Tony Travers on Margaret Thatcher, a councillor’s daughter who oversaw a decade-long struggle between central and local government
Margaret Thatcher, whose father had been a councillor, was a Conservative radical who believed in a smaller state and lower taxes. At the time she became prime minister the New Left was growing in power within many Labour groups. It campaigned for rising public expenditure and higher rates bills. The 1980s was characterised by a decade-long struggle between central and local government.
The backdrop to the 1979 Tory election victory was the 1978-79 ‘Winter of Discontent’. James Callaghan’s minority government appeared helpless in the face of a wave of public sector strikes. Mrs Thatcher proposed curbs on trade unions and triggered a process of economic reform that profoundly affected councils.
Initially, there was a cut in central funding for local government, followed by the introduction of a new ‘block grant’ regime which was supplemented by a system of spending targets and penalties for ‘over-spenders’. When this approach was seen to have failed, legislation was introduced in 1984 to allow rate capping. A number of Labour-controlled councils responded by proposing to set no rate. This policy eventually led an outbreak of ‘creative accounting’ and to a number of Liverpool and Lambeth councillors being surcharged.
In 1986, the Thatcher government abolished the Greater London Council and six metropolitan county councils and, in 1990, the Inner London Education Authority. Many Conservative MPs (notably ex-PM Edward Heath) and peers rebelled against both rate capping and abolition, though to no avail. Development corporations were introduced to speed up regeneration, but outside council control.
There were also major parliamentary rebellions against the poll tax. Yet the policy was implemented in Scotland in 1989 and both England and Wales in 1990. Millions of households were left worse off and Mrs Thatcher herself was catastrophically damaged by the adverse political reaction. Poll tax was surely the worst policy mistake by any government since 1945.
Mrs Thatcher had many legacies. The Scots mostly stopped voting Conservative, England became even more centralised, the Labour party was forced to clear out its ‘loony left’ and local taxation was made permanently toxic. The vacuum left by the GLC’s abolition made space for the more-powerful mayor of London. She will never be forgotten, by friend or foe alike.