09/04/2013 - 17:13

Thatcher's lasting legacy

09/04/2013 - 17:13

Bookmark

Save articles for future reference.

The passing this week of former British prime minister Margaret Thatcher makes it timely to reflect on the very different reform process Britain and Australia went through in the 1980s.

Few people divide opinion as sharply as Margaret Thatcher.

Not just during her record 11 years as Britain’s prime minister, but even now after her passing.

The Iron Lady was defined by one of her famous quotes: “The lady’s not for turning”.

She was a strong-willed leader who presided over radical changes designed to make Britain a more competitive and more dynamic country.

Former Australian prime minister Bob Hawke also presided over big changes, at around the same time and with similar goals.

Like Thatcher’s government, Mr Hawke and his treasurer, Paul Keating, deregulated the economy, privatised many state-owned businesses, and fostered a more flexible labour market.

Mr Hawke was renowned for achieving consensus support for his changes – for gaining broad support from industry, unions and the community at large for the changes he introduced.

Thatcher, by contrast, was renowned for crashing through, and as a result is usually portrayed as a divisive figure.

No doubt that reflects her forceful personality, but it also reflects the circumstances she inherited and the trenchant opposition she faced.

She won power in 1979 and was re-elected twice afterwards, stepping down in 1990 after losing support from her Conservative Party colleagues.

Her 11 years in power made her the longest-serving British prime minister of the past century.

Thatcher’s impact was global, joining with former US president Ronald Reagan in taking an aggressive, hawkish stance against the Soviet Union.

The pressure they exerted ended up being a big factor in the break-up of the Soviet Union, which was unable to match the military and economic might of the Western powers.

On the domestic front, she took power at a time when Britain was moribund. The economy was highly regulated, trade unions were very powerful, and the business sector lacked enterprising flair.

There was little opportunity for people who wanted to be enterprising. Regulators and bureaucrats largely dictated what businesses could do.

Thatcher changed all that, hence the terms – used disparagingly by many – Thatcher’s Britain and Thatcherism.

She smashed the unions, bringing in troops to overcome industrial action in the coalmines in particular.

Its hard to appreciate Thatcher’s role without also recognising the hardline intransigence of union leaders like coalminers’ boss Arthur Scargill, who opposed any significant change in the industry, despite many mines being high cost and inefficient.

It was a similar story in the newspaper industry, where multiple unions defended inefficient and outdated work practices.

That system was only broken when Rupert Murdoch built his new operation at Wapping, which became the scene of more protracted industrial action.

The coalminers and the print unions were two-high profile examples of a much deeper problem across British industry.

One of Thatcher’s top goals was to break the ability of vested interests, whether unionised workers or entrenched management, to gain commercial benefits from state-owned regulated industries.

That drove her deregulation push and her privatisation agenda. Critics hold that the privatisation of some assets was botched, and that is probably true, although it misses the bigger picture.

Thatcher wanted to change the way people thought about the role of government. It wasn’t there to provide subsidies, regulations, and jobs for life. Her goal was to reduce the role of government.

Reforming governments in Australia have achieved many of the same goals without the social and economic dislocation that occurred in Britain in the 1980s.

That reflected the wider acceptance in Australia of the need for change.

All industries must evolve over time as circumstances change. That process creates new opportunities, which generate employment and prosperity.

People who fail to recognise are eventually mugged by reality; it just becomes a more painful process, as Arthur Scargill, the print unions, and many others in Britain discovered in the 1980s.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options