In most of Britain, the day of the general election dawned cool and overcast. As voters walked to their polling stations, some of them noticed the front page of the Sun, prominently displayed at the front of the newsstands. The tabloid, owned by press baron Rupert Murdoch, had long exulted in its status as the preferred reading of the working class; no one, it was considered, commanded the affections of the traditional Labour voter like the Sun. (This, indeed, was the same newspaper that had once dubbed Margaret Thatcher “the Milk Snatcher.”)1 So its editorial message on this day, splashed across the front page, was all the more shocking: “Vote Tory this time. It’s the only way to stop the rot.” The members of the print workers’ union at the paper did their best to sabotage the day’s edition, even cutting parts of the text they didn’t agree with. The editors still managed to get it out, though a bit late.2
It was apparent, by the end of the five-week election campaign, that Thatcher’s message of change had resonated with her audience. Callaghan had acknowledged this widespread desire and tried to present himself as the candidate who would ensure that change came in a “controlled” way, without the chaos that, according to him, the Tories’ radical “free-market” approach was sure to bring. But the humiliations of the Winter of Discontent were still fresh, and many voters now saw “Sunny Jim” above all as the man who had allowed the unions to roll over his government. These disillusioned Britons were willing to take a chance on someone truly new.
Many of those who cast their ballots for Thatcher that day were voting against a lifetime of political habit. The famously left-wing playwright Harold Pinter, vexed by “union selfishness,” cast his vote for Thatcher, as did his wife, the writer Lady Antonia Fraser. The theater director Peter Hall, who had voted for Labour since the 1950s, struggled with conflicting feelings, but ultimately opted for the Conservatives with his vote as well, noting in his diary that “we have to have change.” Journalist Stephen Fay also voted for the Tories for the first time “because he felt we needed a corrective.”3
But it was not only the traditionally left-of-center intellectuals who found it in their hearts to make the change. So, too, did a remarkable number of skilled workers, the legendary “C2s” of the statisticians. In some parts of the industrial Southeast (including the city that was home to the giant Ford plant that had played such an important role during the unrest of the fall), up to 13 percent of the traditional Labour electorate switched to the Tories. Even among members of the unions, there was substantial support for Thatcher’s positions: 51 percent thought that the Conservatives had the best tax policies, and a shocking 37 percent even believed that Thatcher’s party had the best approach to combating unemployment. Meanwhile, support for the Liberal Party, the political home of centrists, evaporated—an indication that Britons, at least on this day, were willing to vote for a more sharply defined alternative.4
In the afternoon Callaghan called his key aide, Bernard Donoughue, and gave him the bad news: “Mrs. Thatcher [will] be in No. 10 as Prime Minister tomorrow. So we must be out by 3:30 PM.” The polling stations were scheduled to close at 10 p.m., but preliminary counts and exit polls were already showing the scale of Callaghan’s defeat. The Conservative Party won 44 percent of the vote, translating into a parliamentary majority of forty-three seats. Thatcher’s strategy of aggressively targeting Labour voters had paid off dramatically: the 5.2 percent swing from Labour to Conservative was the largest in any election since 1945.
But this was not the only ingredient of her triumph. Simon Heffer, a recent Cambridge graduate who was working in a pub at the time of the 1979 election, represented yet another important segment of the pro-Thatcher vote: a rising new generation of Conservatives who rejected the clubbiness of the postwar party and wanted to see a new, meritocratic Britain. On the night of the election, he attended a Tory victory party with several of his university friends, and as they watched the returns come in on the BBC, they exulted in the palpable sense of a watershed. “It was as if we had been dragged into the modern era, and that prehistoric world where the country was governed by unelected trade unions was over.”5
On the afternoon of May 4, Thatcher paid the traditional visit to the queen in Buckingham Palace. When she descended the stairs, she was met, according to tradition, by the principal private secretary to the prime minister—in this case, Kenneth Stowe, who had accompanied Callaghan to the palace when he had left Number Ten Downing Street earlier in the day. Now he escorted Thatcher back to the prime minister’s residence. There, standing in front of the TV cameras, she recited an uplifting quote attributed to Saint Francis of Assisi: “Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope.”
In fact—though few picked up on it at the time—the prayer was of solidly nineteenth-century origins. But no matter. The passage had been chosen for her by her chief speechwriter, Ronnie Millar. Thatcher was not especially keen on it at first. Still, it was her first public statement as prime minister, and as such it was subjected to copious analysis. Most of the commentators focused on her call for harmony, which few of them took seriously. As her biographer John Campbell noted, no one paid particular attention to the middle lines of the quatrain, which neatly summed up her sense of her own mission. Saint Francis, after all, was a reformer whose deeply held beliefs infused a radical program of social renewal. As another observer put it at the time, she was the first “political evangelist” of any stripe to enter Number Ten since 1945.6
The ambiguity of the quote—invoking both consensus and polarization—nicely summed up the political reality in which Thatcher found herself. She had fought the election by forcefully promising change, yet she had done so on a platform that was vague on the details. This was no accident. The Margaret Thatcher we envision when he hear her name today did not emerge in all of her glory from the general election of 1979. She was an evangelist, to be sure, but she was also an eminently practical politician, and she understood perfectly well that she could not unduly try the patience of her voters. Nonetheless, there was no mistaking the decisiveness with which she moved ahead.
The situation the new government faced was dire. Britain in 1979 was a country that had been “collectivized” to an extraordinary degree. Nearly a third of the 2 5 million Britons who had jobs worked in the public sector. The civil service was roughly twice the size it had been in 1939. Nearly half of the people working in manufacturing were employed by nationalized industries. Public-sector corporations had enormous debts, and the government was pouring subsidies into the industries it controlled. Most of that cash was being spent on declining businesses like coal (which was producing a third less than in 1938 despite the injection of public funds) and the railways (which were offering one-half as many miles of service as in 1938). In the private sector, two huge union organizations had an almost unchallenged say over policy—even though the number of working days lost to strikes was eight times higher than in the years before World War II. Meanwhile, inflation had drastically eroded the value of the pound sterling. One pound in 1980 had one-twentieth the purchasing power of the same amount of currency in 1938. Prices had risen by an average of 13 percent over 1978–1979 and showed no sign of slowing.7
Thatcher had been waiting in the wings for four years, enough time for her to devise a blueprint for what she wanted to do. When the time came, she was ready, and she got down to work with noteworthy speed. She needed all of two days to assemble her new government—a remarkable achievement considering the modest resources of the British prime minister’s office (especially when compared with the enormous apparatus that stands behind every US president). She had always made a point of working harder than anyone else around her, and she continued that ethos as prime minister, sleeping as little as four hours a night. That left plenty of time for her to stoke her bottomless appetite for briefing books and memoranda. Her mastery of homework was a lifelong point of pride.
It was also a weapon of control. She was determined to know the subject matter of government better than any and all of her ministers. As for the professional bureaucrats of the British civil service, Thatcher regarded them as suspect from the start. They were, she believed, sly defenders of the entrenched status quo, and she was not going to let them get the better of her. She believed that career civil servants would always find ways to undermine directives from the political leadership; she was convinced, among other things, that resistance from left-leaning officials had been a major cause of Heath’s downfall, and she was determined not to tolerate it. From the very beginning of her stint at Number Ten, she looked for ways to supersede or bypass the bureaucrats wherever she could. She paid surprise visits to the ministries, and she carefully noted who was likely to go along with her program and who was not. Over time she came to realize that most of these highly professional government officials were willing to implement the course that she set, and she gradually relaxed. Still, from the very beginning she began to make a habit of appointing special political advisers to help her formulate policy on particular issues. And within the cabinet itself, she took care to appoint her own loyalists to the most important economic positions.
Perhaps her most significant appointment was the one she did not make. The minister with the most direct responsibility for the British economy is the chancellor of the Exchequer, and many onlookers assumed that her natural choice for this position was Keith Joseph. He was, after all, her avowed mentor on economic issues. It was Joseph who had first dared to challenge Heath for the leadership in 1975, and it was Joseph who had done the most to lay the groundwork for an intellectually credible challenge to the reigning mixed-economy consensus. Yet many of Josephs colleagues—not to mention Thatcher herself—had harbored doubts about his steadiness ever since the gaffe that had ended his ministerial ambitions. In the event she passed him over for the big job. She chose him instead as the secretary of state for industry, where he was to supervise the state-owned corporations, the commanding heights of the British economy. “To put Joseph in charge of the one Whitehall department whose whole purpose was to pursue active government industrial policies was the political equivalent of putting a monk in charge of a whorehouse,” one commentator wrote at the time.8 As it happened, Joseph’s reputation as a crusader for the free market was little in evidence during his term—further confirmation, to his doubters, that he was more of a talker than a doer. The first year of the Thatcher government brought only a few cautious measures to expose the nationalized industries to greater market competition; a few shares were sold in some of the companies. Joseph gained notoriety primarily for his efforts to win even greater allocations of budget funds for his charges.
It was, instead, Geoffrey Howe that Thatcher picked to be her chancellor of the Exchequer. It was a revealing choice. Howe boasted nothing of Joseph’s oratorical flair. The famously caustic Labour politician Denis Healey memorably compared listening to Howe in the House of Commons to “being savaged by a dead sheep.” But Thatcher was not looking for flashiness. For years Howe had been quietly carving out a name for himself as a student of monetarist theory and market-oriented policies. His somewhat pedestrian exterior concealed a spirit of remarkable tenacity. On the surface he seemed to have little of Thatcher’s combativeness, but he was, in fact, impossible to dislodge on an issue once he had made up his mind. True to form, he was to prove one of the most persistent of Thatcher’s ministers, remaining in the cabinet almost until the end of her administration.
Shepherded by an anxious prime minister, Howe now set to work devising the new governments first budget. The scheduling of the election left him just a few weeks for the task. Thatcher was determined to use the 1979 budget as the occasion for a stark declaration of her policy priorities for the economy. In the event, the supposedly plodding Howe proved that his instincts were even more radical than hers. His budget not only proposed dramatic cuts in income tax and public spending and a considerable tightening of the money supply—all principles laid out in the election manifesto—but also ushered in the dismantling of exchange controls. There could be no clearer statement of the new government’s commitment to the workings of the market. But it was a highly risky move. The turbulence that had plagued the British economy in the preceding years had not inspired great confidence in foreign investors. The removal of controls could potentially spark a run on the pound sterling—a horrendous prospect for a newly inducted prime minister. In her memoirs Thatcher claimed to be on board with Howe’s move from the start. In fact, as Howe later recalled, she needed considerable persuading.
The budget that Howe revealed to the nation in June 1979 thus made for a radical departure. It slashed the rate of income tax for top earners from a punitive 83 percent to 60, and took the basic rate from 33 percent to 30. It unveiled the first steps toward the elimination of exchange controls. (The chancellor waited until later in the year to abolish them altogether.) Howe also announced deep cuts in public spending—though he boosted funding for the military and the police, in line with Thatcher’s election pledges. That meant that some revenues would still have to be increased, and Howe did it by raising taxes on consumption. The budget accordingly provided for a sharp rise in value-added tax, which now rose to 15 percent. This point also gave Thatcher cause for nervousness. As she was perfectly aware, the hike in VAT would add several percentage points to retail prices, thus contributing to inflationary pressures.
This was not the only factor that looked likely to undermine price stability. In its final months the Callaghan government had agreed on substantial pay hikes for public-sector unions, and during her campaign Thatcher had agreed to respect her predecessor’s pledges. Just as expected, inflation rose. The consumer price index jumped from 11 percent in the summer to 20 percent by the end of 1979.
Thatcher and Howe believed that they knew the solution. It was Milton Friedman who had declared—with bracing but controversial clarity—that “inflation is always and everywhere a monetary phenomenon.” In the view of Friedman and other monetarists, the notion that governments could tame inflation by demand-side methods, like tinkering with wage and price controls, was utterly illusory. The acolytes of monetarism insisted instead that government’s task was to ensure price stability by restraining the supply of money in circulation—or, to use the more populist formulation, to slow down the rate at which government printing presses were turning out banknotes. Thatcher’s team was not breaking entirely new ground here. Key members of the Callaghan government’s economic team—above all his own chancellor, Denis Healey—had already accepted the basic monetarist premise. So, too, had the directors of the Bundesbank, the central bank that had presided over West Germany’s economic miracle (and thus represented a prominent foreign model for the Thatcherites). And in the United States that autumn of 1979, the new chief of the Federal Reserve, Paul Volcker, launched a tight money policy also aimed at tamping down his country’s high rate of inflation.
But no one went about it with quite the same single-mindedness as the new government in London. Howe pledged to squeeze the money supply a few percentage points beyond what Healey had done, and he backed it up by raising interest rates from 12 percent to 14 percent. In June, he raised them again, from 14 to 17 percent—the largest one-day hike in British history. This amounted to a serious austerity program. Unemployment, exacerbated by the cuts in government spending, continued to climb. This was, perhaps, a bit more determination than the commercial class had counted on from the new prime minister. British business associations—noting continuing threats from the unions, Thatcher’s pledges of monetary restraint, and the generally dim prospects for global growth—predicted a rash of bankruptcies. After reaching a euphoric high upon her election, the British stock market plummeted in the first few months after Thatcher took office.9
Thatcher, however, was determined to push ahead. The critics who attacked monetarism as an exercise in scholasticism were missing the point. For all her attention to political ideas, Thatcher was not interested in doctrine for the sake of doctrine. She drew her motivation from values, a firmly held set of moral principles; policy was just a way of putting them into action. The distinction is important. Shirley Robin Letwin, one of Thatcher’s most persuasive apologists, argues that the key to understanding Thatcher is not ideology but a core ideal. For her, Thatcherism is a practical approach to achieving certain political ends in the specific historical context of Britain at the end of the 1970s. Thatcherism, she argues, was above all an effort to promote certain “vigorous virtues.” It aimed to restore the primacy of the individual by nurturing a sense of personal choice and responsibility and to revive the family’s role as the basic unit of society, and it aspired to achieve these goals without resorting to active government intervention. It was this political agenda, she writes, that explained the distinctive style of government that characterized the Thatcher administration. In her pursuit of these “vigorous virtues,” Thatcher inevitably assumed a role as the “leader of a crusade,” a “continuous revolution.”10
In this reading, the Thatcherites were drawn to monetarism not because they had particular views on the technicalities of the monetary supply but because the monetarists stipulated that direct government management of the economy through the control of prices, wages, dividends, or foreign exchange was inefficient and wrong. Thatcher’s supporters often made the point, in later years, that she herself never approved of the conceit of “Thatcherism.” It is true that did not see herself as the progenitor of an economic theory. What she aspired to do above all else was to restore to Britons a sense of individual agency, to create an environment that rewarded entrepreneurial risk and self-sufficiency and did away with the notion that government could be relied upon to meet all needs. In economic policy, this translated into the assumption that it was not the business of government to micromanage economic activity. Privatization was consistent with this view. So, too, was her consistent opposition to any form of wage and price controls.11 This was an instinct that she first revealed, with bracing clarity, in 1979. When Thatcher took office, the British government had a long-established mechanism that held down prices on a number of retail goods. It was clear that lifting the controls would fuel already galloping inflation. But she quickly moved ahead to dismantle them.
Thatcher regarded economics as the realm in which the most decisive battles would be fought, and it was above all for her economic policies that she is remembered. Cutting taxes, reducing public spending, curtailing the money supply, and lifting controls on foreign exchange were all measures that she began in 1979, thus making a clear break with the principles of the postwar consensus and laying the groundwork for even more crucial reforms that were to come later.
Needless to say, there were other matters that demanded her attention during her first year in office. Quite a lot of her time went to the problem of Northern Ireland, where the situation had steadily deteriorated throughout the 1970s. In August 1979 things took a dramatic turn for the worse. That was the month the Provisional Irish Republican Army managed to assassinate Lord Mountbatten, the last viceroy of India, by blowing up his boat during a vacation on the Irish coast. The same day the IRA staged a carefully engineered ambush outside of the Northern Irish town of Warrenpoint that took the lives of eighteen British soldiers—the largest loss suffered in a single incident by British security forces during the Troubles. The two attacks presaged a long and bitter struggle with Irish Republicans that would run straight through the Thatcher era. She responded by ratcheting up British military action against the IRA—a tough and resolute policy that was sure to invite retaliation from the Nationalists, and did, years down the road.
The most immediate foreign policy issue to be resolved was the problem of Rhodesia, where the minority white population was struggling to cling to power in the face of an armed struggle conducted by several revolutionary anticolonial movements. In the end, despite a certain degree of resistance from those within her own party who maintained ties with the white settlers, Thatcher managed to find an elegant diplomatic solution that allowed Britain to divorce itself from the colony and ensured majority rule. Her success was attributed, in part, to a highly effective (and photogenic) goodwill gesture: her dance with Zambian president Kenneth Kaunda at a meeting of the Commonwealth countries aimed at addressing the question of Rhodesian independence. The commentators at home greeted this triumph as evidence that she was a far more practical politician than her uncompromising manner might otherwise suggest.
If they thought that they had figured her out, however, she soon moved to confound them. In November 1979 she attended her first European Economic Community (EEC) summit meeting in Dublin. There she presented the other heads of state with a demand that no other British leader had made before her in such categorical terms. For some time it had been clear that the United Kingdom was paying more into the European budget than it took out. Contrary to existing EEC policy, Thatcher now informed her colleagues that Britain wanted the extra money back. They agreed to consider the matter and resolved to move on to other points on the agenda. Thatcher, having made the point, then continued to make it, for hours. German chancellor Helmut Schmidt and French president Valéry Giscard d’Estaing, who were accustomed to having their way at European get-togethers, displayed their disapproval. Schmidt ostentatiously began to leaf through his newspaper. Giscard d’Estaing pretended to fall asleep. Thatcher went on. Giscard d’Estaing ordered his driver to rev the car engine outside the windows of the summit venue. Still Thatcher continued. No one had seen anything like it. Giscard d’Estaing later stated publicly that the summit, completely overshadowed by this single issue, had been on the brink of collapse several times.
Thatcher was unrepentant. “I left our partners in no doubt that my room for maneuver was limited, but I did not feel it right to refuse to make this further effort,” she later told parliamentarians. “We should get more, and it is worth while going on negotiating to get more, particularly as a number of countries in the Council of Ministers were trying very hard to help us achieve a better result.” Down the road European leaders ultimately granted Britain a rebate far beyond what the Foreign Office had considered possible. But it came at the cost of considerable damage to Britain’s reputation as a reliable player on the European stage—doubts that lingered for the rest of Thatcher’s term in office and beyond.
Of the many pressing issues that Margaret Thatcher faced in her first year, however, there was one that she had to handle with particular care. This was the weighty question of trade-union power. The Winter of Discontent and the shift in public attitudes toward the unions that it helped to bring about had been a crucial factor in the Conservative electoral win. Yet Thatcher moved relatively cautiously on this front at first.
She had good reasons for opting to proceed with care. Tackling the unions was not among her immediate priorities. Cutting taxes, adopting new monetary targets, and abolishing exchange controls took precedence—partly because they were relatively easy to do. No one’s interests were directly threatened, and no legislation was immediately required.
As Thatcher understood perfectly well, moreover, her administration needed time to prepare the ground. The unions were formidable opponents, and they were deeply rooted in British political life. Here again her own experience as a minister under Heath proved a useful legacy. He had made no advance preparations to deal with the miners’ strike that finished off his government. This was a mistake she would not repeat. She made a conscious choice to refrain from confronting the unions all too directly at first. Instead, she moved ahead incrementally, starting with small reforms that chipped away at the rules that made it far too easy for union leaders to launch strikes (sometimes even absent a clear mandate from their members).
But there was also a narrower reason for her hesitation, and it had to do with the dynamics of her own political organization. Thatcher had won the 1979 election as the head of a deeply divided party. Despite her victory in the 1975 leadership fight, the rest of the Conservative Party elite had remained little changed from the days of Heath. Thatcher and her like-minded colleagues remained a minority in her shadow cabinet, whose membership largely overlapped with the ministerial team that had governed from 1970 to 1974. Many of these shadow ministers were Tory heavyweights, backed by powerful constituencies and decidedly loyal, if not to Heath himself, then to the brand of consensus politics that he had seemed to embody.
In public Thatcher spoke in ringing tones of the need for a “conviction cabinet” that mirrored her own evangelical political style:
If you’re going to do the things you want to do—and I’m only in politics to do things—you’ve got to have a togetherness and unity in your Cabinet. There are two ways of making a Cabinet. One way is to have in it people who represent all the different viewpoints within the party, within the broad philosophy. The other way is to have in it only the people who want to go in the direction in which every instinct tells me we have to go. Clearly, steadily, firmly, with resolution. We’ve got to go in an agreed and clear direction.12
The reality was starkly different, and in private her tone reflected that. In a small gathering in Number Ten she once referred to herself dramatically as “the rebel head of an establishment government.”13 This was perhaps not quite as strange as it sounded; at least one observer of the British political system argues that prime ministers must behave like rebels within their cabinets while projecting unity to the outside.14 But Thatcher, it turned out, had to work much harder than many prime ministers to have her way.
Journalist Hugo Young observes that Thatcher’s 1979 government team manifested less “togetherness” than any other postwar cabinet.15 This had many reasons. One of them, at least partly, was the matter of her gender. (Conservative grandees were not the only ones guilty of lingering chauvinism, of course. On her first visit to NATO headquarters in Brussels, journalists considered it entirely legitimate to ask, “What are you going to do with your handbag?”)16 Her team was dominated by pillars of the establishment, just the sort of people one might expect to find in a Conservative Party government—and this also meant that they were men. Six of her ministers were alumni of the Guards, the senior regiment of the British Army, and six were alumni of Eton. Universities other than Cambridge and Oxford barely figured in the mix. On this score, at least, the grocer’s daughter could claim a degree of commonality—but only up to a point. Although she was a natural politician, her social origins certainly did not predestine her to be a member of the ruling class. Politically, only six out of the twenty-two could be considered her allies. As later became known, only one of them had actually voted for her on the first secret ballot in the leadership contest in 1975.17 She had beaten Heath because she marshaled the most credible challenge to his leadership—not because everyone agreed with her views.18
As leader of the opposition she had succeeded, to a considerable degree, in papering over some of the resulting divisions. Policy toward the unions was a case in point. In late 1977 two of Thatcher’s stalwarts, John Hoskyns and Norman Strauss, presented the party leaders with a memorandum titled “Stepping Stones.” In their paper the authors made a passionate case that confronting the unions had to be the centerpiece of any serious strategy to reverse Britain’s economic decline. Rather than sticking to the consensus view that dictated compromise with the unions, Hoskyns and Strauss insisted that it was time for the Conservatives to pursue a long-term strategy of identifying organized labor as an obstacle to prosperity. This was too much for the Heathites. Thatcher had chosen one of them, party grandee James Prior, to serve as the shadow cabinet’s point man on industrial relations precisely because his reputation as a compromiser would mollify labor leaders. While Prior agreed in principle that union powers needed to be reduced, in practice he favored a characteristically Heathite course of accommodation. He pronounced “Stepping Stones” a provocation that could sabotage the party’s prospects of winning the next election if its contents became known. He prevailed upon Thatcher to keep it out of the public eye. (Party chairman Peter Thorneycroft, who later proved himself a devoted monetarist, actually demanded that every existing copy be burned.) But “Stepping Stones” remained enormously influential within her administration—especially after the Winter of Discontent shifted the boundaries of public tolerance for union behavior. This divide returned when the Conservatives began drawing up their manifesto for the 1979 election. Thatcher, confident that voters were ready for a change, proposed several specific reforms (including a law against secondary picketing and a ban on strikes by public-sector workers). But she met with stiff resistance from the moderates, and the language of the manifesto was watered down accordingly.19
During Thatcher’s first term in office, indeed, it was above all the split within her own party that most vividly expressed the challenge she faced. The aim of the Thatcherite counterrevolution was to dismantle the postwar consensus, and no one embodied this better than the Heathites within her own cabinet. A nineteenth-century term was revived to express the distinction: the Thatcherites were the “dries,” like the arch-conservatives of the Victorian era, while the centrists came to be known as the “wets,” evoking a political pedigree that went back to the One-Nation Tories of Disraeli, who insisted that Conservatives should pursue policies that addressed national interests rather than sectional ones. Prior, in this scheme, functioned as the “chief wet” of Thatcher’s first cabinet. As her secretary for employment, he was the only one of the moderates to hold an economic office. His centrist stalwarts included the eloquent Ian Gilmour, whose later book, Dancing with Dogma, provides perhaps the best elucidation of the moderates’ views. Another, the aristocrat Peter Carrington, served as her foreign minister, while Willie Whitelaw, popular among the party rank-and-file, became her home secretary and deputy prime minister.
The wets revolted against both the style and the substance of Thatcher’s new order. There was, to begin with, her habit of browbeating her colleagues—an approach that applied to her allies as well as her enemies. Though she was famously kind to her personal staff, her attitude toward the members of her cabinet was relentless. She harangued them like schoolboys. Even her longtime friend Keith Joseph came to dread his sessions with her; before heading off to meet her, he would tell his staff “to send two ambulances at 3 o’clock.” Whitelaw told a confidant that, for the first time in his life, politics had ceased to be “fun.”20 “Fun,” of course, was a very poor description of what Thatcher was about. Her domineering manner grated on her middle-aged male colleagues who, thanks to their traditionalist upbringings, were accustomed to deference from the women in their lives. James Prior was writing only partly in jest when he confessed in his memoir that “I found [Thatcher’s bossiness] very difficult to stomach and this form of male chauvinism was obviously one of my failings.”21
She made things worse with her habit of filling the key economic posts in her cabinet with like-minded allies while reserving the less important positions for the moderates. Her tendency to rely on ad hoc groups of advisers and loyalists also alienated the wets. Though it was not widely known at the time, for the first years of her administration she breakfasted regularly with a small group of trusted political aides who shared her views. These unofficial meetings played a major role in shaping policy.
There was little time left over for the objections of dissenters like Prior, who cast himself as the lonely voice of reason amid the clamor of right-wing fanatics. “I was telling her all the time that we should take things steadily, and not believe that we could solve all the problems by draconian legislation,” wrote Prior.22 The announcement of Howe’s budget dispelled any illusions that the views of Prior and other wets would receive a fair hearing. The night before the budget was announced, Prior was having dinner with a leading union official, who asked about the rumors of an impending hike in VAT. Prior reassured him that no one was considering such madness.23 All the greater, then, his embarrassment the next morning:
It was really an enormous shock to me that the budget which Geoffrey produced the month after the election of 1979 was so extreme. It was then that I realized that Margaret, Geoffrey and Keith really had got the bit between their teeth and were not going to pay attention to the rest of us at all if they could possibly help it. That first budget also brought it home to me that I was really on a hiding to nothing from the very beginning, as the only economic Minister who was not of the monetarist right.24
Monetarism, for the wets, amounted to a doctrinaire rejection of “pragmatic” economic policy. Gilmour later published an eloquent denunciation of the “sans culottes of the monetarist revolution” embodied by Thatcher and her ilk. “British Conservatism is not an ‘-ism,’” he sneered. “It is . . . not a system of ideas. It is not an ideology or a doctrine.” The wets derided the monetarists’ obsession with precise money-supply targets. Prior and his colleagues also pointed out that the combination of the high pound and the new government’s policies of austerity would have devastating effects on British industry, which was, certainly at first, the case. Prior sneered at treasury monetarists in his memoir as impractical ideologues whose ideas about economics came from books and lecture rooms rather than contact with business realities: “None of them had any experience of running a whelk stall, let alone a decent-sized company. Their attitude to manufacturing industry bordered on the contemptuous.”25
None of this had much effect on Thatcher’s determination to push ahead with her change of economic course. Still, Prior was somewhat more successful when it came to the government’s policies on organized labor. Prior did agree to outlaw secondary picketing, but Thatcher wanted to make good on her promises in the election manifesto by cutting welfare benefits for strikers and banning secondary strikes as well. Howe proclaimed that Prior’s bill was just the beginning of a longer process to bring the unions back under control, provoking equally public disagreement from Prior. This marked the beginning of what one observer described as “open war” between the two sides.26 And that was essentially the way it remained until Thatcher began to purge them from her cabinet two years later. But she had, at least, started down the path that ultimately led to her successful challenge to union power in the miners’ strike of 1984–1985.
The wets fought their corner as best they could. They scored many valid points but never quite won the argument. In their own defense, much later they pointed to the self-destructive behavior of the unions, the ineptitude of the Labour opposition, and a rightward shift in public opinion abetted by Rupert Murdoch’s conservative press as factors that undermined their chances.27 There is truth to this. There is a sense in which the wets simply found themselves on the wrong side of history. For the present-day student of politics, reading the memoirs of Prior and his like-minded colleagues is to breathe the air of a vanished age—a bit like perusing the memoirs of the aristocrats who fled revolutionary France or the liberal democrats exiled from Russia by the Bolsheviks. For better or worse, the Conservative opponents of Margaret Thatcher palpably belong to a vanished world.
Of course, one can argue that the battles of 1979 gave little indication of the revolutionary scale of what was yet to come: the epic confrontation with the coal miners, the financial deregulation of the “Big Bang,” the far-reaching sell-off of state-owned corporations. Indeed, the word privatization, taken up by Joseph and his followers, was just on the verge of widespread acceptance, an evolution that underlined just how entrenched statist assumptions had become. (Thatcher originally preferred the less provocative denationalization, but it proved too unwieldy.) In 1979, though, Thatcher and her supporters spoke only of “selling shares” in the nationalized industries. There was little talk, at the time, of returning them entirely to the private sector.
All true enough. Yet it was precisely her triumph in the 1979 general election that made the rest of her reforms possible. Her victory marked a decisive break with the postwar consensus and the principles that underlay it. Margaret Thatcher was the first British politician since 1945 to declare that the drift toward socialism had to be stopped and who won a clear majority after campaigning on just this basis. Her electoral win was not a random one-off; to a large extent it reflected a fundamental shift in British thinking. Public opinion surveys from the 1970s showed, for example, a striking rise in the belief that high taxes stifled entrepreneurship and job growth.28 A Gallup poll in 1979 showed that 77 percent of Britons surveyed favored some privatization of nationalized industries—an increase of 18 percent over the previous decade.29 A 1976 survey revealed that a majority of Britons believed that unions were a major factor in the country’s economic decline, and 74 percent believed that British unions had far too much power—a figure that rose to 82 percent by the year of Thatcher’s election. All these data help to explain why the 1979 election indeed amounted to a watershed. “Even if what was achieved in the short term was limited,” writes journalist Simon Jenkins, “there was no question that 1979 was a revolutionary moment.”30
For the thirty-four years before her rise to power, Britons had accepted a particular model for how British society ought to be run. In 1979 few understood that Thatcher’s upset was opening the way for eighteen straight years of Conservative rule and a fundamental reordering of the British political landscape. The consensus was over.