The gloom-mongers were wrong about Margaret Thatcher, and they’re wrong about Brexit now

Margaret Thatcher takes applause during the Falklands War, October 1982
Happiness research identifies 1982 as the point when the country’s sense of its worth started to grow once again and it has not looked back since Credit:  BBC

When the House of Commons last met on a Saturday (assuming this weekend’s sitting goes ahead), it pains me to think that I was in the press gallery to witness the event. It is hard to believe it was 37 years ago. Tempus fugit. The occasion was a debate on the Argentinian invasion of the Falklands which had taken place a few days earlier. We all know what happened next; how the fortitude of Margaret Thatcher, combined with an extraordinary feat of arms, led to the liberation of the islands and consolidated her reputation as the Iron Lady for ever.

But that is not how it felt on that April morning in 1982. We easily forget today what a basket case the country was at the time and how losing a slice of British territory to a jumped-up South American military junta seemed emblematic of national decline. It was the ultimate humiliation, one designed to make our already rock-bottom sense of self-worth sink even lower.

Mrs Thatcher had been in office for three years and her grip on power was tenuous to say the least. Unemployment was rampant: by the end of the year it would reach 10.8 per cent, the highest level since the war, with more than three million out of work. Inflation stood at 12 per cent but was falling rapidly as monetary policy tightened, with interest rates at around 11 per cent.

Mrs Thatcher and the chancellor, Sir Geoffrey Howe, had faced fierce resistance to their economic policy, not just from the opposition but even from within the cabinet and especially from the Labour-supporting media and academia. The previous year, 364 economists had signed a letter to The Times denouncing the Budget and stating that there was “no basis in economic theory or supporting evidence” for the government’s approach. It threatened Britain’s “social and political stability” and should be abandoned.

Fortunately, Mrs Thatcher was made of sterner stuff than to take any notice of their defeatist and apocalyptic maunderings. In fact, 1982 marked a turning point in national fortunes. New research from the universities of Warwick and Glasgow into the somewhat nebulous concept of national happiness suggests that, in the UK, the nadir of general well-being was not the two world wars, nor even the privations of the Victorian era but the Winter of Discontent.

For those of us who lived through it this finding comes as no great surprise since it really did feel we were on an inexorable slide to penury, with an acute sense that the country was unravelling. This was exacerbated by the strikes, the rubbish piled up in the streets, the unburied dead, the hospital blockades. It was like something out of a dystopian novel and it was this downward spiral that Mrs Thatcher vowed to arrest.

But she was being beaten back by the very people who had got us into the mess. Labour, whose economic policies and indulgence of the unions had created the crisis; the “wet” Tories who had subscribed to the post-war view that the state knew best; the economists who thought the status quo should be maintained, and were wrong because most subscribed to the same Keynesian consensus that had prevailed for decades. (Incidentally, the few economists, like Patrick Minford, who stood against it find themselves in a similar position again today over Brexit.)

Had it not been for the intervention of General Galtieri in April 1982, Mrs Thatcher might well have been toppled and the old order would have taken over once more, committed to repeating the policies that had caused the disaster in the first place.

The happiness research identifies 1982 as the point when the country’s sense of its worth started to grow once again and it has not looked back since. There is a parallel with today. Pretty much the same people – the Labour Party, the Left-leaning media, economists – are all signed up to a new consensus, issuing similarly gloomy prognostications about what will happen when we leave the EU, as they did back then.

More to the point, the Labour Party is led now (as it was in 1982) by someone who thinks the country was better off when the unions ran the show and the state owned everything.

An imminent election will see Jeremy Corbyn campaigning on a pledge of mass renationalisation that the CBI and various think tanks have calculated will cost close to £200 billion. Working out exactly how much is difficult because Labour is reluctant to give details, but that is not the point. What is extraordinary is that we have a potential government that thinks the post-war extension of state power that led to economic calamity is something to be replicated. They are people who think the answer to the difficulties faced by Pizza Express and Thomas Cook is public ownership, because the state is evidently so much better at providing food and organising our holidays.

Moreover, we have pretty much the same claque of gloom-mongers telling us that everything is going down the drain and Brexit will be an unmitigated disaster. They also persistently advance the fatuous thesis that those who favour leaving the EU do so because they hanker after some Golden Age of British exceptionalism that never existed, a Blimpish fixation with 1940, Spitfires and Krauts.

Yet this is just rubbish. Many who think belonging to the EU’s centralised and undemocratic institutions is not an absolute requirement for national well-being are actually looking both forward and outward. Remainers are entitled to scoff at the idea of a more globalist Britain and argue that our future is better secured within the paternalist safety-net of a neo-imperialist bloc; but don’t patronise those who think otherwise with your own Little Englander hang-ups.

What the happiness research shows is that when things look bleak people think things will get better. Aspirations and expectations matter to the national mood, which is why Boris Johnson’s optimism strikes a chord with voters. So if we are feeling down, in thrall to predictions of disaster, we should remember that things have been a lot worse in the recent past and we will look back to these extraordinary times and wonder what all the fuss was about. Let’s just hope it does not take 37 years to realise it.