they receive Child Benefit of “£20.30 a week for the first child and £13.40 for each extra one until they are 18” for their four kids (three boys, 19,17, and 14, and a girl, 8).

It might seem odd that people as rich as this receive state benefits at all. You can thank the idea of ‘universal’ benefits. When the welfare state was introduced it was thought that making poverty a condition for receiving benefits might make those who received them feel bad. So, to spare their feelings, it was decided that certain benefits would be dished out to everybody who qualified regardless of income. Thus, a Lord I know who owns a collections of stately homes once told me he was being paid Winter Fuel Allowance to heat his palace.

Obviously, with the British governments finances in such dreadful shape, this principle ought to be one of the first to be junked. And, however imperfectly, it is being. You’d also think that it would be one of the least controversial cuts. Not a bit of it. Ed Miliband, a man who never saw a bandwagon he didn’t try and jump on, supports benefits for millionaires. It’s generally a good thing to be on the opposite side of an argument to Ed Miliband. And its rather pleasing to be on the opposite to Mrs Epstein too.

The first thing to note about Mrs Epstein’s article is that, never once, does she use the word ‘taxpayer’. Instead you have a phrase like this; “There was something quite heartening to think the State was directly responsible for ensuring my children had shoes”

First, isn’t Mrs Epstein primarily responsible for ensuring her children had shoes? Since when did the State become some sort of Daddy Warbucks who will take care of us all and abrogate us of all responsibility to look after ourselves and our families no matter how rich we are?

And what is this ‘State’ that is apparently responsible for making sure Mrs Epstein’s kids don’t go barefoot? The State has no money with which to buy shoes for Mrs Epstein’s kids other than that it takes from the taxpayer, most of whom earn less than Mrs Epstein. Yet she can write, apparently without a hint of shame, “Despite earning a good salary as a journalist and broadcaster and being married to a chartered accountant, the Government money lands in my account each month. I accept it happily, without so much as a twitch of embarrassment” Its not government money though, it’s taxpayers money.

The whining self justification continues. You get a statement like this “I understand that we are going through a time of great financial difficulty in this country and that sacrifices must be made to get us back on track” followed by statements like this “But why should my children lose out” and this “The State had pledged its support for all parents. Why should that change?” In other words, yes, sacrifices will have to be made. By someone else.

As Margaret Thatcher famously said,

“I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first.”

The people primarily responsible for putting shoes on the feet of children are the parents of those children. If they cannot then the State, with taxpayer funds, can step in. But the belief that the State represents an inexhaustible teat at which we are all entitled to suck on endlessly is part of what got us into this mess. Britain spends more on welfare than the entire GDP of Austria, a prosperous nation of 8.4 million people.

“I’m not talking about a tax loophole or state backhander that allows the streetwise to filch from an already over-committed welfare state” Mrs Epstein says. Yes, that’s exactly what she’s talking about.

Thatcher Derangement Syndrome # 2

Wrong again

Owen Jones, the Just William of left wing journalism who famously came a cropper on Andrew Neil’s show, has piped up in the Independent to comment on the deranged hatred some on the left have for Margaret Thatcher.

“As far as (the right) are concerned,” Jones writes, “it is nothing more than spite from a hate-filled left, still furious at being comprehensively defeated” Au contraire, says Jones, there are perfectly understandable reasons for hating Thatcher.

“A reasonable right-winger would accept that her 11-year rule opened up the greatest divisions Britain has experienced in modern times” Jones says. I’m not so sure. Read about the 1970s, about Northern Ireland, about trade unionists in the winter of 1978/1979 stopping ambulances entering hospitals, and then try and say, with a straight face, that Britain pre Thatcher was a land of social unity.

In a similar vein Jones goes on to say that “Thatcher is reviled by some not just because she crushed the left, the Labour movement and the post-war social democratic settlement” In actual fact the left crushed itself with its embrace of ever more radical forms of socialism (it wasn’t Margaret Thatcher who described Labour’s 1983 manifesto as “the longest suicide note in history“), the labour movement splintered as changes in working patterns which Thatcher had nothing to do with kicked in (as even the Marxists recognised) and the “post-war social democratic settlement” collapsed amid inflation, debt, and unemployment because we could no longer afford it.

Jones speculates rather pointlessly that “Perhaps if a Labour government had reduced the prosperous middle-classes of the Home Counties to mass unemployment and poverty, and stockbrokers desperate to save their livelihoods had been chased by police on horseback through the City of London, they would understand the bitterness” Perhaps. But it wasn’t the Home Counties which were being propped up with unsustainable and ever growing subsidies of taxpayers cash.

“Thatcher hate is not kneejerk anti-Toryism” Jones concludes,  “after all, there will be no champagne corks popping when John Major dies, and there was no bunting on display to celebrate the deaths of Ted Heath, Alec Douglas-Home, Harold Macmillan or Anthony Eden”

Eh? Is Jones sure about that? Let’s not forget that Nye Bevan, one of the most overrated figures in British political history, said in 1948 that “No amount of cajolery, and no attempts at ethical or social  seduction, can eradicate from my heart a deep burning hatred for the Tory Party.  So far as I am concerned they are lower than vermin”

Bevan didn’t say that about a Conservative Party containing right wing ideologues like Thatcher, Norman Tebbit, or Keith Joseph. He said it about a Conservative Party which contained such Keynesian, welfare state loving, consensus supporting politicians as Harold Macmillan, R A Butler, and Alec Douglas-Home.

Thatcher would have been hated just for being a Conservative but she would have been tolerated if she had done as her opponents wished and  governed Britain in the 1980s in the same way as it was governed in the 1940s. She didn’t, partly out of conviction and partly because it wasn’t possible.

By 1979 Britain was unraveling and, thanks to her predecessors choice of short term fixes, Thatcher had no choice but to act radically. In all the years I’ve been asking people who claim to hate Thatcher what they would have done instead, I’ve still not had a serious answer. Jones tells us that “When Thatcher came to deliver a speech at Sheffield’s Cutlers’ Hall in 1983, my eldest brother was among those throwing eggs” Of course he was. When you haven’t got an alternative that’s about all you can do.

Thatcher did the job that none of her predecessors had had the balls to do and it was a job made much harder by their political cowardice. But a necessary job job isn’t made less necessary by its unpleasantness.

If Thatcher had kicked the can a little further down the road like Wilson or Heath she’d have been hated but tolerated. She didn’t. She did the right thing and she won. That is what turns the hatred into insanity.

Black Wednesday

Lamont and advisor run up the white flag

I’ve mentioned before that I’ve been jotting down some notes about the 1990s. As today is the twentieth anniversary of Black Wednesday, I thought I’d share what I’ve written about that…

In 1990 the British economy entered a recession caused by the raising of interest rates from 7.38% in May 1988 to 14.88% in October 1989. Thatcher’s government did this in an attempt to dampen the inflation they had unleashed with a pre election spending boom between 1985 and 1988 though they claimed it was that it was to prepare Britain for entry into the Exchange Rate Mechanism.

I remember all this quite well. The area I lived in was full of people with mortgages, people who had embraced the Conservative ethos of the property owning democracy in the 1980s. And now, in the name of European integration, they were being crucified on a cross of ERM by the same Conservative Party. ‘Repossession’ became a dreaded spectre, figures reported on the evening news. In 1989 there 15,800 repossessions, in 1991 there were 75,500 and I remember kids I was at school with losing their homes. As a Northerner down south my dad became something of a local oracle in how to deal with tough times and I remember a couple my mum knew through her babysitting group coming round for tea, digestives, and advice in how to deal with a mortgage they could no longer afford.

John Major possessed impressive reserves of self belief so he might not have been as stunned as everyone else by (his election victory in April 1992). Even so, these reserves were quickly depleted. Within six months of the election the Conservative Party had thrown away its trump card of sound economic management (the playing of which always involved a fair bit of bluff) and handed Labour a poll lead which it wouldn’t lose except briefly for another fifteen years.

The Exchange Rate Mechanism had been forced upon an unwilling but weakened Thatcher a month before she left office by Major, as Chancellor, the rest of the cabinet, and the civil service. It committed Britain to keeping the value of sterling pegged to the value of the deutschemark. When German spending on reunification threatened to stoke inflation the Bundesbank raised interest rates and, thus, the value of the DM. Britain had no choice but to follow.

Two approaches were pursued, both of them disastrous. First, more than £3 billion of Britain’s foreign currency reserves were spent on buying sterling in an effort to push its value up. All that did was make George Soros even richer. This just left interest rates.

Matters came to a head on September 16th 1992. That morning, with the cash for further currency manipulation gone, the government announced a rise in interest rates from 10% to 12%. Still the value of sterling fell. In the afternoon the government was forced to announce a further rise in interest rates to 15%. Even this failed to stop sterling’s slide. In the evening an exhausted looking Chancellor, Norman Lamont, emerged from Number 11 Downing Street with a young policy advisor named David Cameron at his side to announce defeat. Britain would leave the ERM and devalue.

Britain’s failed attempt to stay in had been nothing more than an expensive way to cause more pain for already suffering British businesses and mortgage holders. It became known as Black Wednesday, unless you were a Eurosceptic, in which case it was White Wednesday.

The Major government never recovered. The day after Black Wednesday Major phoned The Sun’s editor Kelvin MacKenzie and begged him to go easy on the government. “John”, MacKenzie is said to have replied, “I’ve got a large bucket of shit lying on my desk and tomorrow morning I’m going to pour it all over your head”

But after Black Wednesday something remarkable happened. With the government’s credibility on monetary policy utterly ruined the Bank of England was put in charge with the goal of using interest rates to control inflation. Worrying about the value of sterling vis a vis other currencies was in the past. And it seemed to work. The economy recovered and embarked on its longest ever boom. Unemployment fell from nearly 3 million in early 1993 to 1.7 million in early 1997. The economy, it seemed, ran better without politicians ‘managing’ it.

Thatcher Derangement Syndrome

Back in 2003 Charles Krauthammer coined the term ‘Bush Derangement Syndrome‘ to describe “the acute onset of paranoia in otherwise normal people in reaction to the policies, the presidency — nay — the very existence of George W. Bush” Since then BDS has spawned new strains such as the particularly virulent ‘Palin Derangement Syndrome‘ But the progenitor of them all, the ebola to BDS’s common cold, is TDS; Thatcher Derangement Syndrome.

One of the side effects of TDS it to make it victims, some of them otherwise normal people, come out with feverish ramblings. We saw an outbreak of this last week at the TUC conference and I’ve commented recently on the continued presence of this malady in my home town, Sheffield.

But what of the paranoia so key to BDS? Well, yesterday we saw it in TDS.

The report into 1989’s Hillsborough disaster where 96 Liverpool football fans died found that the lurid stories circulating about the day were, as many had always suspected, made up. Furthermore, and more seriously, it found that the Police had covered up their role in the disaster and attempted to smear the Liverpool fans.

Back in 1989 The Sun printed these false stories under the now infamous headline ‘The Truth’. The report yesterday found that The Sun based its story on information from Police officers and a then Conservative MP for Sheffield, Irvine Patnick, all of which were untrue.

So, soon, the following graphic was circulating.


There’s David Duckenfield, the chief superintendent in charge of policing at Hillsborough on the day, and there’s Kelvin MacKenzie, editor of The Sun at the time. And there’s…Margaret Thatcher?

You read that right. Apparently Margaret Thatcher should “face trial for (her) part in the Hillsborough cover-up” There’s just one problem. No one has given any indication that she was involved in the cover up to any degree.

Indeed, papers dribbling out after the event show that Thatcher was told that a senior member of the Merseyside Police had said that “he was deeply ashamed to say that it was drunken Liverpool fans who had caused this disaster, just as they had caused the deaths at Heysel” So she was being told the same pack of lies as everyone else.

When the Taylor Report into Hillsborough came out, we learned yesterday, Thatcher was concerned that it placed blame only on the Police and not on the fans also. We now know this was wrong, but given what Thatcher had been told at that time her attitude is quite reasonable. And she did, after all, “welcome the thoroughness of the report and its recommendations”

Jack Straw popped up on the radio this morning to blame Thatcher for creating a “culture of impunity” in the Police. That’s what you do these days. If you are convinced someone did something nasty but there is no evidence of it then you accuse them of ‘creating a culture’, it’s an evidenceless crime.

Besides, this culture was around long before Maggie Thatcher, just ask the Guildford Four, the Birmingham Six, Stefan Kiszko, or anyone who dealt with the Metropolitan Police in the 1960s and 1970s. This is another symptom of TDS; seeing a trend which was well under way before Thatcher took office, like the collapse of heavy industry or increasing consumer credit, and blaming her for it.

So what is Thatcher, quite blameless of any cover up relating to Hillsborough, doing on that mocked up front page? Beats me. There’s certainly no sense to it but that’s why TDS is a ‘Derangement’ syndrome. But considering this surrounds events that left 96 innocent people dead, it’s a particularly unpleasant outbreak.