Mrs Thatcher’s Ecstasy

The local government elections have come and gone (more or less) as expected. Labour did not do as spectacularly well as some predicted, and in the event the caution of the Labour leadership was justified. The Conservatives did better than they feared they might. But they would be unwise to find too much consolation: Labour gains were not as spectacular partly because Labour was defending such a large proportion of the seats anyway, and partly because the increase in the Labour vote was not matched by a proportionate gain in seats. It is possible that the Government’s strategy of blaming high poll taxes on Labour councils had some effect in areas (like London) where memories of ‘loony’ left-wing councils are strong, while in Westminster and Wandsworth the electorate clearly behaved in a cheerfully Thatcherite manner. On the other hand, the Tories did badly in a number of areas where their own councils set low poll taxes. There is, in fact, not much evidence that the electorate has changed its mind about the poll tax and the result of the Mid-Staffordshire by-election would still seem to represent accurately the public view. The best the Government can hope for is that the electorate will become habituated to it; and we can be certain that nothing – including money – will be spared to ensure that it does.

Yet, even if the electorate does become habituated, the poll tax is and will remain the most indefensible single item of legislation introduced by any British government this century. The 1902 Education Act might have done more immediate damage to the (Conservative) government which introduced it, but the opposition it mobilised was very much smaller and the legislation survived largely intact. The poll tax in its present form will not survive intact whatever the outcome of the next election; indeed, as it stands, it seems unlikely to survive beyond July. The Government’s supporters argue either that the tax is right ‘in principle’ or that it represents some unexpected blemish in the Government’s otherwise immaculate record. Neither of these is true.

The legislation introduced by this Government (as by any other) usually falls into one of two kinds. There is a mass of ‘administrative’ enactments, often uncontentious, which are generated by the Civil Service or by social or economic necessity. In many previous Conservative governments they constituted the bulk of legislation. There is a second kind: legislation generated by vested interests within the Party or by ideological commitments. The evidence suggests that Mrs Thatcher neither understands nor is interested in the first, but that she and her circle are intimately, obsessively interested in the second. The poll tax, although uniquely maladroit in its conception and execution, is merely one example of that extreme ideological legislation which has been typical of this government.

The fundamental objective of it all has been the destruction of the social base of the Labour Party, of ‘socialism’, and particularly of the Labour Party in local government. This was to be achieved by the ideological mobilisation of an electoral majority against what was left of the old working class. Although Mrs Thatcher herself was probably inclined to think that ideology itself was sufficient, she and her government were prudent enough to reinforce it by a significant redistribution of income and property – largely at the expense of the already poor and of general public provision. Behind it all was one unstated assumption: that such legislation would have no indirect or unpredictable consequences, and certainly no negative ones. It simply gathered votes and settled scores. It represented a view of social reality which was almost childishly simple-minded.

The poll tax was, therefore, preceded by a long list of legislation which differs from it only in that public opposition was less vehement and more segmented. The list itself ranges from the absurd, like the bizarre Clause 28 of the Local Government Act (which, although it purported to be a private member’s amendment, clearly had the support of the Prime Minister and the party whips) to the very serious, like the abolition of the GLC, the metropolitan counties and the ILEA, or the student loans bill. The abolition of the GLC was first proposed by Mrs Thatcher when the Conservative Party was drafting its 1983 election manifesto, and it was inserted as part of a demagogic campaign against Labour-controlled local authorities. It is clear that neither Mrs Thatcher nor her advisers had the slightest idea what these authorities were required by Parliament to do, nor, presumably, did they care. The result was as we might expect: legislation of ever more complexity and an inevitable increase in bureaucratic power. The unelected London Residuary Body had to be created to superintend all those bits and pieces of the GLC’s (and the ILEA’s) work that could not be imposed on other organisations.

The abolition of the ILEA was undertaken in the same insouciant manner as that of the GLC. Keith Joseph, who shared most of the Prime Minister’s prejudices against it, was nonetheless convinced that it had to exist; it therefore survived Mrs Thatcher’s ‘reorganisation’ of London government. It could not, however, survive her need (and the need of those who sought her favour or the favour of the Parliamentary Conservative Party) for further proofs of her indispensability. Its fate was nominally determined by a backbenchers’ amendment to Baker’s Education Bill; in practice, it was government policy. We should remember who those backbenchers were: Norman Tebbit and Michael Heseltine. It seems fair to say that neither they nor the hundred or so Conservative MPs who supported their amendment had any clear notion of what the ILEA was obliged to do; nor again, it seems fair to say, did they care. Mr Tebbit and Mr Heseltine were primarily concerned with their political careers and whether London education was or was not promoted was quite secondary. Attitudes to the ILEA were tests of ideological purity within the Conservative Party and both of them, like the Prime Minister, were determined to pass them. As a piece of legislation, the abolition of the ILEA was probably even more recklessly foolish than the poll tax. The result, however, is equally characteristic. By abolishing the hated ILEA, the Government was driven to handing over London’s education to the even more detested borough councils, where Labour is inevitably predominant.

In some ways, in fact, it is the student loans bill which is the more illuminating example of this type of legislation. It is, in the first place, utterly ideological in its preconceptions. Unlike some other government policies, where the main aim has been the simple reduction of public expenditure (whatever the ex-post justifications), this Bill was devised by the right-wing utopians who have had access to the DES as well as to Downing Street in the last few years. It was drafted on the premise that direct public funding of tertiary students inhibits the enterprise culture; the entrepreneurial spirit could be encouraged only by the accumulation of individual debt. But it was not sufficient that the student should be encumbered with debt on graduation: he or she should be in debt to a private agency. It was also not sufficient that the Government should be repaid via income tax or national insurance or any kind of graduate tax: it must be repaid via the banks. Thus the Government, under the Bill, was to pay the banks, first to disburse public money, and then to collect it. The original premise was itself wildly improbable, but the Bill’s practicalities rendered it impossible. These were pointed out to the Government repeatedly, particularly in the House of Lords, but such objections were dismissed as those simply of the faint-hearted. More to the point, the banks had indicated by signals which only ministers succeeded in overlooking, that they were most unwilling to get involved. The denouement is well-known: they destroyed the Bill during its progress through Parliament. Most other British governments would in these circumstances have withdrawn the Bill, however reluctantly. Not Mrs Thatcher’s. It was converted into enabling legislation and strenuously whipped through both Houses.

There are two noteworthy things about this episode. The first is the distance between the ‘real world’ and the mental world of the present government. The Prime Minister and her apologists have constantly asserted that it is the function of government to be hard-headed and businesslike, to create the appropriate environment in which businessmen and bankers can make businesslike decisions. When presented with such a mad scheme the banks did the only thing possible: they took a businesslike decision. Yet the Prime Minister’s response was – as we know – not one of relief (as, say, Harold Wilson’s would have been), but to become ‘incandescent’ with rage. This was not the first and it will not be the last time that the aims of the Government and the aims of the ‘market’ are quite contradictory. There is, furthermore, a wider significance to this: it is now becoming clear even to many of those who once thought Mrs Thatcher was their last best hope that the gains they have procured from her government are incidental to policies which will in the end bring them only net loss.

The second noteworthy thing is the Government’s recourse to enabling legislation. The Secretary of State is now empowered to present regulations for a student loan scheme to Parliament in such a manner and with such provisions as he thinks fit. In a way, enabling legislation – once thought to be constitutionally improper – is the ideal legislation for this government. It need embody only a declaratory principle – usually of disapproval – and then it can be handed over to ministers and civil servants to be implemented without scrutiny and thus without regard to practical difficulties. It might even be forgotten, since it will have served its political function. Mrs Thatcher’s comments on national testing under the Baker Education Act are here revealing: she thought it had gone too far; she did not realise that it would involve so much testing; she feared it would constrain teachers. These are, of course, reasonable comments, but they make it clear what she had in mind by the legislation. It was, to her, an ideological statement: a declaration against all that she believed wrong in state education. It is, however, notoriously difficult to legislate for negatives: which is why, astonishingly, the Government introduced dozens of amendments during the Education Bill’s third reading in the Lords. Attempts to do so, as in this case, produce incoherent legislation which is ignored or endlessly modified, or which leads to significant increases in bureaucratic and arbitrary authority. The last is true of the Education Act, which should be seen as enabling legislation – and thus in the best tradition of the present government.

The poll tax is also clearly in this tradition. It is the product of grievances so strongly felt yet so irrational that they are difficult to remedy via legislation. Ideologically, these grievances are deeply embedded in Tory folklore about the rates. In particular, two pieces of folklore: that little old ladies who live in large houses are unfairly treated; and that there are innumerable council houses teeming with adult wage-earners who pay no rates at all. (A more serious objection can be levelled at the rates on business, but that is not, presumably, an objection the present government can now make.) And the emergence of the poll tax cannot be understood unless we recognise the power of this folklore within the kind of Conservatism Mrs Thatcher herself represents. Since the great majority of the electorate are not little old ladies in large houses or well-paid council tenants their exasperation with the poll tax is not surprising.

The poll tax is also intended as a piece of political engineering. By so ‘gearing’ it that any extra increase in council expenditure falls disproportionately on the poll tax, the Government plainly intends to compel the not entirely poor to vote against services which would otherwise be in their interest. It also is intended to compel them to vote Conservative. When asked why capping was to remain after the abolition of the rates, the then minister for local government unhesitatingly replied that it would be some years before the Conservative Party would be large enough in a number of councils for them to be given an unfettered right of charging. Nothing could have been more overt – as there was nothing covert about the reasons for the forced sale of council houses. In its mixture of electoral calculation and ideological fantasy the poll tax comes from the heart of modern Conservatism.

There are two conclusions we might draw from all this. The first is that although Labour has been the principal beneficiary of the poll-tax affair it has not come out of it particularly well. While it is understandable that they are now extremely nervous about proposing a new local tax, the Labour leadership has been very feeble nonetheless. What should they do? The Liberal answer – which was also the answer of the Layfield Committee – is a local income tax. That has both simplicity and fairness to recommend it. It has, however, one major disadvantage: it levies no taxation on the value of house property. But the inflammation of the value of the country’s housing stock – on the whole, a disaster for Britain – has to be controlled, and the only way that can now be done is via taxation. Furthermore, living in a large and pleasant house is undoubtedly a form of income and there is no reason why it should not be taxed. In a trenchant leader, the Times, under its new editor, argued that a ‘brave’ but ‘wise’ government would simply restore the rates. A brave but wise opposition should do the same thing, whatever it then does to expunge their anomalies.

The second conclusion is that Mrs Thatcher’s rapport with her constituency is oddly unsatisfactory. ‘Oddly’ because this rapport is famous. Her ‘instinctive’ understanding of the lower middle class and the ‘C2s’ (the skilled working class) is widely held to have been the secret of her success. What is usually meant by this is that the C2s possess all the English prejudices and no one is better at appealing to these prejudices than the Prime Minister. Her neo-Poujadist rhetoric has undoubtedly had some effect (though as much in West Surrey as in Harlow): but the events of the last few years suggest her instincts are very defective. She underestimated the extent to which the poll tax offended a sense of fairness, and the degree to which the C2s – particularly C2s on pensions – depend upon the state and public provision. If her government does come to grief – by no means certain – the significant by-election will have been the Vale of Glamorgan, where the poll tax was not an issue but the Health Service was. As it still is: almost as many told the exit polls in Mid-Staffordshire that they switched their vote because of the Health Service as the poll tax. There is no evidence that Mrs Thatcher or her familiars have ever understood how ideologically complicated is the social existence of the C2s. In the last days of Imperial Russia legislation which combined political manipulation with ideological delusion was known as administrative ecstasy: in this sense Mrs Thatcher’s government has always been ecstatic.