Well the Beeb does have to butter up the Tories before the Cameroons take office… expect lots more Rightist lies/revisionist bollocks over the next few months.

All depends on how you measure ‘success’. If you look at economic activity rate you get a different picture.

Taking the start points for the 3 recessions as 1981 Q1, 1990 Q3 and 2009 Q1 (these are all the quarters before inactivity started to rise). After 3 quarters, inactivity had risen by 0.5%-0.6% each time. Of course, their paths will probably be different going forward, but at the moment there’s very little to tell them apart.

(http://www.statistics.gov.uk/statbase/tsdtables1.asp?vlnk=lms -> 12.2 Economic inactivity by age -> YBTL: LFS: Economic inactivity rate: UK: All: Aged 16-59/64: %: SA)

You’re right. We should have just continued with more of what we were getting in the 70s. No change was needed at all.

The bit about history ‘proving’ Howe right is interesting, because no credible historian of the Thatcher period agrees…

Damn commie BBC!

4 – how do you define which historians are and are not credible?

So, the bit about not ‘bitching about the media’ didn’t last long…

@3″You’re right. We should have just continued with more of what we were getting in the 70s. No change was needed at all.

Change so that the usual ones can get fucked over, right?

Paul Cotterill: “You fucking what? Try telling that to people who needed a job in the 1980s.”

C’mon. By the final quarter of 1995 – that’s correct, the final quarter of 1995 – Britain’s ILO standardised unemployment rate was lower than that in France, Germany or Italy, and the employment rate of working-age people was higher. Mind you, that was AFTER the depreciation of the Pound against the currencies in the European Exchange Rate Mechanism (ERM) by about 25% on being forced out of the ERM in September 1992 through speculation in the foreign exchange markets.

Btw Nigel Lawson, as Chancellor 1983-9, resigned when the 1980s boom he had engineered through monetary policy became unsustainable and led to resurgent inflation. Evidently, monetary policy didn’t work too well but he does deserve the lasting credit for formally abandoning the “Medium Term Financial Strategy” – the official jargon for “Monetarism” – in the autumn of 1985, partly or largely because the money supply refused to remain within the official targets set. Geoffrey Howe had been Chancellor from the start of Mrs Thatcher’s government in May 1979 through to when Lawson took over in 1983. Geoffrey Howe has the (dubious) credit for introducing the Medium Term Financial Strategy.

This was the IMF’s official obituary for “Monetarism”, delivered in 1996:

” …instability of monetary demand, especially in the context of supply shocks and declines in potential output growth, complicated the task of monetary authorities. As a result, during the 1980s most central banks – with some notable exceptions – either abandoned or downplayed the role of monetary targets.”
IMF World Economic Outlook, October 1996, p.106.

John Major was Lawson’s successor as Chancellor. He has the historic honour of taking Britain into the ERM in October 1990 – which Gordon Brown cheered on at the time from the Labour benches.

Were the 364 economists really wrong in signing up to that letter in March 1981 ?

“The bit about history ‘proving’ Howe right is interesting, because no credible historian of the Thatcher period agrees…”

Al – maybe you should try that line on Brian Harrisson whose Oxford History of that period I am currently reading. What “credible historians” did you have in mind? Paul Weller? Billy Bragg? The man down the pub? And do bear in mind the level of inflation he took over from the outgoing Labour Government.

Like wot I said last month on Though Cowards Flinch on Howe’s 1981 Budget, contrary to received Tory wisdom it Did Not Work:

Geoffrey Howe’s 1981 Budget is often referred as a precedent for the Tories, deflating during a recession. That included cuts and increases in indirect taxation, but it also included increases in direct taxation (Tory right wing & press would go ape-shit) and a windfall tax on bank profits (they’d be called Trots).

The 1981 Budget has totemic status now among right wing, neo-liberals who regard it as “taking tough decisions that laid the foundation for the successes of the 1980s”. This is only “success” if you regard three million unemployed and helping to destroy manufacturing industry, as “a price worth paying” (© N.Lamont) for the rich to become richer.

The 1981 Budget was hugely was unpopular at the time. Famously, 364 economists, of all shades, wrote to the Times: ‘There is no basis in economic theory or supporting evidence for the government’s present policies….The time has come to reject monetarist policies.’

The Tories tanked in the polls and did not recover until after the Falklands War (the so-called ‘Falklands Factor’ is often forgotten today as a factor in the Tories 1983 General Election victory).

Howe and the Tories have since claimed the 364 economists were wrong and he was right, “sowing the seeds for economic recovery”. In fact recovery was flimsy and insofar as it marked a ‘turning point’ was due of something the 364 economists could not have known: to wit, the Treasury, in defiance Tory monetarist orthodoxy of the time, was relaxing monetary policy.

This, in the words of ’stumblingandmumbling’: “unleashed an enormous – unexpectedly so – pent-up demand for loans. So consumer credit growth (and mortgage lending) boomed. Household borrowing therefore offset government saving, with the result that domestic demand recovered.”

And why wouldn’t this work now?

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/11/2010-vs-1981.html

That is all.

I’ll leave the economic details to those who know better, but I doubt if any budget formulated in 1981 could have failed – from there onwards the Thatcher government sold council houses, which probably accounts for the boom in mortgage lending. About 20 state-controlled companies were also sold-off (most of these national assets had been paid for by the previous generation of taxpayers)
and there was the matter of north sea oil. It was certainly an exceptional period, no wonder they could afford the growing unemployment and the annihilation of the coal and heavy manufacturing industries.
We now know the secret of their apparantly reasonable unemployment statistics and the long-term consequences of withdrawing stringent controls on borrowing. I don’t think anything of use for future fiscal policy can be gleaned by Howe’s 1981 budget.

“The Tories tanked in the polls and did not recover until after the Falklands War (the so-called ‘Falklands Factor’ is often forgotten today as a factor in the Tories 1983 General Election victory).”

The Conservatives had a lot of unintended support for the 1983 election because of Labour’s manifesto, famously described by Gerald Kaufman as the “longest suicide note in history”.

This was the manifesto that would have committed an incoming Labour government to negotiating withdrawal from the European “Common Market”, to unilateral nuclear disarmament and to taking the commanding heights of the economy into public ownership, commitments disavowed by New Labour in the mid 1990s. This is a little curious because Tony Blair was first elected to Parliament at that election and had previously written a 22-page letter in 1982 to Michael Foot, the Labour leader then:

“the 29-year-old Mr Blair tells then Labour leader Michael Foot how reading Marx had ‘irreversibly altered’ his outlook.

“He also praises Tony Benn, agreeing with the left-winger’s analysis that Labour’s right-wing was bankrupt.”
http://news.bbc.co.uk/1/hi/5081798.stm

Amazing.

@ 13

The recent government involvement in nationalisation/part-nationalisation of banks went far beyond anything in the 1983 Labour manifesto. It is now the Tory right who wish to withdraw from the EU and cancellaton of renewal of Trident has been put forward by several mainstream commetators as part of package of cuts.

The Labour Party in the ’80s was ruined as an electoral force by the ‘Gang of Four’ and the formation of the SDP by right-wingers who thought fighting the Labour left was more important than fighting Thatcher and the Tories. The much vaunted “sensible, moderate” SDP imploded in 1987 with its alliance with the Liberal Party, and a tiny rump limped on under David Owen till it disappeared in 1990.

Blair can answer for himself about is odd “political journey”.

and so there were no structural problems in the uk in 1981 that needed addressing? The medicine was harsh. The economists wanted a “softer” approach…but would the outcome have been any different? The precedent for today is scary because we now face another STRUCTURAL budget deficit…ie however much you tax people, it will not equal government spending – on treasury figures. Wake up guys

@13

The Conservatives had a lot of unintended support for the 1983 election because of Labour’s manifesto, famously described by Gerald Kaufman as the “longest suicide note in history”.

And yet, more people voted Labour in 1983 than voted Tory in 2001 (and only slightly less than in 2005).

Labour 1983: 8,456,934 votes
Conservative 2001: 8,357,615
Conservative 2005: 8,772,598

That “suicide note” had a lotta endorsement. Funny old world.

“That “suicide note” had a lotta endorsement. Funny old world.”

Yup. Mrs T came out of the 1983 election with 13,012,315 votes and a majority of 140 seats. What’s especially interesting is that New Labour felt absolutely impelled to junk the main planks of the 1983 manifesto, presumably because it was felt these were an electoral liability.

“and so there were no structural problems in the uk in 1981 that needed addressing?”

Of course, there were massive structural problems in the economy inherited from the 1970s. What I find so interesting is that the Thatcher governments through the 1980s had a more proactive, interventionist industrial policy than New Labour governments have had since 1997.

A total of £3.4 billion of taxpayers’ money was sunk into reviving the state owned British-Leyland group – renamed the Rover Group for privatisation – and the state-owned Rolls Royce was turned round into a hugely successful manufacturer of jet engines. What is not widely appreciated is that the Thatcher governments sunk billions of taxpayers’ money in support of the nationalised coal mining industry.

PS

Does the BBC have, as often claimed, ‘a left wing bias’? No.

http://www.newstatesman.com/uk-politics/2009/08/mehdi-hasan-bbc-wing-bias-corporation

(the Andrew Neil 2005 quote is particularly fruity, imagine a BBC presenter putting forward a radical left equivalent; the Daily Mail and the Tories would go berserk)

“The Labour Party in the ’80s was ruined as an electoral force by the ‘Gang of Four’ and the formation of the SDP by right-wingers who thought fighting the Labour left was more important than fighting Thatcher and the Tories. The much vaunted “sensible, moderate” SDP imploded in 1987 with its alliance with the Liberal Party, and a tiny rump limped on under David Owen till it disappeared in 1990.”

Huh? Social democrats are “right-wingers” now? Maybe compared to the Trots they left behind in Labour perhaps.

The Alliance with the Liberal Party began in 1981, not 1987. It lasted until 1988 when it merged with that party to form the Liberal Democrats. You may have heard of them. There was no “implosion”.

Yes a “tiny rump” did carry on till 1990. But you neglected to point out what happened to the biggest “rump” of the SDP.

@ 20

So David Owen was a social democrat eh? So Roy Jenkins was a social democrat eh? Do.Me.A.Fucking.Favour.

The majority of the Labour Party they left behind were not in that glib cliche “Trots”. It was widely predicted that the SDP and Liberal would replace Labour, with their “sensiible and moderate” policies they died on their arse in 1987.

Let’s not forget the 1987 SDP conference and former Communist turned prominent SDP-er Sue Slipman’s speech which stated :”The SDP should retain the classless opportunities provided by Thatcherism” and that “The SDP should civilise the Thatcherite project” and that “The SDP should be a friendly critic of Thatcherism”.

If the SDP did have any legacy it was as one of the ideological forebears of Blairism and New Labour. Social Democrats?

When comparing unemployment rates we should remember while the tories tried to hide unemployment and change counting methods they were amateurs compared to labour.

1.5million more on incapacity benefit than in 97.

The true rate of uk unemployment is much higher and institutions like the BBC feed much of the propaganda about the state of the economy.

Mass immigration during labour time in office has meant that employment rates have grown. Together with the masking of unemployment this has meant the true state of unemployment in the uk has been masked.

It should also be mentioned that manufacturing has halfed since labour came into power with the rate of decline even greater that the tory years. Labour created an economy based on more and more debt masking the state of the real economy. And all for power.

Paul Cotterill

You cannot really compare the unemployment rates between the 2 periods and make any meaningful comparison.

In the early 80s the economy was a complete shambles after the 25% inflation of the 70s and a fiscal mess that meant the IMF gave us banana republic type bail outs and order the then labour government to make the only ever real cut in NHS spending. UK industry was widely called the sick man of Europe.

The other problem Howe had dealing with the fiscal meltdown a recession causes is the fact that the uk fiscal position was such a joke before the crisis. Refer to the imf bail out.

@ 23

Ah the old Tory hardy perennial “going cap in hand to the IMF”

Shall we look at someone who was there at the time thinks of IMF crisis now? It’s Edward Pearce, who was a leader writer for the Daily Express at the time and subsequently a Commons sketch writer and leader writer for the Daily Telegraph (so probably not a Trot, or indeed Labour Party member):

“…the IMF visitation of 1976 is still reliably posted as the ultimate failure of a Labour government. In fact, the IMF-precipitating episode of 1976 was sparked by someone at the Treasury, never identified, selling pounds for dollars in the wake of the cuts imposed and recovery achieved in 1975 by the chancellor, Denis Healey.

Derek Mitchell, then permanent secretary at the Treasury, would later tell me that the entire 1976 episode, IMF and all, had been ‘strictly a headline crisis’. Indeed as the crisis broke, the scarcely pinko Investors Chronicle had asked: ‘why now, when the real crisis was last year?’”

source:

http://www.lrb.co.uk/v31/n17/letters