I wasn’t really there for the 70s. Or at least I was, but I was watching Blue Peter and spooning Cremola Foam up from the tub. I had to piece the 70s together later from what the grown ups said. Phrases like ‘three day week’ (how did that work? could you do it flexitime?) and ‘winter of discontent’ and ‘the IMF’ were muttered between adults; the 70s economy sounded like an embarrassing uncle, the black sheep of the family.
I was definitely there for the 80s though. I remember an advert where a handsome man dropped off his son at boarding school. He turned to his beautiful (yet classy) wife and said, smugly, ‘We’re going it alone – Ian’s with me, John’s with me, and we’ve got the backing’, and she said, ‘Darling that’s wonderful’. I also remember sneering at street collections for the miners; did they think you could sell coal at a loss indefinitely? I’m ashamed of that now*.
So I concluded that in the 70s the unions were mad for power and the government couldn’t count. The 80s answer was: cut taxes; privatise; and shrink the state to make way for entrepeneurs.
Some of this has gone well. The heroin trade moved into some mining towns before the state had finished packing. On France’s state-owned TGV, passengers now moan, ‘Enough of this fast, affordable, extensive, punctual and reliable service. We want a selection of hot beverages and refreshments before the buffet car closes at Carlisle’.
What about tax cuts? The hope was that we work harder if we keep more of our income. This would make us more productive. So even at the new, lower tax rate, the government would get more money in.
I’ve always wondered about this. Say promotion means an extra £1000. Taxed at 40% you’ll get £600. If tax rises to 45%, do you say ‘No way am I working harder for £550! I’m going back to messing around on twitter RIGHT NOW’? I’m not the only one with doubts about the ‘cut taxes and raise revenue!’ story.
How much of the 80s medicine was the right cure for the right disease? Unions can be reformed rather than sidelined. Governments might be less likely to abuse monopoly power than companies, unless you watch the companies as though they were in detention. Poor management, low investment and lack of training might be more damaging than high taxes.
Imagine that instead of our 80s, we’d had higher taxes and support for mining towns as the pits closed; investment in education, infrastructure and new industries and businesses, keeping some of the talent which left for London and the City.
*Not because I think you should dig stuff up and sell it at a loss. Because if someone is reaching for the plug on the town’s life support machine without suggesting an alternative, the only decent thing to do is protest .