The Rise and Fall of Thatcherism

Peter Clarke

Can it be only eight years since Thatcher left 10 Downing Street? Since the tears were shed and the net curtains twitched? Historians of the Thatcher era in British politics are undoubtedly helped by the fact that it ended with both a bang and a whimper. The bang meant the precipitous termination of three notable political careers by 1990: that of Thatcher herself after the 20th century’s longest premiership; that of Geoffrey Howe, her lieutenant as Chancellor of the Exchequer from 1979-83, during the period of the so-called ‘Thatcher experiment’; and that of Nigel Lawson, who succeeded him at the Treasury from 1983-89, during the period of the so-called ‘economic miracle’.

The whimper – apologia is a less pejorative term – followed as a natural result. All three had time on their hands – blood, too, perhaps. All three acted quickly to produce alibis, to set the record straight, to shore up their reputations (and their bank balances). The outcome was a battle of the books, fuelled by a desire for vindication, which meant that the secrets of the Thatcher Government were dragged into the public domain with a haste which some may call unseemly but which a contemporary historian can hardly be expected to deplore.

First, in 1992, Lawson produced The View from No. 11. It was a cogent defence of his stewardship, exhibiting his expertise as an old financial journalist (though he celebrated his liberation from journalistic constraints by turning in over a thousand pages). The next year saw the much-heralded publication of the first instalment of the Thatcher memoirs, The Downing Street Years, which naturally took the opportunity to rebut key elements in Lawson’s story. But it was not left holding the field for long, since in 1994 Howe’s memoirs appeared, under a title, Conflict of Loyalty, which itself turned the knife in the fatal wound that his resignation speech had inflicted on Thatcher in 1990. Conceivably, her two ex-Chancellors could have competed with each other over the respective credit and blame for economic management in the Eighties. Instead, their united front held firm in the battle of the books – in which, however, the Lady had the last word, publishing her own second volume, The Path to Power, in 1995.

Mutual recriminations, disclosing unsuspectedly fierce animosities and raking over petty personal quarrels, are always distasteful – except to historians, who have always found that they produce excellent sources. It is in this spirit that I return to Thatcher’s memoirs – not, I trust, in a wholly uncritical spirit – to look for the light that autobiography can throw on the broader ideological phenomenon of Thatcherism.

For Thatcherism was a potent force in the displacement of one set of conventional assumptions about the economic role of the state by another set. There was both a significant change in Treasury practice and a remaking of the sort of ‘common sense’ that could be appealed to. In this respect, we can think of a stylised model of the political economy of the last hundred years as falling into three phases.

The first was that of Gladstonianism, which long outlived Gladstone. This was the era of moral improvement, self-help and laissez-faire; or at any rate of restriction of the strictly economic role of state activity to the grounds sanctioned by classical (or neo-classical) economic precepts. The state had no responsibility for the working of the system as a whole.

At some point between the Thirties and the Fifties – economic and administrative historians differ as to just when – the Gladstonian paradigm was replaced by another, usually labelled the Keynesian consensus. Certainly, in the postwar period, the Treasury adopted a new role in macroeconomic management – aimed at the maintenance of a high and stable level of employment, and using the budget for the counter-cyclical regulation of aggregate demand in the economy rather than balancing the government’s books. The canonical text was the Employment White Paper of 1944, and behind that – invoked with a vague but emphatic air of piety – was the ghost of Keynes. Common sense now said that mass unemployment had been abolished, that a little inflation was a price well worth paying, and that any government which ignored this nostrum was politically doomed.

We no longer live in this world; we are now irrevocably in a third phase, for which the Third Way is one trendy label. Sound money and balanced budgets are back; so is high unemployment; yet governments can apparently survive unemployment, while tight monetary policy and the elimination of deficits is enjoined alike by the markets, by a majority of the electorate and by the prevailing economic wisdom. These are salient features of the post-Thatcherite era of political economy. As Alfred Sherman liked to tell Keith Joseph in the Seventies, Keynes is dead.

Thatcherism undoubtedly carried a doctrinal as well as a personal connotation, but it may be that it is best understood in a sense personal to Thatcher; that this helps to explain its ideological resilience in face of the intellectual and empirical frailties of its doctrinal claims; and that the fall of Thatcherism was irreducibly personal in its trajectory.

The story of the Thatcher Government is told at length in The Downing Street Years. But told by whom? It is a pertinent question to clarify before the book is cited as a source. For there hangs over that tome a spectral pall, the result of much collaborative assistance from ‘my memoirs team’. In an important sense, however, it surely does not matter who actually wrote what, page by page, paragraph by paragraph, phrase by phrase (or even joke by joke). No more than Churchill did Thatcher draft every word published in her name. Yet her memoirs have been created by a team whom she superintended and by methods similar to those which produced most of her public utterances. If it sounds like Thatcher, it is Thatcher, because that is how she intended to sound.

We know that this is literally true from the way in which, on becoming leader of the Conservative Party, she put herself in the hands of Gordon Reece, a former television producer, who knew just what needed to be done. The hair was wrong, too suburban; it was restyled. The clothes were wrong, too fussy; they were replaced. The voice was wrong, too shrill; it was lowered in pitch through lessons from an expert in breathing. With singular dedication, Thatcher made herself into ‘Maggie’, the leader who is remembered, and she did so knowing full well that she was not born to it, that it did not come naturally or easily.

Speech-writing was tackled in the same way. Before her first Party Conference as leader, the sixty-page handwritten draft of her speech – ‘I found no difficulty: it flowed and flowed’ – was the starting point; but she tells how she readily turned to others for expert help. Finally, the playwright Ronnie Millar was brought in, and the lack of jokes remedied as the text was ‘Ronnie-fied’. One famous piece of Ronnification was the message, prepared for her by Millar, which Thatcher spontaneously delivered out side 10 Downing Street on her election in 1979: the prayer of St Francis of Assisi, beginning: ‘Where there is discord, may we bring harmony’ – a sentiment which many have found an ironic epigraph for her premiership.

This kind of preparation became her standard procedure, for spontaneous asides as well as big speeches, because she chose to project herself in this way. These were among the means by which the Maggification of British politics was achieved. Her purposeful projection of herself, moreover, was part of her populism – not to distance herself from those whom she often referred to as ‘our own people’, but to represent them more effectively.

A journey back to her home town of Grantham is inescapable at this point. The Path to Power conveys the provincial ambit of Thatcher’s early life, with a self-awareness that avoids affectation. She always remained the daughter of Councillor Alfred Roberts, proprietor of a retrospectively famous grocer’s shop; and her manifest debt to her upbringing is brought out nicely.

It was an amalgam of three influences, all with strong mutual affinities, and all mediated through her father. First came the moral ethic of judgmental Methodism. Young Margaret was sent to Sunday School in the morning before accompanying her parents to chapel; and was then expected to attend Sunday School again in the afternoon, though let off the evening service. Then there was the economic ethic of the family grocery business. Satisfying the customer’s needs, at any hour of the day, from a range of produce freely imported from all corners of the world, told its own story about the wealth of nations. ‘There is no better course for understanding free-market economics than life in a corner shop.’ Finally, there was the political ethic of the overburdened ratepayer. Here was the archetype of the respectable, God-fearing, hard-working citizen, faithfully represented by Councillor Roberts, the old-fashioned Liberal who became a staunch Conservative. As a Wesleyan lay-preacher, he would put on a ‘sermon voice’ which his precocious daughter noticed – and later emulated. Political precepts were endowed with an unshakeable moral authority and grounded in a hard-won economic wisdom learnt not from books but from life. There is little reason to doubt her affirmation: ‘What I learned in Grantham ensured that abstract criticisms I would hear of capitalism came up against the reality of my own experience: I was thus inoculated against the conventional economic wisdom of postwar Britain.’

Thatcher readily makes the link from economics to values, in a comment on ‘Bloomsbury’ – a coterie which, of course, included Keynes. Their relaxed attitude towards sexual orientation and conduct does not escape comment. With their ‘rejection of the Victorian virtues in their own behaviour’, Bloomsbury paved the way for the abandonment of the classical restraints in economic policy. The clash between Bloomsbury and Grantham is an implicit theme throughout the book: the one symbolising the sophisticated errors of the cosmopolitan élite – ‘the chattering classes’ – while the other evokes the reliable common sense of plain folk in middle England.

In the process, Grantham is reinventd as a sepia-tinted community where the sober virtues of thrift, hard work, pride and independence have – miraculously but inspiringly – survived among ordinary self-respecting people despite half a century of liberal condescension. The image of ‘our own people’ – a Conservative proxy for the rhetoric of the class war – remained fixed.

The fact is that young Margaret Roberts left the real Grantham a very long time ago: a place at Somerville College, Oxford, was the means of making good her escape in 1943. Oxford opened many doors; what kept them open was her determination to work in the London area, where she could keep in the swim. The lucky break – the first of many – was being shortlisted for the unwinnable constituency of Dartford in 1949. As usual, she made the most of her chance; she secured the nomination in the 1950 General Election, and in the process met and became engaged to Denis Thatcher, a man whose ‘views were no-nonsense Conservatism’.

This was the making of Mrs Thatcher, not only literally, because it gave her the name under which she was to become famous, but because Denis’s support was irreplaceable, as is handsomely made clear in The Path to Power. What Thatcher fails to say, however, is that Denis’s money was vital. True, there is a pre-Dartford comment, that ‘with no private income of my own there was no way I could have afforded to be an MP on the salary then available,’ but no further allusion to how these difficulties were subsequently magicked away. It is, I trust, not just the politics of envy to draw attention to this reticence. There is an obvious ideological significance in Thatcher’s failure to acknowledge her good fortune as a millionaire’s wife. To do so would be to vitiate her faithfully recreated identity as the grocer’s daughter.

There were some advantages in being a woman – one of only seven, as against 246 men, sitting on the Conservative benches in the 1966 Parliament. Under these conditions, it was virtually impossible not to promote someone of her ability, subsequently assuring her of a place in Heath’s Cabinet in 1970, if only as the token woman.

The remarkable transformation of That cher’s standing, which saw her installed as leader of the Party by 1975, was relatively sudden. Moreover, it was intimately linked with the perceived failures of a Government in which Thatcher was a leading Cabinet minister. Her memoirs make no bones about ‘the indefensible record of the Heath Government’, to which she repeatedly and forthrightly attributes the inflation which subsequently surged under Labour.

What she came to realise was the Conservatives’ longstanding deviation from the homely maxims of Grantham in favour of policies of consensus. She later labelled Tories who went along with this approach ‘quislings’ or – the name that stuck – ‘wets’. Blaming her own party along with Labour, the Thatcher memoirs are thus scornful of ‘the damaging moral, social and economic developments of the Sixties’. It is not surprising to find that this indictment goes far beyond technical matters of monetary policy. The youth culture, with its ‘bizarre clothing’ and drugs, becomes part of a deplorable ‘world of make-believe’, symbolised by Carnaby Street, the Beatles and the mini-skirt. The best that she can say about any of this is that ‘they did indeed prove good export earners.’

However ambivalently she looks back, Thatcher cannot claim to have stood out at the time for a radically different approach. Enoch Powell, who did so, is commended for making ‘the two intellectual leaps in economic policy which Keith Joseph and I would only make some years later’. It is easy to see why The Path to Power is dedicated to the memory of Joseph. It was his speeches in 1974, following the Conservative Government’s defeat at the hands of the miners, which signalled the revolt of the economic liberals, or monetarists, or new Right, or real Conservatives, or whatever – a group in search of a label.

First, they tried jettisoning Heath’s policies; within a year they had succeeded in jettisoning Heath, too. As it turned out, this exercise became an object lesson in the old maxim that treason doth never prosper – for when it did, everyone ended up calling it Thatcherism. By 1979, she was poised to take power and the Thatcher experiment ready to begin. ‘Personally, I was conscious that in some strange way I was instinctively speaking and feeling in harmony with the great majority of the population,’ she writes. ‘Such moments are as unforgettable as they are rare. They must be seized to change history.’ It was in this sub-Churchillian mood, confident that she, too, was walking with destiny, that Thatcher entered 10 Downing Street.

‘Thatcherism’ is a term which Lawson claims to have established in a speech which he made as Financial Secretary to the Treasury in 1981. What does Humpty Dumpty mean by it? ‘The right definition,’ he tells us, ‘involves a mixture of free markets, financial discipline, firm control over public expenditure, tax cuts, nationalism, “Victorian values” (of the Samuel Smiles self-help variety), privatisation and a dash of populism.’ And the wrong definition? Why, of course, ‘whatever Margaret Thatcher herself at any time did or said’.

What Lawson significantly does not include within his capacious definition is monetarism, for reasons that clearly have much to do with the prudence of hindsight. But even he admits that the economic policy of the Thatcher Government in 1979 ‘became known by the single word “monetarism”, although in fact that was only part of the story’.

There are a number of difficulties, however, in establishing the doctrinal coherence, let alone the practical efficacy, of monetarism. As a doctrine, it lacks a canonical text. In monetarist proselytising in Britain, the name of Milton Friedman was frequently mentioned, his seminal address to the American Economic Association respectfully invoked. Yet this, for all its keen theoretical insights, evinces scepticism and caution about their immediate application to policy. It is in this respect curiously similar to Keynes’s General Theory, which it is often supposed, by readers unfamiliar with either text, to have superseded as a handbook to economic policy.

For anyone seeking a monetarist panacea, what Friedman actually said seems unpromising. On 29 December 1967, standing before his fellow economists in Washington DC, he spent most of his presidential address explaining ‘What Monetary Policy Cannot Do’. When he finally turned to guidelines, Friedman permissively allowed that the authorities might reasonably seek to target either the exchange rate or the price level rather than the money supply itself. Only at this point did he offer his own advice – rather cursorily, since he had left himself only about three minutes before he sat down – that the authorities opt for ‘a steady rate of growth in a specified monetary total’; but the choice of either the total itself or the rate at which it would be permitted to grow was ‘less important than the adoption of some stated and known rate’.

Either Friedman was not very expert at watching the clock while lecturing; or, perhaps, he never intended to make some of the claims for which his authority was subsequently cited. Joseph himself can also be largely exonerated; the title of one of his key speeches was ‘Monetarism Is Not Enough.’

What has been called ‘British monetarism’ was embodied by 1980 in the Medium Term Financial Strategy (MTFS), which, as Howe gracefully conceded, owed more to Lawson than anyone else. The essence of the MTFS was already apparent in Lawson’s call for ‘a wholly new approach to economic policy’ while in opposition in 1978. Thus he tied together a commitment to monetary targets in wringing inflation out of the system with a restoration of something like ‘the old balanced Budget discipline’. It was the overarching emphasis on rules and discipline rather than the discretionary laxity of the Keynesian regime that prompted Lawson’s pithy slogan: ‘Rules rule: OK?’

The MTFS elaborated Friedman’s hints in peculiar ways. Certainly, the public proclamation of targets, for an annual decline of 1 per cent in this measure of the money stock, was consistent with Friedman. Moreover, the choice of ‘broad money’, expressed as the total £M3, was obviously licensed, if not prescribed, by Friedman. But the MTFS also had a further non-Friedmanite aspect – fiscal policy.

This was in part a reflection of institutional differences between Britain and the USA, where the Federal Reserve Bank was alone responsible for monetary policy. This was a period when the British Treasury had effective control not only over fiscal policy (the budget) but, through the Bank of England, over the money supply, too.

Or so it was supposed. What the conduct of the monetarist experiment revealed, all too starkly, was the ineffectiveness of the authorities’ control over £M3. The technical reasons for this need not concern us. Friedman’s stipulation, that the monetary authority be guided ‘by magnitudes that it can control, not by ones that it cannot control’, had plainly not been met. Lawson was not alone in reaching the conclusion that it could not be met by any of the rival money supply aggregates on offer: a disillusionment expressed in Goodhart’s Law, ‘that any monetary aggregate ceases to be reliable the moment it becomes a target for policy purposes.’

The persistent, undeniable overshoot of the £M3 figures by the autumn of 1980 was the crisis of monetarism. Thatcher might have initially resisted the targets set in the MTFS as ‘graph-paper economics’; but, once committed, she scorned such levity. ‘The “wets” found the wayward behaviour of £M3 a suitable subject for mockery at dinner parties,’ she writes. ‘But for Geoffrey and me it was no such diversion.’

£M3 was essentially a public target; failure to hit it was inescapably a public humiliation. Monetarism could no longer be regarded simply as an economic doctrine – responses were both more complex and more visceral. Lawson’s account of this episode is subtitled: ‘The Prime Minister Blows Her Top’. Howe, always relatively pragmatic in his outlook, confesses himself to have been ‘dismayed by the figures’, but all the more resistant to the Prime Minister’s impulse to find another, superior lodestar, such as monetary base control, as now advocated by her adviser, Sir Alan Walters. ‘We had to make the best of the case to which we had committed ourselves,’ is the way Howe puts it.

Having encouraged the cult of £M3, the Treasury’s own apostasy had to be dissimulated, first under Howe and then under his successor Lawson. Not until his Mansion House speech of 1985 did Lawson feel free to bury £M3; meanwhile, new aggregates were introduced alongside the old, and all the numbers changed so that it could, in the end, be claimed that the targets had been hit. It was, as Thatcher puts it, ‘a process by which the clarity of the MTFS became muddied’.

A further expedient was necessary – the shift in policy implemented in the Budget of 1981. With monetary policy apparently unable to bear the strain put on it, there was little alternative to using fiscal policy – but in a pro-cyclical rather than an anti-cyclical way. The net result was piquant. If economic activity was thereby curbed, so, too, was inflationary pressure – an unremarkable consequence for even the most unreconstructed Keynesian. But this fulfilled a crucial part of the Thatcherite agenda.

A continued public profession of monetarism – whatever that now meant – thus served as ideological cover for a simpler objective, to be achieved by cruder methods. The Government elected in 1979 was committed to reversing the Keynesian priorities on inflation and unemployment. In Lawson’s pregnant phrase, ‘it was time for primitive signals.’ It was this bloody-mindedness that united the Thatcherite inner core through the disappointments of 1980 and the drastic measures of 1981. Moreover, Lawson pays a handsome tribute to the leadership of a Prime Minister from whom he later differed so sharply: ‘The indispensable element of the revolution which so astonished Whitehall was Margaret Thatcher herself.’

By the time of the General Election of 1983, the Government could, despite everything, point to the headline inflation figures for its rationale. All those who wrote off Thatcher in 1981 – not only the now divided opposition but the ‘wets’ in her own Cabinet and no fewer than 364 economists – were to be cruelly undeceived. Recondite questions about the erratic course of £M3 were left to the chattering classes – as Thatcher puts it, ‘commentators poking tiresome, if predictable, fun when the targets were altered or not met’. The fact that the Retail Prices Index had fallen from an annual rate of increase of 18 per cent in 1980 to 4.5 per cent in 1983 was sufficient repartee for a Prime Minister freshly garlanded in the Falklands.

Thatcher’s greatest political triumphs, as well as her ultimate demise, came for reasons little connected with £M3. The trajectory of Thatcherism is to be understood less in terms of doctrinal consistency than of deep-seated ideological impulses refracted through the personality of Thatcher herself. Her indispensable contribution was not new ideas, nor even old ideas, but an ability to locate and mobilise a constituency behind them. Joseph had been the more impressive intellectual influence in propagating the ideas; but it took Thatcher – and perhaps some luck – to make them politically effective.

If luck was often on Thatcher’s side, she made sure that she took full advantage of it. Her election as leader of the Party in February 1975 had been a tribute to her own boldness. In allowing herself to be used as the means of removing Heath, Thatcher had picked up enough support to become irresistible. It was the first of three moments when events ran decisively her way, giving her an uncovenanted bonus of support which she could hardly have foreseen, and perhaps did not wholly deserve, but which she was determined not to squander. It was a pattern that was to be repeated over the Winter of Discontent in 1978-79 and the Falklands in 1982.

When, before becoming leader, she had talked of the need for the Conservatives to re-establish their middle-class support, she was naturally accused of appealing to a narrow social group. She responded with the argument that being middle class ‘has never been simply a matter of income, but a whole attitude to life, a will to take responsibility for oneself’. The themes were familiar. The trouble was that Thatcher’s attempt to bypass the rhetoric of class had reached out for the sort of ordinary people whom she remembered from the sepia photographs of the Grantham Rotary Club; she had not reached the constituency which she actually needed.

What made the difference here, however, was not so much the policy rethinking which the Conservatives were currently engaged in: it was the impact of events. As late as September 1978, when Callaghan teased everyone with the prospect of an election, only to carry on regardless, Thatcher suggests that the pending industrial disputes might have been beyond her, even had she come to power at that point. ‘If we had been faced with that over the winter of 1978-79 it might have broken us, as it finally broke the Labour Government.’ As it was, she was again let off the hook.

It was the trade unions themselves who turned the whole situation in her favour, giving her an opinion poll lead of an order which she had never before enjoyed and swinging her party against a conciliatory policy towards the unions. ‘Thankfully,’ she admits, ‘the shocking scenes of the Winter of Discontent ensured that this feeble approach was now out of touch with reality and people’s expectations.’ The unions had thus succeeded in doing for her what she had hitherto been incapable of doing for herself: creating a popular constituency which could be mobilised behind her agenda.

‘We have ceased to be a nation in retreat,’ she proclaimed in 1982. ‘We have instead a newfound confidence – born in the economic battles at home and tested and found true 8000 miles away.’ She was referring to the South Atlantic, where an armada had – to the world’s astonishment – restored the Falkland Islands to British possession after their invasion by Argentina. The Falklands episode, which so notably revived her political fortunes, was the moment of truth for Thatcher’s political leadership. She was subsequently taken at her own valuation and felt an unshakeable confidence in her own judgment, which she was ready to back against all-comers.

Thatcher’s conviction politics were inspired by the conviction that she was in the right. Her memoirs betray little sense that there was another side to the argument. Here was a Prime Minister who was not hobbled by inner doubts – a highly effective mind set in a politician, and one to which many of her achievements can no doubt be attributed. But here, more unnervingly, was someone apparently a stranger to any sense of relativism, irony or magnanimity. She always knew best. Hence the paradox of a Government whose rhetoric was often self-consciously libertarian enforcing centralist solutions which faithfully reflected the Prime Minister’s wild streak of moral authoritarianism.

This same mindset played a part in fomenting the policy which was arguably her undoing. It was her conviction about the Poll Tax which led her to designate it the flagship of her third term in office from 1987; it was her confidence in her own political judgment which led her to override the misgivings of her colleagues; and it was her unassailable sense of tutelary rectitude which governed her handling of the issue.

The essence of the plan was to relieve the overburdened local ratepayers whom Councillor Roberts had faithfully represented. Instead of rates (a property-based tax, paid only by householders) there would be a uniform charge levied on every adult resident in a local government district – the propertied and the propertyless alike, the salaried and the retired, the student and the unemployed worker, the duke and the dustman. All would pay the same, just as all had votes – democracy at its finest. Or so Thatcher generally maintained.

The great argument for the Poll Tax was that it made local government accountable to local electors. Thus it provided a radical solution to the problem of local government overspending, which could henceforth surely be left in the hands of the voters themselves to sort out, rather than subjected to interventionist measures of rate-capping from the centre. That is what Nicholas Ridley, the most loyal Thatcherite in the Cabinet, thought was at stake; for him, as for Lawson, Thatcherism was more than ‘whatever Margaret Thatcher herself at any time did or said’.

Thatcher is unrepentant, not only of her general defence of the Poll Tax proposals, but of ‘pressing for much more extensive community charge capping than was ever envisaged for the rates’. The explanation is simply that ‘I felt we needed this safeguard.’ Capping the demands of extortionate left-wing councils, by deploying the power of central government, was thus a necessary evil, when she found that the actual levels of Poll Tax were ‘frequently bearing down on our own people’. Who were they? ‘The sort of people I grew up with,’ she said in a speech in Cheltenham. ‘These are the people whom I became leader of this party to defend.’

As leader, she admits that she was not an easy colleague. But then, how could she be? ‘Of course, in the eyes of the “wet” Tory establishment I was not only a woman, but “that woman”, someone not just of a different sex, but of a different class, a person with an alarming conviction that the values and virtues of middle England should be brought to bear on the problems which establishment consensus had created.’

When Thatcher entered the House of Commons in 1959, she was a notable addition to a very small group of women MPs. She writes of the ‘male chauvinist hilarity’ which she could expect, and of her difficulties ‘as a woman striving for dominance in this noisy, boisterous, masculine world’. She also suggests that ‘a woman – even a woman who has lived a professional life in a man’s world – is more emotionally vulnerable to personal abuse than most men.’ Characteristically, she does not whinge about this; but it may help explain her own steely determination, and often her unrelenting hardness, as a defence mechanism.

Moreover, as a woman she still felt a special sense of alienation from this male-dominated club. Again, rather than vainly seeking acceptance, she continued to assert her own outsider status, even as Prime Minister, writing of ‘the fact that I so often had to act as a lone opponent of the processes and attitudes of government itself – the Government I myself headed.’ Her disadvantages as a woman were thus turned into a corroboration of her populist credentials.

It was her colleagues who bore the brunt of her pent-up frustrations. ‘Once I begin to follow a train of thought I am not easily stopped,’ Thatcher declares, with evident self-knowledge. And her avowed respect for collective responsibility did not preclude her from forcing the pace by appealing over her Cabinet’s heads to public opinion. She admits at one point that, ‘as I often did in government, I was using public statements to advance the argument and to push reluctant colleagues further than they would otherwise have gone.’ She recognises that her openly contemptuous handling of Sir Geoffrey Howe – once her faithful Chancellor of the Exchequer, then her long-suffering Foreign Secretary, ultimately her unforgiving assassin – left something to be desired: ‘I may, myself, have been less than tactful.’ In the long run this was to prove an expensive mistake.

When Lawson moved next door, into No. 11, these new neighbours began their own battle of wits and will over economic policy. Lawson insisted on playing his cards close to his chest – whereupon, so Thatcher writes, ‘Treasury spies, realising that this was an impossibly secretive way of proceeding with someone who after all was “First Lord of the Treasury”, furtively filled me in – with the strictest instructions not to divulge what I knew – before Nigel proudly announced to me his budget strategy.’ If this was the position during the heyday of the Thatcher-Lawson economic miracle, it is not difficult to credit the strains that were to develop between No. 10 and No. 11 when the going got rough.

It is at this stage in her memoirs, in the aftermath of her third election victory, that a new note is sounded. The story of the national curriculum in the schools introduces another vocabulary: ‘ran into difficulties … never envisaged … unfortunately … next problem … disappointing … unsatisfactory … very concerned … appalled … comprehensively flawed … thoroughly exasperated … very different from that which I originally envisaged.’

After this, it is little surprise to find that Lawson is repeatedly blamed for the overheating of the economy, which led to a resurgence of inflation after 1987, thus compromising the central claim of Thatcherite economic competence. The final betrayal, personal as well as political, is already on the cards. Incidental causes of exasperation give way to chronic crises. Lawson and Howe cease to be irritating and become intolerable. Lawson’s decision to leave the Treasury in 1989 remains incomprehensible, at least to Thatcher; a year later, Howe’s decision that he had had enough ‘turned out to be almost a rerun of Nigel Lawson’s resignation’. Funny coincidence, that. Heseltine’s persistent disloyalty was soon to be eclipsed by Howe’s ‘final act of bile and treachery’. As Thatcher ruefully comments: ‘In politics there are no final victories.’

What, then, of the doctrinal consistency of Thatcherism? The doctrine on which the ‘Thatcher experiment’ was premised in 1979 failed a number of tests. Not only did it exhibit a curiously uncertain intellectual pedigree, but its implementation as the Treasury’s guiding strategy displayed a talismanic faith in the potency of £M3 for which there was inadequate justification either in theory or in practice. It is difficult to withhold sympathy from Lawson’s verdict. ‘We did not abandon the monetarist guiding light. It was the light that abandoned us.’

But the sound money doctrine also embraced balanced budgets. Does Lawson’s own fiscal record as Chancellor perhaps offer a compensating vindication of the claims of the strategy of which he was the prime author? It is true that he said in his 1988 Budget speech that ‘we are set to secure something previously achieved only on one isolated occasion since the beginning of the 1950s: a balanced budget.’ But on the historic measure of a balanced budget – the Consolidated Fund accounts – there had in fact been a surplus of revenue over expenditure in every year from 1948 to 1972 – measured against GDP, a bigger surplus than Lawson’s in no fewer than 18 of those years.

The Thatcher Government’s great coup in fiscal policy can be seen, on inspection, to be not so different from the way in which it had turned the edge of monetary policy. Lawson had not met the Gladstonian target but changed it, by substituting a new definition of a balanced budget, in terms of the Public Sector Borrowing Requirement. Its adoption at this juncture permitted capital items, notably the proceeds of privatisation, to mask the fact that the underlying deterioration in the public finances since 1973 was in terms of current expenditure as against revenue – a structural imbalance, inherited from Labour but not corrected under the Conservatives. This is clearly signalled under the traditional conventions, which, for example, show a deficit of over 10 per cent by 1994, historically unparalleled in peacetime.

Lawson more than once invokes the maxim: ‘Never underestimate the tide of ideas.’ The history of Thatcherism suggests a complementary axiom: never underestimate the force of personality. For Thatcher’s real pre-eminence surely came as an exponent of the higher opportunism in politics: a discretionary rather than a rule-bound politics in which, for better or worse, she trusted her own intuition. Some of her most influential successes – privatisation is an obvious example – were improvised in government rather than implemented as part of a blueprint. Perhaps one can say that, while Thatcher was often dogmatic, she was not really doctrinal in her politics – an insight into the rise and fall of Thatcherism on which her own memoirs can serve as an illuminating source. They can no more be regarded as an innocent source, however, than their author as an innocent bystander.