Admist the fall of Baghdad (ok...I got it wrong on the timing) and the budget it's perhaps not surprising that no-one remembered it was the 11th anniversary of John Major's 1992 general election win. I remember the day very well -- I had my driving test in the morning. It was (at least in Cambridge) a beautiful sunny day, a fact that many commentators later attributed to Major's surprise win -- it just seemed too nice a day to vote that nice Mr Major out of office.
The election campaign was easily the most exciting of the four I can remember well, simply because it was the only one where the result hadn't been know for months. Indeed during the last week it looked most likely that Labour would win, their campaign was slicker, the opinion polls tended to put them ahead, and the Tories were finding it hard to agree on a common post-Thatcher view of the world.
Yet if not obvious at the time, in hindsight there were signs that Labour had blown it. The impact of the Sheffield rally is played up by ex-Labour cabinet ministers, and played down by professional polling experts, but I for one remember vividly the news beginning with Neil Kinnock shouting what sounded like 'Well, Roy...well, Roy' as if he couldn't find Roy Hattersley in that huge arena (it later was revealed he was actually shouting 'We're alright'). That clip has been shown repeatedly, but it wasn't a one-off -- earlier in the campaign when Kinnock was asked how it was going he noted 'We're strutting'. Not a good idea.
The John Smith (hang on...I forgot the obligatory tears at his name) budget is now seen as the main culprit for the Labour defeat, but at the time it didn't. I lived in the safest Conservative seat in the country and no-one seemed that concerned about it -- the famous Conservative 'double whammy' posters I remember being seen more as a part of the rough & tumble of campaigning, not actually an accurate forecast of what a Labour government would be like.
Overall at the time it seemed the Conservatives had won for two reasons. First, the electorate didn't particularly like Neil Kinnock, especially in Conservative marginals. Second, Conservatives still enjoyed a post-Thatcher, post-Gulf war boost and the electorate felt the new government needed more time to prove itself.
John Major's reputation is nowadays in tatters, but it shouldn't be forgotten just how bad a situation he inherited. Much is made of how quickly his government lost public support after the 1992 election, but a similar situation happened with the Thatcher government of 1987. The story is pretty simple, two things went wrong. Most important was the poll tax. Accounts I read now of the late 1980s fail to recreate just how important, day-to-day, the poll tax became as a political issue, defining the third Thatcher term like no other (incidentally one of the best books on not just the poll tax but the whole British political system is David Butler's 'Failure in British Government: The politics of the poll tax. It's out of print but should be in any good library. I only wish Tony Blair had read it). What accounts also fail to make clear is how much the poll tax was a Cabinet and party policy, not Mrs Thatcher's alone. Certainly the damage it did to party's poll standing was clear, in fact the 30-32% the party is stuck on today first appeared in 1989 when poll-tax fever was at its height.
The second issue was the economy, where a combination of tax cuts and far to loose monetary policy had created a familiar British story of excess demand, at the time manifesting itself in the form of higher inflation and a huge trade deficit. Nowadays the true-believers argue that it was all Lucky Lawson's fault for not letting the pound rise, but that was never seriously contested at the time given the Tories desire to avoid a repeat of the high-pound induced 1980s recession.
These two errors resulted in our membership of the ERM. By 1990 external confidence in Britain had collapsed due to the huge drop in the Conservatives' support, riots in central London and the failing economy. The issue now was a weak pound exacerbating soaring inflation (the economy didn't tank until later -- when Thatcher left office inflation was at 10.9% but unemployment was about 1.6m I think, which was good for her), hence interest rates were jacked up to 15%. This was further eroding the Tories support, and given Thatcher's belief in four yearly elections, she only had about a year to turn it around. Howe and Major told Thatcher that the only way in which interest rates could come down would be if the pound strengthened, and the only way this could be achieved was to talk up the prospects of ERM entry at a rate higher than the current rate. This was done and indeed the pound strengthened. Of course the big problem was you can't keep talking it up without actually joining the ERM. Again Thatcher was told that the credibility this gave to the pound would allow rates to be cut, and so facing a leadership challenge (not announced but inevitable given Sir Anthony Meyer's challenge a year earlier) she agreed to join. Interest rates were duly cut by 1%, but of course it was not enough to save her premiership the following month.
Clearly there's an element of 'so what' about all this, but I think as this gulf war ends, and attention will return to domestic politics it is helpful to be reminded of what has happened before. The problem I have is I can't remember much about the year and half between Thatcher's fall and Major's win. I do remember the discussion about what would replace the Poll tax, and the almost inevitably of it being a property tax with the only question how much of a single person advantage the Thatcherites could keep. Other than the gulf war the only other thing I recall was the day-to-day monitoring of the exchange rate, and constant concern that it would remain within its ERM band.
posted by Matthew @ 4/10/2003 10:20:00 AM
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