Norman Stone - The Atlantic and Its Enemies

Meanwhile, the Thatcher governments responded with greater doses of managerialism, as with the schools; costs were held down arbitrarily: small, possibly creative, departments were closed down, for minuscule savings that turned out to be costly, such that Middle Eastern or Balkan studies imploded, much to the country’s loss when both areas turned out to make for great international crises later on. A White Paper even asserted that ‘If evidence of student or employer demand suggests subsequently that graduate output will not be in line with the economy’s needs government will consider whether the planning framework should be adjusted’ — meaning, no money. In 1987 one Lord Croham reported in business-schoolese, and a fake ‘market’ was set up, in which the universities were to ‘compete’ for funds. This meant encouraging them to produce publications, which could be totted up. The overwhelming majority went unread. The ‘bidding’ system was of course dominated by a single ‘buyer’, the government, which held down fees. Even clinical medicine was paid for at just over £5,000, and politics rated £2,200 per student, roughly what might be demanded by a decent infants’ school for a term. Even then, the fees were supposed to include ‘research’. As Simon Jenkins remarked, ‘What is so strange about [these] higher education reforms is how little headway was made by the Right.’ Government cack-handedness was such that it mismanaged a scheme for early retirement. In principle there was something to be said for clearing dead wood and promoting the young. However, academic salaries were already so low that even a three-quarter pension was not to be lived on. What happened was that the dead wood stayed, whereas men who could find another job took the pension and then moved on — 4,500 of them in 1985, generally from departments that were specially favoured, such that 800 new posts had to be set up. There was a puzzle at the heart of it all. British universities had produced brilliant results at a time when nuclear physicists had to go through a committee to get higher-quality box-wood for an experiment, and had to break in to the Cavendish Laboratory after 6 p.m. to see how their experiments were going. By the 1980s they had a level of money that could be described in the words of the Habsburg prime minister a hundred years before as ‘supportably unsatisfactory’. Where were their split atoms and radar and penicillin? There are imponderables in the world of academe, and quantification — box-ticking — could drive them out. The world, at any rate, voted with its feet and preferred America, warts and all.

The disintegration of the Thatcher government can be dated from the early months of 1986. Triumphalism reigned, and for the most part deservedly so. However, there was no strategy to deal with longer-term problems, and, almost casually, an expedient was found for a shorter-term one: the Poll Tax, which, by 1989, was causing great numbers of the MPs to think that they would be vastly defeated at the next election. Local government in Great Britain had once worked remarkably well, in an apparently messy way: the great Victorian cities had led the world in prevention of epidemics, in provision of transport and even as regards schools, where the half-dozen semi-public institutions of each, such as Glasgow High School or Manchester Grammar, were of legendary quality. The local owners of property paid the bills, and controlled the results. Then came votes for all, industrial decline, inflation and sixties grandiosity. Great cities put up concrete housing estates — soon hideous and crime-ridden — and local government descended often enough into corrupt stagnation, most voters not bothering, and the rest supporting a system by which absurdly cheap rents made it unprofitable to look elsewhere for employment. Meanwhile, property-owners paid. In London, 75 per cent of the income came from voteless businesses. Of 35 million local voters, only half paid rates. As a matter of principle, the rates were both inadequate and provocative of much anger, because they could be unjust: an elderly widow paying the same as a working family next door, on the one side, more than a better-off family in a public-rented house on the other, and more than a widow in some better-run place across the street. London was absurdly run, more or less by Whitehall but with fifty non-elected bodies and a general misunderstanding as to what made Paris work. Only a fifth of people on the various boards were elected, and there was the usual modern English problem that acronyms mean mess.

Was there not some way of sorting out the mess? There were wrangles between government and local government, especially London and Liverpool, where high spenders proposed to ignore government guidelines for the control of inflation. The only way to deal with this was to set a rates ‘cap’ and here there were battles, one problem being that if the government ‘capped’ rates, it would necessarily be responsible for the ‘cuts’ that followed — old folks’ homes closed, etc. How could this problem be solved? There had been inquiries, six since the war, but there seemed to be no alternative to rates, from property. In the USA there was a local sales tax, and the country was easily large enough to have endless variety. Neither there nor in Germany did central government take detailed control of local finance, and in both cases there were large units, ‘states’, which produced somewhat different and healthily competing ways of doing things. The Heath government had attempted a reform along these lines, ending up with things that were too large to be changed or too small to be effective. Local government was an unrewarding karst of a subject, and the matter was now dealt with in an almost casual way. Had local government’s powers been confined, what followed might have made sense. As matters came to a head, there emerged the most absurd piece of reactionary triumphalism since Charles X of France, in 1830, had appointed as prime minister a man who had visions of the Virgin and decreed a closure of the press. The revolution of 1830 quickly ensued.

It was called a service charge. In theory, high-spending and inefficient councils would be penalized by their own voters, because the service charge would be so high, higher than in comparable areas. Nigel Lawson and one or two others demurred, but in January 1986 the plan was introduced, with preparation time of ten years. Parliament’s system of select committees strangely allowed it through, and a one-time Heathite, scorned by Sherman, and greatly promoted thereafter, introduced the Bill more or less without criticism, so long as he was given money (over £5bn) to smooth its passage. There were to be safety nets and rebates, complications that made the Bill very difficult to understand. Nigel Lawson argued that the best thing would be to remove education from local government responsibility, as it accounted for half of its spending. At any rate, serving bills for several thousand pounds on a family not used to paying anything at all was not a sensible method of gaining popularity, especially as so much of local government was inefficient and pointless (Oxford had forty times as many AIDS ‘counsellors’ as there were AIDS victims). By 1989 a large number of Conservative MPs were feeling their heads. The details, as monks, the disabled, etc. had to be exempted, were surreal.

All of this amounted to a piano and chromatic version of a funeral march, but there was another version in the major going on very loudly at the same time. The government had failed in its aims, a failure concealed by some magnificent victories, and above all by the legendary status of its leader. Neither in England nor in the USA had ‘the State’ really been cut back. The concomitant, inflation, now returned. By the end of 1988 house prices were rising by almost one third per annum. In 1987 the consumer price index rose by only 2.7 per cent, but in 1988 it was rising and in 1989 was at 15 per cent — more or less the figure with which this administration had started. The pound slid, and the balance of payments registered alarm. To all of this, the European lobby in London responded with cries for closer co-operation with the Europeans. The Confederation of British Industry was important in this respect. It consisted mainly of well-established businessmen of the older type, not expert in finance, and brought up in the corporatist world of the seventies, when businesses really flourished only through their links with a then all-governing government. The Economist , the Financial Times and a small host of respected commentators all blamed the troubles upon failure to join the ERM, the early stage on the way towards a European currency, in the context of the Single European Act. The monetarists had been waved aside, and the one-time Chancellor, Geoffrey Howe, was now in favour of some British co-operation with the would-be European currency (he had recently and very uncomfortably given up smoking). So was his successor, Nigel Lawson (soon to give up eating). Charles X had been overthrown by his cousin Louis-Philippe, a man for the wallet, and the Orleanists now gathered, to conspire in London.