Love her or loathe her, there was something special, something atypical about Margaret Thatcher. She wasn’t just another rather ordinary politician that scampered to the top of the political ladder as did other UK prime ministers like David Cameron, John Major, Edward Heath or even others like Jacob Zuma or George W Bush.
It probably helped her career that there had never been a woman as prime minister of the UK, but I would doubt whether that was the factor that propelled her into 10 Downing Street and kept her there for more than 11 years. In her first term, Thatcher “de-nationalised” – she apparently preferred that to “privatising” – British Petroleum (now BP), Cable & Wireless and British Aerospace.
According to the Wall Street Journal, privatisation wasn’t part of her Conservative Party’s election manifesto in 1979 when she swept out the Labour Party, but she needed to balance the fiscal books and there wasn’t any money to speak of in the state kitty.
In her second term, British Telecom followed in 1984 – which turned out to be the biggest public offering yet at the time. This was followed by British Gas in 1986.
In order to undercut resistance from the trade unions, her government offered free share grants in the privatised entity.
During her term she sold the state ports, the state steel producer, the water utilities, the shipyards and shipbuilders – the latter led to the shedding of thousands of jobs and the virtual death of the industry – Jaguar and Rolls-Royce, which the Journal described as “industrial basket cases with premium products”.
Thatcher also reduced the top marginal tax rate from 98 percent to 40 percent, which was kept by Labour’s Tony Blair and only raised to 50 percent under Gordon Brown. It has subsequently been reduced again to 45 percent by Cameron.
Some economists blame the current troubles – and the de-industrialisation of the UK – on Thatcher. However, the manufacturing sector was arguably falsely underpinned during the 1970s by state bailouts of the abovementioned entities.
She appeared to have correctly recognised that the East – in particular China – was better able to run manufacturing plants while keeping product prices competitive. The economy, instead, shifted to financial services, re-establishing London as the banking and financial services capital of Europe.
Plans for her funeral next Wednesday at St Paul’s in London have to take into account possible demonstrations by her many detractors. There have already been outbreaks of violence by youths – including in Scotland – who revelled in her death.
She provides a great lesson for South Africa. Here we have an obsession with expanding the role of the state in the economy. It is just the opposite approach to that of Thatcher.
Britain was in a dire state when she came to power in 1979. The country had been hit by a wave of strikes – ironically under a Labour government to which the trade unions were aligned.
The large state entities had been receiving regular bailouts. This has much resonance in South Africa where SAA and the SABC regularly tap into the public purse. Notably, there is one thing Thatcher never did. She did not meddle with the social welfare net and did not unravel the national health insurance system.
She realised that the poor – and the unemployed – had to be looked after, especially if they had been driven out of their jobs at globally uncompetitive industrial plants.