Telling Tales About Labour: What Ed Miliband Could Learn From Margaret Thatcher

Robert Saunders | Renewal 19/3-4

Of all the models on whom Ed Miliband might draw, Margaret Thatcher is perhaps the most improbable. More than two decades after her resignation, Thatcher’s name still evokes a sort of righteous horror on the Labour benches; and few things more disillusioned the membership with New Labour than its periodic genuflections at the shrine of the Iron Lady. Politically and intellectually, the two share little in common. On a personal level, too, ‘the grocer’s daughter’ seems a curious model for the son of a Marxist intellectual, whose natural register appears to be thoughtful and conciliatory, rather than strident or ideological.

Nonetheless, the parallels are intriguing. Like Miliband, Thatcher led the Opposition at a time of economic turmoil, marked by surging unemployment, rising prices and severe pressure on the public finances. Then, as now, grim economic forecasts echoed a wider narrative of decline, encompassing moral corrosion, political corruption and an apparent breakdown of law and order. If contemporary politics is framed by the deficit, the Thatcher era was dominated by inflation. In both cases, an economic pathology was invested with ethical and political significance, as an index of moral decline and a menace to national sovereignty.

There are analogies, too, between the parties they inherited. In 1975, Thatcher took on a party bereft of confidence and direction. The Conservatives had lost four of the last five general elections, and their most recent period in government had collapsed in disarray. The Conservative share of the vote in October 1974 was its lowest since 1918. The party was heavily in debt, and even the Tory heartlands seemed at risk from a Liberal revival in the south of England. The ‘U-turns’ and policy reversals of the Heath government suggested a party that had lost its intellectual coherence; a party, as Thatcher put it, that had ‘lost [its] vision for the future’ (MTFW 102629).(1)

The challenge before Miliband is hardly less severe. Labour polled just 29% of the vote in 2010, its second worst performance since the 1920s. Outside London, it won just 10 seats in the south of England – only half the total of the Liberal Democrats. It lost ground in Wales, faces an earthquake in its Scottish heartlands, and can expect further losses from the forthcoming boundary changes. Financially, the party is barely solvent, and its intellectual moorings have rarely been less certain. ‘New Labour’ has lost its resonance; ‘Next Labour’ is still an aspiration; and ‘Blue Labour’ remains opaque even to most of the membership.

There are similarities, too, in their personal circumstances. The two leaders share a problematic public image and a much derided voice; and in both cases, the new leader appeared to many commentators almost uniquely ill-suited to the challenge ahead. To his many critics, ‘Red Ed’ marks a retreat to Labour’s ‘comfort zone’, just when it needs to reach new bodies of support. Thatcher, similarly, seemed too close to the party base; too prone, in Ian Gilmour’s phrase, to view the world from ‘behind a privet hedge’ (Green, 2006, 21). With her affected accent and millionaire husband, Thatcher seemed hopelessly distant from the lives of ordinary voters; a ‘brainy lady in a Tory hat’, whose ‘smug condescension’ would shrivel the party’s support (The Sun, 1971).

Thatcher won few plaudits as Leader of the Opposition and was regularly bested in Parliament. Yet by the time she faced her first election, she had captured the attention of the country, laid out a clear vision of Britain’s problems and shifted public debate decisively to the right. This was not primarily a matter of policy formation. The 1979 manifesto was notoriously light on detail, and Thatcher insisted when pressed that she must see ‘the books’ before making commitments. Instead, she used the leadership as a pulpit, from which she established a distinctive narrative about her times. She had a keen understanding of the power of rhetoric, which she used to shrink the political space available to her opponents and to establish a favourable environment for her own policy preferences. At a time when the dominant narratives of British politics are being driven by the Coalition, there is much here from which Miliband could learn.

The Thatcher Ascendancy

Thatcher came to the leadership amidst a mood of national crisis. The Labour manifesto, in October 1974, called it the ‘most dangerous crisis since the war’, a perfect storm portending economic collapse, moral corrosion and even the breakdown of democracy (Dale, 1996, 196). In an NOP poll, commissioned by the BBC in 1974, 65% of respondents agreed that there was ‘a serious threat’ or ‘some threat’ to the survival of democracy, and financial journalists warned of an inflationary spiral that might destroy parliamentary institutions (Brittan, 1975, 132).

Thatcher thrived in such an environment, which played naturally to her own millenarian style. As Brian Walden noted in 1977, her speeches had a ‘hectic and unusual’ flavour, which ‘often startled her audiences’. ‘Instead of the reassurance we’ve come to expect from Conservative leaders, Mrs Thatcher’s conveyed a sense of imminent danger’ (MTFW 103191). Yet talk of crisis was not inherently to Thatcher’s advantage. For some, what Britain was experiencing was a crisis of capitalism, requiring new forms of state intervention. For others, it was Conservatism that was in crisis, casting doubt upon its continuing ability to govern. Labour attributed Britain’s problems to ‘the socially divisive policies of the previous Conservative Government, with its deliberate confrontation with … organised working people’ (Dale, 1996, 196). Even many who shared Thatcher’s unease with trade union power feared that a Tory government would exacerbate the problem, rather than ease it.

In this context, Thatcher’s achievement was not simply to exploit a pre-existing sense of crisis; it was to offer a particular reading of Britain’s problems that favoured neo-liberal solutions. This took the form of a public crusade with three, related components: first, a diagnosis of the problem, that prioritised inflation over unemployment; second, the promotion of monetarism as a common-sense solution; and third, an overarching narrative, that pinned the blame decisively on her opponents.

Inflation had always been important to the Conservatives, for their natural supporters had most to lose from the erosion of savings and the elimination of income differentials. But Thatcher’s rhetoric placed the struggle on a higher moral and political plane. ‘No democracy’, she warned, had ever ‘survived a rate of inflation consistently higher than 20 per cent’; and she cited Weimar Germany as an example of the menace to free institutions (MTFW 102465). Inflation, she insisted, produced moral as well as economic decay, by discouraging thrift and promoting a culture of instant gratification. It forced workers into a constant battle to maintain their pay and conditions, a struggle for advantage in which only ‘the hyenas of economic life’ could triumph (MTFW 102697).

By such means, Thatcher recast inflation as a threat to social cohesion and a menace to the survival of democracy. Yet her preferred solution, monetarism, was potentially a difficult sell. Monetarism drew on an abstruse body of economic thought, primarily associated either with foreign intellectuals, like Milton Friedman and Friedrich Hayek, or with obnoxious regimes like Pinochet’s Chile. Even to many Tories it bore all the hallmarks of an intellectual experiment, dreamed up by university economists in Chicago and Vienna. Thatcher’s achievement was to reframe the case in the language of good housekeeping, presenting a contentious policy programme as the conventional wisdom of the ordinary man or woman. Economists, she grumbled, ‘clothe simple propositions with really rather extravagant jargon to make them sound very much cleverer than they are’ (MTFW 103922). It did ‘not require A-level economics, or artificial labels like monetarism’, to understand that one could not simply conjure money out of the air (MTFW 104316). Whenever possible, she avoided words like ‘monetarism’ altogether, preferring to talk of ‘sound’ or ‘honest’ money. Understood in this manner, monetarism was not a prescription for the economy but a statement about it. ‘Monetarism’, she declared, was ‘not a new-fangled thing: it is as fundamental as the law of gravity, and you cannot avoid it’ (MTFW 104377).

In assessing the causes of inflation, Thatcher hammered out a simple message. ‘What we are seeing in Britain’, she proclaimed, ‘is not a crisis of capitalism but a crisis of Socialism’. This quickly became the central principle of her rhetoric (MTFW 102629). Her first broadcast as leader promised to ‘rid the nation of this Socialist albatross’, drawing ‘the people of this country away from the quicksands of Socialism’ (MTFW 102644). Visiting New York in September, she broke diplomatic convention by criticising her own government, telling reporters briskly that ‘it’s no part of my job to be a propagandist for a socialist society’ (MTFW 102464).

The case against ‘socialism’ was not primarily economic. As she told a meeting in 1977, ‘the real case against Socialism is not its economic inefficiency … Much more fundamental is its basic immorality’ (MTFW 103329). In Thatcher’s view, socialism stripped individuals of personal responsibility. By passing their charitable obligations over to the state, individuals felt absolved of the need to help others themselves. She liked to remind the electorate that Nazism was an abbreviation of ‘National Socialism’, and she insisted that the National Front, too, was a ‘Socialist’ organisation. She never acknowledged any qualitative difference between socialism in Britain and Soviet authoritarianism. ‘Socialism is what socialists do’, she asserted; ‘and socialists do more or less the same, as the opportunity permits. GULAG was the consequence of socialism’ (MTFW 103411). Likening class prejudice to racial discrimination, Thatcher redefined socialism as the ‘political organisation of hatred’. Conservatives, of course, had no monopoly on virtue. ‘But we don’t preach hatred and we are not a party of envy’ (MTFW 103764).

Thatcher’s idea of socialism was hopelessly imprecise, and its equivalence between Stalinism and British social democracy travestied the position of her opponents. But its purposes were strategic, not analytical. The intention was to bind together all the different pathologies in British society, in a manner that laid them clearly at the feet of the Labour party. That heightened the importance of the coming election. Labour, Thatcher claimed, had been constrained in government by its tiny majority, reinforced by a combination of IMF supervision, the need to placate its Liberal allies and the requirement to conceal its socialist colours before going to the country. But if ‘the Socialists were to win again we would be set irretrievably on the path to the Socialist State’ (MTFW 102629). Rallying her party before the election in 1979, she drew the challenge of defeating Labour in apocalyptic terms, twice quoting Burke’s aphorism that ‘All that is necessary for the triumph of evil … is that good men do nothing’ (MTFW 104011, 104072).

All this brought many benefits. It vested the coming election with peculiar urgency; gave the party a moral purpose; and, by polarising the choice between ‘socialism’ and ‘freedom’, squeezed the political space for the Liberals. It imbued a predominantly economic programme with a larger ethical significance, recasting the defence of private property as a crusade against authoritarianism. Above all, perhaps, it gave the Conservatives a way of talking about their own recent history. Telling a story of ‘decline’ carried obvious risks for the Conservatives, a party that had been in government for all but six years between 1951 and 1974. Thatcher and her colleagues could not afford to trash the reputation of governments in which they themselves had served – however much they aspired to a new direction. Instead, they constructed a useful historical receptacle, into which policy mis-steps could be unloaded. This was the ‘post-war consensus’, an idea chiefly associated with Keith Joseph. Though ostensibly cross-party, that consensus was usually thought to have been ‘social democratic’ in character, an accommodation on the part of the Conservatives to Labour values. That allowed even the Conservative party’s errors to be mobilised against its opponents, enabling ‘Thatcherism’ to represent itself both as a new political departure and as in keeping with authentic Conservative tradition. In the words of Nigel Lawson, Thatcherism was a re-learning of ancient truths, in which the ‘old consensus is in the process of being re-established’ (Lawson, 1980, 2).

Lessons from Grantham

What might Miliband draw from all this? Analogies of this kind are never exact, and Miliband’s position is in certain respects more difficult than that of his predecessor. Miliband does not confront, as Thatcher did, a governing party that is splintering into warring factions; and he operates in a media environment that is less sympathetic to his party. The success of Thatcher’s rhetoric owed much to ‘events’, over which an Opposition has little control. Had Callaghan called an election in 1978, or the Social Contract held for one more year, her fate might well have been different.

Just as importantly, Miliband faces a government that is itself operating from the Thatcher playbook. The Coalition has already established a compelling political narrative, in which the deficit takes the role previously accorded to inflation. The Conservative message, which is propagated remorselessly in the Tory press, has three basic components: that Britain faced a Greek-style apocalypse in 2010, because of the scale of the deficit; that the deficit was caused by Labour, through profligate public expenditure; and that cuts are the only alternative to national bankruptcy. That narrative is dishonest and demonstrably false; but as a means of establishing political space, it has been brilliantly effective. By trashing Labour’s record in government, it dismantles the party’s hard-won reputation for economic competence. It disables the rehabilitation of public expenditure achieved in the later stages of New Labour; and, by presenting the cuts as a matter of necessity, rather than choice, it relieves ministers from making the ideological case for a smaller state. Above all, it simply writes the banking crisis out of history, transforming a failure of the market into a crisis of public expenditure. With the bail-outs forgotten, government has been transfigured from the solution to the problem, allowing the Chancellor to vest a war on public expenditure with the seductive language of national service.

The danger for the Labour party is severe. At the next election, Labour and the Conservatives may offer different policy prescriptions; but the verdict of the constituencies will depend upon their understanding of the problem. As long as the public accepts the Coalition diagnosis – that the most important issue in British politics is the deficit; that Labour created the deficit through excessive spending; and that painful surgery is necessary to prevent collapse – it will not return Labour to government. Though politicians are always at the mercy of events, it is a narrative that allows for multiple outcomes. If the economy recovers and the deficit falls, ministers will claim vindication. If the storm clouds darken and the economy worsens, the electorate may be still more reluctant to entrust the Exchequer to a Labour party associated with fantasy economics and even higher levels of public borrowing.

How New Labour is remembered will play a crucial role here. Collective memory is fundamental to party branding, and the Coalition narrative threatens to define Labour’s image in government as powerfully as the ‘Winter of Discontent’ or ‘beer and sandwiches in Number Ten’. Yet Thatcher confronted a similar danger. Based on the experience of the Heath government, Labour was propagating a memory of Conservative government in 1975 as divisive, confrontational and ineffectively authoritarian, capable neither of imposing its authority upon the unions nor of governing effectively in partnership with them. Thatcher’s response was to offer a compelling alternative; and it is here that Miliband would do well to follow.

To combat the Conservative offensive, Labour needs to offer three things: first, a sense of urgency about the choices before the country; second, a compelling account of its own about Britain’s economic problems; and third, a clear position on its own record in government. The first should be the most straightforward. For better or worse, the Coalition is carrying through a programme of public service reforms that is breathtaking in its ambition. The mandate for these changes is questionable; yet many, like the marketisation of higher education and the restructuring of the National Health Service, will prove almost impossible to reverse. The next election, if it produces an independent Conservative majority, will open the way for a dramatic restructuring of the British state, potentially as far reaching as that of the 1980s. At a time when faith in the power of political choice is at an especially low ebb, Miliband needs to project more clearly and dynamically what is at stake.

If Miliband is to offer an alternative in 2015, he needs a compelling analysis of the economy. Labour has a strong story to tell here, which contradicts the Coalition narrative. Before the bail-outs, in 2008, national debt and the deficit on the current account were both lower than in 1997. Public spending, as a share of national income, was just 1.2% higher than in 1997 – hardly an orgy of reckless expenditure. As the Institute for Fiscal Studies concluded, before the election in 2010, ‘the public finances were in a stronger position [in 2008] than they had been when Labour came to power’ (Chote et al, 2010, 10). That message needs projecting: not to set the achievements of former ministers in a more flattering light, but to refocus attention on the market failure that triggered the public debt crisis. Only then will proposals for banking reform gain the same salience as the restructuring of the public realm.

To do this, however, Labour must face the most difficult task of all: coming to terms with its own record in government. New Labour is often described as an a-historical creed; but Blairism was profoundly historicist, in the sense that it propagated a particular vision of Labour history. The very concept of ‘New’ Labour was predicated on a historical construct, ‘Old’ Labour, against which the emerging generation could be defined. Rather than combating the Thatcherite conception of the ’70s, New Labour joined in the assault, neutralising the danger by asserting its own distance. Yet that confronts the current leadership with a dilemma. ‘Old Labour’, like ‘New Labour’, is a Blairite construct; disclaiming both, the Labour party today finds itself historically rootless. It has no heroes to invoke, and no story to tell about its own contribution in government.

New Labour has been repackaged by the Coalition as economically inept and dangerously extravagant. Yet Labour cannot combat that narrative until it has made its own reckoning with the past. Tempting though it may be to view the New Labour era as some kind of nightmare, from which the party is now awakening, this is not credible as a political strategy. Instead, Labour needs a serious dialogue about its actions in government. Is it proud of ‘prudence’? Does it celebrate, or lament, its caution in expanding public expenditure? Is it proud, or abashed, of the 3p taken off the basic rate of income tax? Was the 50p tax rate a temporary expedient, imposed in extraordinary conditions, or a recovery of purpose by a party with a commitment to greater equality? This dialogue should take place on two levels. Internally, it must be frank about its failings and ready to learn from its mistakes. But in the public arena, the more pressing task is to restate its successes and to combat the hostile message of its opponents.

Miliband’s early steps in this direction were sometimes awkward. The nature of the leadership contest compelled him to define himself against ‘New Labour’; but that left his party with no positive story to tell about its past. Nor did it have a coherent narrative about the economy. For all his many talents, the appointment of Alan Johnson as Shadow Chancellor was an extraordinary error. At a time when economics was the decisive battleground of British politics, Labour’s first task was to restate its economic credentials; and that could not be done by a man who joked of his ignorance of economics. Like the attempt to brand Labour ‘the new optimists’, it played to the dominant Tory narrative: that Labour was a fantasy party, in denial about the problems it had left behind.

Like Thatcher, Miliband has sought to identify a unifying theme to which all Britain’s problems can be related. Where Thatcher chose ‘socialism’, Miliband has opted for ‘responsibility’. The theme has obvious merits, linking bankers’ bonuses, MPs’ expenses, criminality in the media and the recent riots in a way that emphasises the traditional Labour territory of social interdependence. It also allows Labour to tackle more problematic subjects, such as welfare dependency and immigration, from an ostensibly left-of-centre starting point. The problem is that it is inherently non-partisan. When Thatcher railed against ‘socialism’, it was obvious that she was talking about Labour. No-one on the Conservative benches self-identifies as ‘irresponsible’, and that limits its power as a political weapon. ‘Responsibility’ has no political hook; indeed, if it were to ‘take’ as a theme, there would be nothing to prevent David Cameron from simply co-opting it. If Miliband is to fight from the Thatcher playbook, he must identify his unifying idea more squarely with Conservatism: the ‘free market consensus’, perhaps, or simply, ‘Thatcherism’. That way, acknowledging his party’s own mistakes would become a form of political attack – highlighting a reverence for the financial sector, an obeisance to market ideology and an ease with the ‘filthy rich’ that were all borrowed from Conservatism.

There is no guarantee that such an approach would bring victory at the polls, and it would not replace the serious work required on policy. But it would restore a sense of purpose to Labour politics, while readmitting the party to a national conversation from which it has too often, in recent months, seemed absent. It would also be in keeping with the party’s own traditions. Labour has characteristically seen itself as a movement, not just as a party; with a relationship to the past that informs its vision for the future. Strikingly, its most effective recent broadcast was probably ‘Against the Odds’, a nostalgic but also purposeful history of the party shown at the conference in 2009 (Labour, 2009). Traditionally, the party has founded its appeal, not simply on lists of policies, but on a vision of the good society and a critique of the times in which it lives. Margaret Thatcher, paradoxically, was a brilliant exponent of that political form. In learning from its greatest opponent, Labour may simply be returning to its own best traditions.