Following computerisation and expansion of commodity markets, huge profits are being made in the City of London. This forms the core of the growth in financial services during the Thatcher years, helped by the establishment of sterling as a petro-currency. The runaway profits come to an abrupt end when the worldwide stock market crashes, wiping millions of dollars off the value of corporate shares. The newly privatised companies are naturally affected by this, with many of the new small investors badly hit. Labour's promise of exchanging shares in public monopolies for guaranteed stakes now looks like a great idea. But as Britain's economy heads into a massively overheated period, few remember this.|
Meanwhile, the Labour Party goes through an introspective process following a third consecutive electoral defeat. Many are suggesting that radical changes will have to take place in order for Labour to become electable again. "Reform communists" are to often take the lead in theorising about the future of the Party. A group gathered around the magazine Marxism Today become increasingly vocal, urging further changes to policy to cope with the "success" of Thatcherism.
Bryan Gould makes a speech at Conference about "shareholder capitalism" and employee share ownership and is heckled.
|November 1987||The leadership of the Labour Party launches a far-reaching Policy Review. Despite the wide consultations, the leadership becomes increasingly isolated from the membership during this period. The majority of activists are still firmly on the Left of the Party and repeatedly return Left majorities to the National Executive, passing Left resolutions at Conference.
According to the Left, Neil Kinnock seems not to want to defend policies which Labour members think are right, but which are not over-popular in the country as a whole. An example of this is illustrated by the silence regarding nuclear disarmament. Although he has the strength and sentiment within the party to maintain a grip on power, Kinnock's leadership can only change policy by ignoring Conference resolutions and the wishes of its members. People like Gerald Kaufman and John Smith, both seemingly born into right-wing Labour fixing, became increasingly influential upon policy - despite often being fairly critical of Kinnock behind closed doors.
Neil Kinnock and his supporters argue that the result of 1983 left deep scars, and that without power, Labour can't achieve anything for those who are being targeted by the Conservatives - the poor and vulnerable. Sticking to the policies that lost the two elections, they say, will only result in Labour being stuck in permanent opposition.
The uneasy, changing relationship between leaders and members is reflected in a new emphasis on "designer socialism." The new communications strategy, which basically consists of killing off the venerable Labour Weekly in order to produce glossy magazines, heralds the start of a process whereby members became more passive, similar to donors. This is reflected in the growing use of stage-management at Conference. Whilst this may reflect a growing Americanisation of the UK during this period, it offends many members, who feel the standard of political debate in the party is falling.
The leadership feels that the Labour Party Young Socialists are harbouring the Militant Tendency. It effectively closes them down by removing the leadership, lowering the age limit from 26 to 23 and dissolving many of the 500 branches around the country. It is an action which stretches the constitution to breaking point - and tears much of the young activism out of the Labour Party.
|April 1988||The housing boom is proving unsustainable. The housing market follows the stock exchange and also crashes, plunging many owner-occupiers into negative equity. The British economic boom, based upon consumption and credit, is boiling over, and the high interest rates used to contain this bring about a rapid rise in unemployment. The Thatcher miracle is finished. Margaret Thatcher has not solved Britain's economic problems and continues to blame public sector workers for being greedy.|
|August 1988||Despite being led by an ex-Eurosceptic, Labour now officially supports all moves towards European integration. The conversion is made genuine after a visit by EU Commissioner Jacques Delors who promises TUC Conference a social Europe, and convinces many in the unions that this could be an effective bypass around Britain's intransigent employers|
|September 1988||Neil Kinnock retains his personal popularity within the Party and any threatened confrontation with the Right wing never emerges. Now back in Parliament, but a figure now largely deserted by the soft-left, Tony Benn challenges for the leadership and only receives 11% of the electoral college. Nobody wants to return to the outright fighting of 1981 and Benn is becoming associated with a particular type of negativism. Political life has moved on, and arguably Tony Benn, Dennis Skinner and Eric Heffer now represent a kind of Left Conservatism.
Peter Mandelson is responsible for many of these changes in perception as Director of Campaigns and Communications. Mandelson effectively directs the Policy Review. He controls the input. He discredits Shadow Cabinet members who suggest anything that Peter Mandelson does not think is popular with the electorate. As a confident of Neil Kinnock, Mandelson is in a great position to build up some individuals and discredit others. This he does to great effect, and finds a small grouping of ambitious new MPs who are prepared to accept his patronage. Among these MPs,of course, are Gordon Brown and Tony Blair.
|October 1988||With these internal manoueverings,there is scarcely energy left to conduct a decent policy review. In fact, it becomes much easier to find policies which are unpopular than to find policies which are popular. So lots of policies are scrapped. They are replaced by less specific intentions which are in keeping with reformist social-democracy.|
The Employment Act imposes further legal obstacles to unions declaring strike action. It imposes balloting according to strict rules and establishes a regulator to monitor unions' behaviour.
|February 1988||Nurses across the UK go on strike, being led by NUPE, to protest at a 3% pay offer. This was also a protest about the underfunded state of the NHS, which is struggling to treat patients and maintain its infrastructure after repeated Conservative spending cuts. With public opinion backing the strikers, eventually the government capitulates, offering an average rise of 13%.|
|May 1988||British Steel is privatised following a fierce period of restructuring which saw thousands of steelworkers thrown onto the dole queue.|
|June 1988||In the European Elections, the Greens win an unprecedented number of votes. Since the Chernobyl disaster in 1986, environmental issues have become important in mainstream politics. However, when all parties attach green policies to their programmes, this soon disappears from mainstream political dialogue. There is little to mark Labour as being a more environmentally-friendly party than the Liberals.
Political instability takes hold, as Conservative divisions over Europe start to affect the Thatcher government. To some extent this represents a fundamental contradiction in Thatcherism, as internationally free markets can also means a decrease in individual state sovereignty.
|December 1988||The Conservatives begin a process of internal explosions which are to make life easier for Labour. Aside from this, despite having a self-styled media guru directing Labour's strategy, there appears to be little activity in this time from the Parliamentary Labour Party. By the end of 1988, internal debate has become quieter in the Party. Nobody could argue that the Party is divided. However, apart from a few people, such as Robin Cook and some of the right-wingers such as Gerald Kaufman, few individuals could attack the Conservatives as effectively as the Conservatives themselves.|
|January 1989||The Communist bloc begins to crumble in early 1989. One by one, eastern European states fall. Sometimes this is be used to discredit socialism as a whole. It is certainly true that there now seems to be no existing alternative to market economies.|
|May 1989||Chancellor Nigel Lawson repeatedly clashes with Thatcher's eurosceptic adviser, Alan Walters. He resigns in frustration. This is a crippling blow to Thatcher. Lawson had provided much of the confidence for the administration. The issue is Europe, again, and his desire to peg the pound within the European Exchange Rate Mechanism. Linking the pound to the deutschmark is an awful thing for Mrs Thatcher to comprehend. Unfortunately she then appoints Lawson's successor, John Major, who is equally keen on the idea.|
|June 1989||The nine Water Boards of England and Wales are privatised, following the example of Scotland a year previously. They are given uncontested long-term monopolies. Inevitably, this leads to domination by French water conglomerates.|
|September 1989||The Policy Review finally emerges as an all or nothing document called Meet the Challenge, Make the Change. This bypasses individual Conference resolutions. It sets a precedent for future leadership-led policy changes. The most significant changes are the abandonment of unilateral nuclear disarmament - something which Conference still strongly believes in. Faced with a document presented by Kinnock on a back me or sack me basis, Conference accepts the Review.
In policy terms, the Review represents a climbdown on a number of issues, but leaves a large vaccuum behind, in positive policy terms. Labour before this time was not committed to massive nationalisation and high taxes. In fact the Review merely filets much of the substance from the 1987 manifesto, none of which recommends massive nationalisation or high taxes.
The 1989 Employment Act attempts to impose a 150 pound deposit fee for employment tribunals. It makes smaller employers excempt from having to give details of disciplinary hearings. It restricts time off with pay for union reasons and abolishes the training commission.
|December 1989||A big storm engulfs Westminster,taking not only the Conservatives, but also the lacklustre Labour leadership and unions by surprise. The community charge is an ideologically driven scheme, designed to tax people regardless of wealth. It is introduced in Scotland one year before England, in line with Mrs Thatcher's use of Scotland as a test-tube for new ideas.
Anti-Poll Tax Unions are set up in local communities to organise non-payment. Militant are at the forefront of these, but they also included non-party people and anarchists. They are helped by millions of people, in an economy ravaged by recession, being simply unable to pay. Desperate councils try to employ bailiffs to collect the furniture and belongings from peoples houses but are fought off by organised residents groups. Soon the poll tax becomes uncollectable.
|January 1990||In England, hastily organised groups make sure "I'm not paying the poll tax" posters are seen in thousands of windows. Hundreds of supporters swamp courts and council offices. Militant and the APTUs are directly challenging the Conservatives in an extremely effective way, often with the help of Labour members. Now 18 million people are not paying the poll tax and the Tories are very worried.|
|February 1990||Labour prepares a Poll Tax Protest Petition, but is fairly taken aback by the scale of events. Some Labour councils, faced with bankruptcy, take fright, and begin implementation.|
|March 1990||A huge rally is scheduled. Over 200,000 people converge on London, representing one of the largest anti-Thatcher demonstrations. When the police attack the mixed crowd of men, women and children, the riots spread around the West End of London, with all the media and world looking on. The political nature of the British police is hard to conceal. It is becoming obvious that, outside of the Southern Tory heartlands, people's patience with the Thatcher government is running low.
The electricity supply and production boards are privatised. This returns a large profit, especially for institutional investors.
|May 1990||Polls predict a meltdown for the Conservatives. This is underlined by the results in local council elections around the UK.|
|August 1990||Despite the divisions over Europe, self-preservation still characterises many Tory MPs. A growing number see Mrs Thatcher as a liability. Foreign Secretary Geoffrey Howe resigns over her attitude towards Europe. The departure of such a senior figure fatally erodes Thatcher's authority. Labour watch with growing anticipation.|
|September 1990||There is still time to pass more anti-union legislation. All secondary action is now declared unlawful and the closed shop is effectively outlawed.|
|October 1990||A leadership challenge from Michael Heseltine follows, which is not won convincingly by the Prime Minister.|
|November 1990||Finally a succession of ministers visit Thatcher and urge her to resign. On Thursday 22nd an old lady runs crying from the steps of Downing Street to awaiting car. Mrs Thatcher has changed the environment in which politics operated. She opened Britain to foreign influences and ripped open nationalist divides in Ireland and Scotland, with large poor ghettoes emerging in many parts of Britain. Ironically, after 11 years of government which set out to encourage "self-help," in many of Labour's traditional heartlands, the habit of full-time work is being lost and crime is rampant. The economy is now service-based and labour is increasingly casualised. There is a new middle-class emerging, made wealthy from property and financial services. An ownership economy has made people more assertive - and maybe more selfish.|
|December 1990||Ominously, Neil Kinnock fails to impress even in Mrs Thatcher's last Commons performance as Prime Minister. Relatively wealthy people are not immediately inclined to vote Labour, despite a worsening recession. When John Major becomes Prime Minister, Labour's poll lead of 20% became a Conservative lead of 8%.|
|January 1991||In 1991 the political atmosphere intensifies, with the election campaign starting extremely early. Whilst the recession continues to bite, Conservatives highlight the fact that this is a global problem. Neil Kinnock relaunches himself as a dignified elder statesman, presenting a number of fairly anodyne policies for easy public consumption. Meanwhile, his Shadow Chancellor, John Smith, mounts a "prawn cocktail" offensive in the City of London. John Smith attempts to convince those in the financial sector that Labour is responsible and pro-business, and is fairly well-received by many, being an affable character.|
|March 1992||The 1992 election is fought almost entirely on the centre-ground of politics, with the Liberal Democrats now to the left of Labour on some social issues. Following opinion polls to the last percentage point, Labour aim to neutralise the Conservative's strongest areas. The campaign is effectively aimed at the narrow band of people within the marginal constituencies that Labour need to overturn the Conservative majority. Although Labour's appeal has broadened in some ways, in effect, the target audience had narrowed. The manifesto is very broad and unspecific in some areas, and very specific in others, namely tax.|
|April 1992||The parties enter the campaign roughly level in the opinion polls. Once again, the Conservatives produce a number of scare stories about the tax proposals. Labour's plans to raise National Insurance contributions are in the manifesto - distributive mechanisms favoured by John Smith. In fact, they are a fair way of gaining more tax for social programmes. But the Tories describe this as a "Tax Bombshell" and the media are quick to describe this as Labour's plans to "get the rich." It is also noted that there were plans for around 20 new ministries in Labour's manifesto, and this is regarded as a product of the vaccuum left by the Policy Review.
Despite the media scare stories there is still reason to be fairly optimistic in the week before the 1992 Election. No-one thinks that the charismatic Liberal Democrat leader Paddy Ashdown will support the Conservatives in the event of a hung parliament. Then the Conservative press notches up a gear. There are so many scare stories that Labour's press team can't keep up with the rebuttals. These are centred around taxes, with trades union horror stories also thrown in. The media also subjects Neil Kinnock to some severe personal abuse, which has not seen since Michael Foot's 1983 campaign.
John Major proves a tougher character than many had realised. Slightly weak in demeanour compared to the rugby-obsessed Kinnock, he nonetheless proves to be an effective campaigner on the streets, using a soapbox and loudhailer. Labour fail to convince. In fact some of the policy changes may be counter-productive, as Neil Kinnock looks like a man desperate to win at any price. The focus upon electoral reform in the final week of campaigning looks like a grave mistake, maybe convincing weaker Liberal voters to return to the Conservatives.
The final result is an appalling shock. Labour only achieves a 2% swing, and a massive 14 million people vote Conservative, the highest total vote for a UK party ever. The strategy of attacking the marginals partly works, as the Conservative majority is cut to 21. Anti-Tory tactical voting also robs the Conservatives of some seats.
On the morning of 10th April 1992 Neil Kinnock sombrely announces his resignation. The mood in the Labour Party is funereal. After all the battles and changes in the name of electability, it seems that nothing could unseat the Conservatives. Kinnock leaves behind a fairly centrist, European-style social democratic party, with an increasingly middle-class membership. Despite fighting the election on the "centre-ground" the Tories promptly embark upon a series of reforms and changes that spread Thatcherism even further into the national life of Britain. The NEDC, the last corporatist remnant of the 1970s, where unions discuss issues with the CBI and government, is immediately abolished.