History of England 1-6

The Labour government had proved itself unable to contain the divisions within the nation; with the Conservative government, there would be no more juggling of incompatible priorities. This was the true ‘Thatcher revolution’, at least in principle. Inflation was the great danger, and it must be crushed before any reforms could be contemplated. So far as she and her chancellor Geoffrey Howe were concerned, the solution was to control the money supply and let the market adjudicate in matters of price. Monetarist theory had at its heart a dictum that was simple enough: government should not spend what it did not have, and what it spent must be worth something. Thatcher and Howe had only to be thrifty, but the ‘dismal science’, as economics had become known, was young and inexact. They soon found themselves dismayingly close to the position of their predecessors, cramped and hobbled by circumstance. The monetarist drive in Howe’s first budget ran counter to election promises that could not lightly be cast aside. To honour the latter, and to support the hundreds of thousands left unemployed by the new policy, the government found itself pouring millions more into social benefit than was sustainable under monetarism. The result was recession.

Had it all been a costly and ghastly mistake? The human price was already apparent: unemployment had reached 2 million by 1980 and was climbing. Three hundred and sixty-four economists had written to the press to testify that this revolution had no basis in sound economics. Many were predicting a U-turn, a challenge to which Thatcher offered a celebrated retort at a Conservative party conference: ‘You turn if you want to; the lady’s not for turning.’ Caught off guard when the conference was invaded by activists protesting at job cuts, she rose to the occasion, observing that ‘It’s wet outside, I expect they wanted to come in … It’s always better where the Tories are.’ Although she lacked a sense of humour, she was quite capable of wit.

Naturally, no U-turn was forthcoming. In other fields, matters were more auspicious. The ‘Right to Buy’, the policy by which the Tories promised council tenants the opportunity to purchase their homes, had been the jewel of the Tory manifesto, and it was set in place. The pledges to restrict secondary picketing and to establish secret ballots were likewise in the manifesto, but it would be a while before they could be tested. The top rate of tax was reduced from 83 per cent to 60 per cent, the European average. In the eyes of many, the previous rate had been one of the chief causes of the country’s relatively poor economic performance. The rich could always seek other climes.

The cost of the war on inflation mounted ever higher, and its casualties began to protest. Riots broke out in the early Eighties, motivated in part by the insensitive ‘sus’ laws, later known as ‘stop and search’, and in part by mass unemployment in the black communities. They began in the depressed district of St Paul’s in Bristol in April 1980, and spread to Brixton in London the next year, with burning buildings, tear gas, police charges and mob attacks. The frenzy was contagious, and riots took place in at least 58 British towns and cities. The Times reported that fears about the breakdown of law and order were being widely expressed in foreign centres, no doubt laced with schadenfreude. Some commentators went perhaps too far. ‘The extinction of civilised life on this island,’ wrote E. P. Thompson, ‘is probable.’ It was an opportune moment for dismay: at the end of March 1982, there was a strong warning that the Argentinian navy was about to invade the sovereign territory of the Falkland Islands.

51

The Falklands flare-up

Neil Kinnock, later leader of the Labour party, said of Thatcher that she had ‘the greatest gift: the right enemies’. Certainly General Leopoldo Galtieri of Argentina was an ideal enemy. He had come to power in a coup and had ensured that some 20,000 of his compatriots ‘disappeared’. Now the Falkland islanders were next on his list of internal undesirables.

It had the makings of a great naval adventure, but it played out in the eyes of a world looking for disasters. Many wanted to see the back of Thatcher and cheered on the Argentinians. Others wanted to retain Britain’s influence and cheered the British contingent. It was a small turf war, but it had momentous consequences for Britain. Was it about to decline into a third-rate power? A genuine fear of failure invaded the military, as well as the diplomatic contingent, Westminster and the public at large.