Britain in the 20th Century: A new consensus? 1990-2001

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The fall of Margaret Thatcher left a legacy that was both contested and divisive. During the 1990s, the Conservative Party, under the impact of divisions on Europe and on economic policy, began to fragment. But, after four election defeats, Labour, under Tony Blair, who relabeled the party New Labour, seemed to be adopting some of the main tenets of Thatcherism. To what extent was there a new consensus in the 1990s, and were the policies of the New Labour government, elected in 1997, an extension of Thatcherism or a repudiation of it?

This is a part of the lecture series Britain in the Twentieth Century: Progress and Decline. The other lectures in this series given during the 2011/12 academic year include the following:
    The Character of the Post-War Period
    The Attempt to Construct a Socialist Commonwealth, 1945-1951
    The Conservative Reaction, 1951-1965
    The Collapse of the Post-War Settlement, 1964-1979
    Thatcherism, 1979-1990

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22 May 2012   Britain in the 20th Century: A new consensus? 1990 - 2001   Professor Vernon Bogdanor CBE   The 1990s are characterised by a return of some degree of consensus based on the things Margaret Thatcher had done, many of which the Labour Opposition under Tony Blair came to accept. In the 1990s, it seemed that the old battles had been fought out to exhaustion.     Margaret Thatcher - who had held office since 1979, a longer continuous period than anyone since the Napoleonic Wars - was dethroned and replaced by John Major in November 1990. He, rather unexpectedly, won the General Election in 1992, but lost to Blair in 1997. Blair was Prime Minister at the end of the Millennium.   John Major’s period of office was characterised by consolidation rather than radical reform; the Conservatives became once again a party of cautious and piecemeal change – as they had been before Thatcher. It seemed as if Margaret Thatcher had found and slain all her major enemies - over-powerful trade unions, an over-large public sector, local authorities spending too much – and so the problems of the 1970s seemed to have been solved. But there were new problems that arose as a result of this very success, to the extent that it was successful, namely that the individualistic market economy she set up was somehow seen as a threat to social cohesion. In the 1990s, people felt they needed a stronger unifying thread of community and cohesion within which these new market reforms could work. Whereas, in the 1980s, economic issues were crucial, in the 1990s, the focus moved to the question of society, of how to hold society together. It is a question I think we are yet to resolve.   Labour, in opposition, was coming to accept Margaret Thatcher’s reforms. The transformation of the Labour Party reached its height in 1995, when Tony Blair, the new Leader, rejected and secured the abolition of Clause IV of the Labour Party’s Constitution, established in 1918, and which committed the Party to wholesale nationalisation.1997 was the first election since the Labour Party was formed in which nationalisation was not an issue. No one was asking what industries the Labour Party would nationalise if it won power. Indeed, they were asking what industries the Labour Party would privatise if they got into power, which is a sign of the success of Thatcherism.   The Conservatives also tacitly abandoned Margaret Thatcher’s thesis of permanent change, endless activity, so that there was a new, broad consensus on the role of the state and on taxation. Old style socialism - the socialism of people like Clement Attlee, even Harold Wilson, - seemed to be dead, an ideological casualty of the twentieth century.   Many of the main differences were within the parties, rather than between them – for example, between Old Labour and New Labour, a division that has perhaps not yet been resolved. Of course, there were many people in the Labour Party who did not like Blair’s reforms.   In the Conservative Party, the Thatcherites, who were very powerful and strengthened by a sense of guilt at having removed Margaret Thatcher, wanted a much more radical approach than John Major was prepared to countenance. They wanted a more radical Euro-sceptic approach towards Europe, and more radical market reforms. Their representative under the Major Government was John Redwood, who stood for the Leadership against him in 1995. Had he defeated Major, I think we would have seen much greater changes than we saw when, two years later, Blair took over, because Redwood would have taken a much stronger Euro-sceptic attitude and there would have been stronger attempts to introduce the market into the public services.    The split in the Conservatives was much more serious than the division in the Labour Party, because the latter was determined and realised it could only get back to power if it showed itself to be a bit more unified than in the past.   With the consensus on economic matters, there was a new source of division, on a topic which had not been contentious since before the First World War: the constitution. The parties differed much more on that, in some ways, than on basic social philosophies, and the Labour Party came out in favour of devolution to Scotland and Wales, a Human Rights Act, a directly elected Mayor of London, reform of the House of Lords, and they were also willing to look at alternative electoral systems, though they did not commit themselves to the Liberal Democrats’ favourite nostrum of proportional representation.     In the 1992 Election, that was a key issue, and the Conservatives argued that this would threaten the stability of the country, particularly devolution, which they said would break up the country. They may yet be proved correct. John Major said in 1992: “The UK is in danger – wake-up my fellow countrymen, wake-up before it is too late!” The Conservatives got back in 1992, but in 1997, when the Labour Party got in, we saw the most radical constitutional programme since the Great Reform Act of 1832 - a huge raft of reforms. We now see possibly one of the consequences: the SNP victory in the devolved Parliament in Edinburgh. This places a question mark over the continuation of the United Kingdom, which everyone took for granted in the twentieth century.    In his memoirs, John Major said about the end of Margaret Thatcher’s reign: “It was the Poll Tax which sowed the seeds of her destruction”. This was the attempt to reform local council finance, so that everybody would pay a fixed charge for local government services. Before this tax, how much you paid depended on the value of your property – much like the current system, Council Tax. Poll Tax meant a fixed charge, of the sort you would pay for electricity or gas, for council services, and everyone would pay it. The only people excluded would be students and people who were not in work. One of the criticisms of it was that the duke would pay the same as the dustman – it was socially unfair.     But that was not the cause of the revolt against it, I think. The real cause was much cruder. The Chancellor of the Exchequer, Nigel Lawson, who was against the reform, perhaps rather spitefully would not give enough money to finance the introduction of the Poll Tax, so it had to be set at a very high level to begin with. The idea of the reformers was to set it at a low level to begin with, to ease it in, and then perhaps raise it later. But that did not happen. It was put at a high level. Some people did benefit from it, but as generally happens, the people who benefit do not say “thank you” while the people who suffer squeal very loudly. There were riotous demonstrations against it, and it made the Conservative Party unpopular.   Perhaps a deeper reason behind Thatcher’s fall was that she had been there too long: she had outstayed her welcome, and people were finding her remote and unresponsive. Things came to a head on the matter of Europe, where Margaret Thatcher seemed to be undermining her Foreign Secretary, Sir Geoffrey Howe, in negotiations. Geoffrey Howe resigned from the Government, saying that Thatcher’s attitude was like “sending your opening batsman to the crease, only for them to find, the moment the first balls are bowled, that their bats have been broken before the game by the team captain.” He ended a powerful speech, which surprised people who considered him an emollient and modest person, by saying: “The time has come for others to consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long.” That was an open invitation to Michael Hesteltine to stand against Margaret Thatcher.   Now, Michael Hesteltine had resigned from Thatcher’s Government in 1986, primarily because of her high-handed manner with the Cabinet, and her attitude to Europe. He was, in some ways, related to an earlier Conservative tradition, because he believed in more intervention in industrial affairs than Margaret Thatcher. He was much more like Edward Heath than Margaret Thatcher. But he made the promise, which won over a lot of Conservative MPs, to abolish the Poll Tax if he was elected.   Margaret Thatcher failed by just four votes to secure a sufficient majority. She won the vote, but not by enough, according to the rules of the Conservative Party, which stated that you needed 15% more than your challenger. She failed by just four votes, and, instead of fighting a second ballot, she stood down. On the second ballot, Michael Hesteltine again stood, but he was defeated by the Chancellor of Exchequer, John Major. He was just 47 years old, the youngest Prime Minister since Lord Rosebery in 1894. Since then, there have been two younger ones – both Tony Blair and David Cameron, so it is becoming a young man’s position. But, at that time, he was the youngest Prime Minister since Lord Rosebery.   But his background was a little different from Lord Rosebery’s. Lord Rosebery was a hereditary peer who had been born in a house in Berkeley Square, had great houses, and he went to Eton and Christ Church. When he was at Christ Church, he kept a stock of racehorses, and his tutors said that he had to choose between them and his studies – he chose the horses! He was a very wealthy man. In 1880, the cost for the Liberal Party of the General Election was £50,000 – a few million pounds now – and Lord Rosebery paid for that out of his income.   John Major, on the other hand, had the most unpromising beginning of any Prime Minister in the twentieth century, except for Ramsay MacDonald. He was the son of a trapeze artist in a circus, who, when he retired, became a manufacturer of garden equipment and gnomes. When that venture failed, he and his family were forced to move from Worcester Park in Surrey to a tenement flat in Brixton with an outside lavatory. John Major won a scholarship to grammar school, but left at sixteen with no qualifications – just three O Levels, as it then was. He used to say about his education: “Never has so much been written about so little.” He was then turned down for a job as a bus conductor because he was too tall, and was unemployed for a while. He eventually took a job in banking.   Meanwhile, he found himself speaking for the Young Conservatives on Saturday morning on a soapbox in Brixton, which is of course Labour territory. He found he had the ability to speak and was sympathetic to Conservative policies. He became a local Councillor and then secured the safe constituency of Huntingdon, Cambridgeshire, in 1979 (having fought Brixton twice, hopelessly). When he put in for the seat, people said, “You will not get that – this is the land of old Tory colonels and the like, and they will not choose you.” He said, “No, no, it is not, it is a London overspill – they are people just like me.” This turned out to be the case.   But his rise to the Premiership was meteoric and unexpected. He was elected to the Premiership in November 1990, but he had only entered the Cabinet in 1987, just three years before that, and had held no major post until July 1989, in the Foreign Office, eighteen months before becoming Prime Minister. That lasted just three months. Then, in October 1989, when Nigel Lawson resigned, he was made Chancellor, and he became Prime Minister unexpectedly. On his first morning, he said to his new Party Chairman, Chris Patten, “I do not know if I can do this job – I was not really expecting it yet.”   He was described by one of his colleagues as “the kind of man one would meet in the car park of any do-it-yourself store, loading veneered chipboard shelves into his hatchback, the sort of person I would expect to see with his car parked by the pavement on a Sunday, washing the car, eating some polo mints and listening to the cricket match on the radio.” He seemed very ordinary.   But two months after becoming Prime Minister, he achieved the highest opinion poll ratings since Winston Churchill during the War. He became very popular at the beginning, though, later on, things got worse.   His main aim was, one might put it, to humanise Thatcherism. He says in his memoirs: “What I believe in is a rough and ready decency. My politics are quiet politics. I dislike brash popularism. I distrusted bitter conflict. I was at ease with the knitting up of conciliation.” He said he wanted to make changes that would produce, across the whole of this country, a genuine “classless society”. This slogan enabled him to defeat both Michael Hesteltine and Douglas Herd for the Conservative Leadership, because they, rather foolishly, had themselves photographed in front of large country houses. John Major’s ordinariness helped him there.   Of course, “the classless society” is very much associated with the left - indeed I think was Karl Marx’s phrase - and certainly many in the Labour Party would have said they wanted to create a classless society. But John Major did not want to do it by the Labour method of state intervention, but by extending choice - what he called the privatisation of choice - hitherto available only to the more fortunate. For example, John Major would say that, if you were well-off, you could afford to choose which school to send your children to; if you did not like that school, without fuss, you could just remove your child and place him in a school you preferred. He wanted to extend that choice to people without great means. Similarly, in the Health Service, he wanted to introduce the ethos of markets and choice, so that people who were not well-off could benefit from them. That was his first major change.   In the Citizen’s Charter of 1991, he said that the standards of the private sector should be applied to the public sector. There should be performance targets – displays on the Underground telling you the next train will be there in five minutes, that is John Major’s doing. There should be complaints procedures – you should be able to appeal if you are given bad service, and you should get redress if you are inconvenienced by bad service in the public sector, and there should be independent agencies to monitor performance. This was a great change from Margaret Thatcher, who tended to the view (though never publically expressed it) that anything in the public sector was going to be not so good as the private sector, so that the only real answer was privatisation. A public service would have to exist, but it would be nothing more than a ‘residual’ service for those who could not afford better.   John Major defended his position in his memoirs:    “My own life history was different from that of most of my predecessors at Number 10. When I was young, my family had depended on public services. I have never forgotten, and never will, what the National Health Service meant to my parents or the security it gave, despite all the harsh blows that life had dealt them. These personal experiences left me with little tolerance for the lofty ideas of well-cosseted politicians, the metropolitan media, or Whitehall bureaucrats, who made little use of the public services in their lives and had no concept of their importance to others. They may have looked down on the public sector and despised it as second rate, but many of them knew nothing of the people who worked there or the manifold problems they faced.”   In a speech made before becoming Prime Minister, to the Audit Commission, he warned against “denigration of the valuable inheritance of the public sector”. You cannot imagine Margaret Thatcher using those words.   The aim was to adopt the best private sector practice, with competition wherever possible, through an internal market. Major introduced the beginning of what is now called the free schools movement, schools outside local authorities with their own specialisms. He also wanted charters in various areas of the public services to test and evaluate performance.   In his memoirs, John Major attacks cynics on both right and left, who claimed, “from the comfort of privilege and the cushion of an expense account, that these were trivial issues or somehow evidence that I had a chip on my shoulder.”     He did secure real improvements in the public services. In 1990, over 200,000 patients had to wait over twelve months for an operation. In 1997, the figure was down to 15,000. Testing was introduced in all state schools, as were tables of overall performance. John Major’s equivalent of free schools, grant-maintained schools, were kept by Labour and renamed city academies - Labour claimed to have invented them. A lot of the reforms were criticised by Labour in opposition, but adopted by New Labour in office, and a lot of the achievements claimed by the Labour Party were begun under John Major. There is much more continuity than one would think. The public service reforms were really begun by John Major, and counted as his first major achievement.    His second achievement was in Europe. John Major was the first Prime Minister of the post-War era. By that, I mean the first Prime Minister for whom the War was not an important memory. Margaret Thatcher was born in 1926, so that she was nineteen when the War ended. She went to university at the end of the War, and it was a living experience for her. John Major was born in 1943, so he had no memory of the War, and he had none of the dislike for the Germans felt by previous Prime Ministers. Indeed, in one of his first speeches on Europe, in Germany in March 1991, he said, in words that were to haunt him later, that Britain should be at the very heart of Europe. Again, one cannot imagine Margaret Thatcher saying that. In his memoirs, he says: “I was a pragmatist about the European Community. I was keen to rebuild shattered fences, to prevent Britain being seen forever as the odd man out, to be excluded from the private consultations that so often foreshadow new policy in Europe.” It was in that spirit that he signed the Maastricht Treaty at the end of 1991. It then had to be ratified in Parliament, which was going to cause him great problems.   In the meantime, Parliament was coming to the end of its term and there had to be a General Election by spring 1992. The Conservatives were not expected to win that. It would be a fourth successive victory, and no Government had returned for a fourth successive term since 1827. Furthermore, Britain was in the middle of a recession - the longest since the War - which affected not only people in the working class but people in the professional and managerial class in the South of England, who formed the backbone of the Conservative Party.   The Labour Party had, under Neil Kinnock, begun the process of modernisation. It had abandoned its commitment to unilateral nuclear disarmament. It had accepted European Community membership. The left was marginalised. The Labour Party took the view that people would support them because they would be more effective in the public services than the Conservatives. A large number of polls indicated that people would be prepared to pay more in taxation to improve public services, and in particular, the National Health Service, and that is what the Labour Party was advocating. They said they would increase taxes for those on higher incomes to finance public services. This, as you might expect, was distorted by the Conservatives, implying everyone would be paying more taxes.     Nevertheless, the attitudes expressed in opinion polls were not expressed in the polling booths. People said that it would be a good idea to make more money from taxation for public services, but when asked if they themselves would be prepared to pay higher taxes, they said no. Perhaps they were giving the answers the pollsters expected. When I was at primary school, I was asked who the greatest composer was. I said Beethoven and was told, no, the answer is Mozart, so I always said Mozart after that. Perhaps that may be what people said to the pollsters!   But there was also some scepticism about whether extra money from the state would help or whether it would not just go to bureaucracies and trade unions. In my personal opinion, the memory of the Winter of Discontent was still very strong. People were still fearful that a vote for Labour would mean the return of strikes. I think that this is an underestimated factor in keeping Labour in opposition.   Labour’s main cry was: “It is time for change – we need a new fresh Government.” But the Conservatives said, “We have already got a fresh Government because we replaced Margaret Thatcher with John Major in 1990, you do not need another change, let this one work itself to fruition.”   The outcome was that the Conservatives won 14 million votes, which is the largest number ever gained by any political party in any British election. Tony Blair’s landslides were on much lower turnouts, so he did not achieve 14 million votes.   The Conservatives had a very small overall majority of 21, but that was largely due to the electoral system. The Conservatives were 8% ahead of Labour, which was the largest victory by any Conservatives over the Labour Government, except for Margaret Thatcher’s two landslides of 1983 and 1987. It is a larger victory than that won by Harold Macmillan in 1959, Edward Heath in 1970 and Margaret Thatcher in 1979, in terms of percentage of the vote.    However, the electoral system worked against the Conservatives. They had a majority of just 21, which meant that any eleven rebels could defeat the Government; on Europe, there would be more than eleven rebels – a large number of Euro-sceptics, influenced very much by Margaret Thatcher. Major’s Government was therefore in trouble, despite this striking victory. John Major was fond of saying he had an overall majority of 21, thirteen of whom were mad.    Furthermore, as a consequence of by-elections, from deaths and so on, a majority of 21 was not really enough to last a full Parliament, and by 1996, the majority had gone. John Major was dependent on the Ulster Unionists for his majority – it was, in effect, a Hung Parliament.   But the key point is this: the Euro-sceptics occupied a pivotal position in that Parliament. Perhaps that is one reason why David Cameron was not too sorry not to have won a small overall majority but happier in coalition with the Liberal Democrats, because he escapes that fate. In effect, Major relied on the Liberal Democrats, who were pro-Europe, to get Maastricht through.   While it may be a problem if you win an election, it is even more of a problem if you lose an election. What was happening to the Labour Party? They were particularly worried: could they ever win an election? They came to see that, because of the changing class composition of the country, they were continually trying to run upwards on a moving escalator. If the percentage of the working class was falling at each election, and you won, shall we say, two-thirds of the working class vote, that was a smaller number of votes at each election. So the Labour Party faced a very serious problem, and had to adapt very considerably, which they did under Blair. I think the main impact of the fourth Conservative victory was not on the Conservatives but on Labour.     In 1995, the Labour Party got rid of Clause IV. In the 1997 Election, it said there would be no increases in income tax, at all, for anyone – unusual for the Labour Party. Furthermore, they said they would not go beyond the Conservative Party’s expenditure plans for the first two years of a Labour Government. Gordon Brown, it is often forgotten now, as Chancellor, was accused of excessive rigidity, and had the nickname of “Prudence” in 1997 because he would not spend money. Furthermore, the Labour Party said they would accept Conservative reforms, privatisation and trade union reform.   John Major says in his memoirs: “Above all, our victory in 1992 killed socialism in Britain. It also, I must conclude, made the world safer for Tony Blair. Our win meant that, between 1992 and 1997, Labour had to change.” I think that is absolutely right.   John Major remained Prime Minister until 1997, and because he is sandwiched between two very long Premierships, Margaret Thatcher and Tony Blair, we think of it as a short interlude. I was at a seminar where someone asked Enoch Powell what he thought of John Major, and he replied, “Does he exist?” But actually, Major was Prime Minister continuously for longer than anyone in the twentieth century, apart from Thatcher, Macmillan and Asquith, and made a much more fundamental impact than is generally known.   But he faced the problem of Europe, which was to destroy his Government. In a sense, this was odd because Major had got a good deal for Britain at Maastricht in 1991 – it is only perhaps clear now how good a deal he got – because he secured an opt-out from Britain joining the Euro. Britain and Denmark were the only countries that had a legal opt-out. Every other country, and all the new countries that entered in 2004 and afterwards, are committed legally to joining the Euro. Major said, perhaps a bit unwisely, that this was “game, set and match to Britain.” Of course, without that opt-out, the Conservatives would never have accepted the Maastricht Treaty, but this was a triumph because he got all of its benefits without having to join the Euro. He was received with acclaim when he returned to Parliament, a Roman triumph, but he made a great tactical error of delaying ratification until after the Election. He inherited Margaret Thatcher’s majority of 100 so he would not have had any problems getting it through before the Election. However, he waited until after the Election, when things started to go wrong.   First of all, the Danes voted against Maastricht in a referendum, so it had to be re-negotiated, which allowed Conservative opponents of the Treaty to organise. In May 1992, just before the Danish referendum, 22 Conservatives voted against the Second Reading of the Treaty (more than Major’s majority), but after the Danes rejected it, 100 Conservatives signed a motion calling for a fresh start - Maastricht should be abandoned.   Further problems arose in the autumn of 1992, when Britain was pushed out of the Exchange Rate Mechanism of the European Monetary System. This was a preliminary to the Euro, in which European countries agreed to align their exchange rates, without a common currency. Margaret Thatcher, as you can imagine, was strongly against that. Her Chancellor, Nigel Lawson, and her Foreign Secretary, Geoffrey Howe, were strongly for it, and they threatened to resign unless Britain joined. In the dying days of Thatcher’s Premiership, in October 1990, she was persuaded, perhaps pushed, to join the Exchange Rate Mechanism, which pegged the pound to the German mark. German Reunification then led to great pressures on the pound. In normal circumstances, the pound would have been devalued, but it was like the Euro, to this extent, that these were pegged fixed rates that you could not devalue.     The crisis came to a head on so-called Black Wednesday (which the Euro-sceptics were to call White Wednesday) in September 1992, when money started coming out of Britain because bankers thought that the rate had been set to the Deutsche mark at too high a rate – the pound was overvalued. This is what people are now saying about Greece, but Greece cannot even get out because it is a common currency. We said we would not get out, but we were pushed out, in effect, and the pound fell. By February 1993, it was not 2.95 to the Deutsche mark, but 2.3.     Nevertheless, that devaluation began Britain’s economic recovery. Inflation started falling and the fall in the pound helped Britain’s export trade. It is a great paradox that the economic recovery came at the same time as a fall in Tory support, because many people suffered from this devaluation. House prices fell and many people suffered from negative equity - again, natural Conservative voters, home-owners – and above all, the Conservatives lost their reputation as the party of sound economic management. They became the party of devaluation, and they never regained their place in the polls.   By June 1993, John Major’s standing was the lowest since the polls began, and his Government was doomed. The Conservatives assumed they would recover, that these were mid-term blues, but they did not.   Even more importantly, in some ways, it stimulated a reaction against Europe amongst the Conservative backbenchers, and, on the Third Reading of the Maastricht Treaty, 41 Conservatives (more than Major’s majority) voted against it and another five abstained. A vote of confidence was needed to get the Bill through. Major threatened to resign if Maastricht did not get through.   Major’s low ratings continued, and in 1995, he tried to put an end to criticism by resigning the Conservative Leadership and challenging his opponents to stand against him. John Redwood stood, as I mentioned earlier, on a programme of drastic lowering of taxation, and a much more Euro-sceptic programme, disengaging from Europe. Redwood won 89 votes, and John Major 219. Now, that is not as much as it seems because a further eight abstained and there were twelve spoilt ballots – that makes it 109, if you add that to 89. If you count the Conservative Party as a whole, about a third of a Parliamentary Party refused to support him. If you count just backbenchers, about half refused to support him, because about 100 people were in the Government in some form or other. So, Major said, had he won three fewer votes, he would have gone. He said his level was 216 – he got 219. He said, “It was less than I had hoped for, but more than I had feared.” It did not really prevent the criticisms of him.   But, as I say, his achievements were greater than is thought. I have already mentioned the reform of public services. On Europe, his achievements were greater than is thought because, for better or worse, he kept us in Europe. If he had not got the Maastricht Treaty ratified, we would no longer be in the European Union. Some people may think that would be a good thing and some a bad thing, but the Government’s policy was to keep us in the European Union.   He also avoided a complete split in the Tory Party, which seemed on the cards, similar to the split on the Corn Laws in 1846 or tariff reform in 1903. In his memoirs, Major quotes Harold Macmillan, who said that Balfour had been bitterly criticised for not having a view on protection and free trade: “Balfour had said the important thing was to preserve the unity of the Conservative Party.  He had been abused for that. But who argues now about protection and free trade? When was the last time the conventional arguments were exchanged, 1923? Whereas, the preservation of great national institutions have been the right policy. Lloyd George might have been clear-cut on policy, but he destroyed the Liberal Party.” John Major said, “The day may come when a similar judgement is made on the single currency.” So that is his defence of policies, which, to his opponents, were policies of fudge. Both sides on the debate - Michael Portillo on the Euro-sceptic side and Kenneth Clarke on the Europhile side - said John Major should have taken a clear position. But Major’s objected that he would have lost a wing of the Conservative Party by doing so. It was better to fudge the issues and hold the Conservative Party together, which I think he did successfully.   Another achievement was the reduction of inflation, which, when he came to power, was approaching double figures and the rate of interest was 14%. Unemployment was rising, a recession was in place. But, by 1997, inflation was negligible, and the rate of interest was just 1.6%, and economic growth was much higher than it had been: it was under 1% when Major took power in a recession, 3.5% by the time he left office. The Nuffield study of the 1997 Election says: “The Conservatives could legitimately claim that Britain was setting an example to Europe and the world as a model of prudent and sustained economic growth.” That was the basis for Labour’s success: they inherited a very strong economy in 1997. But it is a great paradox that Major won a General Election in a recession but lost it in a boom when it was safe to vote Labour; he laid the economic foundations for Blair’s success.   John Major’s wider aim was, as I have said, to create a classless society, or, as he also put it, “a society at ease with itself” - a gentler society after Margaret Thatcher, in which class and social divisions were less acute, more constructive engagement in Europe, more conciliation at home. He often compared himself to Stanley Baldwin, Prime Minister of the ‘20s and ‘30s. In a sense, however, he suffered the same fate as Baldwin: in trying to conciliate everyone, he ultimately conciliated no one.     In 1997, he was massively repudiated by the electorate. He was rejected in the Conservative Party by the Europhiles and the Euro-sceptics alike – both thought him wrong, although he tried to conciliate them. The Euro-sceptics said he had sold out too much to Europe; the Europhiles said he had not given enough of a lead. On the Continent, he was thought to be insufficiently European, insufficiently communitaire; in Britain, he was thought to be insufficiently Euro-sceptic, and his replacement as Tory Leader, William Hague, was much more of a Euro-sceptic than he was.    However, to some extent, he did create a more tolerant, easygoing environment than Margaret Thatcher had done. He did not resolve the deep social problems – perhaps no one has. Tony Blair summed things up accurately in 1995: “We enjoy a thousand material advantages over any previous generation, and yet we suffer a depth of insecurity and spiritual doubt they never knew.” Blair, of course, was a strongly religious Prime Minister, at a time when Britain was becoming a less religious society; as his spin-doctor, Alastair Campbell, famously said, “We do not do God,” when Blair tried to introduce religion into a speech.   When Blair came to power in 1997, he was the first Prime Minister since Ramsey Macdonald never to have been in Government before. Since then, there has been one other, David Cameron. No member of his new Government had ever held a Cabinet post before. Only five had ever been Junior Ministers.     He had won a landslide majority in the ’97 Election of 179, the largest majority Labour has ever won - indeed, the largest majority since the War. He championed policies that he said were policies of the Third Way. The Third Way was distinguished from the old left, from Old Labour, and the new right, which was Margaret Thatcher and John Major. He said that the basis of his socialism (though he did not use that word much) was ethical and not economic. He said it was not a socialism of state control – that was dead. He said it was a socialism of values, of social interdependence and community. That, of course, did not really distinguish him from John Major. He said, “We accept the market economy, but not a market society... The state no doubt should do less, but it needs to alter behaviour so that we have the community attitudes that make a market economy work effectively and fairly.” Not too dissimilar from David Cameron’s idea of the Big Society, perhaps – maybe there is a consensus on that.   He said he wanted a modern notion of society, “where rights and responsibilities go together, and responsibility is to be nurtured, so that we can deal with problems like family breakdown, the underclass and social exclusion.” The Blairite view was that poverty and other social ills result much less from the economic system, as the left had previously believed, than from deep-rooted social dislocation. So, whereas the old battle was on the front of ownership – do we have state control or not? – this battle was on the front of public institutions, the ethos of society, self-interest or wider social obligation. I think Ed Miliband would probably agree with that.   Despite the rhetoric of New Labour, I think there was less change of policy after the 1997 Election than at any changeover since 1951; the election of Labour, in a sense, confirmed a new status quo. It did not repudiate it, as the Election of 1945 had repudiated the ‘30s, and as the Election of 1979 had repudiated the earlier period.   I think Douglas Herd, who had been Conservative Foreign Secretary, was not unreasonable when he said: “The Conservatives lost the Election, despite having won the argument.”   A former Chancellor, Norman Lamont, said: “The only thing the electorate wanted to change was the Government, nothing else.”   Someone called it “a landslide for the status quo”.   Gordon Brown, the new Chancellor, said, in words one cannot imagine any of his predecessors using: “The war on inflation is a Labour war,” and that is why he was accused of excessive prudence during his first term as Chancellor. Labour introduced policies which you would have expected Conservatives to introduce: tuition fees for students in universities; the privatisation of the London Underground. As I say, the question was not what Labour would nationalise, but what it would privatise.   On Europe, despite the rhetoric, the Labour Government followed similar policies to that of the Conservatives. The rhetoric was different, but we gained, under Blair and Brown, the advantages, such as they were, of European membership, without committing ourselves to joining the Euro. Blair was sympathetic to the Euro, Brown less so – the Labour Party now says how wise they were, and I think they probably want to erect a statue to Gordon Brown for keeping us out of the Euro.  .   I want to conclude with a few comments about the changes in the post-War period. If you look for the greatest ideological casualty of the post-War period, I think it is the idea derived from the War of state planning, of active government, championed from the Attlee Government in 1945 to the Heath Government in the ‘70s, accepted by the Labour Party but also most Conservatives, in reaction to the 1930s. The Conservatives were left scarred by the unemployment of the 1930s.   It was not just old style socialism that was dying, but the whole idea that governments could do as much as had been thought to cure human ills. During the War, everything was obviously planned.  It seemed things ran efficiently, we all worked together, and people believed that the same could be achieved in peacetime. At first, it seemed we could: we nationalised industries; we set up the Health Services; we set up the welfare state; we set up a new educational system. At first, things seemed to go very well, but gradually, as time went on, people ceased to believe, rightly or wrongly, that Governments knew what was best for them. Attlee appeared to people as a kindly, rather stern headmaster; Macmillan as a well-meaning grandee, an officer who had been looking after the men, making sure the rations were all there.     But as time went on, two things happened. Firstly, Government seemed to get less competent – there seemed to be more policy failures. Whereas the setting up of the Health Service and a national insurance system seemed a great success, things gradually became less competent. In particular, it seemed, from the 1960s onwards, that Governments were less competent at managing the economy. Perhaps the experts did not know best after all.   Secondly, people took for granted many of the benefits they had, and they became less deferential and less willing to believe that others knew better than them, less willing to follow and do what Attlee or Macmillan or other Leaders told them to do. I think this reached its climax when Edward Heath, just before the February 1974 Election, spoke to the people and said, “Let us all pull together to deal with these economic problems, as members of one nation.” When Churchill or Attlee said that in the 1940s, people did it, but when Heath said it, they said no, we will not.   It is interesting that Margaret Thatcher, of all people, said that you could not overestimate what governments can do – they cannot do that much in economics, it is up to people themselves. This heralded the new era.     Perhaps that is true of social change as well. Just as they overestimated what they could do in economics, Blair and Major, and maybe Cameron, perhaps overestimate what they can do to change society.    Furthermore, in place of the state, there was a much greater emphasis on the market than there was. The market was discredited, as you may remember, in the 1930s, because of mass unemployment and poor conditions, and people thought state planning could cure that. By the end of the century, however, the pendulum had swung back the other way.   The idea that those in power adhere to a public service ethic - disinterested people who want the best for the community – also ended. The Labour Party was very much dependent on that idea, and, in the early years, it seemed reasonable. People thought that of Churchill and Attlee and the early Prime Ministers. Now, we are much more cynical and critical of politicians – we think they are a parcel of rogues and you cannot trust any of them. Therefore, if you cannot trust them, why should we give them and the state more powers? If they are all so awful, it is very dangerous to give them more power, so we shall trammel them round with Human Rights Acts and devolution and all the rest of it.   This was seen in the recent local elections, where people voted against directly elected Mayors in all referendums but one. In other words, people may not like their local authorities, but believe it would be just as bad if you had another type of politician called an elected Mayor running things. People want less of politicians, to put it crudely.   A further, fundamental change is the end of what some people called corporatism, perhaps more precisely the role of the trade unions in Government. This was again something endorsed by the War, and in particular by Ernest Bevin, who was Minister for Labour and National Service. After the War, the trade unions were brought into Government, not just by the Labour Party but by Conservatives as well, for consultation. Gradually, that consultation became a trade union veto, so you could not do anything if the trade unions did not want it. Britain had become a kind of blocked society by the 1970s, and any radical reforms you wished to achieve were denied by the trade unions. They would go on strike and so there was a fear of provoking them.   The idea of the superiority of our political system has also taken a bit of a battering. After the War, there was no doubt that our democratic system had beaten Hitler, that the Westminster model was the best, and was exported to Africa and Asia. Continental countries had different systems, so much the worse for them – they were second class countries, we were the best, and Britain was the centre of the world, head of a great Empire and Commonwealth.     Now, the raft of constitutional reforms shows that this is no longer true. If you think you have got a marvellous house, you do not keep mending it. Anyone who keeps reforming something shows it was not that good in the first place.    From the time of Margaret Thatcher, the blocked society was opened up. Thatcher weakened the trade unions, restored flexible labour markets, and opened up the economic system so that more people owned houses and shares. After the War, about 30% of people were owner-occupiers; now, the figure is nearly 70%, a major, radical social change, a property-owning democracy. More people now own shares than belong to trade unions – that is another major and radical social change.   John Major, as I have described, opened up the public services to make them more accountable, so we are now no longer prepared to just accept what we are given. If there is rotten service, we complain, we can appeal, and, to some extent, there is some degree of competition. It is not as easy as it perhaps might be, but if you do not like the school which your child attends, there is a chance of moving, and, particularly with the free schools and city academies, a chance of choosing, within limits, a school. This also applies to some extent in the Health Service as well.   Blair opened up the political system: another referendum for Europe; policies of devolution; an elected Mayor of London, and so on.    Broadly speaking, people no longer see themselves, as they did in the 1940s, as passive pawns of the state, prepared to accept what they are offered; they want choice in public services. The blocked society has been undermined by changes in the social structure – class system, much greater social mobility, affluence, home ownership, and so on. It is a much more fluid society. People in it do not want to be dependent, do not see themselves as clients of the state or subject to the power of the men and women in Whitehall. They want to make their own choices, and I think if there is one key change, it is that: our transition from a blocked society to a much more fluid and individualistic society.   The Festival of Britain in 1951 was financed wholly from public funds; the Millennium Dome, at the end of the century, was financed from corporate sources and the proceeds of the new National Lottery. This illustrates the development of the market economy.   The settlement of Attlee after the War, which lasted so long, has almost wholly gone. Some of it is still there, of course (e.g. the Health Service), but some of it has been dismantled. It is not clear what should replace it or what will replace it. We have not been able to answer the question that plagued both John Major and Tony Blair, of how competitive markets can be made compatible with a stable community. Neither Party seemed to have an answer to that. David Cameron is trying to find it with his Big Society.   But perhaps the most striking difference between 1945 and 2000 is the loss of national self-confidence, despite Thatcher’s attempts to restore it. In 1945, Britain was the leader, not only in democratic and constitutional matters, but in building the welfare state. It was a new Jerusalem, the model for all social democracies elsewhere. Every country would follow the National Health Service, every country would follow British methods of securing full employment, running he economy and so on, and there were predictions in the early 1950s of a new Elizabethan age. Britain was to be an example to the world. That was certainly the feeling of the Attlee Government and the Churchill Government which succeeded it.   People do not, I think, feel that anymore. People are much richer than they were, of course, and they have a much wider choice. Is it a better world than the one we hoped for in the 1950s? Well, that is a question for you to answer and that is for you to decide.     © Professor Vernon Bogdanor CBE, 2012

This event was on Tue, 22 May 2012

Vernon Bogdanor

Professor Sir Vernon Bogdanor FBA CBE

Professor of Law

Vernon Bogdanor CBE is Emeritus Gresham Professor of Law, former Visiting Gresham Professor of Political History, Research Professor at King's College London, a Fellow of the British Academy and an Honorary Fellow of the Institute of Advanced Legal Studies.

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