What Remains of Thatcherism?

Mrs. Thatcher came to power in 1979 with a mission - to reverse years of economic decline in Britain. This, it was argued, required major reforms in microeconomic policy and a reduction in the role and size of the state. Macroeconomic policy was seen as playing a facilitating rather than a direct role. Above all a fundamental change in the attitudes of the British people was required. In this Viewpoint we examine the record of the Thatcher government and ask how much of this philosophy is likely to survive under the government of John Major. Our verdict is that, in key areas such as the community charge, health and education, Mrs. Thatcher failed to wean the British people off the welfare state - we prefer public provision out of general taxation to a direct charge for services consumed. It is already evident that Mr. Major's government acknowledges this and is backing away from the harshest aspects of Mrs. Thatcher's social policies. In macroeconomics the primacy of the battle against inflation has generally been accepted, though the chosen policy - the EMS rather than independent monetary policy - is not Mrs. Thatcher's. We believe that the present approach offers the greater hope for a lasting reduction in inflation, but it is an irony that this was the area which ultimately brought Mrs. Thatcher down - Britain accepted her end but not her means. On industrial policy there are fears, which were first raised by Sir James Ball in his Viewpoint of October 1989 and which were expressed forcibly when Mi. Heseltine first challenged Mrs. Thatcher, that the new government will revert to a more interventionist approach. It is too early to know whether these fears are justified, though it is clear that any backsliding in this area will be the test of how much of Thatcherism survives into the 1990s.