Conservative Economic Policymaking and the Birth of Thatcherism, 1964–1979, by Adrian Williamson

The collapse of the post-war ‘settlement’ and the rise of ‘Thatcherism’ in the 1970s and 1980s is by now firmly established as the central question in late twentieth-century British political history. Many of the landmarks are very familiar, but the opening of official and private papers has made possible a wave of detailed research which fleshes out and refines contemporary judgements on the period. Adrian Williamson’s study of Conservative economic policy-making under Ted Heath and Margaret Thatcher represents a major contribution to this literature. Drawing on twenty-eight interviews with veteran policy-makers and an exhaustive trawl through the archives, Williamson clarifies our understanding of how Conservative economic thinking developed in a wide range of fields in the run-up to the 1979 general election. Williamson’s rhetorical target is the idea that the mid-1970s witnessed an ideological coup in which New Right thinkers linked to the Institute of Economic Affairs and the Centre for Policy Studies took control of Conservative policy—a notion propagated both by ‘wet’ critics such as Sir Ian Gilmour and by some Thatcherite ‘true believers’. He argues instead that Conservative economic policy in the Thatcher years comprised a mixture of three elements—‘Supply Side Reform, the New Realism, and Powellism’ (p. 4)—of which the first two were the most important and the least controversial. The supply-side agenda of tax cuts, deregulation, free-market competition and trade union reform first took shape in the mid-1960s and enjoyed wide support within the party, even though the Heath government’s experience forced the Conservatives to rethink how they could achieve these objectives. The ‘New Realism’ which emerged in macroeconomic policy after 1974, meanwhile, was not unique to the Conservatives but extended right across the British establishment, as reflected in the use of cash limits, money supply targets and asset sales (and the tacit acceptance of unemployment) by Denis Healey and Jim Callaghan. For the most part, the Conservative economic strategy developed by Sir Geoffrey Howe and his colleagues in the Economic Reconstruction Group between 1975 and 1979 was built on these twin intellectual foundations. The more radical ideas associated with Enoch Powell and the New Right think-tanks—‘theoretical monetarism’, privatisation of the welfare state and opposition to the EEC—were much less influential. Although Thatcher’s radical instincts were clear, she ‘played no part in the numerous policy groups established by [Sir Keith] Joseph after 1975’, was ‘often out of her depth’ on technical matters and ‘was constrained by policy compromises that had been painstakingly hammered out’ between Howe, Joseph and their more cautious colleagues (pp. 229–30).

Art · Deregulation · Economic history · Economics · Ideology · Market economy · New Right · Political economy · Political science · Politics · Realism · Sociology · Spanish Civil War · Thatcherism · Law · Political and Economic history of UK and US