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History of Modern Britain – Andrew Marr

August 18, 2018

Britain in 1945; the country is victorious but nearly bankrupt. As Clement Attlee’s Labour government sets out to build ‘New Jerusalem’, Britain is forced to hold out the begging bowl in Washington. Though Ealing Studios produces a series of very British comedies and there is a spirit of hope in the air, the British people’s growing impatience with austerity threatens to take the country from bankruptcy to self-destruction.

The Land of Lost Content 1955–1964

The 1950s were a period of apparent calm, order and prosperity for Britain, but much of the populace was hungry for change, many began to distrust the government and protestors and satirists led people to question and mock their rulers. In 1961, the liaison between working-class Christine Keeler and Secretary of State for War John Profumo brought the closed world of the British establishment together with the cocky new Britain growing up around it.

Paradise Lost 1964–1974

As the 1960s progress, Harold Wilson takes centre stage in a rapidly changing Britain as the country looks to modern technology and a fairer, liberated future. However, the Wilson governments presided over years of industrial conflict, stagnation and decline. As Edward Heath’s government ascends to power in the 1970s, British industry is reduced to working a Three-Day Week, electricity is rationed and the country is again haunted by the shadow of wartime austerity. When Heath asks “Who governs?”, the British public gave their answer.

Revolution!

1974–1990

Andrew examines the Britain of Margaret Thatcher, and comes to some surprising conclusions about the British national character. It was a period of extreme ideological polarisation. Imperial visions stirred again as the fleet sailed for the Falklands. Privatisation and deregulation amounted to a cultural, economic and political revolution. Heroic national rescue operation or final act of self-destruction? An exploration of the extent to which we British are all now the children of Thatcher.

New Britannia 1990–2007

Britain enters the uncharted waters of the post-Thatcher era. Many have done well in the end during the Thatcher years but now boom is turning to bust. Britain feels more vulnerable than ever to rapid international change – from the influence of powerful new global market forces to global warming. Just when many in post-war Britain are getting used to the good life, it seems we might have to start giving up our big cars and foreign holidays.

He brings potentially dull subject matter vividly to life. He explores post war Britain in detail. It’s the world in which I grew up.

Although not an academic historian, Marr describes himself as a “history addict” who has been “marinating in history” for more than 30 years.

Quotations;

History is either a moral argument with lessons for the here-and-now, or it is merely an accumulation of pointless facts.

The great background question about the Labour governments of the sixties is whether with a stronger leader they could have gripped the country’s big problems and dealt with them. How did it happen that a cabinet of such brilliant, such clever and self-confident people achieved so little? In part, it was the effect of the whirling court politics demonstrated by ‘In Place of Strife’.

Consumerism has shouldered aside other ways of understanding the world – real political visions, organized religion, a pulsing sense of national identity. So an obvious question is whether the triumph of consumerism, that big story of British life from 1945 until today, is about to be halted.

The most fundamental thing the war changed was the political climate: it made democracy fashionable.

If the government could throw an army into Europe and defeat the most well organised and frightening-looking military machine of modern times, then what else could it do? Was all the waste and lack of planning and general amateurism really the best the British could achieve?

As early as 1940 the great wartime Archbishop of Canterbury, William Temple, had called for ‘extreme inequalities of wealth to be abolished’. Going rather further, his Council of Clergy and Ministers for Common Ownership declared private ownership of industry ‘contrary to Divine Justice.

Britain’s dilemma from 1945 until today has been easy to state, impossible to resolve. How do you maintain independence and dignity when you are junior partner, locked into defence systems, intelligence gathering and treaties with the world’s great military giant?

“This was the moment when Britain was on the edge and her modern story begins. From that decision on that day, everything follows.”

“History is either a moral argument with lessons for the here-and-now or it is merely an accumulation of pointless facts”

For most of the modern period politics has served Britain less well than our self-congratulation about parliamentary democracy might suggest. Good people, acting honourably, failed to lead well. We have been run by cliques of right and left who did not understand the direction the country was taking. Hennessy is right: the political lass was intelligent and faced terrible choices which are easy to brush aside afterwards when the dangers have passed. But Barnett is also right: we could have had a better country, had we had clearer-minded leaders who did not shrink from telling hard truths, or from treating the voters like adults. So, Labour did not build a New Jerusalem. So, the Tory cabinets of the fifties and early sixties failed to create the restored great power, the New Elizabethan Age they dreamed of. The Wilson and Heath years were supposed to be a time of modernization; a refitted, retooled Britain. They ended with trade unions rampant and the lights flickering out. John Major set out promising to create a country at ease with itself and ended up with a country ill at ease, above all with John Major. Tony Blair’s New Labour Britain was never as cool or efficient as he told us it would be, even before the Iraq war. Nor was it whiter than white. Each failure occurred on its own terms.

The exceptions were the Labour government of 1945, which developed a Welfare State even if it did not achieve the social transformation it wanted, and Margaret Thatcher’s first two adminis­trations, which addressed the British crisis head-on. Both set templates for what followed.

The post-war Labour government did the following things. It created National Health Service. It brought in welfare payments and state urance ‘from the cradle to the grave’. It nationalized the Bank of gland, the coal industry, which was then responsible for 90 per cent f Britain’s energy needs, and eventually the iron and steel industry

It withdrew from India. It demobilized much of the vast army, air force and navy that had been accumulated during the war. It directed armament factories back to peaceful purposes and built new homes, though not nearly enough. It oversaw a rationalization and shake-up in the school system, raising the leaving age to fifteen. It kept the people fed, though, as we have seen, not excitingly fed. It started to fight Communism in Korea and to develop the atomic bomb. It did these things against the background of the worst financial crisis that could be imagined, at a time when its own civil servants were drawing up plans for starvation rationing if the money ran out, and while meeting its obligations to the malnourished people of other countries, left bereft by war or crop failure. It harangued people to work harder and consume less. In its dying months it did its best to amuse and entertain them too, with the Festival of Britain. This combines to form the most dramatic tale in our peacetime history of a State organization doing things it actually meant to.

Hitler had a précis of the Beveridge report with him in the Berlin bunker at the end of the war (“superior to the current German social insurance in almost all points”)

Harold Macmillan described Keith Joseph as “the only boring Jew I’ve ever known”;

in 1964 the outgoing Tory chancellor of the exchequer, Reginald Maudling, handed over to his Labour successor, James Callaghan, in the hall of No 11 with the words “Sorry to leave such a mess, old cock”.

Edward Heath “a political leader whose reputation deserves to be revisited”

Attlee’s answer to an interviewer who asked “Is there anything else you’d care to say about the coming election?” – “No”

‘only the 1945-51 Labour Administration and Thatcher’s first two terms really dealt successfully with Britain’s problems’.

“The left tended to think people’s private lives should be their own, even if they made choices traditional Christian society regarded as immoral; but that people’s working lives, from how much they earned to where they worked, were fit for State interference. The right had a reverse view, that the State should uphold traditional moral codes with the full rigour of the law, but keep out of the economy as much as possible.”

“The one economic medicine so bitter that no minister in the seventies had thought of trying it was duly uncorked and poured into the spoon. It was time for Britain to grimace and open her mouth.”

“Androgynous fashion, long hair, the Pill, a new interest in the inner psychological life – an unabashed sloppiness, if you will – really marks the sixties. It was when Britain went girlie. And what do girls do? Girls shop.”

“The great background question about the Labour governments of the sixties is whether with a stronger leader they could have gripped the country’s big problems and dealt with them. How did it happen that a cabinet of such brilliant, such clever and self-confident people achieved so little? In part, it was the effect of the whirling court politics demonstrated by ‘In Place of Strife’.”

“When they finally went home, they left behind an unstable, unhappy part of the world, with borders like wounds scored across it.”

“To what extent was this David Cameron’s fault? It’s hard to think of a more complete definition of political failure than an essentially pro-EU Prime Minister who plots to defeat his enemies on the right, and by doing so ejects his country from the EU by mistake,”

“being sacked. Major’s hopes for central regulation withering away echo Lenin, who hoped for a ‘withering away’ of the Soviet”

“The great background question about the Labour governments of the sixties is whether with a stronger leader they could have gripped the country’s big problems and dealt with them. How did it happen that a cabinet of such brilliant, such clever and self-confident people achieved so little? In part, it was the effect of the whirling court politics demonstrated by ‘In Place of Strife’.”

“When they finally went home, they left behind an unstable, unhappy part of the world, with borders like wounds scored across it.”

If there was one single domestic good that the British took from the sacrifices of the war, it was a health service free at the point of use. We have clung to it tenaciously ever since and no mainstream party has dared suggest taking it away.

Aside from military historians, Korea has become the forgotten war. Yet it was a genuinely dangerous global confrontation in which Britain played an important if subsidiary role. It was the first and only time when British troops have directly fought a major Communist army, Mao’s Chinese People’s Liberation Army; and it was a long and bloody conflict. Britain and her Commonwealth allies, fighting with a mixture of professional soldiers and young National Service conscripts, lost more than a thousand dead and nearly three times as many wounded. The overall UN casualties were around 142,000.

As they struggled against a peasant army across icy, rocky hills and through paddy-fields the US military contemplated using their new atomic bombs to lay down an irradiated dead zone between Korea and China.

In a memorandum to Attlee’s government, the British chiefs of staff wrote with elegant understatement that ‘from the military point of view . . . the dropping of an atomic bomb in North Korea would be unsound. The effects of such action would be world-wide, and might well be very damaging. Moreover, it would probably provoke a global war.’

Though the Cuban missile crisis of 1962 is remembered, rightly, as the moment when the world came nearest to nuclear war, there was a serious possibility of it happening earlier, in Korea and China.

In some ways, Korea can be compared to the Iraq wars, the first of which had UN backing, and both of which were American wars in which Britain played a secondary role.

The Cold War shaped post-war Europe. In Britain it helped quickly blight the sunny optimism about a better future that so briefly bloomed in the years after the war.

By the end of this period, in 1963, there were still nearly a quarter of a million people in ‘domestic service’ – maids, housekeepers, valets – and more than six hundred full-time butlers. Britain was still graced with thirty-one Dukes, thirty-eight Marquesses and a mere 204 Earls.

People were more or less obedient citizens and subjects, not picky consumers. Patriotism was proclaimed publicly, loudly and unselfconsciously, in a way that would quickly become hard to imagine.

Knowing what we know now, there were signs of social change everywhere from the disaffected teenagers just beginning to be discussed, to the rise of Maltese, Italian and home-grown crime dynasties, and the first wide-eyed, optimistic Caribbean immigrants. There was also much boredom and frustration. Working-class Britain was getting richer, but still housed in dreadful old homes, excluded from higher education, unless part of a small and lucky elite, and deprived of any jobs but hard and boring ones. Eventually, the lid would blow off. Yet to be British was something to be proud of.

Politics in the fifties, at least on the Tory side, was unimaginably different from politics today. There were the same rackety campaigning offices, the same ambitious young researchers dreaming of becoming ministers themselves and the same underlying ruthless struggle for personal power. But many more people were party members, the backbench MPs were more independent-minded, with more status in the country, yet far lazier, too; and above all, the top of government was small social circle which operated well out of the way of lenses, microphones or diarists.

Astonishingly, within months of his becoming Prime Minister, Macmillan was leading a government in which thirty-five ministers out of eighty-five, including seven in the cabinet, were related to him by marriage.

The private thinking of Whitehall was laid out in a fascinating memo from top officials to a cabinet committee shortly after the Americans had upped the ante in the nuclear race by exploding their first H-bombs. The British cabinet paper was frank about the overall position: ‘It is clear that ever since the end of the war we have tried to do too much – with the result that we have only rarely been free from the danger of economic crisis.

Suez is often seen as a very short era of bad judgement, a crisis whose origins are obscure and whose consequences are hard to discern. This sells it short. Suez was about Britain’s colonial history.

The biggest single difference between the Suez and Iraq crises was, of course, that the Americans did not want war in 1956 and were determined for it in 2003.

Much later, according to the then Vice President, Richard Nixon, Eisenhower had second thoughts about Suez, calling his decision to crush Britain his greatest foreign policy mistake. Dulles, who was desperately ill with cancer, told the head of the hospital where he died in 1959 that he reckoned he had been wrong over Suez too.

‘Suez’ became four-letter shorthand for the moment when Britain realised her new place in the world.

A year after Macmillan’s triumphant re-election, he made a speech unlikely to be forgotten. No single speech made more of an impact in seeming to settle the argument than the one Harold Macmillan made in Cape Town in 1960, known forever as his ‘wind of change’ speech. He told his startled audience; ‘the wind of change is blowing through this continent’ and like it or not, this was simply a fact.

Did the British scuttle from Africa happen too fast, in a mood of political hysteria and without proper thought for what would follow? The sheer speed may not be as admirable as we have been taught to think.

Only after Macmillan’s stunning 1959 general election victory did pressure really begin to build up for some kind of restriction on immigration to Britain. Opinion polls were now showing strong hostility to the open-door policy.

‘Immigration was restricted a full four years after all measures of the public mood indicated clear hostility to a black presence in Britain, and even then it was only done with hesitation. And when the 1962 Commonwealth Immigrants Act finally passed into law, it was notably liberal, at least by later standards, assuming the arrival of up to 40,000 legal immigrants a year with complete right of entry for their dependants.

In the three-year period from 1960 to 1963, despite the intense hostility to immigration, ‘more migrants had arrived in Britain than had disembarked in the whole of the twentieth century up to that point. The country would never be the same again.’

In 1962 the world had come to the brink of nuclear war during the Cuban missile crisis.

In 1955 secret government papers on the impact of hydrogen bombs stated that the effect ‘on dense populations would remain beyond the imagination until it happened. Whether this country could withstand an all-out attack and still be in any state to carry on hostilities must be very doubtful.’

Macmillan had his post-nuclear government system ready. Whitehall had earmarked 210 people who would run the remnant of a country, from chiefs of staff and intelligence officers to typists and clerks. They would be rushed to TURNSTILE, the top-secret underground bunker system with sixty miles of tunnels, built deep under the Cotswolds at Corsham. Everyone else, including the wives, husbands and children of those ordered to the bunkers, would have been left to burn, die of radiation poisoning, or otherwise expire.

It is striking that the original clinching argument for British nuclear weapons, which was that they would give Britain’s politicians special status and leverage to influence Washington, so quickly collapsed. And it is even more striking that when the argument collapsed there was no radical rethinking of Britain’s nuclear posture

Labour never went anti-nuclear, even though so many of its supporters were so passionately committed to CND

By the 1960s, the flow of lower-middle-class and working-class children through grammar schools and into the universities was strongly affecting the atmosphere of the whole country

Despite the new tycoons and the cluster of truly innovative big companies, Britain’s output was growing far more slowly than other comparable countries and her share of world markets was shrivelling at a terrifying speed. Despite outside shocks, from Indian independence to Suez, from the sterling crises and the failure of weapons systems, to France’s rejection of her application for Common Market membership, the country had made no radical change of direction. Privately, civil servants and politicians acknowledged that there were profound problems, and agonized about what should be done

No revolution, invasion or wartime defeat had shaken the British as they acquired their new cars and explored their new supermarkets; British political scandals were a branch of light entertainment compared to the darker struggles convulsing Italy, France or Eastern Europe. And when Britain finally made a change, it turned out to be a surprisingly modest and ineffective one.

An alternative assessment came from Crossman as he contemplated the funeral gathering for Sir Winston Churchill in Westminster Hall at the end of January 1965: ‘But, oh, what a faded, declining establishment surrounded me. Aged marshals, grey, dreary ladies, decadent Marlboroughs and Churchills. It was a dying congregation gathered there and I am afraid the Labour Cabinet didn’t look too distinguished, either. It felt like the end of an epoch, possibly even the end of a nation.’

The thirteen years of Tory rule, wasted according to Harold Wilson, were followed by fifteen years when modern Britain rose and failed. ‘Modern’ does not simply mean the look and shape of the country formed during 1964–79, most of which is still here around us, essentially unaltered – the motorways and mass car economy, the concrete architecture, the rock music, the high street chains. It also means a belief in planning and management. This was the time of practical men, educated in grammar schools, sure of their intelligence, rolling up their sleeves and taking no nonsense. They were going to scrap the old and fusty, whether that meant the huge Victorian railway network, the grand Edwardian government palazzos in Whitehall, the historic regiments, terraced housing, hanging, theatre censorship, the prohibitions on homosexual behaviour and abortion, the ancient coinage and the quaint county names.

Huge comprehensive schools would be more efficient than the maze of selective and rubbish-dump academies. The many hundreds of trade unions would resolve themselves into a few leviathans, known only by their initials. Small companies would wither and combine and ever-larger corporations would arise in their place, ruthless and managed on the latest scientific, American lines. Britain herself would cease to be a small independent trader and would merge into the largest corporation then available, the European Community. This was managerial self-confidence, which would be smashed to pieces during the seventies and never recover.

Just seven men dominate the politics of these thirteen years. They are the three prime ministers, Harold Wilson, Edward Heath and James Callaghan; two other Labour politicians so important they stand alongside the premiers, Roy Jenkins and Denis Healey; and two who stood increasingly outside the management consensus, leading attacks on it from right and left – Enoch Powell, and Anthony Wedgwood Benn.

Though they had many differences of outlook, in broad terms they could agree that Marxism destroyed freedom, and that the discredited liberal free market brought chaos and unfairness. Heath would denounce ‘the unacceptable face of capitalism’ and Healey would promise to make the richest in the land ‘howl with anguish’

In the sixties and seventies, Britain was becoming a more feminized, sexualized, rebellious and consumption-addicted society. The political class was cut off from this by their age.

The cross-looking men with moustaches and short back and sides were losing ground. But they were visibly still in power.

Britain had been going through a time of self-doubt, partly because of the seedy revelations of the Profumo affair and fears of moral decay among the old ruling class, but more importantly because of economic decline.

The country needed to sweep away privilege and cobwebbed aristocracy, and replace it with ruthless and ‘purposive’ modern planning. The problem Wilson would soon face was how to achieve a successful planned economy in a capitalist world.

By 1965 the post-war division of children into potential intellectuals, technical workers and drones – gold, silver and lead – was thoroughly discredited.

For roughly a quarter of children there were the grammar schools, offering traditional academic teaching, including much memorizing and strict discipline.  For the other three-quarters of state-educated children there were the secondary moderns, frankly second-rate and often in buildings which reflected their lower status.

In practice there was therefore a sharp, public, sheep-and-goats division of the country’s children, which took place at eleven years old through the ‘eleven-plus’ examination. Many of the majority who were rejected and sent to the secondary moderns never got over the sense of rejection and failure.

By 1970 when Wilson was defeated, a third of children were at comprehensives and a mere eight education authorities were holding on to the old division.

The revolution simply rolled on. Edward Heath, devoted to his old grammar school, had promised to stop bullying education authorities into destroying grammar schools. Crosland’s 10/65 was duly withdrawn, and Heath appointed that ultimate enthusiast for the grammar schools system, Margaret Thatcher, as Education Secretary.

As one of her biographers flatly pointed out, ‘for all her strong prejudices against them . . . Margaret Thatcher approved more schemes for comprehensive schools, and the abolition of more grammar schools, than any other Secretary of State before or since.

Crosland’s legacy went far beyond comprehensives. He was a high spender on education, as was Margaret Thatcher, both believing long before Tony Blair that there was no better way of investing taxes than in ‘education, education, education.

Perhaps the proudest educational achievement of the Wilson years was the Open University. It has been one of the most successful and liberating acts by a post-war government in education.

The greatest changes of the Labour years were achieved by Roy Jenkins, a man Wilson had always distrusted.

Back in the Tory years when he was slim and dashing, Roy Jenkins had set out his case for social reforms, which would remove the State’s powers over individual freedoms. He argued that the ‘ghastly apparatus of the gallows’ must go, as well as judicial flogging; that the persecution of homosexuals should end, as Wolfenden had suggested; that the Lord Chamberlain’s powers to censor stage plays must also end; that the ‘harsh and archaic’ law forbidding almost all abortions should be changed; that the divorce laws, which caused unnecessary suffering, should be reformed; and that the immigration laws needed to be made more civilized. Through the mid-sixties, all these changes happened. Hanging went in 1965, before Jenkins became Home Secretary, but there was a softening on immigration in 1966, flogging went in 1967, the same year as the liberalization of abortion law, and the decriminalization of private homosexual acts between men aged over twenty-one. State censorship of plays ended in 1968, and the following year, the divorce laws were liberalized. Jenkins had also called for changes to the laws on suicide and on alcohol licensing, and those came later; but it was a formidable drum-roll of libertarian change, without precedent and never matched.

Jenkins turns out to be the single most influential politician of the sixties, though never Prime Minister himself.

He felt he was at the cutting edge of a war about what it meant to be civilized. Against him and the reformers were many clergy, including the Roman Catholic Church; millions of quietly conservative-minded citizens; and much of the political Establishment. After supporting the abolition of hanging, and after refusing to authorize the birching of a prisoner, he became a hate-figure among many ordinary policemen as well as for the grassroots of the Tory Party, something he seemed to regard as an honour. Yet he was not liberal on everything. He believed that crime would be cut more effectively by catching more criminals and getting more guilty verdicts, than by horrific punishments.

The left tended to think people’s private lives should be their own, even if they made choices traditional Christian society regarded as immoral; but that people’s working lives, from how much they earned to where they worked, were fit for State interference. The right had a reverse view, that the State should uphold traditional moral codes with the full rigour of the law, but keep out of the economy as much as possible.

A fair verdict is that the changes allowed the British to be more openly themselves, and that while the results are not always pretty; the apple of self-knowledge cannot be uneaten again and returned to the tree.

The truth is that we have never really left the sixties. We have simply repeated them, and that goes for those who were only born later. Sixties music, shopping and celebrity culture have been spread far beyond their first makers and participants, to almost everybody in the land.

As the eighties’ economy revived, the sixties’ basic preoccupations – escapism, personal fulfilment, and shopping – returned with full force.

If you weren’t listening in the Cavern Club in the early days, or at the Isle of Wight when Dylan went electric, if you never dodged the police horses at Grosvenor Square, or heard Adrian Mitchell and Allen Ginsberg in the Albert Hall, or sashayed out of Bazaar with a bright bag of swirly-patterned clothes . . . then sorry, Babe, you missed it, and you missed it for ever.

The shift was in what it might mean to be properly human. The old virtues of stoicism, buttoned lips and obedience were retreating. Traditions of submission and obedience, hierarchies of class inherited from medieval landowning, industrial capital and imperial administration, began to wobble and dissolve into something very different, a society, which was dilute, porous and mushily self-forgiving. This took place not because bad people corrupted good people or, if you are ‘pro-sixties’, because noble revolutionaries ushered in an age of personal freedom, but because it suited a new economic system.

All developed societies lavish attention on a small number of favoured people, rich, beautiful or talented. What has changed in recent decades is the scale of celebrity devotion, this cargo cult of modern Britain. It has elbowed aside rival forms in television entertainment, invaded and occupied popular newspapers and produced racks of magazines breathlessly following face-lifts, marital break-ups, boob jobs and births of celebs. All of this originated in the mid-sixties.

The raising of footballers and musicians from being tradesmen-servants of the public to misbehaving gods began then too.

The sixties introduced mass drug use to Britain as the musical and hippy enthusiasts promoted it as a social and personal good. The authorities decided to destroy the drug culture as a social evil. Both were confounded. Nobody became wiser or more interesting through using heroin, LSD or dope, and the battle against drug use has been entirely lost. The victims began with a steady stream of performers and hangers-on who died from overdoses or drugs-related accidents and, more important by far, are the hundreds of thousands of poorer, less talented children who followed them after having far less fun.

While the message of the sixties still lives, other stories can dominate the newspapers for months on end, even years, and then are apparently forgotten almost immediately. Perhaps they are too painful to dwell on. The story of Rhodesia’s Unilateral Declaration of Independence, or UDI, and of the short-lived Federation that preceded it, obsessed four prime ministers in a row, Macmillan, Douglas-Home, Wilson and Heath. It filled front pages, elbowing out other contemporary crises such as Vietnam that now bulk vastly bigger in world history. It caused deep divisions in both the main parties, with their leaders condemned as race traitors or betrayers of Africa, according to taste. It produced bizarre summits on Royal Navy warships, and dramatic confrontations at the United Nations. It pitched the young Queen Elizabeth into a constitutional fight over the hanging of three Africans. Its cast of characters, Garfield Todd, Roy Welensky, and Sir Humphrey Gibbs, forgotten now, as well as Ian Smith and Joshua Nkomo, were for a time household names. But little of this is recalled in the history of the sixties.

And the final outcome of the Rhodesian crisis, a vicious guerrilla war followed by the rule of Robert Mugabe, one of the most incompetent megalomaniacs to hold power at the beginning of the twenty-first century, was genuinely tragic.

This was the dilemma that Harold Wilson inherited when he took office in 1964.

By the time Wilson left office in 1970 the Rhodesian dilemma was no nearer to being solved, and it would continue to hang over British politics into the Thatcher years, when the black majority finally won power.

Amid this maelstrom Britain, yet again, was close to bankruptcy. How to get a grip? Devaluing the pound might have given the Wilson government and the country the chance of a fresh start. In a world of fewer and floating currencies, the importance of devaluation is harder to understand now, but it was then the single most important issue facing Wilson.

This was a choice which went beyond economics. Devaluation and world politics were inextricably linked.

The alternative was to try to keep the global role and borrow from the United States. This was certainly on offer but at a large political price. As President Johnson’s special assistant put it at the time, ‘We want to make very sure that the British get into their heads that it makes no sense for us to rescue the pound in a situation in which there is no British flag in Vietnam, and a threatened British thin-out both east of Suez and in Germany . . . a British Brigade in Vietnam would be worth a billion dollars at the moment of truth for Sterling.’

Crossman assessed the dilemma shrewdly, noting in January 1965 that Wilson was committing Britain to defence spending ‘almost as burdensome – if not more burdensome – than that to which Ernest Bevin committed us in 1945, and for the same reason: because of our commitment to the Anglo-American special relationship and because of our belief that it is only through the existence of that relationship that we can survive outside Europe.’

That, according to Barbara Castle, was what George Brown had decided: ‘We’ve got to turn down their money and pull out the troops . . . I want them out of East of Suez. This is the decision we have got to make: break the commitment to America . . . I’ve been sickened by what we have had to do to defend America – what I’ve had to say at the despatch box.’ Castle interjected: ‘Vietnam?’ and Brown replied: ‘Yes, Vietnam too.’

Had Britain broken with America during the most testing time in its Vietnamese agony, the story of the Atlantic alliance would have taken a very different turn. We would probably have entered the EEC much earlier and, again probably, have played a role closer to that of France in the following decades, less linked in nuclear defence or intelligence terms to Washington. What this would have meant for the British economy’s failing experiment in continental corporatism, and for the stability of the anti-Communist world, is impossible to say.

At the centre of all the difficulties the government faced was the dilemma of devaluation.

Decade by decade, government by government, the impact of energy policy on British politics is a constant theme. One could write a useful political history, which did not move beyond the dilemmas posed by energy supply. We can follow it from the winter of 1947 when the frozen coal stocks blew Attlee off course, through the oil-related shock of Suez and the destruction of Eden, to Heath’s double confrontation with the miners, ending in his defeat in 1974, the rise of Scottish nationalism fuelled by North Sea oil, and then the epic coalfield confrontation between Margaret Thatcher and Arthur Scargill taking the story up to today’s arguments about global warming and gas dependency on government, the impact of energy policy on British politics is a constant theme. One could write a useful political history, which did not move beyond the dilemmas posed by energy supply. We can follow it from the winter of 1947 when the frozen coal stocks blew Attlee off course, through the oil-related shock of Suez and the destruction of Eden, to Heath’s double confrontation with the miners, ending in his defeat in 1974, the rise of Scottish nationalism fuelled by North Sea oil, and then the epic coalfield confrontation between Margaret Thatcher and Arthur Scargill taking the story up to today’s arguments about global warming and gas dependency on Russia.

It had its effect on Harold Wilson too, when the Six-Day War of June 1967 between Israel and Egypt led to an oil embargo on Britain by Iraq and Kuwait because of an alleged pro-Israel line from London. The economic effect was dreadful; the trade figures a national shock.

Wilson was still determined to resist devaluation. When he discovered briefing papers on the pros and cons had been prepared by civil servants, he brusquely ordered them to be collected up and burned.

The left-wing devaluers hoped to turn Labour at last into a proper socialist government. They preferred to keep Wilson as leader but would have ditched him if necessary. The pro-European devaluers would have liked to replace Wilson with Roy Jenkins.

Eventually, on the morning of November 1967, the senior economic adviser at the Treasury, Sir Alec Cairncross, told Callaghan at a private meeting that the dance was over. Nothing more could be done, the music had stopped. No further foreign borrowing was available. He would have to devalue.

In a 6 p.m. broadcast on 18 November Wilson announced that the pound was being devalued by 14 per cent and that defence cuts, restrictions on hire purchase, or credit, and higher interest rates would follow too.

Wilson was also devalued, possibly by more than 14 per cent.

From then on Labour would become as much a party of Treasury orthodoxy as the Conservatives. After being one of the most energetic Home Secretaries of the twentieth century, Jenkins himself spent a remarkable couple of years as one of its more successful Chancellors. Though he never made it to Number Ten, in terms of personal influence, there is almost a case for renaming the Wilson years the Jenkins years.

Forty years on, the paranoid atmosphere after only a few years of Wilson’s first administration is hard to credit, but there was a rising conviction among some in business and the media that democracy itself had failed.

There is a lurid little saloon bar of the mind where conspiracy theorists, mainly on the left, and self-important fantasists, mainly on the right, gather and talk. The rest of us should be wary of joining them for a tipple. Yet the transition from the discredited old guard of Macmillan-era Britain to the unwelcomed new cliques of Wilson-era Britain was a hard time. Wilson was a genuine outsider so far as the old Establishment was concerned, and he ran a court of outsiders. The old Tory style of government by clique and clubmen gave way to government by faction and feud, a weakness in Labour politics throughout the party’s history.

Until the end of the decade the sixties had not been particularly strike-prone compared to the fifties. Strikes tended to be local, unofficial and quickly settled.

Wilson had pioneered the matey ‘beer and sandwiches’ approach to dealing with union leaders (though he found on his first attempt the sandwiches were too thinly cut to satisfy union appetites). But he was becoming disillusioned. That seamen’s strike of 1966 had been a particularly bruising experience. So for once it was Wilson who took a stand. He was supported by an unlikely hammer of the unions, the veteran left-winger Barbara Castle, now made Secretary for Employment.

This was a package of measures, which looks gentle by the standards of the laws which would come later. The leading trade unionists of the day, once famous men like Jack Jones and Hugh Scanlon, saw it as an unacceptable return to legal curbs they had fought for decades to lift. The battle that followed nearly ended Wilson’s career, and Castle’s. Their defeat made the Thatcher revolution inevitable, though it would not come for a further decade.

But had the Labour Government been united behind Wilson on this, then legislative reform of trade union practices might have been forced through even the Parliamentary Labour Party of the day, and much subsequent grief avoided. Wilson’s reputation, Labour’s reputation and the story of British politics would have been markedly different. But with the cabinet as well as the backbenches in rebellion, Wilson had no choice but to give way.

The great background question about the Labour governments of the sixties is whether with a stronger leader they could have gripped the country’s big problems and dealt with them. How did it happen that a cabinet of such brilliant, such clever and self-confident people achieved so little?

Of the great crises that link Wilson and Heath together, that of Northern Ireland had as much effect on the tenor of mainland British life as any. It brought surprise and embarrassment to millions watching the violence on the streets of the province.

In the fifties and through most of the sixties, Northern Ireland barely appeared on the Westminster radar.

Mostly, though, this was a time of dozy neglect which turned out from 1969 to have been a terrible failure of imagination – malign neglect, whose effects would haunt Britain for the next thirty years.

Rising protests about apartheid in South Africa and the struggle for equal rights in the southern states of the US had focused attention on the squalid half-secret on Britain’s doorstep.

In 1967 a civil rights movement had been formed, using the language and tactics of the Deep South, and the following year, marches and demonstrations were being met with police violence.

Bernadette Devlin of the more radical Ulster Unity Party was elected in 1969 to the Commons, the youngest ever woman MP, on a civil rights ticket.

Now the nature of the conflict would change. It had begun as a protest about unfairness, bigotry and political corruption. It turned into a fight to force an end to the United Kingdom and to bring about the unification of Ireland.

This was the crisis inherited by Heath, the nearly man in Irish peace-making, in 1970.

If Heath is associated with a single action, it is British entry into ‘Europe’ but throughout his time in office the economy, not Europe, was the biggest issue facing him. British productivity was still pitifully low compared to the United States or Europe, never mind Japan. The country was spending too much on new consumer goods and not nearly enough on modernized and more efficient factories and businesses.

It is hard to describe quite how heavily, how painfully, relative economic decline weighed on the necks of politicians of thirty and forty years ago.

Britain not only had heavy levels of unionization through all the key industries but also, by modern standards, an incredible number of different unions – more than 600 altogether.

Almost immediately, Heath faced a dock strike, followed by a big pay settlement for local authority dustmen, then a power workers’ go-slow, which led to power cuts. Then the postal workers struck. The mood of the government was less focused and less steely than it would be nine years later when Margaret Thatcher came to power.

Perhaps the most significant move in the long term was the removal of lending limits for the high street banks, producing a vast surge in borrowing.

This, obviously, further fuelled inflation but it also gave a fillip to the ancient British fetish for house price ownership and borrowing. The huge expansion of credit and the unbalanced amount of capital sunk in bricks and lawns in modern-day Britain can be traced back partly to this decision, then the new credit boom of the Thatcher years.

Heath had worked closely with the Taoiseach (Prime Minister of the Irish Republic), Jack Lynch, and the new Stormont leader, Brian Faulkner, who, as a middle-class businessman by origin, was more in Heath’s image than the Old Etonian landowner, Chichester-Clark, had been. Eventually he had even managed to get the leaders of the Republic and Northern Ireland to sit and negotiate at the same table, something that had not happened since Partition in 1920.

If there was one moment when the ‘troubles’ became unstoppable it was 30 January 1972, ‘Bloody Sunday’, when troops from the Parachute Regiment killed thirteen unarmed civilians.

Within a few years, what had been essentially a policing role by the British Army, separating Protestant bigots from rebellious Catholics, had become a full-scale terrorist or counter-insurgency war with all the paranoia, the kidnappings, the apparatus of repression and the corruption of political life that it brings.

Then the miners struck. At the beginning of 1972 the National Union of Mineworkers began their first national strike since the dark days of the twenties, pursuing a pay demand of 45 per cent.

Arthur Scargill, a rousing speaker, former Communist Party member and highly ambitious union activist, later described the confrontation with Midlands’ police at Saltley as ‘the greatest day of my life’.

Scargill’s greatest day was, for the Prime Minister, ‘the most vivid, direct and terrifying challenge to the rule of law that I could ever recall emerging from within our own country . . . We were facing civil disorder on a massive scale.’

Heath and his ministers knew that they might have to go directly to the country with an appeal about who was in charge but before that, they tried a final round of compromise and negotiation.

Thatcherites later criticized Heath’s government for doing things, which a government ought not to do, and not doing things it ought to.

Heath was blown off course by a political version of the impossible storm that later wrecked his beloved yacht Morning Cloud. Much of the country was simply more left-wing than it was later. The unions, having defeated Wilson and Castle, were more self-confident than ever before or since.

What finally finished off the Heath government was the short war between Israel and Egypt in October 1973, the Yom Kippur War. Israel’s swift and decisive victory was a humiliation for the Arab world and it struck back, using oil. They decided to cut supplies to the West each month until Israel handed back its territorial gains and allowed the Palestinians their own state.

It was a global economic shock, shovelling further inflation into the industrialized world, but in Britain it arrived with special force. The miners put in yet another huge pay claim, which would have added half as much again to many pay-packets.

When the miners voted, 81 per cent were for striking, including those in some of the most traditionally moderate areas in the country. In February 1974 Heath asked the Queen to dissolve Parliament and went to the country on the election platform he had prepared two years earlier: ‘Who governs?’ The country’s answer, perhaps taking the question more literally than Heath had hoped, was ‘Not you, mate.’

Rather fatter, greyer and more personally conservative than he had been ten years earlier, Harold Wilson was back.

Contrary to popular myth, the seventies were not all about mass meetings and walkouts. After Heath had been beaten, the real trouble did not start again until 1978–9.

Wilson carried out his promised renegotiation of Britain’s terms of entry to the EEC and then put the result to the country in the Benn-inspired 1975 referendum.

In the end, to the simple question, ‘Do you think that the United Kingdom should stay in the European Community (The Common Market)?’, 68.3 per cent, or around 17 million people, said ‘Yes’ and 32.8 per cent, some 8.5 million, said ‘No.

More than thirty years later, the biggest question both about Heath’s triumph in engineering British membership and then about the Labour referendum, is whether the British were told the full story and truly understood the supranational organization they were signing up to.

Hugo Young, the journalist and historian who studied the campaign in great detail, wrote: ‘I traced no major document or speech that said in plain terms that national sovereignty would be lost, still less one that categorically promoted the European Community for its single most striking characteristic: that it was an institution positively designed to curb the full independence of the nation-state.’

The truth revealed by opinion polls is that sovereignty, as an issue, did not concern the public nearly as much as jobs and food prices. By later standards the position of Parliament was not taken terribly seriously in public debates.

As to the rest of Wilson’s short final government, much of his energy was spent on foreign affairs. Despite American disapproval the Labour government began the final withdrawal from east of Suez, giving up any pretensions of British influence in the Far East. The Empire was formally over.

Perhaps the most important statistic to hold in mind is that between the early fifties and the mid-seventies, real disposable income – what people had in their hand to spend, taking inflation into account – exactly doubled.

The second half of the seventies were the years of deep political disillusion, strains which seemed to tear at the unity of the UK: Irish terrorism on the mainland, a rise in racial tension and widespread industrial mayhem.

Callaghan was by now a familiar and reassuring figure in Britain, tall, ruddy, no-nonsense, robust and, by comparison with Wilson, straightforward. At sixty-five he was one of the most experienced politicians to become Prime Minister. After Wilson and Heath he was the third and last of the centrist seekers after consensus, the wartime avoiders of national confrontation.

Churchill apart, all of his post-war predecessors had been Oxbridge men. Callaghan had not been to university at all.

Famously, he told a stunned 1976 Labour conference used to the Keynesian doctrines about governments spending their way out of recession, cutting taxes and boosting investment: ‘I tell you in all candour that that option no longer exists and that insofar as it ever did exist, it worked by injecting inflation into the economy . . . Higher inflation, followed by higher unemployment. That is the history of the last twenty years.’

Callaghan is forever associated with failure. There is the humiliating, cap-in-hand begging for help from the International Monetary Fund, the soaring inflation and interest rates of the late seventies and finally the piled rubbish, vast strike meetings and unburied dead of the 1979 ‘winter of discontent’.

Only after the wasteland of his time in office can the bold remaking of Britain under Margaret Thatcher begin. And Callaghan himself had been part of the problem. His sentimental failure to understand the aggression of the union challenge to elected power, and his earlier lack of interest in radical economic ideas, came home to haunt him in Downing Street.

Finally, on 28 March 1979, the game ended when the government was defeated by a single vote, brought down at last by a ragged coalition of Tories, Liberals, Scottish Nationalists and Ulster Unionists. Callaghan was the first Prime Minister since 1924 to have to go to Buckingham Palace and ask for a dissolution of Parliament, because he had lost a vote in the Commons.

On the Tory side, Thatcher showed a new media savvy, working with the television news teams and taking the advice of her advertising gurus, the Saatchis. Callaghan, who had never expected to win, was soundly beaten. The Conservatives took sixty-one seats directly from Labour, gaining nearly 43 per cent of the vote, and a substantial overall majority, with 339 seats.

The unions would eventually lose almost half their members and any political influence they briefly enjoyed. More important than all that, mass unemployment would arrive in Britain. The one economic medicine so bitter that no minister in the seventies had thought of trying it was duly uncorked and poured into the spoon. It was time for Britain to grimace and open her mouth.

In politics, if your tactics work and if you are lucky – then you will be remembered for your principles. Margaret Thatcher’s tactics did work; she was shrewd, manipulative and bold, verging on reckless. She was also extremely lucky. Had Labour not been busy disembowelling itself and had a corrupt, desperate dictatorship in South America not taken a nationalistic gamble with some island sheep-farmers, her government would probably have been destroyed after a single term. Had the majority in her cabinet who disagreed with her about the economy been prepared to say boo to a goose, she might have been forced out even before that. In either case her principles, ‘Thatcherism’, would be a half-forgotten doctrine, mumbled about by historians instead of being the single most potent medicine ever spooned down the gagging post-war British.

During the 1979 election, using all the skills of her new image-makers and advertising agency, and with a shrewd understanding of the importance of television, she was still trailing Callaghan in the personal popularity stakes, by six points at the beginning of the campaign and a whopping nineteen points by the end. It was Labour unpopularity that cost the party power, not Mrs Thatcher’s allure.

Without her the Tory government of 1979–83 would have been entirely different. Without that confrontational self-certainty and determination not to be bested, Britain would have been back with a pay policy, Keynesian public spending policies and a business-as-usual deal with the European Community within eighteen months.

For a while chaos inside the Labour Party had helped protect her from the electoral consequences of her move away from the centre-ground. The Tories might be hated but Labour were unelectable.

One of the many ironies of the Thatcher story is that she was rescued from the political consequences of her monetarism by the blunders of her hated Foreign Office. In the great economic storms of 1979–81, and on the European budget battle, she had simply charged ahead, ignoring all the flapping around her in pursuit of a single goal. In the South Atlantic she would do exactly the same and with her great luck she was vindicated. A pattern was being established – ‘blinkered and proud of it’ – and she would move in the space of a couple of months from being one of the least popular prime ministers ever to being an unassailable national heroine. It could all so easily have gone wrong. A few more fuses working on Argentine bombs, another delivery of French-made Exocet missiles, a different point chosen for the attack, and the Falklands War could have been a terrible disaster, confirming an Argentine dictatorship in power and ending Mrs Thatcher’s political career.

Many people thought the war mere butchery for a meaningless prize. The most famous comment came from that mordant South American writer Jorge Luis Borges who said it reminded him of two bald men fighting over a comb.

The Falklands War changed Margaret Thatcher’s personal story and the country’s politics. But it merged into a wider sense that confrontation was required in public life.

Overhanging the violence at home and part of the backdrop of the Falklands War, was the residual fear of global nuclear war. With hindsight the grey old Soviet Union of Brezhnev, Andropov and Chernenko may seem a rusted giant, clanking helplessly towards its collapse. This was not how it seemed in the early eighties.

In the late winter of 1979 Russian troops had begun arriving in Afghanistan. Mikhail Gorbachev was an obscure candidate member of the Politburo, twenty-eighth in the pecking order, working on agricultural planning, and glasnost was a word no one in the West had heard of. Poland’s free trade union movement Solidarity was being crushed by a military dictator.

Moscow had early and rightly identified Thatcher as one of its most implacable enemies in the West and when, eighteen months after her election victory, she was joined by a new US President, Ronald Reagan, she had a soul-mate in Washington.

If the first Thatcher government had been dominated by monetarism and the Falklands War, the second would be dominated by the miners’ strike. This was the longest such strike in British history, one of the most bloody and tragic industrial disputes of modern times, and resulted in the total defeat of the miners followed by the virtual end of deep coal-mining in Britain.

The political force ranged against the miners in 1984 was entirely different from the ill-prepared, Heath administration they had defeated ten years earlier. A shrewder non-revolutionary leader would not have chosen that fight at that time or, having done so, would have found a compromise after the first months of the dispute. Today, there are a handful of thousand miners left of the 200,000 who went on strike.

An industry whose origins went back to the Middle Ages and which made Britain a great industrial power, but which was always dangerous, dirty and polluting, lay down and died.

Getting your way at all costs with foreign dictators and militant union leaders was one thing. Behaving similarly with senior politicians in your own party was another. Heseltine later wrote: ‘I saw many good people broken by the Downing Street machine. I had observed the techniques of character assassination: the drip, drip, of carefully planted, unattributable stories that were fed into the public domain, as colleagues became marked as somehow “semi-detached” or “not one of us”.’ The great strength of Thatcher’s way of governing was the way her self-certainty gave her administration and the country a surging sense of direction. Its weakness was it cut out so many others, ignored advice and humiliated anyone not seen as an uncritical supporter.

Sir Nicholas Goodison, later Chairman of the Stock Exchange in the Thatcher years, looked back on the mood by the late seventies: ‘We still had exchange controls. We had a Labour government intent on controlling everything, and no freedom of capital movement. British people were not allowed to take capital abroad; British institutions weren’t allowed to invest capital abroad except by special Treasury permissions . . . we were an insulated market.’12 It was this world which was swept away on 23 October 1979 when Geoffrey Howe, to general shock, abolished exchange controls.

Howe himself likened it to walking off a cliff to see what happened. Bankers noted there was no planning for this revolution. Tony Benn said it showed that international capitalism had finally defeated democracy.

In 1982, another slice of American business life came to London in the multi-coloured jackets and raucous bear-pit atmosphere of the new international financial futures market, or LIFFE. Here the high-risk bets were made on the future value of commodities and currencies, in one of the older buildings of the City, the Royal Exchange. Inside its elegant shell roared an atmosphere borrowed straight from Chicago, likened by startled observers at the time to an ill-bred casino.

The new Chancellor after the 1983 election, Nigel Lawson, a former financial journalist, and the new Trade Secretary, Cecil Parkinson, decided to do a deal with the increasingly archaic looking Stock Exchange. It was struggling with a long and wearisome court case brought by the Office of Fair Trading. The ministers promised the legal action would be dropped if the Stock Exchange reformed itself. This was the final piece of action which led to the ‘Big Bang’ of City deregulation, something which has a claim to be the single most significant change of the whole Thatcher era, on a par with confronting the unions or privatization.

And then on 27 October 1986, this London Stock Exchange ceased to exist as the institution it had formerly been. Its makeover made it all but unrecognizable. The new screen-quoted system SEAQ finally came on stream, the moment remembered as the ‘Big Bang’ itself.

For millions of ordinary Britons who had only the haziest idea about the world of finance, the revolution in lending to buy their houses was as big a shock.

It became a good thing, a virtuous thing, to be a big-time borrower. People found themselves harangued in advertisements and junk mail to borrow more, to defect from one bank to another, to extend the mortgage rather than paying it off.

All this would end in tears with the bust that followed and would be used for many years afterwards by Labour’s Gordon Brown as evidence of the Tory ‘boom-and-bust’ policies. But it was the consequence of a decisive break in the financial regulations governing City and everyday life, which changed Britain, probably forever.

The end of the age of controls and nationalistic finance meant also that British manufacturing lost any hope of the kind of long-term banking arrangements that German and French rivals had enjoyed. The asset-stripping habit, buying companies, dismantling them into component parts and selling them on, had become a controversial part of British business life in the seventies. The eighties’ financial revolution ensured it would remain so. There would be no room for old connections or long-term thinking in the new world.

There is a popular belief that the Thatcher governments never really intended to privatize very much, and that they stumbled upon an easy way of raising cash by selling off assets almost by accident. If so, it was one heck of a stumble. During the decade £29 bn was raised in sales of land and businesses and £18 bn from the sale to their tenants of 1.24 million council homes. The gas that cooked meals and warmed houses, oil coming ashore, aircraft taking businessmen and holiday-makers, and the airports they flew from, the phones and phone-lines used to communicate, cars, engines, steel and the water pipes and filtration systems bringing the British their baths and tea – all would be affected by the greatest shift of assets from the State to private companies and individuals in the history of this country.

One of the influential economic writers about the Thatcher years said that coining the word privatization was ‘a master-stroke of public relations’ by the government, which put it into worldwide circulation.

If Labour had been accused of creating a giant state sector whose employees depended on high public spending and could therefore be expected to become loyal Labour voting-fodder, then the Tories were intent on creating a ‘property-owning democracy’ of voters whose interests were entirely different.

Old Labour was killed off not in the Commons but in the shopping centre and the estate agents’ office.

Politicians learned two things. The first was that outside the Westminster village, few British people seemed to care at all who owned the companies and services they depended upon, so long as the service was acceptable. This was becoming a much less ideological country. The second thing they learned was that politics could not step back and wash its hands of what the privatized companies then did. Ministers, not simply chief executives, would still be the target of public anger and held responsible for any failings. This was becoming a more aggressively consumerist country. The result was that, while hundreds of thousands of employees left the public sector to work for newly private corporations, the State grew in other ways, through the quangos, regulatory bodies and bureaucrats now found necessary to regulate and oversee the privatized services.

Jim Callaghan was brought up piously, so when he told an audience in 1977 that God had given Britain her best opportunity for a hundred years in the shape of North Sea oil, there is a chance that he meant it.

The oil seemed like a fairytale intervention, for whichever group of politicians found themselves in power when the pot of gold could finally be yanked open.

Its impact on the politics and public finances of Britain, first in the dying days of old Labour and then during the crucial years of the early Thatcherite experiment in monetarism, can hardly be exaggerated. It helped bankroll Thatcherism, for Britain was self-sufficient in oil by 1980.

A great new source of national wealth helped to produce mass unemployment, or at least make it politically possible.

The number of British refineries actually fell during the great oil decade of 1980–90, from twenty-one to thirteen, and 40 per cent of that was American-owned.

Even when it came to oil supply services, which more or less had to come locally, British companies were slow to catch up and won little extra business overseas.

Finance was a similar story. In the early days of exploration, the US giants were able to fund their work in the North Sea themselves, developing rigs from their earlier experiences in the Gulf of Mexico. The opaque nature of their internal accounting, and the much higher cost of getting any oil out, meant they were appallingly hard for British ministers and the Treasury to deal with.

Labour’s answer was to set up the British National Oil Corporation, BNOC, in 9176, which was meant to be both the ears and eyes in the industry, to buy 51 per cent of the oil landed, and then to sell it on. It gave the government some grip on the developing industry and built up formidable expertise at its Scottish headquarters. Yet it was essentially a bystander with modest powers, compared to the great oil companies. Its oil-producing business was in any case privatized by Nigel Lawson in 1982, the largest privatization the world had then seen; and the subsequent company Britoil was taken over by BP six years later.

Yet the grand hopes of ministers back in the mid-seventies that the oil discoveries would kick-start a great renaissance in banking, engineering, shipbuilding and new service industry, was very wide of the mark.

Before 1979 Labour was struggling to rein in the American companies that had arrived early and eager. But after 1979 the Conservatives were determined to use the oil revenues quickly, to pay debt and cut taxes, rather than to invest it in some long-term plan for industry.

This can be seen as a one-off waste, funding the squeeze of the early Thatcher years but leaving little for future generations left in the pot of gold at the end of the North Sea rainbow.

British manufacturing continued to slither downhill, falling from 34 to 30 per cent of national output in 1970–7, before oil properly came on stream, and then from 30 per cent to 23 per cent in the great oil decade. (By 2006 it accounted for less than 15 per cent.) According to the government’s own figures, 2 million manufacturing jobs were lost at this time.

The mid-eighties were a time when, after ferocious arguments about disarmament and the Russian invasion of Afghanistan, then a spate of espionage cases, the Cold War was finally thawing. In the White House President Reagan, scourge of the ‘evil empire’, was set on creating ‘Star Wars’, the orbiting satellite and anti-missile system intended to make the United States invulnerable to Russian attack. Yet he was ready to talk too, as the famous summit with Gorbachev at Reykjavik showed.

In the 1987 general election campaign Kinnock’s explanation about why Britain would not simply have to surrender if threatened by a Soviet nuclear attack sounded as if he was advocating some kind of Dad’s Army guerrilla campaign once the Russians had got here. With policies like these, he was not putting Thatcher under the kind of pressure, which, perhaps, she needed.

There had been some bad moments for the second Thatcher government. Most obviously, she had nearly been assassinated. The IRA bomb which demolished a chunk of the Grand Hotel at Brighton during the 1984 Conservative conference was intended as a response to Mrs Thatcher’s hard line at the time of the 1981 hunger strike.

If the IRA could not shake her, could anything else? There had been internal rows, not only over Westland but more ominously for the future, about economic policy.

Other rows did. There was the Westland affair itself but also a botched sale of British Leyland and the highly unpopular use of British airbases for President Reagan’s attack on Libya in 1986. After her hugely successful fight to claw back some of Britain’s overpayment to the European Community budget in her first term, these were years of Thatcherite drift over Europe, which would so fatally damage her at the end.

At home a wider dilemma was emerging right across domestic policy, from the inner cities to hospitals, schools to police forces. It was one which would puzzle both her successor governments, John Major’s and Tony Blair’s. It was simply this: how does a modern government get things done?

Before the Thatcher revolution the Conservatives had been seen as, on balance, defenders of local democracy.

Between 1979 and 1994, an astonishing 150 Acts of Parliament were passed removing powers from local authorities, and £24 billion a year, at 1994 prices, had been switched from them to unelected and mostly secretive gatherings. The first two Thatcher governments transferred power and discretion away from people who had stood openly for election, and towards the subservient agents of Whitehall, often paid-up party members and well-meaning stooges.

In the health service, early attempts to decentralize were rapidly reversed and a vast top-down system of targets and measurements was put in place, driven by a new planning organization. It cost more and the service seemed to get worse.

The biggest city councils, notably the Greater London Council, were simply abolished. Its powers were distributed, including to an unelected organization controlled by Whitehall.

Personal relationships matter as much in modern diplomacy as they did in the Renaissance, and the Thatcher–Gorbachev courtship engaged her imagination and human interest. She was becoming the closest ally Ronald Reagan had, in another international relationship, which was of huge emotional and political significance to her. In these years she had become an international diva of conservative politics, feted by crowds from Russia and China to New York.

When the 1987 election campaign began, Thatcher had a clear idea about what her third administration would do. Just like Tony Blair later, she wanted more choice for the users of state services. Tenants would be given more rights. The basic rate of income tax would be cut. She would finally sort out local government, ending the rates and bringing in a tax with bite.

In the event, the Conservatives need not have worried at all. Despite a last-minute BBC prediction of a hung Parliament, and a late surge of Labour self-belief, they romped home.

Afterwards, surveying the wreckage of their hopes, Kinnock and his team won plaudits from the press for the brilliance, verve and professionalism of their campaign. It had been transformed from the shambles of only four years earlier.

And what of the SDP-Liberal Alliance, the big new idea of eighties politics? They were out of puff. They had been floundering in the polls for some time, caught between Kinnock’s modest Labour revival and Thatcher’s continuing popularity with a large and solid minority of voters.

For true believers the story of Margaret Thatcher’s third and last administration can be summed up in the single word, betrayal. Her hopes of a free-market Europe were betrayed by the continentals, abetted by her own treacherous Foreign Office. Her achievements in bringing down inflation were betrayed by her Chancellor, Nigel Lawson. Finally she was betrayed directly – ‘treachery with a smile on its face’ – when her cabinet ministers turned on her and forced her to resign on 20 November 1990. The British revolution was sold out by faint-hearts, its great leader exiled to an executive home in south London, and glory departed from the earth. But there is another word that sums up the story better – not betrayal, but hubris. In the late eighties the Thatcher revolution overreached itself.

Near the end, Thatcher’s fall was triggered by a disastrous policy for local taxation whose blatant unfairness was never properly considered by ministers, as if it did not really matter. And by the end, her own brutal rudeness to those around her left her almost friendless. She had been in power too long.

It was the same pattern in health. In 1988 too, the new Health Secretary, Kenneth Clarke, pressed ahead with the system of ‘money following the patient’, a Monopoly-board version of the market in which hospitals ‘sold’ their services, and local doctors, on behalf of the ill, ‘bought’ them.

Because the government did not really trust local people to work together to improve the health service, the Treasury seized control of budgets and contracts. And to administer the system nearly 500 National Health Service trusts were formed, apparently autonomous but staffed by failed party candidates, ex-councillors and party donors. Any involvement by elected local representatives was brutally terminated.

The more a leader is self-certain, the more there is in the world around her that she wants to change and the fewer other people she can trust. That means taking more powers.

Under our constitution, local government is defenceless against a Prime Minister with a secure parliamentary majority and a loyal cabinet. So it has been hacked away. It is time to address the moment when this programme of crushing alternative centres of power came so badly unstuck it destroyed the Lady Lenin of the free market herself.

Margaret Thatcher would say the poll tax was actually an attempt to save local government. Like schools, hospitals and housing, councils had been subject to a grisly torture chamberful of pincers, bits, whips and flails as ministers tried to stop them spending money, or raising it, except as Whitehall wished.

This was the origin of the poll tax, or community charge as it was officially known, a single flat tax for everyone

The poorest in the land would pay as much as the richest. This broke a principle, which stretched much further back that the ‘post-war consensus’

On 31 March 1990, the day before the poll tax was due to take effect in England and Wales, there was a massive demonstration against it which ended with a riot in Trafalgar Square. Scaffolding was ripped apart and used to throw at mounted police, cars were set on fire, shops smashed. More than 300 people were arrested and 400 policemen hurt. Thatcher dismissed it as mere wickedness.

She had conducted her premiership with a sense of vivid and immediate self-dramatization, the heroine of peace and war, fighting pitched battles in coalfields and on the streets, word-punching her way through triumphal conferences, haranguing rival leaders, always with a sense that history was being freshly minted, day by day.

When Margaret Thatcher left Downing Street for the last time in tears, she already knew that she had successfully completed a final political campaign, which was to ensure that she was replaced as Prime Minister by John Major, rather than Michael Heseltine. She had rallied support for him by phone among her closest supporters. They felt he had not been quite supportive enough. She also harboured private doubts. So ended the most extraordinary and nation-changing premiership of modern British history.

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