Reflections on Thatcher

By Dr Benjamin Worthy

The discussion following the death of Margaret Thatcher has quickly moved from a fragile peace to a divisive debate (see these ambiguous local press headlines). I don’t remember much about Thatcherism but I have vague memories, as Russell Brand wonderfully put it, of a woman on the TV telling people off and constantly saying no.

Having taught British politics I find it fascinating to see the differences between myth and reality in leaders from across time. Thatcher appears to be one leader who will be as wrapped in myth and controversy as Churchill. As Richard Vinen points out his great book on Thatcher, both left and right had an interest in creating a straw Thatcher, a repository of virtue or evil. Added to this, academics, supporters and others, including Thatcher herself, have piled on further layers of mystique. Her comments about there being ‘no such thing as society’, for example, are quoted out of context while her comments about immigration in 1978 are often forgotten.

Take Thatcher’s background as the famous ‘grocer’s daughter’. As Simon Jenkin’s (see a good article here) and biographer John Campbell argue in their works on Thatcher, Alderman Roberts was an important local politician – but Grantham gave her a ‘hinterland’ and an ‘outsider’ story to tell. More importantly the ‘outsider’ Thatcher developed her real contacts at that most establishment of places Oxford, where she gained the friendships that eventually found her a seat. An outsider perhaps but with at least one foot firmly in the establishment.

More interesting is Thatcher as a politician. Her portrait as an ideology driven ‘wrecker’ needs to be qualified. Vinen is not certain she ever read any of the ‘classic’ texts that were supposed to have inspired Thatcherism or that she regarded them as anything more than ‘polish’ (though this is not to underestimate her formidable intellect). Nor was she the first to privatise parts of government or acknowledge the financial arrangements were unsuitable-the prize for both of these goes to her ‘socialist’ predecessor. Her golden rule of politics was said to have been ‘always leave yourself a way out’ – not a very Thatcher thing to say.

As a politician Thatcher is seen as a model conviction politician. But, as John Major and Jon Snow both tried to point out, the same Thatcher signed the Single European Act of 1986 and agreed the Anglo-Irish Agreement. Her privatisation began slowly and she backed away from reforming the NHS or privatising the Post Office. Only when she truly became an ideologue did she lose power.

Vinen highlights her famous 1988 Bruges Speech, seen now as the founding moment of the UK Eurosceptic movement in Britain, as one of the most misunderstood parts of her career. As a statement of Euroscepticism it leaves a lot to be desired. Parts of the speech are very pro-European, peppered with phrases such as ‘And let me be quite clear…Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is in Europe, as part of the Community’-she even begins the speech with a gentle joke about her supposed ‘anti-European’ views.

Even Thatcher’s ‘iron resolution’ over the Falklands war may not be all that it seemed-these papers from the National Archives reveal Thatcher open to the idea of a negotiated settlement (borrowing from Churchill again who said ‘jaw jaw is always better than war’).

The most confusing aspect is her legacy, which can be less a verdict and more an on-going debate. Thatcherism shaped the views of what the state, the economy and society should do. In 2004 this all seemed to have been settled. Post 2007 light touch approaches to banking and food safety seem more questionable.

Thatcher herself spoke of her key achievements as being variously the creation of Tony Blair or the changing of ‘values’ and ‘common sense’. None of these take us very far in understanding what it was Thatcherism did. The difficulty is that debate is on two levels. One level we can (and are) discussing economic and social changes Thatcherism created. On this one I broadly agree with Ken Livingstone’s assessment.

But on another level, the argument is about something harder to define-this may be what Thatcher meant about ‘values’. Both left and right believe Thatcher did something less tangible. To the right Thatcher made Britain ‘great’ again as Cameron said, saving us from a terminal sort of ‘spiritual’ as well as economic decline-though some interesting and much debated research points to 1976, that year of terrible economic crisis, as being the time when the UK was ‘happiest’. To the left Thatcher ‘broke’ something about Britain and what Alexei Sayle called her ‘prejudice wrapped up as policy’ destroyed something worth keeping- a sense of community as difficult to measure as happiness.

The events of the last few days have showed that she has one unarguable legacy. Her idol Winton Churchill spent much of his life a divisive and contrary figure but, a year shy of his 70 birthday, transformed into a figure of national unity and ‘the saviour of his country’ (as a very left wing historian said). By contrast Thatcher, who claimed quoting St Augustine she sought unity, has left division and conflict.

Dr Benjamin Worthy is a lecturer in politics at Birkbeck.

Britain in the EU

By Dr Dionyssis G. Dimitrakopoulos

This blog post summarises parts of a lecture Dr Dimitrakopoulos gave to British diplomats at the Foreign Office on 18 February 2013.

Britain has been described as an ‘awkward partner’ (George, 1994) within the EU but the chequered history of her membership is even more complex. Although it is true that until 1997 there were only two major episodes of positive engagement (the establishment of the single European market in the second half of the 1980s and John Major’s short-lived attempt, upon his arrival at 10 Downing Street, to place the UK ‘at the heart of Europe’) a more thorough understanding of Britain’s 40-year history as a member of the EC/EU ought to be couched not only in contemporary debates on the future of European integration but also Britain’s own past, present and future.

For a start, Britain’s accession to the then European Communities was a sign of an undeclared defeat. As Hugo Young appositely notes,

‘For the makers of the original “Europe”, beginning to fulfil Victor Hugo’s dream, their creation was a triumph.  Out of defeat they produced a new kind of victory.  For Britain, by contrast, the entry into Europe was a kind of defeat: a fate she had resisted, a necessity reluctantly accepted, the last resort of a once great power, never for one moment a climactic or triumphant engagement with the construction of Europe’ (Young, 1998, 2).

Indeed, not only did Britain’s governments shun the opportunity to participate in this process from the beginning – in the 1950s – but their pronouncements were matched by further concrete action: Britain played a major role in the establishment of the European Free Trade Association which was meant to be a counter-weight to the emerging European Communities, and was devoid of a common external tariff and a common trade negotiator vis-à-vis third countries, i.e. two ‘state-building’ features of the EEC. Britain was initially joined by Austria, Denmark, Portugal, Sweden, Norway and Switzerland, nearly all of which [i] subsequently became full members of the EC/EU (as did Finland that became a full member of EFTA in 1986 but joined the EU only nine years later).  In addition, far from its usual position as a leading decision shaper in international affairs, Britain has had to apply three times in order to join the European Communities.

Since then, by and large Britain’s membership has been marked by a number of paradoxes or even contradictions: a sceptical member state but also one whose basic preferences are often (though not always) congruent with key developments in the process of integration as indicated by the single market project, successive enlargements, market-based approaches to a series of policy issues, including employment.

More recently, the terms of the domestic debate on Britain’s membership have not only returned to the themes of the late 1980s and early 1990s but can be seen as evidence of the British political elite beginning to catch up with the continental European debate on the future and the finalité politique of European integration – a debate essentially launched by Joschka Fischer’s famous speech at Humboldt University in May 2000. This involves a struggle between the supporters and opponents of essentially two quite different options for the future of Europe, namely neoliberalism and regulated capitalism. Indeed, on the one hand, David Cameron’s recent speech at Bloomberg and other pronouncements made by senior Tories place them firmly on the side of those who support unfettered markets, a neoliberal Europe – that is arguably the essence of contemporary Tory Euroscepticism for they see the EU as an actual or even just potential source of intervention in the economy. As the emerging debate on the UK’s membership of the EU is bound to reveal, when Mr Cameron refers to ‘flexibility’ he actually has in mind what many on the Continent as well as the UK call ‘social dumping’. In that sense, the recent developments in the debate in the UK mark a return to the early 1990s, when the late John Smith, then Labour leader, was castigating the Major-led government for trying to turn the UK into the sweatshop of Europe, trying to compete with Taiwan on low wages, rather than with Germany on skills, as he put in a speech in the House of Commons. The fact that Mr Cameron has singled out the EU’s Working Time Directive makes him particularly vulnerable to that line of attack because that directive (like others in the socio-economic and environmental domains) actually allows individual member states to pursue higher standards. So, if Mr Cameron wants flexibility, this is bound to mean the dilution of standards, not their improvement.

The Labour Party’s response was largely couched in Ed Miliband and his team’s preference for ‘responsible capitalism’ which has a clear social democratic ‘flavour’. This is good news for those who want to have real choices not only in national electoral contests but also the forthcoming European elections for, ultimately, the kind of Europe that we want is inextricably linked to the kind of Britain we want.

References cited

George, S. (1994) An Awkward Partner.  Britain in the European Community. 2nd edn. Oxford: Oxford University Press.

Young, H. (1998) This Blessed Plot: Britain and Europe from Churchill to Blair. London: Macmillan.


[i] Norway and Switzerland are the two exceptions.

The UK Referendum on Europe: Prepare for the By No Means Inevitable

By Dr Dermot Hodson

So the Prime Minister has finally agreed to a public vote on EU membership, or has he? Media coverage of David Cameron’s longsuffering Europe speech, finally delivered at Bloomberg HQ on 23 January, has focused on the Conservative leader’s commitment to hold a referendum by 2017. As is so often the case with political pledges of this sort, however, the devil is in the detail. At the present moment, there are at least three reasons why this referendum might not go ahead as planned. This blog post sets out these reasons before arguing that the Prime Minister nonetheless needs to change his rhetoric on the EU if he holds out any hope of turning around public opinion in the UK.

The Conservatives might not win the next general election (and Labour and the Lib Dems might hold their nerve).

The coalition agreement signed in May 2010 between the Conservatives and Lib Dems made no mention of an in/out referendum on EU membership and the two parties have not reopened this issue thus far. For this reason, the Bloomberg speech can be seen as a trailer for a future Conservative government rather than a jump cut for the coalition, with Cameron announcing that his party would, if it wins the next election, seek a ‘new settlement’ with the EU before asking the people if they wish to remain members under these new terms. Although some commentators have downplayed the significance of this commitment it goes well beyond the current requirement to put certain categories of EU treaty change to a referendum before they can become law in the UK. This requirement, which is set out in the European Union Act (2011), refers only to a referendum on proposed treaty changes and not on the wider question of whether the UK should remain in the EU.

With the Conservatives trailing in the opinion polls (even after their post-Bloomberg bounce) the opportunity to deliver this manifesto pledge might not materialise. A key question, therefore, is whether the two other main political parties will be forced to match Cameron’s commitment to an in/out vote. Ed Miliband’s initial response to the Bloomberg speech was to reject calls for such a referendum for now, but the Labour leader is already under pressure from the ‘euro realist’ wing of his party to recant. Nick Clegg also came out fighting against the Bloomberg speech, although his criticisms of Cameron rested uneasily with the Lib Dems’ manifesto pledge in 2010 to hold an in/out referendum in the event of a ‘fundamental change’ in the UK’s relationship with the EU.

EU member states might not play ball

The Bloomberg speech is premised on the view that a new EU treaty is inevitable either to determine the fate of the euro or ensure a ‘diverse, competitive, democratically accountable Europe’. This is by no means a foregone conclusion. As regards the euro, the consensus last year may have been that further treaty change was inevitable to resolve the on-going sovereign debt crisis but the comparative calm on financial markets in recent months has given pause for thought. A new EU treaty on the political underpinnings of the European project seems less likely still. Here Cameron’s speech glossed over the fact that the UK and other EU member states spent much of the last decade bringing Europe ‘closer to the people’ though a new European Constitution only for the people of France and the Netherlands to reject this project. Although most elements of the European Constitution were later salvaged under the Lisbon Treaty, EU leaders remain rightly wary after this debacle about seeking legitimacy for European integration through poorly understood treaty reforms, especially when referenda are required for ratification.

Should other EU leaders not take forward plans for a new treaty then the fall back position, according to the Bloomberg speech, is that the UK would seek a unilateral change to its terms of membership. Quite how other EU member states would respond to such a request is unclear. Harold Wilson, it is true, secured a renegotiation of the UK’s terms of accession to the European Economic Community (EEC) in 1975 but the cosmetic changes negotiated at this time stopped well short of the kind of new settlement that Cameron seems to have in mind. Also problematic are the potential knock-on effects from a UK renegotiation. In the mid-1970s the UK’s domestic difficulties with the European project could be treated by the EEC in isolation. These days there is more than one member state capable of unpicking key elements of the European legal order, with France and the Czech Republic among the potential members of this awkward squad.

That said, if the Conservative Party wins the next general election and makes good on its manifesto commitment, the expectation is that other EU member states would cut a deal with the UK to keep it in the European club. What is unclear at this stage is what such a deal would look like and whether it would carry any weight with UK voters. The wording used in such a referendum would obviously be key. Whereas Harold Wilson sensibly put the UK’s renegotiated accession treaty to one side in 1975 by asking voters ‘Do you think the UK should stay in the European Community (Common Market)?’, Cameron is in danger of asking the more nebulous question of ‘Do you want the UK to remain a member of the European Union under the new terms of membership?’ Having committed to draw up legislation for this referendum within the current Parliament Cameron should take a leaf out of Wilson’s book by finding a formulation of words that focuses on the fundamental political issues at stake rather than the fine detail of future treaty negotiations.

The Conservative Party could yet implode

Why the Prime Minister picked this particular fight with the EU at this particular time is puzzling. It is certainly difficult to understand from an economic point of view; calling into question the country’s involvement in the EU single market was hardly the tonic that the UK economy needed in a week in which it emerged that GDP growth had turned negative for the third time since the global financial crisis. Nor does the Prime Minister’s move make sense from a geopolitical perspective. The unstable situation in North Africa at present makes it more important than ever that the EU speak with one voice on international issues, a fact that David Cameron has tacitly acknowledged by committing UK personnel to an EU training mission in Mali. There will be further tests of this sort ahead but such challenges will be unquestionably harder to meet if the UK leads other EU member states into another decade of institutional naval gazing.

Perhaps the most obvious explanation for the Bloomberg speech is a party political one in which David Cameron sought to silence Conservative eurosceptics by signing up to their longstanding demand for an in/out referendum. Some also see Cameron as attempting to contain the UK Independence Party (UKIP) by taking its leader, Nigel Farage, up on his offer not to challenge Conservative candidates in the next general election in exchange for an unequivocal commitment to hold an in/out referendum. The problem with this line of explanation is that the Prime Minister’s announcement on 23 January truly satisfied neither Tory hardliners nor UKIP.

Further backbench rebellions from Conservative Members of Parliament can be envisaged unless the Prime Minister commits to an in/out referendum sooner rather than later and agrees to hold a public vote even if no new settlement with the EU can be achieved. Boris Johnson, Cameron’s rival for the Conservative leadership, has already sown new seeds of discontent here by supporting calls for a referendum before 2015. Nigel Farage, meanwhile, has emerged stronger than ever from the Bloomberg speech by being able to claim credit for the Prime Minister’s referendum pledge while rescinding his offer of a pre-election pact with the Tories because of the contingent character of Cameron’s commitment.

Conclusion

A referendum on EU membership along the lines envisaged in the Bloomberg speech is by no means inevitable for the reasons discussed above. This does not mean, however, that David Cameron can delay political preparations for such a vote. If the Prime Minister is really serious about putting his ‘heart and soul’ into campaigning for staying in the EU under a new settlement then he has his work cut out. A Guardian/ICM poll published in the light of last week’s referendum pledge suggests that 49% would vote to leave the EU. Such views are not set in stone, however, with around 30% of likely ‘no’ voters describing their voting intentions as probable rather than definite. Changing these voters’ minds is critical for a possible future referendum and, even if this vote does not transpire, for winning back public support in the UK for the European project.

Some commentators have praised David Cameron’s efforts to set out a positive vision of UK membership in his Bloomberg speech. Self-evident though the Prime Minister’s remarks were on the EU’s contribution to peace in Europe they sounded less than convincing from a leader who couldn’t find the time to travel to Oslo in December to see the EU awarded the Nobel Peace Prize. This argument will, in any case, carry limited weight with those voters for whom war in Europe is a distant memory. More promising in this regard was Cameron’s quiet questioning of calls to follow Norway and Switzerland into a free-trade agreement with the EU in place of membership, an argument that will receive a hearing if the Conservative leader turns up the volume about the loss of UK influence in Europe from such an arrangement.

In truth, however, the Bloomberg speech betrayed the shallow understanding of Europe that underpins contemporary Conservative thinking. Central to this (mis)understanding are two key beliefs: the first being that France, Germany and other EU partners are motivated by federalist fervour rather than, as is so plainly the case, national interest; and the second insisting that reforming Europe is a peculiarly British phenomenon when it so clearly is not. On the first of these points, Cameron wasted a glorious opportunity to slay the federalist dragon by making it clear that cooperation between EU member states occurs where national interests overlap and cannot persist for long when they don’t, preferring instead to portray the UK as an isolated pragmatist that ‘come[s] to the European Union with a frame of mind that is more practical than emotional’. On the second point, Cameron’s calls for a more competitive, flexible, accountable and fair Europe without weighing EU leaders’ efforts to achieve exactly that over the last twenty years was another serious misstep. At best, this insistence on re-drawing Europe on a blank page misses an opportunity to build alliances with other EU leaders over on-going reform efforts. At worst, it paints Europe in black and white rather than shades of grey, asking people to think of the EU as being entirely uncompetitive, inflexible, unaccountable and unfair only to wonder why they then won’t vote for continued membership.

Dermot Hodson is Senior Lecturer in Political Economy at Birkbeck. He is the co-author of ‘British Brinksmanship and Gaelic Games: EU Treaty Ratification in the UK and Ireland from a Two Level Game Perspective’ (with Imelda Maher, University College Dublin), which is forthcoming in the British Journal of Politics and International Relations. Thanks to Joni Lovenduski, Jason Edwards and Rosie Campbell for comments. The usual disclaimer applies.

Cameron’s EU Speech: What Would Machiavelli Say?

By Ben Worthy and Mark Bennister

David Cameron made his long awaited speech about Europe this week, a speech that will decisively shape both his premiership and Britain’s relationship with the EU. It has been welcomed by parts of the press and Eurosceptic Tory MPs. It has been criticised by various other members of the EU.

The big question is what happens next-will the speech save or sink Cameron, Britain and the EU? In reaching for an assessment one way to go is backwards to 1513 to get the views of that most straight talking of theorists, Niccolo Machiavelli. Machiavelli, author of The Prince, spent time as ambassador to the court of Louis XII and travelled with Cesare Borgia so may know more than most about the twists and turns of foreign policy. He has already been used to dispense advice on the Brown vs. Blair feud and to proffer tips to Ed Miliband.

So what would Machiavelli say about Cameron’s speech and its consequences? He would welcome the clarity (though some feel the superficial clarity hides much fudging).  Machiavelli advised that a leader needs to come down on one side or the other of an argument. A leader must give ‘striking demonstrations’ and reveal himself in favour of ‘one side or another’ without an attempt to hedge or be neutral.  Cameron’s speech was striking and welcomed as defining. Machiavelli may have had some reservations about some of the ‘ifs’ contained in the speech-the clarity of the position could unravel under pressure and no amount of ‘sunny’ optimism could hide this.

Machiavelli warns, however, to ‘shun flatterers’. A leader must always ask and question but too much praise from flatterers will lead to ‘changes and indecision’. He should ‘make up his own mind by himself’. Cameron must beware potentially transient poll ratings or cheering headlines. ‘Prosperity’ in all senses, he warns, ‘is ephemeral’.

Another point Machiavelli may make, rather unexpectedly, would be to go with what the populace want. Machiavelli may or may not have been a democrat but he had a keen sense that any successful leader needed the ‘people’ with him.

In this case discovering precisely what the people want is difficult. It seems that, as of this weekend just over 50% of the public wish to leave the EU, there is support for renegotiation and most people asked would like a referendum (though apparently referendums on any subject are always popular). However, other polls indicate that the EU as a political issue remains a low priority for most voters.

Machiavelli’s final point is the most important. While supporting clarity, Machiavelli was also a supreme realist in terms of the need to adapt- Margaret Thatcher’s famous advice to ‘always leave yourself a way out’. Machiavelli believed most of the politicians he had known had displayed ‘a fatal inflexibility in the face of changing circumstances’.

So Cameron needs to be able to move with events. The difficulty is that, while the ‘ifs’ may bring wriggle room, the promise of a referendum does not. In the short to medium term the question is whether the speech and referendum promise strengthens his hand in Europe or hobbles his negotiating power. In the longer term Cameron has committed to a referendum in 2017 that may take place in be in a very different political landscape. Machiavelli may well point out that if Cameron wins the next election (on his own-another big if) and if his negotiations are successful the EU, the world economy and Britain may all be very different in five years. Could Cameron adapt his cast-iron pledge to this new world?

Dr Ben Worthy is a lecturer in the Department of Politics at Birkbeck, University of London. Dr Mark Bennister is a Lecturer in Politics at Canterbury Christ Church University. He was previously a Teaching Fellow in British Politics at UCL, based in the Constitution Unit.

What is the point of banning discrimination on grounds of sex in insurance?

By Professor Deborah Mabbett

On 21 Dec 2012, a ban on the use of sex as a criterion in pricing insurance came into force throughout the European Union. In a forthcoming article in the journal Regulation and Governance (pre-publication version available at http://www.bbk.ac.uk/politics/our-staff/academic/deborah-mabbett/publications), I have examined how the ban came about and what its significance is. The ban was originally proposed by the European Commission in 2003, but the Commission was persuaded to drop the proposal. Instead, insurers were required to publish the statistical basis for discriminating between men and women, to show that differences in premiums were justified by differences in risk. This compromise was successfully challenged in the Court of Justice of the EU by the Belgian consumer association, Test-Achats.

At the root of the debate about sex discrimination in insurance was the question of whether discrimination was necessary for the market to function efficiently. Insurers do not use every relevant piece of information when pricing their products. Some information is too expensive to acquire, some is already subject to legal prohibitions (such as information about ethnicity or religion) and some is subject to voluntary restraint (such as genetic information). Furthermore, long-established practices of risk classification become entrenched in insurance. Long use yields long data series that enable insurers to check that their assessment of risk is robust, and consumers get accustomed to conventional discriminatory practices.

What drew the European institutions to disrupt the convention that sex is used in pricing some forms of insurance? One answer is that the Commission was concerned about the rise of defined contribution pensions, where individuals buy an annuity with their accumulated pension savings. Women get smaller annuities than men because they live longer, on average. However, on a straightforward cost-benefit analysis, this did not make a strong case for banning discrimination, as women are likely to pay more now for car insurance. Furthermore, insurers can find other indicators for long life expectancy (such as occupation and family history), and they will find new ways of identifying safer drivers too.

A stronger answer is that discrimination was already prohibited in some states of the EU, so different countries had different rules despite the supposed existence of a single market in insurance. The Court of Justice held that there should be a common rule across Europe. Since non-discrimination is a fundamental right, it held that this should be the basis for regulating the single market.

While insurers resisted this strongly, arguing that it would disrupt the market, their reaction now that the matter is decided is rather muted. On the Today programme on 21 Dec, the spokeswoman for the Association of British Insurers emphasised that the effects on premiums were unpredictable, that the market remains highly competitive, and that consumers should shop around. The fact is that insurers do not want an extended public debate about discrimination. They prefer the legitimation provided by market competition, which leaves insurers autonomy in determining their pricing strategies, subject to regulatory constraints. Public scrutiny is uncomfortable because it is prone to reveal that insurers’ practices have a weaker technical basis than they like to imply. During the debate on sex discrimination, statistical studies were done which suggested that premium differentials were not always explained by underlying differences in risk, and that some potential alternative predictors were ignored. This should not really surprise us. While insurers have competitive incentives to search for good predictors, they also have marketing reasons to set prices to the advantage or disadvantage of particular groups.

It is tempting to see the ban on sex discrimination as a step towards a more ‘social’ Europe, going beyond the creation of a free trade area and regulating market transactions for social purposes. However, it is not clear what the social purpose really is: the Court of Justice has upheld a principle rather than pursuing a goal. The case highlights that markets are based on conventions which come under scrutiny when they are exposed to cross-national comparison. The ban reconstitutes the European insurance market and adjusts the ‘playing field’ for competition, rather than addressing a social policy problem or promoting equality of outcomes.