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The Thatcher-introduced settlement is now under pressure as never before

I was elected to Leeds City Council during the miners’ strike, perhaps the defining domestic event in her period of office, became leader in 1989 and tackled head-on her assault on local government and communities, most notably the poll tax. All who were politically aware at the end of the 1970s understood the relevance of W B Yeats’ celebrated line “Things fall apart; the centre cannot hold”.

The post war settlement introduced by Labour under Attlee was under increasing strain, partly as a consequence of a fiscal crisis brought about by the falling profitability of British capitalism. First Heath and then Wilson and Callaghan sought to maintain the 1945 consensus. By the end of the Callaghan Government Labour’s leaders were exhausted physically and intellectually as brilliantly captured in the play This House currently showing at the National in London. Britain was trapped in an impasse. Something had to give. Gramsci had described such a moment as an interregnum. In our country, “the past was dying; and the new cannot be born.”

The 1979 election could not be like the others and the same is true of 2015. It had to be a moment of rupture in order to break the sclerotic British structures. Of course, we were aware that nothing in politics is certain. For the Left, the solution was clear and, many thought, inevitable. Britain should move beyond the Attlee consensus and into a more socialist society.

But when a country arrives at a turning point, as we clearly had, the direction which it takes is not pre-determined.

Mrs Thatcher had understood all of this too. As we now know, it was she who ended the interregnum into which the country had fallen.

She broke with the Attlee consensus and created a new settlement which has endured (albeit modified by New Labour) ever since. Thus it was possible for Tony Blair to say – in his comments immediately in the aftermath of Mrs Thatcher’s death – that: “I always thought my job was to build on some of the things she had done rather than reverse them”. But this Thatcher-introduced settlement is now under pressure as never before.

Indeed we can now see how Thatcherism contained a systemic design flaw. The certainty of the 2008 crisis was built into the post 1979 system. The ideas of market triumphalism meant that the normal process of government intervening in the economy to protect the wider community interests was suspended.

The country was treated to reduced regulation of an increasingly dominant financial sector without the counterweight of a strong manufacturing sector. And it was the failure properly to regulate finance capitalism which was precisely what was at the heart of the crash.

All elections are in part a contest between continuity and change. But, the next election cannot be about more of the same: a further modification of the existing economic settlement.

As Mary Riddell has suggested in the Daily Telegraph, reflecting on Mrs Thatcher, that the times call for “action rather than the stasis paralysing the politics of 2013”.

What is needed is a rupture with the last thirty years. But the question is which way should this rupture take Britain?

Even a brief glance at the political landscape reveals that the Tories and LibDems have chosen to respond to the crisis by seeking further intensification of all the characteristics of the Thatcher consensus. Thus we see austerity, more marketisation, a further assault on the public domain, growing inequality and so on. If this path prevails, then we can be sure that our economy will flatline for the foreseeable future and that a further crisis is inevitable.

Both the Tories and the Liberal Democrats are hopelessly compromised by their period in office. The Tory modernisation project has been jettisoned partly due to the threat from Ukip, and the LibDems have irrevocably embraced divisive neo-liberal economic and social reform (e.g. the NHS reforms).

Therefore if there is going to be a government which will usher in a fresh start for Britain united under the Labour Party.

Ed Miliband has shown that he understands the historic task which falls to the Party and his leadership. Last year he said:

Consent for the old system has broken down…But, anger at the old system’s flaws is not enough to produce change. It needs the ideas and the political movement to transform discontent with the old settlement into consent for the new one.

Mrs Thatcher fully understood the power of ideas and whilst in office and in opposition she carefully nurtured the growth of a new paradigm. When in office there was a steely determination on her part to bring about change. Thus although there was no single moment of rupture with the Attlee consensus there was a remorseless process change so that by the time she left office our country’s economic and social systems were configured in a way which endured through to the present day.

Labour’s task is no less than to create a vision of a new way of governing Britain. We need to build a movement which is capable of sustaining a One Nation Labour government of a new kind.

We will need steely nerves, inventive imaginations and new ways of communicating and governing. With only two years left, there is much work still to be done.

Jon Trickett is Shadow Minister for the Cabinet Office. This blog was previously published at Labour List.


  1. John p Reid says:

    Actually the post war consensus wasn’t as popular as people believed, suppose their had been A Gaitskell government of 59 and they had sold off council homes, and regarding the union reforms O.K , most of the things like secondary picketing and flying pickets hadnt really come about till the 70s , but there was a feeling that no one crossed the picket line in the 50’s and that union membership was an acceptable thing to demand we all joined socially, had on place of strife been introduced , would that have been an end to the post war consensus, I feel that some union members felt so, I recall banner Adolf Castle,
    Whether the winter of discontent was exaggerated to make the left seem more out of touch than they were , there’s never Been an example of the Thatcherite consensus regarding the state collapsing, the way the welfare state oil lapsed in 79′ and no desire from the public to return to the post war concensus

  2. John p Reid says:

    Come to think of it the post was concensus finished a couple of years earlier, with Callaghans 76 conference speech, we use to think we could spend ut way out of a crisis.. While in recession.we can’t

    I wonder if anyone’s told Ed miliband and Ed Balls this?

  3. Tom Blackburn says:

    Indeed John, Callaghan did tack rightwards and ditched Keynesianism in ’76 – and needless to say, went on to lose the next election comfortably. Perhaps that’s worth remembering for those who argue that all we ever have to do is become more right-wing in order to triumph at the ballot box.

  4. Gerry says:

    Good article…only to add that Thatcherism was just the British version of a worldwide ideological assault on social democratic capitalism, and yes it has triumphed ever since, with all mainstream parties in the UK, Cons, Lib Dems, UKIP, Labour, all broadly adhering to Thatcherism.

    The task to challenge its orthodoxy is what will make or break Labour in 2015, you are so right…and most people in the UK simply do not believe – yet- that there is a genuine alternative to austerity or Thatcherism or unregulated markets…

    This, incidentally, is why socialism has so far failed to convince anywhere near a majority of voters, apart from in 1945, that is has a better ECONOMIC argument, vision and plan than that of capitalism, Thatcherism, monetarism, laissez-faire, call it what you will, the devil we all know…

  5. John p Reid says:

    Tom, had Callaghan had the election beofre the winter of discontent, things might have been different, didnT Tony Benn persuade labour we lost in 79 because of the 76 spending freeze and the way to win back votes was to swing left, and lo and behold we got the 1983 result.

  6. John p Reid says:

    Didn’t Callaghan say in 1983 some of the policies that were in the 83 manifesto weren’t (his)my own,

    Such as scrapping the TSG riot police,
    Leaving NATO,
    Leaving Europe
    Re buying council homes
    Return of the closed shop
    Nationalising the 25 biggest industries

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