Thatcherism in Wales
Thatcherism emerged in the mid 1970s as a response by sections of the ruling class to the structural deficiencies of British capitalism, which had been exacerbated to breaking point by the long term ‘retreat from empire’ and the end of the post war boom. It also presented itself as a solution to the decline of the Tory Party, whose electoral support had been on a long term declining trend for fifty years and which from 1964 to 1979 had lost four general elections out of five. Thatcherism was a populist attempt to effect a qualitative break from the post-war political consensus to the benefit of capital.
In government, Thatcherism crashed domestic manufacturing in order to improve profitability and competitiveness by eliminating relatively unproductive capacity. Inflation was to be controlled through tight control of the money supply. Capital investment was increasingly diverted abroad. Many sectors experienced a driving down of real wages and speed-ups in production. Wholesale cuts in public expenditure were combined with a drive towards privatisation, both of state-run industries and of public services. Alongside this, and necessary to it, came a thorough-going mediation of trade union power (and increasingly other forms of popular resistance), both through legal restrictions and through the weapon of mass unemployment.
In Wales, the historic centrality of core extractive and manufacturing industry (steel, coal) coupled with the post war strategic importance of the public sector meant that the Thatcherite project had a particularly deleterious effect. The 1980s saw a dramatic shedding of jobs in the old basic industries: by 1990 steel and coal, the latter already in a long term cycle of decline before the 1970s, accounted for a mere two and a half per cent of the total workforce. In 1989 employment in services comprised 65 per cent of the total workforce (compared to 55 per cent in 1979), with the total manufacturing workforce standing at 25 per cent (compared to 30 per cent in 1979). Unemployment fell between 1986 and 1989 but increased again on a rising trend in 1990: new ventures did not replace the jobs lost in the early 1980s. This was paralleled by a fall in real wages, especially since 1985. Despite the better rates of growth of GDP (which anyway indicates economic activity rather than wealth) Wales has remained a low output and low-income region of Britain. In 1992 Wales had the highest rate of household income from social security in Britain.
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