Margaret Thatcher Takes the Lead

Harry Phibbs
Harry Phibbs is the local government editor of Conservative Home. He is a contributor to CapX and a former councillor on Hammersmith and Fulham Council in London.

Fifty years ago, on February 11, 1975, Margaret Thatcher was elected leader of the UK’s Conservative Party. She had served in the Conservative Government of Ted Heath which had been voted out the previous year. But she was in the awkward position that it had been Conservative in name only. It was increasingly drifting towards socialist policies: nationalization, income policies, subsidies, increased state spending, and state borrowing. The expansion of the money supply produced a short-term economic stimulus, but left a legacy of inflation.

The new Conservative leader, Kemi Badenoch, finds herself in a similarly awkward position – having to repudiate a Conservative government (in which she had been a minister) for steering the country in the wrong direction. All they could both credibly say was that the Labour government was even worse and that the Conservatives would learn from their mistakes and be true to their principles. Having earned a hearing, the battle of ideas could be undertaken – a vision “to have the state as servant, not master,” as Thatcher put it.

In 1979, the Conservatives won the general election, and Margaret Thatcher became the prime minister. As a schoolboy with a precocious interest in politics, I helped in the campaign. The first couple of years were very difficult. There was considerable scorn over whether her free-market policies would work. Critics included many leading businessmen and her own parliamentary colleagues. But her policies triumphed, and she continued as prime minister throughout the 1980s.

The great pride I felt was how her program became an example to the rest of the world. Britain was not imposing its will through an empire any longer, but other countries were choosing to follow its lead. The Adam Smith Institute held international conferences on privatization with ministers from across the globe flying in to take notes. Most powerfully, the fall of communism saw countries in Eastern and Central Europe hold free elections and form new governments that did not want a “third way” between capitalism and communism, but full free-market economies. At the 1990 Conservative Party Conference in Bournemouth, representatives from those countries gave emotional speeches about their liberation and their gratitude for the part played by Margaret Thatcher, along with Ronald Reagan, in winning the Cold War.

What a contrast to the direction of travel we see today. The United Kingdom is hurtling towards socialism – manifesting in its various guises of climate alarmism and ‘woke’ ideology. Meanwhile, much of the rest of the world is marching towards freedom.

Without doubt, the country pursuing the most stridently Thatcherite agenda at present is Argentina. The irony is not lost on British Conservatives who remember the historic victory of the Falklands War victory in 1982, which so embodied Thatcher’s resolute approach in resisting the appeasement of tyranny and the inevitability of Britain’s decline.

As with Thatcher, Javier Milei has implemented free-market reforms while articulating their moral case and intellectual foundation.

These analogies should not be exaggerated, of course. Thatcher’s most radical early measure was the abolition of exchange controls – removed overnight on October 24, 1979. Milei has been more cautious in that regard but bolder elsewhere. Public spending in Argentina has been cut by 30 per cent in just a year. The attack on subsidies, bureaucracy, and corrupt vested interests has been ferocious. Thatcher was often attacked for spending cuts, but she merely restrained increases below the rate of economic growth to ease the burden.

Thatcher championed monetarism, arguing that “sound money” was an essential foundation for prosperity. Milei has taken the same stance. However, the hyperinflation in Argentina in 2023 was vastly worse than the relatively modest inflation Thatcher inherited in the UK in 1979. The deeper the crisis, the greater the willingness of the electorate to accept drastic remedies—even if painful in the short term. Thatcher was fully aware of the political constraints and timing. Measures that were unpopular for the first or 18th months of a parliament were acceptable – provided they were proven to be successful before the following general election. What is extraordinary about Milei is that he has retained popularity even during the early months of economic adjustment.

Already Argentina is seeing growth returning and the poverty rate starting to fall. Milei’s emphatic approach leaves socialists struggling to explain its success away. Countries as varied as Ukraine, Syria, and Vietnam are taking inspiration from his policies.

Then, of course, we have Donald Trump returning to the White House. This has attracted great attention not only in the United States but in Britain and around the world. The rapid repudiation of woke ideology and dismantling of its network of thought police is as if a spell has been broken. We know that Trump is unpredictable. He is not a free-market ideologue – as his fondness for tariffs shows. But his agenda of lower taxes and spending, deregulation, and ditching the false religion of climate change offers a comparison for Britain to consider. Already the prosperity gap between the British and the Americans is significant. We can expect it to widen in the coming years.

We have elections this year in Germany, Canada, and Australia, amongst other places. The damaging futility of the “net zero” target to supposedly tackle climate change will probably be eased or ditched altogether as more enlightened leaders take office. Yet Britain remains trapped with Ed Miliband, the Energy and Climate Change Secretary, pursuing this miserablist agenda with apparently undiminished fanaticism. There is serious concern that the lights may go out on days when the wind is not blowing and the sky is cloudy. Our huge opportunity for shale development is missed.

So is Britain finished? In 1975, Margaret Thatcher declared: “No wonder so many of our people – some of the best and brightest – are depressed and talk of emigrating. Even so, I think they are wrong at giving up too soon. Many of the things we hold dear are threatened as never before, but none has yet been lost. So stay here. Stay and help us defeat socialism, so that the Britain you have known may be the Britain your children will know.” So we have proved our resilience before. I believe we will again. But how frustrating it is to see our country languishing as the rest of the world zooms by.