The Legacy Left By Thatcher

Margaret Thatcher"If you just set out to be liked, you would be prepared to compromise on anything at any time, and you would achieve nothing." -- Margaret Thatcher

Margaret Thatcher. I don't think I can imagine any other two words in the English language that would stir up more passion, more anger and -- let's be honest -- more vitriol in British people.

It is now over 30 years since she came to power, and she has been gradually fading into history. But the fact that a major new film about her (The Iron Lady) is about to be released has brought all those memories flooding back.

I never was a 'Thatcherite'. Indeed, it is only many years after her time as Prime Minister that I have realised just what Thatcher's legacy is.

Her triumphs

Perhaps her greatest success was the economy. Monetarism was just an emerging economic philosophy at the time, but Thatcher was the torchbearer for it. In the short term, the use of high interest rates to bring down inflation caused an immense amount of pain, but in the long term it returned Britain's economy to full health.

Another plus point was the fact that the Iron Lady successfully confronted a union movement that had been threatening to take over the country. The way she dealt with the miners' strike was brutal, but it worked.

Employers were no longer at the beck and call of the unions. With a greater ability to hire and fire, companies were more willing to recruit. In the long run, unions became less confrontational and more co-operative.

What's more, Thatcher did much to make the City a success. She led the massive deregulation of financial markets in Britain known as the Big Bang. In the place of over-regulation and the old-boy network, we had the free market and meritocracy.

And it worked. The City boomed, reaching a point where it arguably overtook New York as the pre-eminent financial centre in the world.

Her failures

But not everything Margaret Thatcher did was a success. Sky-high interest rates initially wreaked havoc, causing unemployment to shoot up to three million, and she allowed much of Britain's manufacturing industry to fall to ruin.

In contrast, countries like Germany and France did much more to foster home-grown manufacturing, supporting it even through the lean times. That means that today these countries have industrial leviathans like BMW, Renault and Volkswagen. Whatever happened to the British car industry?

Just what the country needed?

To sum it all up, I think Margaret Thatcher gave the British economy the jolt that it needed. She reined in the unions, transformed the City and boosted entrepreneurship.

However, you could also say that her legacy is an economy that is imbalanced. It is strong in services such as finance, but weak in the manufacturing industry. The cracks in this model started to appear after the credit crunch, with much of Britain's financial services now on life support.

But, on balance, I think Thatcher was just what the country needed. She laid the groundwork for the boom that lasted all the way to 2007. Britain was no longer the sick man of Europe but a textbook example of economic success. The monetary discipline she espoused was copied by countries all around the world who were fighting the great demon of the time, inflation.

We need a Margaret Thatcher today

These days, we worry not about inflation but about debt. Much has changed, yet there are many similarities between now and 1979: rising unemployment, resurgent unions, a slumping economy and a stock market going nowhere.

And I can't help but think we could do with a Margaret Thatcher today, in Britain but most especially in Europe. She would not have gone in for all this 'softly, softly' consensus building. She would have got stuck in, cracked some heads together and got things moving.

I can just imagine it now: the blue outfit, the immaculate blonde hairdo and a stare so determined that it might be made of, well, iron. Die eiserne Dame, where are you?!

So what do you think? Was Thatcher just what the country needed? Is her legacy good or bad?

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