The Troubles in Northern Ireland – years of terrorist attacks by Irish Republicans and Loyalists – left the province economically knackered. There was a huge reliance on state funded jobs, compared to the rest of the UK, and high levels of unemployment. So when American entrepreneur and General Motors executive John DeLorean showed up promising to build a new car industry in Ulster, politicians fell over themselves to make it happen.
The DeLorean Motor Company, that he set up in 1973, had developed a very distinctive looking car with gullwing doors and stainless steel finish. One of his cars featured in the movie Back To The Future. I remember these cars well and hilariously a mate of mine driving one opened the door to wave as he drove past and the door flew off – fortunately not injuring anybody!
As we all know now – after setting up a production facility in Northern Ireland in 1978 to great cheers and goodwill, things started to go wrong. The cars didn’t sell and the company finances revealed a black hole. A new book on the ensuing scandal claims that Thatcher was informed about the discrepancies in the DeLorean accounts and refused further funding resulting in the loss of 1,500 jobs. You can read more about that new book by clicking HERE.
Maggie had been in power for eight months at the end of 1979. The Economist magazine (broadly sympathetic to her aims) was making its predictions for a new decade – the 1980s. So how did The Economist think Thatcher was going to fare in the years ahead?
Well, the next election was due in 1984 and they thought that was way too close for a government rapidly losing the level of popular support it had enjoyed in the May, 1979 General Election.
Like Cameron today, Thatcher was pleading for more than one term in office to achieve her aims but at the end of 1979, the polls were suggesting Labour would come back to power. The Economist thought the Labour faces just rejected by the electorate – Peter Shore, Dennis Healey, John Silkin – would be back in ministerial posts.
And there wouldn’t have been much surprise there. After all, through the 1960s and 1970s, Labour and the Tories took turns in power. Nobody would have thought in 1979 that Thatcher would last to 1990. The Economist believed it was “conceivable” that Thatcher would be dumped as Tory leader before 1984.
Europe was a big problem for Thatcher – senior Tories were horrified by her roughing up of the EEC (as the EU was called then). Foreign minister Lord Carrington was seen as a restraining influence on the Prime Minister (he would resign when the Falklands War broke out).
The Economist wrote that Carrington and Home Secretary William Whitelaw might move to “bell the cat” – put Thatcher under firm control and force her into a U-turn towards more traditional One Nation Toryism. She would be forced to adopt a more Ted Heath approach or resign.
The revival of the Liberal Party made a Lib-Con coalition – similar to what we have now – a real possibility. But The Economist thought that Labour – under Dennis Healey, who by 1984 would have defeated the left wing of the party – was more likely to return to power. The magazine correctly predicted that Roy Jenkins and Shirley Williams would form a new political party and for a while, that party would exercise a big influence.
So, how wrong was The Economist? The election was called early in 1983; an unexpected war in the Falklands boosted Thatcher; the Labour left put up a stronger fight and Dennis Healey did not become Labour leader; Thatcher purged her enemies within the Tory party and no bell was put on that cat!
Over the first six months of 1980, a total of 3,160 firms called in the receivers. If you look at the list – as I’m doing now – there were loads of Midlands based medium sized manufacturers – especially in the automotive sector.
The toy industry was decimated in this period with Meccano closing down (makers of Dinky Toys); the failure of Dunbee-Combex-Marx (makers of Hornby trains, Scalextric cars and Sindy dolls) and huge redundancies at Lesney (maker of Matchbox toys).
Still, one area thrived – private receivers. Insolvency proceedings had been overseen by the government owned Official Receiver but Thatcher decided the City could do a far better job. And so through public policy, she helped build up the likes of Deloittes, Peat Marwick, Cork Gully and Coopers Lybrand. Many of these firms have since merged to create mega-accountancy operations.