Thatcher and the cleaving of the working class

Words: Alex Walker

Margaret Thatcher is probably the most divisive person in British political history. She’s the Iron Lady who stood up against the unions and restored Britain to her senses, and she’s the heartless demon who crushed the working man. 

But her policies were divisive in a different way, too. They forced a separation between members of the British working class – a division based on employment, homeownership, and education. For those who weren’t able to rise up the ladder, the Thatcherite environment locked them into poverty. There is a cruelty in the lasting divisions that were sown within communities, and continue to affect them today.

The initiative more responsible for this divide than any other was the Right-to-Buy scheme. Under Right-to-Buy, councils could sell off council housing to their residents at discounted prices, sometimes up to 70%. The scheme was incredibly popular, and drastically changed the demographics of homeownership, which rose from 55% of householders in 1979 to a peak of 71% in 2003. Thatcher always presented this as a mechanism for people to break away from reliance on the state, and for many it was. But the scheme was designed, above all, to reduce the national bill and undermine the welfare state – which had been a key part of the political consensus since the Second World War, and formed a crucial part of many people’s lives. 

Councils didn’t replenish the housing stock when they sold it, freeing the government from their commitment to the maintenance and provision of affordable housing. As a result, there hasn’t been enough social housing to provide for the people who need it, or enough rebuilding of affordable housing, the private sector having taken over the responsibility for new houses.

The policy also caused an acceleration in the value of houses, from an average of £20,000 in 1979 to £60,000 in 1989. People who had been able to buy their houses had made a sizeable and very quickly appreciating investment, while those who had not were now unable to get on the housing ladder. The housing boom, which has broadly continued to this day, brought financial benefit to a huge number of people, but made homeownership an impossibility for many others. Small economic differences between individuals and families in the same community quickly became vast craters.

Similar things can be said of Thatcher’s interactions with unions and government-owned industry. There’s a strong argument that the government was under threat from union power, especially given the events of the 1970s. The Winter of Discontent had brought the economy to a halt in the year of Thatcher’s election, and successive Labour and Conservative governments under Wilson, Heath and Callaghan had been unable to combat them. But the ferocity in which the unions were fought was extreme: working class people employed in more profitable industries, or as white-collar workers, became wealthier and more likely to be able to buy their houses – which made them wealthier still – and by the end of the 1980s were in an entirely separate position to the union-reliant workers in heavy industry.

Unions maintained the lobbying for full employment – a system whereby the government ensured that the number of jobseekers did not exceed the number of jobs available – and formed a major part of the social lives of their members, especially in the mining towns of the North and Wales and in poorer industrialised cities like Glasgow. Full employment had been in place in Britain for most of the 20th century, and often took the form of generations of families being employed in the same heavy industry. 

Working class communities had been bound together by full employment in government-owned industries, unions, and with support from the state, all of which Thatcher made dirty words. In the dismantling of these institutions, working people suffered – but this process has continued and shifted, now more often taking the forms of urban renewal and gentrification. Local groups are overtaken, and people are priced out.

The destruction of these communities contributed to the creation of the ‘underclass’, a concept developed in the late 20th century. Young people no longer went into trades with their families, or joined unions who provided positive community outreach and social engagement. Poverty and deprivation became dominant forces in people’s lives, where once there had been work and local relationships. In 1979, 13.4% of the population lived below 60% of median incomes before housing costs. By 1990, it had risen to 22.2%

Britain had also been a country which prided itself on not leaving people out on the street, but homelessness and rough sleeping began to rise. By 1990 there were over 25,000 families in temporary accommodation, and 2,000 people sleeping rough in London alone. 

There was an economic boom between 1985-1988, known as the Lawson Boom – but by 1990, inflation had increased to 9.5% anyway, and by the early 1990s recession had returned. The Lawson Boom was caused by the revenues generated by North Sea Oil, privatisation, and reducing income tax: however, the basic rate of income tax was only reduced from 29% to 25%, and the top rate was cut to 40%, from 83%, which contradicts the idea that Thatcherism endeavoured to make normal people wealthier. 

Thatcher’s policies of economic liberation were focused on the rich, and encouraging business – and a consistent rise in unemployment was deemed unimportant. VAT was increased from 8% to 15%, which significantly impacted normal buyers, especially those who had a limited budget, and the Poll Tax which so famously ended her premiership forced everyone in the county, irrespective of wealth, to pay the same amount. 

When Thatcher is discussed in a binary way, we ignore the question of empathy. The politicians enacting these reforms had no concern for the damage that wrought on the lives of society’s poorest. Many people joined a new branch of the middle class, buying houses that quickly gained value and investing in newly-privatised businesses, but many also saw the destruction of their historic communities and news highs of unemployment and living costs. Blair and Labour moved with Thatcher, reversing few of the changes she made: communities fell apart as the industries which held them together were dismantled or sold off, and the divisions between classes grew. After thirty years of political consensus rule, Thatcher created an environment which allowed families to be plunged into poverty provided the economy was ‘successful’, and cemented the fiscal Conservatism that still dominates the party, the country, and the lives of those across it.

learn more

  • BOOK: A History of Modern Britain – Andrew Marr
  • DOCUMENTARY: Thatcher: A Very British Revolution (2019)
  • BOOK: Thatcher and Sons – Simon Jenkins

Alex Walker is an English Literature student at Newcastle University, and a regular contributor to the Newcastle University Courier. Follow him on Twitter.