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Scotland under the Conservatives, 1979-1997 Pt.2

THE FIRST PART of this section concentrated on Britain’s relative economic decline in the 1960s and 1970s. Thatcher was well aware of the country’s reputation and on 13 May 1975 told the Scottish Tory conference: “It is to Britain that journalists now come following the scent of economic and political decay.” She had no truck with the postwar consensus saying as early as 1968: “There are dangers in consensus…It seems more important to have a philosophy…”

She herself is supposed to have had one derived from the works of Milton Friedman, Friedrich von Hayek and others. These were certainly the thinkers who most impressed her political mentor Sir Keith Joseph and his acolytes in the ‘New Right’ – including several Scots from the University of St. Andrews such as Ralph Harris who in 1955 founded the Institute of Economic Affairs, and Madsen Pirie and Eamonn Butler who founded the Adam Smith Institutewith help from Douglas Mason.

Thatcher herself, however, although she certainly acknowledged the influence of von Hayek, may have been even more  influenced by her religious upbringing in Grantham by her Wesleyan Methodist father who taught her ‘what was right and wrong in very considerable detail’. She attended chapel three or four times every Sunday and married Dennis in the Wesleyan Chapel in London. Her father believed in self-reliance above all else and even insisted on paying her grammar school fees despite her having won a scholarship. Margaret absorbed his doctrine of individual responsibility, telling the Church of Scotland in what became known as her ‘Sermon on the Mound’ of 21 May 1988 (a document that well rewards reading) that ‘any set of social and economic arrangements which is not founded on the acceptance of individual responsibility will do nothing but harm’. She included some choice biblical quotes in her address which predictably upset Christian socialists. Her other personal values – hard work, patriotism, family, loyalty – were also certainly imbibed in Grantham.

In her memoirs she wrote: “The balance sheet of Thatcherism in Scotland is a lopsided one; economically positive, but politically negative.” It was certainly negative politically. The Scots never abandoned the postwar consensus and only a quarter of them ever embraced privatisation. The vast majority wanted ever more money poured down the drain of unprofitable, uncompetitive, worn out nationalised industries – exhausted coal pits, burned- out coke foundries, unmodernised shipyards – all undermined by the worst trade union practices. A recent, otherwise very well researched PhD thesis from Glasgow University has even argued: “By criticising and disposing of Britain’s nationalised industries Thatcher was unintentionally weakening the ties of the post-war Union.

Employment in state-owned industries had helped to justify Scotland’s allegiance to the British state. This evaporated as a result of the privatisation programme and many Scots began to question their British identity as the British state increasingly withdrew from Scotland’s industrial landscape. Thatcher failed to appreciate that if Scotland was to rely on private enterprise, with minimal support from the Treasury, then it had little reason to remain part of the UK.” This demonstrates perhaps the strength of the nostalgia for a lost industrial past among certain Scots but it is arrant nonsense. Scots wanted jobs; it didn’t matter whether they were in the public or private sector. Privatisation occurred throughout the UK without any widespread questioning of citizenship. If British Rail, for example, avoided privatisation under Thatcher, it was certainly not because British citizens attached overweening feelings of national identity to it.

Besides, the main political beneficiaries of Thatcher’s massive unpopularity in Scotland were not the Scottish Nationalists, whose share of the vote in the general elections of 1983 and 1987 was 11.8 per cent and 14 per cent respectively. The main beneficiary rather was Labour whose vote share at these elections was 35.1 per cent and 42.4 per cent. And Labour (then at least) was a bastion of unionism. Nor can it be argued, as Alex Salmond and others have done, that Thatcher’s main political legacy was the Scottish Parliament. Even Sir Tom Devine, a highly distinguished historian whose political sympathies now lie with the SNP, considers this ‘a moot point’. Scottish Nationalists none the less certainly hate Thatcher and blame her for having ‘deliberately’ devastated Scotland. Nicola Sturgeon says: “Thatcher was the motivation of my entire political career. I hated everything she stood for.”

The Tories in Scotland laboured under many disadvantages which had nothing to do with Thatcher. The Scottish media was against them. Almost all newspapers read in Scotland were produced there and this press grew increasingly critical of the Conservatives. By far the most popular paper was the Daily Record which was a Labour propaganda sheet, being the sister title to the Daily Mirror. The Glasgow Herald and Scottish Daily Express supported the government but the latter from 1974 was printed in Manchester causing a fall in circulation and the former switched its allegiance in 1983 to the SDP/Lib Alliance, a bitter blow indeed for the Tories. A Scottish edition of the Sun appeared in 1986 but this didn’t help. Attempts by the Tories to buy the Herald and the Scotsman failed. The government was also in regular conflict with BBC Scotland while STV was less sympathetic than ITV and run by prominent Labour supporter Gus MacDonald.

The Scots Tories also had a habit of scoring own goals. Writing in the party’s inaugural house magazine The Scottish Conservative its editor, the ineffable Nicky Fairbairn MP, attacked the rest of the Scottish press as “little Scotlanders… yearning to return to those far-off days when Scotland was an independent oatmeal republic with a squabbling parliament presiding over abject poverty.” This was quite an own goal and historical nonsense to boot. But Sir John Junor, Scots-born editor of the Sunday Express and a close friend of the Thatchers was quoted by a journalist in 1989 saying:
“If there is a dislike of Mrs Thatcher among the Scots, it’s for two or three reasons. One is that the Scots are a male chauvinist race, and not any longer particularly intelligent, because most of the best people have left Scotland. They are also a whingeing people, which they never used to be… they’ve made a mess of industry. They’ve buggered-up the motor car industry …Margaret Thatcher’s too damned good for you all. And you resent her because she’s got this upper class or simulated upper class Edinburgh accent (sic) And you resent also the fact that she’s pulling you out of the shit that you’ve put yourselves into over so many years.”

Even if it were half true, this way of expressing the truth could only hurt the Tories.

Nigel Lawson, meanwhile, on a visit to Glasgow in November 1987 said that whole areas of Scottish life were “sheltered from market forces and exhibit a culture of dependence rather than that of enterprise”. The Scottish Sun transposed this into: “Will you stop your snivelling, Jock?” Finally, Trade and Industry Secretary Nicholas Ridley in 1990 in London’s Evening Standard denounced the Scots as ‘subsidy junkies’. It did not matter that the leading Scottish Nationalist, Jim Sillars, had himself decried “the begging bowl mentality” of his fellow Scots.

The Scottish Tory Party meanwhile had become more and more integrated into the English party. In this process it had lost touch with its base and saw its number of local constituency agents dwindle. In August 1990 one of its deputy chairmen confessed to the Sunday Times that the party was ‘only a branch office of the UK Party. We don’t account independently and are not even registered for VAT in Scotland. When Stirling MP Michael Forsyth, branded ‘Margaret Thatcher in drag’, was made Chairman in July 1989 he had to bring in ideological Scots allies working in England to help him reform affairs in Scotland, but he did not last long in the job. There was a constant battle between his and Rifkind’s supporters until the Scottish Secretary forced him out at the start of September 1990. Thatcher, however, appointed him Minister of State in the Scottish Office with control over every significant department there other than industry. This public infighting did no service to the party at all. Forsyth, like Thatcher herself, although popular with ordinary party members was out of tune with consensus-loving Scots. By 1989 only 41 per cent of the Scottish professional classes supported the Tories, only 31 per cent of skilled non-manual workers, under 20 per cent of skilled manual workers, only 34 per cent of Kirk members and only 24 per cent of Protestant manual workers.

Scottish Tory MPs, too, were mostly untypical of Scots as a whole. Many had been educated either in English public schools (such as Eton, Rugby, Winchester and Ampleforth) or their Scottish equivalents. Many were landowners, two, Michael Ancram and James Douglas-Hamilton, were aristocrats. Moreover, according to Charles Moore: “Broadly speaking, the more upper class and rural elements who dominated the party hierarchy and produced two-thirds of Scottish (Tory) MPs were pro-devolution, and the more urban and working-class elements were anti.” Thatcher herself however seemed to like the “posh, languid types” that dominated the party. But since by 1979, despite early statements approving the establishment of a Scottish Assembly, she was merely promising discussions on the matter, she eventually had to turn “in desperation to the man she had tried to avoid” as Shadow Scottish Secretary, the working class MP for Glasgow Cathcart, Teddy Taylor. He lost his seat in 1979 but with the failure of devolution in the referendum that year Thatcher as prime minister could simply ignore that issue. This meant that the role of Secretary of State went to the emollient, patrician George Younger, known as ‘Gentleman George’ for having surrendered his Perthshire constituency to allow Sir Alec Douglas-Home to enter the Commons in 1963. With the steady support of his close friend and ally, the deputy prime minister and Scottish landowner, William Whitelaw, Younger was able to keep Scotland relatively calm politically until he made an egregious political mistake. He persuaded Thatcher to counter a national political rebellion that was brewing in Tory Scotland over rate revaluation – by replacing domestic rates with a poll tax (an idea revived by Douglas Mason in a paper for the Adam Smith Institute). This, he and other cabinet colleagues, including Rifkind, (Younger was promoted Defence Secretary in 1986) believed would be as popular as council house sales (which had boosted home ownership in Scotland enormously) and be an election winner. So, far from imposing the poll tax on Scotland, Scotland – or the Scottish Tories at least – imposed it on Thatcher and England. Thatcher, however, has been demonised ever since for using Scotland as a testing ground for the poll tax.

Until the poll tax local finance had been based on ‘the rates’, the tax levied on the estimated rental value of people’s homes. Local councils had a long habit of raising these especially since it was Labour policy to keep council house rents low. As far back as 1953 therefore a committee was set up under Lord Sorn to review the valuation and rating system and it considered a local income tax, site value rating and a poll tax as alternatives. A poll tax was a flat tax on everyone on the electoral register irrespective of income or wealth, the aim of which was to give the widest possible number of voters an interest in local affairs and an incentive to exercise political responsibility. The Sorn Committee however rejected it. It would be difficult to collect and in any case the Committee objected in principle “to associating registration as a voter with liability to tax”. Instead it advised that the present rating system should continue but, as happened in England, revaluations should take place every five years, not every single year. The Rating Value (Scotland) Act enshrined this in law.

In due course a rating revaluation took place in 1984 with results published the following year. Rateable values would rise on average by no less than 250 per cent. Property owners would be hit hardest. The letters pages of the Scottish newspapers were engulfed with complaints.

Thatcher was told by a panicking Scottish Tory Chairman, Sir James Goold on 14 February 1985 that there would have to be a 170 per cent increase in Scottish rates although only 20 per cent of households would pay the full amount. Most of those worst hit would be Conservatives; for example rates in Perth and Kinross would rise by 70 per cent. Thatcher wanted to postpone the new charges but was told this was legally impossible. The cabinet office went to work and on 31 March Thatcher ‘purred’ when William Waldegrave gave an excellent presentation on the case for a poll tax. The cabinet office reckoned that on average it would cost only £160 a year. Lawson pointed out that poor people would end up paying about 22 per cent of their income while the rich would pay only one per cent of theirs. But for whatever reasons the Treasury did not fight the proposed tax. More importantly, Younger was desperate to do anything to placate Scottish ratepayers and so Lawson said: “If Younger is so keen, let him introduce it.”

Even Labour held its fire at first, fearing the Tories were on to a vote winner. And Thatcher thought so too. It should come in as soon as possible. The Bill enacting it in Scotland was moved on 24 November 1986 and in February 1987 the new Scottish Secretary, Malcolm Rifkind, declared that so eager were his fellow Scots to have the poll tax, he would abolish domestic rates entirely (i.e. without any overlap of systems) and put the poll tax into full operation on 1 April 1989. At the Scottish Tory Party conference at Perth that year Thatcher declared that the Scots has suffered more than most under the rates and added to great applause: “Indeed, it was in response to your needs in Scotland that we finally decided on the introduction of the community charge.” And what was good for Scotland became good for England also.

As Rifkind soon admitted, it proved a huge mistake – the greatest of Thatcher’s premiership. It was condemned by all the Scottish churches and at the Scottish cup final in 1988 supporters of both Dundee United and Celtic had shown Thatcher a red card. In March 1990, shortly before its introduction in England, riots took place in London and elsewhere and when Thatcher refused to rescind the measure it played no small part in persuading Tory MPs to desert her in their party’s leadership vote. But she did not think up the measure to punish the Scots. Quite the opposite. They asked for it.

Still, Tory popularity in Scotland was not killed off altogether. With a promise to abandon the poll tax, Major won an election in 1992 with a record Tory vote in the UK while raising his party’s share in Scotland from 24 per cent in 1987 to 25.6 per cent. But he was discredited almost immediately when in September 1990 Britain crashed out of the ERM at the cost of £3.3 billion. And then his party split down the middle over the Maastricht Treaty. He also lacked any personal charisma and his Spitting Image puppet was painted grey all over. His one gesture to Scotland – the return of the Stone of Destiny from Westminster Abbey – was seen as an act of cringing embarrassment and political weakness. In the general election of 1997 the Tories failed to win a single seat in Scotland where their share of the vote fell to 17.5 per cent. From then on till 2016, they secured only a single seat at elections.

But perhaps we should blame Major for this rather than Thatcher.

Thatcher was certainly correct, however, in writing that politically she had failed in Scotland. On the other hand, she had claimed that economically Thatcherism had been successful. How right was she?

Her judgement in retrospect seems rather modest since what Scotland experienced under her premiership was really a new industrial revolution. Political commentators at the time quickly realised that her premiership had revolutionary qualities. Peter Jenkins entitled his book ‘Mrs Thatcher’s Revolution’; John Cole’s study had the title ‘The Thatcher Years. A Decade of Revolution’; while Denis Kavanagh’s ‘Thatcherism and British Politics’ was subtitled ‘The End of Consensus?’ Her record in Scotland however was rarely treated in detail and mostly just disappeared in the fog of nationalist resentment. If Christopher Harvie, the Nationalist historian, realised that it encompassed something different in scale, he expressed this contemptuously by comparing her (unfavourably) to Edward I. Perhaps, surprisingly she has not yet been compared to Stalin implementing his five year plans. But then most of her critics are left wingers who probably admire Stalin.

Thatcher came to power in the midst of a world recession. Unemployment stood at roughly nine per cent in the UK, Europe and America. Inside the UK itself it was always higher in Northern England than in Scotland. And the decline of Scotland’s heavy industries had been going on for decades. In 1962, for example, the Coal Board ordered the closing of 27 uneconomic pits by 1965. Output had steadily declined while costs soared. But decline continued and 23 of Scotland’s remaining pits were ordered to close by 1970 while the fate of another thirteen remained uncertain. Only a few coal-fired electricity stations could afford to buy coal. And with transport turning to oil and the development of smokeless zones, coal had a limited future. Colville’s the steel giant said it would turn to oil. Not that steel was in any better shape. When it was renationalised by Labour in 1967, Colville’s was technically bankrupt on account of the debts built up by its steel mill at Ravenscraig. In 1979-80, the British Steel Corporation made the largest loss in its history – £1.8 billion of which £96 million was attributable to plants in Scotland. Ian MacGregor was brought in to rationalise it and by October 1980 Craigneuk Foundry (opened at a cost of £72 million two years previously) had lost a quarter of its workforce.

During the 1960s a third of UK shipbuilding capacity was based on the Clyde but it too was in decline. By 1964 the UK’s share of world launchings had fallen to 13 per cent from 31 per cent in 1954. The Clyde yards were kept going by ’Micawberism’ – accepting unprofitable contracts in the hope that something better would turn up to stave off bankruptcy. In October 1965 even the relatively modernised yard of Fairfield’s in Govan stood on the brink of liquidation and was only saved by being taken over by a new consortium of government and private enterprise with trade union support. In 1966 the Geddes Committee none the less reported that this ‘vital’ industry still had a future if only radical steps were taken involving rationalisation: a Shipbuilding Board should be established to coordinate construction while the main shipyards should be grouped into larger units, one for the lower reaches, one for the higher reaches of the Clyde. All this was to be accompanied by better techniques and building methods and trade union flexibility to end demarcation disputes. The aim was to make Clyde yards competitive with Swedish, German and Japanese yards which had already modernised. But was it practicable? The steel industry was told to grant a discount to the shipbuilders, something it could not afford. Still a Board was set up with powers to extend credit facilities up to £200 million. Nothing improved however and Heath as prime minister was forced into rescuing Upper Clyde shipbuilders after a well publicised workers’ ‘sit-in’ there. The point is, to quote Sir Tom Devine, that “the old industrial economy was dying before Mrs. Thatcher became prime minister and would have come to an end if her government had never existed.”

As it was, the old industries crumbled remarkably quickly and between 1976 and 1987 Scottish manufacturing lost 36.9 per cent of its jobs, with the textile region of the borders losing 64 per cent of its capacity. As for mining, in the 1980s the number of active pits fell from 15 to 2. As for shipbuilding, only a handful of yards survived into the 1990s. In 1987 the QE2 had to be re-engined with diesels in Germany. Finally, the last cargo of jute was landed in Dundee in 1998.  By then Scottish textiles were limited to high-quality knitwear mostly in the borders.

However, it was not just the traditional heavy industries that suffered. All sorts of factories shed thousands of jobs at this time, from Singers in Clydebank to Caterpillar at Uddingston to the Invergordon Smelter to Peugeot Talbot’s car plant at Linwood. Many others including multinationals could be mentioned. This was the price of international recession and Thatcher’s attempts to cure inflation which eventually did come down to 5 per cent.

Was Thatcher then determined to destroy Scottish industry in an attempt to create a free market economy at all costs? Unemployment in Scotland may have averaged 11.6 per cent between 1979 and 1988; employment in manufacturing may have fallen by 33 per cent in Scotland during Thatcher’s premiership but things were worse in Northern England and Scottish living standards overall increased by 30 per cent during her premiership.

Recent research also shows that despite her free market principles Thatcher regularly supported the Scottish in all sorts of ways and kept state aid alive and well. For example, the Barnett formula established in 1978 and which gave Scotland a 23 per cent public spending advantage over England was maintained. She allowed Keith Joseph and George Younger to offer PSA-Citroen considerable financial assistance to keep Linwood open but the French company refused. Younger was allowed to offer a £25 million rescue package to ALCAN to keep the Invergordon Smelter open but this offer was also rejected. When RBS was threatened by takeover from HSBC and Standard Charter Bank, she supported referring the bids to the Monopolies Commission. Then again, the 1980 budget introduced tax-free ‘enterprise zones’ of which four were eventually located in Scotland. Locate in Scotland was set up as part of the still continuing Scottish Development Agency, to attract inward investment to Scotland from abroad. The SDA itself had an annual budget of £275 million.  In 1981 a loan guarantee scheme guaranteed 80 per cent of loans given to Scottish companies who might not otherwise get them. The Ravenscraig steel mill was regularly saved from closure. Thatcher prevented the Locate in Scotland office in the USA from being merged with that of Invest in Britain. Scotland was relatively shielded from cuts in regional aid. In 1986 she received £46.1 million in regional selective assistance and £107.5 million in regional development grants. Meanwhile she received far more money from European regional aid than any other part of the UK (although this was really just a recycling of the UK’s own contribution.) Thatcher also allowed Rifkind to take the annual £6 million loss-making Caledonian MacBrayne ferries under the auspices of the Scottish Office when the Scottish Transport Group was privatised in 1988. Water remained a public utility in Scotland after it was privatised in England. Finally when regional direct grants were abolished in 1988, regional selective assistance was reformed to keep funds available in Scotland. This evidence – based on David Stewart’s 2004 Glasgow PhD on Scotland under Thatcher – seems to suggest if anything that Thatcher had a soft spot for Scotland. It certainly refutes the accusation she was anti-Scottish.

By the end of her premiership the Scottish economy had been transformed. It was now based on finance, electronics, oil, tourism, and public services. A lot of the new industries admittedly were controlled from outside Scotland, principally from England or the USA but the main point was the Scottish economy was now more competitive, varied, stable and geared to the international market.

Even by 1981 around 100 electronic companies had located in Scotland and were providing 40 per cent of the European microchip business. During the early 1980s already Scotland was producing 79 per cent of the UK’s and 21 per cent of Europe’s output of integrated circuits.

Between 1979 and 1985 some 60,000 new jobs were created in Scotland. She also attracted 16,000 new retail jobs and over the same period employment in health, education and related areas rose by 29,000. Banking and finance saw the largest percentage increase as its workforce expanded by 21,000. The number of self-employed workers rose by 32,000. Part time workers rose by 76,000. Electronics meanwhile continued to flourish, employing 43,000 people by 1983 and accounting for 9.9 per cent of Scottish manufacturing output. By 1989 Scotland’s service sector provided 1.3 million jobs or 68 per cent of total Scottish employment. Financial services accounted for 176,000. By 1990 it employed 180,000 and generated an income of £1.8 billion. Electronics remained the most successful industry and in 1989 Silicon Glen assembled 35 per cent of Europe’s personal computers, 25 per cent of the world’s auto-tellers and 12 per cent of semi-conductors. By 1990 the total number of those employed in North Sea oil exploration stood at 64,000.

By 1990, however, 70 per cent of Scottish industry was controlled from outside. Between 1987 and 1989 inward investment doubled from £9.4 billion to £18.6 billion, accounting for 4 per cent of GDP. Scotland’s economy had changed although many did not notice and choose not to notice even now. Thatcher had forced an industrial revolution on a reluctant land which still felt nostalgia for a basically Victorian economy. She has had little thanks but it was due to her that the Sunday Times could publish that headline quoted in the last chapter announcing the Scots had become officially better off than the English. That marked a truly historic change. Scotland may not like Mrs Thatcher, a remarkable woman who not only won the Falklands War, helped end the Cold War and saw the dangers to UK sovereignty presented by Delors in Brussels – but who changed Scotland more radically than any leader since.

Scotland under the Conservatives 1979-1997, Part one 

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Photo of the first edition of The Scottish Conservative courtesy of the Editor.


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