I have a huge, towering stack of music papers from the 1980s in my study including the NME, Record Mirror, Sounds, Melody Maker, Smash Hits, Fab 208, etc, etc, etc. And in one edition of Fab 208, the editor had asked famous popstars of the day to draw themselves.
Most noteworthy for me was Dave Wakeling of The Beat who was the only pop star to depict himself in profile. The magazine noted that he feels strong about world problems.
The Beat were a very political combo and I had the honour of interviewing the late Ranking Roger for the biography I co-wrote of Neville Staple of The Specials.
From 1979, inflation doubled in the first year of the Thatcher administration from 10% to 22%. The recession that followed brought the rate down to 5% in 1980. At the same time, unemployment soared to a breathtaking three million – and that was the official figure.
For Thatcher, inflation was always a bigger priority than unemployment. This was unusual at the time because memories of the starving jobless in the 1930s still loomed large in Britain.
Whereas in Germany, memories of hyper-inflation chimed more with the Thatcher viewpoint. That’s not to say British people weren’t fed up with price rises in the 70s – but the spectre that haunted families more was the prospect of the breadwinner being out of work.
To combat inflation, Thatcher embraced an economic theory called “monetarism” that necessitated high interest rates, higher taxes (VAT doubled almost straight away) and sharp cuts in public spending. The result of what one politician dubbed “voodoo economics” was disastrous for millions of people between 1979 and 1981.
It didn’t even work very well as a theory. Inflation was brought under control by 1980 but the money supply continued to grow. So there were further spending cuts that led to calamitous falls in economic output and whole regions de-industrialised. Unsurprisingly – monetarism was dumped by 1984.
To get a clearer idea of Thatcher’s thinking on inflation, I found a 1974 speech made in Preston by Thatcher’s economic guru Keith Joseph. He made it very clear that inflation was regarded by the Tories as the main enemy and not the traditional bogey of unemployment.
In fact, he argued, governments had been so spooked by the Great Depression of the 1930s that they thought mass joblessness was always around the corner. So governments spent money and then tried to hold down pay with incomes policies – always unsuccessfully.
Keith Joseph’s words in 1974 make interesting reading given what was to happen in Thatcher’s first two years in power with unemployment leaping:
It is perhaps easy to understand; our post-war boom began under the shadow of the 1930s. We were haunted by the fear of long-term mass unemployment, the grim, hopeless dole queues and towns which died. So we talked ourselves into believing that these gaunt, tight-lipped men in caps and mufflers were round the corner, and tailored our policy to match these imaginary conditions. For imaginary is what they were.
“Inflation is caused by governments” – speech by Keith Joseph in 1974
Already by the mid-1970s, people were shocked by an unemployment level of 500,000. Joseph swept that aside. Public money should not be used to create jobs. And anyway, he went on, a significant percentage of the unemployed were shirkers and scroungers.
There are the drifters and hippies who draw “welfare” but engage in activities to earn money, legal or illegal. From time to time the Ministry carries out local checks, and suddenly the number of registered unemployed melts away. How many fraudulent unemployed there are at any given time can only be estimated, but they probably account for at least a tenth of the registered unemployed at normal times. We ought to do more about such people, but expanding demand will not turn them into honest men.
“Inflation is caused by governments” – speech by Keith Joseph in 1974
Forty years ago, attitudes towards LGBT people were majority unaccepting. Gay and lesbian rights activists were derided as part of the “loony left”. And for many LGBT people, the choice was either living in a social ghetto or staying firmly in the closet.
AIDS hadn’t come to prominence at the start of the decade but once awareness of the HIV virus increased, attitudes worsened. This was largely fuelled by tabloid newspaper headlines blaring “gay plague” and a lack of public education – at first.
Role models for LGBT people were in short supply. In popular entertainment, gay men were almost invariably effeminate or led tragic lives culminating in some grim death. The idea that gays and lesbians could lead mundane, suburban existences living peacefully with their neighbours was far off.
Homosexuality had been legalised back in 1967 but legal recognition didn’t mean social tolerance. Although cultural phenomenon like disco music in the 70s made gay people more visible and arguably confident, things appeared to go into reverse in the 1980s.
The worst expression of this was Section 28 of the Local Government Act in 1988 that included the provision that local authorities were not to “promote homosexuality”. This has now been abolished and nowadays similar legislation only pops up in Putin’s Russia and certain African countries renowned for their homophobia.
I recently discovered an old school exercise book from a subject called Civic Studies that was part of our curriculum around 15 years of age. We had to write out answers to a series of questions that went like this:
Q: Who supplies our electricity? A: The Central Electricity Generating Board
Q: Who runs the country’s mines? A: The National Coal Board
And so it went on. This was an economy that could be described more as state capitalist than socialist. Civil servants and professional managers and technocrats ran industries that successive government in the post-war period believed were essential to the national interest.
Both Conservative and Labour governments presided over publicly owned and managed industries. Two world wars had revealed the need for better run key industries. There was also a perception that the private sector had under-invested and poorly managed many of these assets in recent decades. British capitalism was deemed to have lost the drive and verve that had powered the Industrial Revolution.
Under Jeremy Corbyn’s leadership, the Labour Party was calling for rail and mail services to be re-nationalised during the 2019 general election. But go back forty years and it would amaze you to see what was under public control – though about to be privatised by the Thatcher government.
Take for example the British National Oil Corporation (BNOC). This was created by a Labour government in 1975 to ensure that the British public would have a stake in any North Sea oil licences and thereby derive a share of the profit from oil and gas exploration. This approach was very similar to what Norway did with the creation of Statoil – a government owned entity that delivered guaranteed pensions to the Norwegian population. It’s now part of a large multinational called Equinor but at the time of writing, the Norwegian state remains the largest shareholder.
The UK, however, went down a very different route. Thatcher created a rather mediocre private sector interest called Britoil that was snapped up by British Petroleum (BP). What’s now forgotten is that BP was a nationalised asset up until 1979 – having been created under a Conservative government in the early 1950s. The BP sell-off was huge and managed by the global investment firm Goldman Sachs.
British Airways (BA) was created by the government in 1974. The world’s favourite airline – as it likes to claim – was state owned and set up to take over the assets of British European Airways (BEA) and the British Overseas Airways Corporation (BOAC). This was a time when most national carriers were owned by governments in Europe. It wasn’t an early sell-off, only being privatised in 1987.
So, the “mixed economy” of state and private run companies was very different to the UK today. Ships were built by British Shipbuilders. Gas was supplied by the British Gas Corporation. Cars were made by British Leyland. And you boarded trains run by British Rail. All of these were privatised over a 20-year period from 1979. This dramatically changed the structure of British capitalism and made the idea of public ownership very alien to younger generations.
As I pointed out earlier, these nationalised interests were run by civil servants and professional managers. Relations between the boardroom and workforce could be every bit as fractious as the private sector. Indeed, some of the biggest strikes of the 1970s were in nationalised industries. And they were often taken into public ownership more out a dire need for reorganisation and urgent bail-out than any grand socialist design.
Such was the case with British Leyland, the car maker. It was created in 1968 by bolting together several auto companies in the hope of creating a British equivalent to General Motors of the United States – and saving troubled brands like Jaguar. But the company lacked a common purpose and the car designs were naff compared to what Ford and GM were producing. That said, I can remember plenty of people driving British Leyland cars in the 1970s. However – it was broken up and most of the brands are now in overseas hands.
During the economic recession of the early 1980s – coupled with a deliberate policy of “slimming down” state run assets for privatisation – there were mammoth job losses. Regardless of your political views, the impact on cities around the UK was seismic. And arguably the aftershocks are still being felt today.
British Steel saw 82,300 jobs shed between 1979 and 1983. The National Coal Board released 36,500 miners between 1978 and 1983 – with many more to go after the 1984/85 miners strike. British Shipbuilders made over 20,000 workers redundant between 1979 and 1982. British Airways also lost 20,000 staff in the same period. This changed the very nature of Britain by degrees from a manufacturing, blue-collar nation in the north and Midlands to communities with more white-collar jobs, “flexible” labour and persistent unemployment in the 1980s.
During the economic collapse between 1979 and 1983 overseen by Margaret Thatcher, many household name brands disappeared. In 1982, there were over 12,000 company liquidations – two and a half times more than 1979. Personal bankruptcies were also up about 60% over that period. So, what household names were destroyed at this time?
In the air industry, Laker Airways was grounded on 5 February, 1982. Sir Freddy Laker had been a well known face on TV pioneering the idea of cheap flights between London and New York. This was a time when the idea of going to the United States was a dream for most people. He launched the “Skytrain” in 1977 and introduced the idea of movies on flights – unheard of before then. Despite his entrepreneurial flair, he could not survive Maggie’s recession.
In the clothing sector, names such as Janet Reger (underwear), Morland (sheepskin), Libro (leisure wear) and Alligator (rainwear) went bust. In the retail sector, some big prestige brands closed their doors for the last time. This included Swan and Edgar, Timothy Whites, Dicky Dirts, Supasave and the ultra-chic Biba brand. In the world of shoes, it was goodbye to Norvic and Mr Henry.
The toy sector was completely decimated in the UK. Airfix came unstuck – a company that had provided us with model planes and historical figures to glue together throughout our childhood. The auto sector saw big cuts at the nationalised car maker British Leyland. But it was also cheerio to the iconic De Lorean and Hesketh motorbikes.
Even the world of sports wasn’t spared with Wolverhampton Wanderers football club and Hull City rugby league club facing the cliff edge at that time.
Anybody over 50 years of age who lived in the Midlands or North of England and Scotland after 1979 will remember the economic depression that ravaged the industrial heartlands. I went to university in Liverpool in 1981 just after a summer of riots in that city and can recall well the sight of closed factories and decaying docks.
So – what on earth happened at that time? Up until Margaret Thatcher took over in 1979, unemployment had actually been falling for two years. Inflation had been brought to under 10%. Industrial output was finally ticking up as were living standards. The middle of the 70s had been disastrous. The Labour government of James Callaghan had to grovel to the International Monetary Fund for a bail out. But by the end of the decade, the economic indicators were improving. Plus oil from the North Sea was about to provide a bonanza.
However – Thatcher played to a sense that the post-war political consensus had run into the buffers. Even if the economics looked more favourable, the political and social environment in Britain was very volatile. Many people were fed up and looking for decisive leadership. And so Thatcher was elected. Unfortunately, she came into power wedded to what Labour Chancellor of the Exchequer Denis Healey described as “voodoo economics”.
Pursuing a monetarist economic policy turned a global recession into a British depression. Our unemployment sky-rocketed from 1979 to 1981 from about a million to three million – and that was the official statistics. Those stats were constantly revised in the 80s to massage them downwards.
Big rises in interest rates, indirect taxation (VAT), the exchange rate and cuts in public spending depressed demand and accelerated factory closures and bankruptcies. Every evening, the TV broadcast news would announce thousands of job cuts and names of firms now facing closure. These included household name brands and affected all sectors.
I got used to reciting the figures as a young political activist at that time. Manufacturing jobs slid by 22%. In vehicle production, jobs crashed by 28% – nearly a third of those in work. Young people were disproportionately affected with under-25s making up 40% of the jobless total. Two out of every three school leavers couldn’t find work. As the recession continued, it became clear that the number of long-term unemployed was increasing at an alarming rate. Many who had worked in blue-collar manufacturing, mining and dock work were stuck on the dole.
The incredible cost of this level of unemployment was around £17bn in benefits and lost tax revenues. I’d have to calculate the real cost in today’s money. That is a 1981 figure. It didn’t make economic sense. But it made political sense. For Thatcher, inflation was the real demon and fear of losing your job was a weapon against the power of the trades unions.
Yes we have. It was January, 1981 and the right of the Labour Party felt thoroughly embattled. The Left had surged forward since the Labour general election defeat in 1979 bringing in Margaret Thatcher and the Tories. So – rather like Chuka Umunna and his group of six other Labour MPs, there were four very senior Labour politicians who quit the part very publicly in 1981.
Europe was a lightning rod issue in 1981….and 2019
The so-called Gang of Four (named after a group of plotters in Communist China) issued what became known as the Limehouse Declaration aiming a series of stinging attacks on the Left of the party. The four were Roy Jenkins, Shirley Williams, David Owen and Bill Rodgers. Jenkins, Williams and Rogers had all been ministers and grandees of the party – while Rodgers was a more junior player.
The party had been in ferment for nearly two years after being kicked out by the electorate. The Left blamed the previous Labour government’s policies of economic cutbacks and pay restraint for the loss of power. Their solution was a more robust, socialist party advocating unilateral nuclear disarmament, withdrawal from the Common Market (forerunner of the European Union) and increased nationalisation.
I was very active in the Labour Party at this time and meetings often divided between those who wanted to nationalise the top 25 monopolies (Tribune supporters) and those wanting to go for 250 monopolies (Militant supporters). The seeming capitulation of prime minister James Callaghan and chancellor Dennis Healey to the demands of the International Monetary Fund for economic austerity was seen as a “class betrayal”.
There were also reforms to the party structure promoted by Tony Benn, a left wing MP, and his “Bennite” supporters. This included the option to deselect MPs and extending party leadership elections from just MPs to constituency parties and the trades unions. Needless to say, this all went down like the proverbial bag of sick with the Gang of Four.
From Gang of Four to The Independent Group
The Gang of Four formed the nucleus of a new political party, the Social Democrat Party (SDP). Twenty-eight Labour MPs and one Tory eventually defected and ran for re-election in 1983 under the SDP banner. Roy Jenkins and Shirley Williams were no longer MPs in 1981 (Jenkins had gone off to become President of the European Commission) but won seats in 1983. The SDP formed an alliance with the Liberals and their vote came alarmingly close to Labour, who scored an all time low. Thatcher won a second term.
Today’s Independent Group has veered away from forming a new party – probably with the SDP in mind, which went from hubris and electoral surge to eventual collapse into the Liberal Democrat party. But there must be a hope that they can peel off a significant number of MPs in the months ahead.
One has to be careful with similarities but in both periods, Labour had moved sharply leftwards; an atmosphere had been created in the party where centrist elements were marginalised and the eventual departure came as no surprise. Both today and in 1981, I suspect many on the Left were glad to see the split – believing it was evidence that the party was moving in the correct direction.
Differences between today and 1981
Europe is very much the overwhelming focus now and these seven MPs are solid Remainers who suspect Jeremy Corbyn is anything but. In 1981, the policy clashes were much broader and deeper. The Left was influenced by a Marxist critique of capitalism that covered everything from the ownership of the economy to a critique of “bourgeois” democracy. Today’s millennial socialists are – for the present – way less ideological and Momentum has nothing like the full throttled anti-capitalist agenda of Militant in the 1980s.
The MPs who have left are – in my humble view – of a lesser calibre to the Gang of Four. That could, of course, change with further departures – watch this space!