Miriam Cates: Burnham gets some things right about Thatcher

Miriam Cates is a presenter on GBNews and the former MP for Penistone and Stocksbridge.

Much of our new prime minister’s economic philosophy remains an enigma. It has been said that he is everything from a raving socialist to a Brownite. Or just confused. Some say the “King of the North” takes his cues more from Catholic social teaching than any fiscal dogma. The economic policies announced in Burnham’s first week in Number 10 were relatively conservative; two small tax cuts and a bus fare cap which, although an example of price fixing, is nevertheless a Conservative Party idea. 

What we do know is that Burnham views Thatcherism, or ‘neoliberalism,’ as a big mistake. As he put it:

“The deindustrialisation of the 1980s was devastating for places across Makerfield [and the North]. That was followed by deregulation, privatisation and austerity. It all adds up to 40 years of neoliberalism that have not been kind to the north of England.”

And:

“Margaret Thatcher deregulated [utilities] and then they just work for the private shareholders and not for the paying public.”

Unsurprisingly, and perhaps intentionally, comments such as these provoked an angry reaction across the Right and throughout the South. 

Conservative commentators were quick to point out that Britain’s economy was on life support before Thatcher’s reforms – which resulted in rapid economic growth. Others have noted that London and the South East of England are by far the most productive areas of the UK, generating the lion’s share of tax revenue and, in effect, subsidising the rest of the country. 

Some talking heads, such as GBNews commentator Mike Parry, went as far as to claim that this is proof that northerners need to be a bit more industrious.

Like Andy Burnham, I grew up in the North. I spent my childhood in the 1980s and ‘90s in Sheffield, a city that was suffering terribly from the closure of the steelworks and the pits which, for generations, had provided good work to local men and a source of identity and regional pride.

In many ways I was not a ‘native.’ My parents were middle-class graduates who moved up from London shortly before I was born, so I was fortunate enough not to be directly affected. But I saw the toll taken by the frequent rounds of industrial redundancies on my classmates, their parents, and our city. 

Over the decades, a sense of helplessness set in. Where once young men could expect to follow their fathers into the kinds of occupations that would support a family, school leavers now too often face the choice between insecure or menial work or packing their bags and moving South. 

By any metric, much of the North is very poor. South Yorkshire’s GDP per capita remains below that of Hungary, a country that was still locked behind the Iron Curtain when I started school. And Andy Burnham is right about access to opportunity. The town of Stocksbridge, situated ten miles to the North of Sheffield with a population of 10,000, has almost no public transport links, and not a single sixth form or post-sixteen education facility.

The UK is the most geographically unequal economy in the Western world. The North really is a different country. 

In Sheffield, rightly or wrongly, one person was widely held to blame for this: Margaret Thatcher. Back in the 80s and 90s, the hatred ran deep. The Battle of Orgreave in 1984, a brutal clash between 6000 police officers and 5000 striking miners, sowed the seeds for a generation of bitterness and anger against Thatcher and the Tories. And it turned political disagreements into a bitter ideological war. I can remember singing rhymes in primary school about how we wanted to dispose of the Iron Lady. That’s why, despite being culturally conservative – as demonstrated by Andy Burnham’s retro “pub snacks” social media skit – it took forty years for many in the north to even consider voting Conservative again. 

Yet if our new Prime Minister believes Thatcher’s reforms were unnecessary, he is fundamentally wrong. In the 1970s, Britain was the sick man of Europe, humiliated by being forced to go cap-in-hand to the IMF for a bailout. Thatcher’s policies of privatisation, deregulation, and the rejection of a planned economy were not mistakes; the original sin was the postwar nationalisations that made these reforms essential in the first place. The mistake was what came next. Or rather what didn’t. The North was left to languish and Britain’s industrial heartlands were quietly abandoned rather than reformed. 

It is not necessary to hold any particular sympathy for northerners to see that Britain’s imbalanced economy is a disaster for our whole country. You don’t have to believe that we should re-open the coal mines and re-fire the blast furnaces to acknowledge that Britain’s enormous trade deficit is one of the primary causes of our economic fragility. The service sector and public sector jobs that have replaced heavy industry in the North are not contributing to the wealth of the nation and our export capacity as they once did. 

Even for those in the South, much of the ‘wealth’ created by Thatcher’s reforms was a temporary illusion. The selling-off of North Sea Oil initially resulted in a massive injection of cash to the Treasury. Tax receipts from private oil companies accounted for up to ten per cent of government revenue during the peak production years of the 1980s, allowing for tax cuts and growth.

But as with all national assets, the oil fields could only be sold off once. The reason that drilling the North Sea again – a good idea though it is – won’t result in a huge increase to national wealth or a substantial reduction in energy prices is because, unlike the Norwegians, we don’t own the oil. During the Thatcher premiership, over 40 major state-owned enterprises – with a value of £60bn (£250bn in today’s money) were privatised. Where there is true competition and a free market, private ownership should always be the preferred option. But when privatisation is pursued for ideological reasons – even when there is no real prospect of competition, or where there are national security concerns – the outcomes can be suboptimal to say the least. The scandal of Thames Water is a case in point. 

Thatcher’s financial reforms were also not as successful as many on the Right like to claim. Banking deregulation massively increased the money supply, unleashing an unprecedented expansion of cheap credit. As Steve Baker and Max Rangely argue in their monograph “Are we in the largest bubble in history?,” those closest to the source of the new money – such as bankers and traders – were enriched, but as the price of assets inflated, the young and the poor were priced out of home ownership. In 2021, London house prices reached 13 times the median income. By anyone’s measure, that is not a success.

At the time, Margaret Thatcher’s Britain seemed like an economic triumph. The Prime Minister’s resourcefulness and determination to rescue Britain made her one of the most admirable leaders our nation has produced. But the long tail of her reforms – doubled down upon by successive governments – has left the UK with one of the most fragile and imbalanced economies in the West. 

So Andy Burnham is right about ‘neoliberalism,’ – at least in part. Much of Britain has been left behind by the failed economic policies of the last few decades. But the important question now is how does our new Prime Minister intend to fix the problem without a pendulum swing back to socialism – the doctrine that made Thatcher’s course-corrections so necessary in the first place? The culprit is not free markets but distorted markets.

To borrow a phrase from Boris Johnson, the regions must be “levelled up“—not through state hand-outs or by shifting civil service desks outside of the M25, but by restoring real, productive power to all parts of the nation. The industrial ‘muscle memory’ of the North still remains. To unlock it, the Right may have to accept that some targeted state intervention is required to correct past failures.

“Number 10 North” might be a great gimmick for Instagram, but for more serious inspiration, Burnham must turn to supply-side interventions: Freeports, targeted deregulation, and drastic tax cuts on industrial energy.

Through blood, sweat and coal, the North of England was once responsible for generating the wealthiest era in British history. Politicians of all political persuasions should be asking what can be done to make the regions great again, not out of pity or nostalgia, but because the UK’s economic success depends on it. 

If the North wins, the nation wins.

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