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Britain, Ireland and Europe, 1994-99: Peace, Devolution & Development.   Leave a comment

LSF (1947) Nobel Peace Prize obv

Unionists & Nationalists – The Shape of Things to Come:

In Northern Ireland, optimism was the only real force behind the peace process. Too often, this is remembered by one of Blair’s greatest soundbites as the talks reached their climax: This is no time for soundbites … I feel the hand of history on my shoulder. Despite the comic nature of this remark, it would be churlish not to acknowledge this as one of his greatest achievements. Following the tenacious efforts of John Major to bring Republicans and Unionists to the table, which had resulted in a stalemate. Tony Blair had already decided in Opposition that an Irish peace settlement would be one of his top priorities in government. He went to the province as his first visit after winning power and focused Number Ten on the negotiations as soon as the IRA, sensing a fresh opportunity, announced a further ceasefire. In Mo Mowlem, Blair’s brave new Northern Ireland Secretary, he had someone who was prepared to be tough in negotiations with the Unionists and encouraging towards Sinn Feiners in order to secure a deal. Not surprisingly, the Ulster Unionist politicians soon found her to be too much of a ‘Green’. She concentrated her charm and bullying on the Republicans, while a Number Ten team dealt with the Unionists. Blair emphasised his familial links with Unionism in order to win their trust.

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There were also direct talks between the Northern Irish political parties, aimed at producing a return of power-sharing in the form of an assembly in which they could all sit. These were chaired by former US Senator George Mitchell and were the toughest part. There were also talks between the Northern Irish parties and the British and Irish governments about the border and the constitutional position of Northern Ireland in the future. Finally, there were direct talks between London and Dublin on the wider constitutional and security settlement. This tripartite process was long and intensely difficult for all concerned, which appeared to have broken down at numerous points and was kept going mainly thanks to Blair himself. He took big personal risks, such as when he invited Gerry Adams and Martin McGuinness of Sinn Fein-IRA to Downing Street. Some in the Northern Ireland office still believe that Blair gave too much away to the Republicans, particularly over the release of terrorist prisoners and the amnesty which indemnified known terrorists, like those responsible for the Birmingham bombings in 1974, from prosecution. At one point, when talks had broken down again over these issues, Mo Mowlem made the astonishing personal decision to go into the notorious Maze prison herself and talk to both Republican and Loyalist terrorist prisoners. Hiding behind their politicians, the hard men still saw themselves as being in charge of their ‘sides’ in the sectarian conflict. But Blair spent most of his time trying to keep the constitutional Unionists ‘on board’, having moved Labour policy away from support for Irish unification. In Washington, Blair was seen as being too Unionist.

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Given a deadline of Easter 1998, a deal was finally struck, just in time, on Good Friday, hence the alternative name of ‘the Belfast Agreement’. Northern Ireland would stay part of the United Kingdom for as long as the majority in the province wished it so. The Republic of Ireland would give up its territorial claim to the North, amending its constitution to this effect. The parties would combine in a power-sharing executive, based on a newly elected assembly. There would also be a North-South body knitting the two political parts of the island together for various practical purposes and mundane matters. The paramilitary organisations would surrender or destroy their weapons, monitored by an independent body. Prisoners would be released and the policing of Northern Ireland would be made non-sectarian by the setting up of a new police force to replace the Royal Ulster Constabulary (RUC), whose bias towards the Unionist community had long been a sore point for Nationalists. The deal involved a great deal of pain, particularly for the Unionists. It was only the start of a true peace and would be threatened frequently afterwards, such as when the centre of Omagh was bombed only a few months after its signing by a renegade splinter group of the IRA calling itself ‘the Real IRA’ (see the photo below). It murdered twenty-nine people and injured two hundred. Yet this time the violent extremists were unable to stop the rest from talking.

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Once the agreement had been ratified on both sides of the border, the decommissioning of arms proved a seemingly endless and wearisome game of bluff. Though the two leaders of the moderate parties in Northern Ireland, David Trimble of the Ulster Unionists and John Hume of the Nationalist SDLP, won the Nobel Prize for Peace, both these parties were soon replaced in elections by the harder-line Democratic Unionist Party led by Rev. Dr Ian Paisley, and by Sinn Fein, under Adams and McGuinness. Initially, this made it harder to set up an effective power-sharing executive at Stormont (pictured below). Yet to almost everyone’s surprise, Paisley and McGuinness sat down together and formed a good working relationship. The thuggery and crime attendant on years of paramilitary activity took another decade to disappear. Yet because of the agreement hundreds more people are still alive who would have died had the ‘troubles’ continued. They are living in relatively peaceful times. Investment has returned and Belfast has been transformed into a busier, more confident city. Large businesses increasingly work on an all-Ireland basis, despite the continued existence of two currencies and a border. The fact that both territories are within the European Union enables this to happen without friction at present, though this may change when the UK leaves the EU and the Republic becomes a ‘foreign country’ to it for the first time since the Norman Conquest. Tony Blair can take a sizeable slice of credit for this agreement. As one of his biographers has written:

He was exploring his own ability to take a deep-seated problem and deal with it. It was a life-changing experience for him.

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If the Good Friday Agreement changed the future relationship of the UK and Ireland, Scottish and Welsh devolution changed the future political shape of Great Britain. The relative indifference of the eighteen-year Tory ascendancy to the plight of the industrial areas of Scotland and Wales had transformed the prospects of the nationalist parties in both countries. Through the years of Tory rule, the case for a Scottish parliament had been bubbling under north of the border. Margaret Thatcher had been viewed as a conspicuously English figure imposing harsh economic penalties on Scotland, which had always considered itself to be inherently more egalitarian and democratic. The Tories, who had successfully played the Scottish card against centralising Labour in 1951, had themselves become labelled as a centralising and purely English party. Local government had already been reorganised in Britain and Northern Ireland in the early 1990s with the introduction of ‘unitary’ authorities.

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Scotland had a public culture further to the left than that of southern England, and therefore the initiatives on devolution came from the respectable middle-classes. A group of pro-devolution activists, including SNP, Labour and Liberal supporters, churchmen, former civil servants and trade unionists to found the Campaign for a Scottish Assembly. In due course, this produced a Constitutional Convention meant to bring in a wider cross-section of Scottish life behind their ‘Claim of Right’. It argued that if Scots were to stand on their own two feet as Mrs Thatcher had insisted, they needed control over their own affairs. Momentum increased when the Scottish Tories lost half their remaining seats in the 1987 election, and, following the poll tax rebellion, the Convention got going in March 1989, after Donald Dewar, Labour’s leader in Scotland, decided to work with other parties. The Convention brought together the vast majority of Scottish MPs, all but two of Scotland’s regional, district and island councils, the trade unions, churches, charities and many other organisations, in fact almost everyone except the Conservatives, who were sticking with the original Union, and the SNP, who wanted full independence.

Scottish Tories, finding themselves increasingly isolated, fought back vainly. They pointed out that if a Tory government, based on English votes, was regarded as illegitimate by the Scots, then in future a Labour government based on Scottish votes might be regarded as illegitimate by the English. In a 1992 poll in Scotland, fifty per cent of those asked said they were in favour of independence within the European Union. In the 1992 election, John Major had made an impassioned appeal for the survival of the Union. Had the four countries never come together, he argued, their joint history would have never been as great: Are we, in our generation, to throw all that away?  He won back a single Scottish seat. Various minor sops were offered to the Scots during his years in office, including the return of the Stone of Destiny, with much ceremony. However, the minor Tory recovery in 1992 was wiped out in the Labour landslide of 1997, when all the Conservatives seats north of the border, where they had once held the majority of them, were lost, as they were in Wales. Formerly just contestants in middle-class, rural and intellectual constituencies, in 1997 Scottish and Welsh nationalists now made huge inroads into former Conservative areas, and even into the Labour heartlands, and the latter despite the Labour leadership being held consecutively by a Welshman and a Scot.

By the time Tony Blair became the party leader, Labour’s commitment to devolution was long-standing. Unlike his predecessor, he was not much interested in devolution or impressed by it, particularly not for Wales, where support had been far more muted. The only thing he could do by this stage was to insist that a Scottish Parliament and Welsh Assembly would only be set up after referenda in the two countries, which in Scotland’s case would include a second question as to whether the parliament should be given the power to vary the rate of income tax by 3p in the pound. In September 1997, Scotland voted by three to one for the new Parliament, and by nearly two to one to give it tax-varying powers. The vote for the Welsh Assembly was far closer, with a wafer-thin majority secured by the final constituency to declare, that of Carmarthen. The Edinburgh parliament would have clearly defined authority over a wide range of public services – education, health, welfare, local government, transport and housing – while Westminster kept control over taxation, defence, foreign affairs and some lesser matters. The Welsh assembly in Cardiff would have fewer powers and no tax-raising powers. The Republic of Ireland was similarly divided between two regional assemblies but unlike the assemblies in the UK, these were not elected.

In 1999, therefore, devolved governments, with varying powers, were introduced in Scotland, Wales and, following the ratification referendum on the Belfast Agreement, in Northern Ireland. After nearly three hundred years, Scotland got its parliament with 129 MSPs, and Wales got its assembly with sixty members. Both were elected by proportional representation, making coalition governments almost inevitable. In Scotland, Labour provided the first ‘first minister’ in Donald Dewar, a much-loved intellectual, who took charge of a small group of Labour and Liberal Democrat ministers. To begin with, Scotland was governed from the Church of Scotland’s general assembly buildings. The devolution promised by John Smith and instituted by Tony Blair’s new Labour government in the late 1990s did, initially, seem to take some of the momentum out of the nationalist fervour, but apparently at the expense of stoking the fires of English nationalism, resentful at having Scottish and Welsh MPs represented in their own assemblies as well as in Westminster. But there was no early crisis at Westminster because of the unfairness of Scottish and Welsh MPs being able to vote on England-only business, the so-called Midlothian Question, particularly when the cabinet was so dominated by Scots. But despite these unresolved issues, the historic constitutional changes brought about by devolution and the Irish peace process reshaped both Britain and Ireland, producing irrevocable results. In his television series A History of Britain, first broadcast on the BBC in 2000, Simon Schama argued that…

Histories of Modern Britain these days come not to praise it but to bury it, celebrating the denationalization of Britain, urging on the dissolution of ‘Ukania’ into the constituent European nationalities of Scotland, Wales and England (which would probably tell the Ulster Irish either to absorb themselves into a single European Ireland or to find a home somewhere else – say the Isle of Man). If the colossal asset of the empire allowed Britain, in the nineteenth and early twentieth century, to exist as a genuine national community ruled by Welsh, Irish and (astonishingly often) Scots, both in Downing Street and in the remote corners of the empire, the end of that imperial enterprise, the theory goes, ought also to mean the decent, orderly liquidation of Britannia Inc. The old thing never meant anything anyway, it is argued; it was just a spurious invention designed to seduce the Celts into swallowing English domination where once they had been coerced into it, and to persuade the English themselves that they would be deeply adored on the grouse moors of the Trossachs as in the apple orchards of the Weald. The virtue of Britain’s fall from imperial grace, the necessity of its European membership if only to avoid servility to the United States, is that it forces ‘the isles’ to face the truth: that they are many nations, not one.

However, in such a reduction of false British national consciousness to the ‘true’ identities and entities of Scotland, Wales and England, he argued, self-determination could go beyond the ‘sub-nations’, each of which was just as much an invention, or a re-invention, as was Britain. Therefore an independent Scotland would not be able to resist the rights to autonomy of the Orkney and Shetland islands, with their Nordic heritage, or the remaining Gallic-speaking isles of the Outer Hebrides. Similarly, the still primarily Anglophone urban south-Walians and the inhabitants of the Welsh borders and south coast of Pembrokeshire might in future wish to assert their linguistic and cultural differences from the Welsh-speakers of the rural Welsh-speakers of West and North Wales. With the revival of their Celtic culture, the Cornish might also wish to seek devolution from a country from which all other Celts have retreated into their ethnolinguistic heartlands. Why shouldn’t post-imperial Britain undergo a process of ‘balkanization’ like that of the Former Yugoslavia?

LSF RSF Lets build a culture of peace LR

Well, many like Schama seemed to answer at that time, and still do today, precisely because of what happened due to ethnonationalism in the Balkans, especially in Bosnia and Kosovo, where the conflicts were only just, in 1999, being brought to an end by air-strikes and the creation of tides of refugees escaping brutal ethnic cleansing. The breaking up of Britain into ever smaller and purer units of pure white ethnic groups was to be resisted. Instead, a multi-national, multi-ethnic and multi-cultural Britain was coming into being through a gradual and peaceful process of devolution of power to the various national, ethnic and regional groups and a more equal re-integration of them into a ‘mongrel’ British nation within a renewed United Kingdom.

Economic Development, the Regions of Britain & Ireland and the Impact of the EU:

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The late twentieth century saw the transformation of the former docklands of London into offices and fashionable modern residential developments, with a new focus on the huge Canary Wharf scheme (pictured above) to the east of the city. The migration of some financial services and much of the national press to the major new developments in London’s Docklands prompted the development of the Docklands Light Railway and the Jubilee line extension. The accompanying modernisation of the London Underground was hugely expensive in legal fees and hugely complex in contracts. Outside of London, improvements in public transport networks were largely confined to urban and suburban centres with light railway networks developed in Manchester, Sheffield and Croydon.

Beyond Canary Wharf to the east, the Millennium Dome, which Blair’s government inherited from the Tories, was a billion pound gamble which Peter Mandelson and ‘Tony’s cronies’ decided to push ahead with, despite cabinet opposition. Architecturally, the dome was striking and elegant, a landmark for London which can be seen from by air passengers arriving in the capital. The millennium was certainly worth celebrating but the conundrum ministers and their advisers faced was what to put in their ‘pleasure’ Dome. It would be magnificent, unique, a tribute to British daring and ‘can-do’. Blair himself said that it would provide the first paragraph of his next election manifesto. But this did not answer the current question of what it was for, exactly. When the Dome finally opened at New Year, the Queen, Prime Minister and celebrities were treated to a mish-mash of a show which embarrassed many of them. When it opened to the public, the range of mildly interesting exhibits was greeted as a huge disappointment. Optimism and daring, it seemed, were not enough to fill the people’s expectations. Later that year, Londoners were given a greater gift in the form of a mayor and regional assembly with powers over local planning and transport. This new authority in part replaced the Greater London Council abolished by the Thatcher government in 1986.

However, there were no signs that the other conurbations in the regions of England wanted regionalisation, except for some stirrings in the Northeast and Cornwall. The creation of nine Regional Development Agencies in England in 1998-99 did not seek to meet a regionalist agenda. In fact, these new bodies to a large extent matched the existing structures set up since the 1960s for administrative convenience and to encourage inward investment. Improving transport links were seen as an important means of stimulating regional development and combating congestion. Major Road developments in the 1990s included the completion of the M25 orbital motorway around London and the M40 link between London and Birmingham. However, despite this construction programme, congestion remained a problem: the M25, for example, became the butt of jokes labelling it as the largest car park on the planet, while traffic speeds in central London continued to fall, reaching fifteen kilometres per hour by 1997, about the same as they had been in 1907. Congestion was not the only problem, however, as environmental protests led to much of the road-building programme begun by the Tory governments being shelved after 1997. The late nineties also saw the development of some of the most expensive urban motorways in Europe.

In the Sottish Highlands and Islands, the new Skye road bridge connected the Isle of Skye to the mainland. A group led by the Bank of America built and ran the new bridge. It was one of the first projects built under a ‘public finance initiative’, or PFI, which had started life under Tory Chancellor Norman Lamont, five years before Labour came to power when he experimented with privatising public projects and allowing private companies to run them, keeping the revenue. Although the basic idea was simple enough, this represented a major change in how government schemes were working, big enough to arouse worry even outside the tribes of political obsessives. There were outraged protests from some islanders about paying tolls to a private consortium and eventually the Scottish Executive bought the bridge back. At the opposite corner of the country, the Queen Elizabeth II road bridge was built joining Kent and Essex across the Thames at Dartford, easing congestion on both sides of the Dartford tunnel. It was the first bridge across the river in a new place for more than half a century and was run by a company called ‘Le Crossing’, successfully taking tolls from motorists.

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Undoubtedly the most important transport development was the Channel Tunnel rail link to France, completed in 1994. It was highly symbolic of Britain’s commitment to European integration, and millions of people and vehicles had travelled from London to Paris in under three hours by the end of the century. The town of Ashford in Kent was one of the major beneficiaries of the ‘Chunnel’ rail link, making use of railway links running through the town. Its population grew by over ten per cent in the 1990s. By the end of that decade, the town had an international catchment area of some eighty-five million people within a single day’s journey. This and the opening of Ashford International railway station as the main terminal in the rail link to the continent attracted a range of engineering, financial, distribution and manufacturing companies to the town. In addition to the fourteen business parks that were established in the town, new retail parks were opened. Four green-field sites were also opened on the outskirts of the town, including a science park owned by Trinity College, Cambridge. Ashford became closer to Paris and Brussels than it was to Manchester and Liverpool, as can be seen on the map below. In addition to its international rail link, the town’s position at the hub of a huge motorway network was in a position to be an integral part of a truly international transport system.

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Modern-day affluence at the turn of the century was reflected in the variety of goods and services concentrated in shopping malls. They are now often built on major roads outside towns and cities to make them accessible to the maximum number of people in a region.

Economic change was most dramatic in the Irish Republic, which enjoyed the highest growth rates in Europe in the 1990s. The so-called ‘Celtic Tiger’ economy boomed, aided by inward investment so that by the end of the decade GDP per capita had surpassed that of the UK. Dublin, which remained if anything more dominant than London as a capital city, flourished as a result of a strong growth in the service industries. Growth rates for the ‘new economy’ industries such as information and communications technology were among the highest in the world. Generous tax arrangements and the city’s growing reputation as a cultural centre meanwhile helped to encourage the development of Dublin’s ‘rockbroker belt’. Even agriculture in the Irish Republic, in decline in the early 1990s, still contributed nine per cent of Ireland’s GDP, three times the European average. In the west of Ireland, it was increasingly supplemented by the growth of tourism.

Nevertheless, while the expansion of Ireland’s prosperity lessened the traditional east-west divide, it did not eliminate it. Low population density and a dispersed pattern of settlement were felt to make rail developments unsuitable. Consequently, Ireland’s first integrated transport programme, the Operational Programme for Peripherality, concentrated on improving: the routes from the west of Ireland to the ferry port of Rosslare; the routes from Belfast to Cork; Dublin and the southwest; east-west routes across the Republic. Many of these improvements benefited from EU funding. The EU also aided, through its ‘peace programme’, the development of transport planning in Britain, with infrastructure projects in, for example, the Highlands and Islands of Scotland. In 1993, the EU had decided to create a combined European transport network. Of the fourteen projects associated with this aim, three were based in Britain and Ireland – a rail link from Cork to Larne in Northern Ireland, the ferry port for Scotland; a road link from the Low Countries across England and Wales to Ireland, and the West Coast mainline railway route in Britain.

The old north-south divide in Britain reasserted itself with a vengeance in the late 1990s as people moved south in search of jobs and prosperity as prices and wages rose. Even though the shift towards service industries was reducing regional economic diversity, the geographical distribution of regions eligible for European structural funds for economic improved the continuing north-south divide. Transport was only one way in which the EU increasingly came to shape the geography of the British Isles in the nineties. It was, for example, a key factor in the creation of the new administrative regions of Britain and Ireland in 1999. At the same time, a number of British local authorities opened offices in Brussels for lobbying purposes and attempts to maximise receipts from European structural funds also encouraged the articulation of regionalism. Cornwall, for instance, ‘closed’ its ‘border’ with Devon briefly in 1998 in protest at not receiving its EU social funds, while the enthusiasm for the supposed economic benefits that would result from ‘independence in Europe’ helped to explain the revival of the Scottish Nationalist Party following devolution. ‘Silicon Gen’ in central Scotland was, by the end of the decade, the largest producer of computing equipment in Europe.

The European connection was less welcome in other quarters, however. Fishermen, particularly in Devon and Cornwall and on the North Sea Coast of England, felt themselves the victims of the Common Fisheries Policy quota system. There was also a continuing strong sense of ‘Euroscepticism’ in England, fuelled at this stage by a mixture of concerns about ‘sovereignty’ and economic policy, which I will deal with in a separate article. Here, it is worth noting that even the most enthusiastic Europhiles, the Irish, sought to reject recent EU initiatives which they felt were not in their interests in their 2001 referendum on the Treaty of Nice. Nevertheless, the growth of physical links with Europe, like the Channel Tunnel, the connections between the British and French electricity grids, and the development of ‘budget’ airlines, made it clear that both of the main ‘offshore’ islands, Britain and Ireland were, at the turn of the century, becoming increasingly integrated, both in economic and administrative terms, with the continent of Europe.

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At the beginning of 1999, however, a debate began over British membership of the euro, the single currency which was finally taking shape within the EU. Though he was never a fanatic on the subject, Blair’s pro-European instincts and his desire to be a leading figure inside the EU predisposed him to announce that Britain would join, not in the first wave, but soon afterwards. He briefed that this would happen. British business seemed generally in favour, but the briefing and guesswork in the press were completely baffling. For Gordon Brown, stability came first, and he concluded that it was not likely that Britain could safely join the euro within the first Parliament. When he told Blair this, the two argued and then eventually agreed on a compromise. Britain would probably stay out during the first Parliament, but the door should be left slightly ajar. Pro-European business people and those Tories who had lent Blair and Brown their conditional support, as well as Blair’s continental partners, should be kept on board, as should the anti-Euro press. The terms of the delicate compromise were meant to be revealed in an interview given by Brown to The Times. Being more hostile to entry than Blair, and talking to an anti-euro newspaper, his team briefed more strongly than Blair would have liked. By the time the story was written, the pound had been saved from extinction for the lifetime of the Parliament. Blair was aghast at this.

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The chaos surrounding this important matter was ended and the accord with Blair patched up by Brown and his adviser Ed Balls, who quickly produced five economic tests which would be applied before Britain would enter the euro. They required more detailed work by the Treasury; the underlying point was that the British and continental economies must be properly aligned before Britain would join. Brown then told the Commons that though it was likely that, for economic reasons, Britain would not join the euro until after the next election, there was no constitutional or political reason not to join. Preparations for British entry would therefore begin. This gave the impression that once the tests were met there would be a post-election referendum, followed by the demise of sterling.

In 1999, with a full-scale launch at a London cinema, Blair was joined by the Liberal Democrat leader Charles Kennedy and the two former Tory cabinet ministers Ken Clarke and Michael Heseltine to launch ‘Britain in Europe’ as a counter-blast to the anti-Euro campaign of ‘Business for Sterling’. Blair promised that together they would demolish the arguments against the euro, and there was alarmist media coverage about the loss of eight million jobs if Britain pulled out of the EU. But the real outcome of this conflict was that the power to decide over membership of the euro passed decisively from Blair to Brown, whose Treasury fortress became the guardian of the economic tests. Brown would keep Britain out on purely economic grounds, something which won him great personal credit among Conservative ‘press barons’. There was to be no referendum on the pound versus euro, however much the Prime Minister wanted one.

Very little of what New Labour had achieved up to 1999 was what it was really about, however, and most of its achievements had been in dealing with problems and challenges inherited from previous governments or with ‘events’ to which it had to react. Its intended purpose was to deliver a more secure economy, radically better public services and a new deal for those at the bottom of British society. Much of this was the responsibility of Gordon Brown, as agreed in the leadership contest accord between the two men. The Chancellor would become a controversial figure later in government, but in his early period at the Treasury, he imposed a new way of governing. He had run his time in Opposition with a tight team of his own, dominated by Ed Balls, later an MP and Treasury minister before becoming shadow chancellor under Ed Miliband following the 2010 general election. Relations between Team Brown and the Treasury officials began badly and remained difficult for a long time. Brown’s handing of interest control to the Bank of England was theatrical, planned secretly in Opposition and unleashed to widespread astonishment immediately New Labour won. Other countries, including Germany and the US, had run monetary policy independently of politicians, but this was an unexpected step for a left-of-centre British Chancellor. It turned out to be particularly helpful to Labour ministers since it removed at a stroke the old suspicion that they would favour high employment over low inflation. As one of Brown’s biographers commented, he…

 …could only give expression to his socialist instincts after playing the role of uber-guardian of the capitalist system.

The bank move has gone down as one of the clearest achievements of the New Labour era. Like the Irish peace process and the devolution referenda, it was an action which followed on immediately after Labour won power, though, unlike those achievements, it was not something referred to in the party’s election manifesto. Brown also stripped the Bank of England of its old job of overseeing the rest of the banking sector. Otherwise, it would have had a potential conflict of interest if it had had to concern itself with the health of commercial banks at the same time as managing interest rates. As a result of these early actions, New Labour won a reputation for being economically trustworthy and its Chancellor was identified with ‘prudent’ management of the nation’s finances. Income tax rates did not increase, which reassured the middle classes. Even when Brown found what has more recently been referred to as ‘the magic money tree’, he did not automatically harvest it. And when the ‘dot-com bubble’ was at its most swollen, he sold off licenses for the next generation of mobile phones for 22.5 bn, vastly more than they were soon worth. The produce went not into new public spending but into repaying the national debt, 37 bn of it. By 2002 government interest payments on this were at their lowest since 1914, as a proportion of its revenue.

Despite his growing reputation for prudence, Brown’s introduction of ‘stealth taxes’ proved controversial, however. These included the freezing of income tax thresholds so that an extra 1.5 million people found themselves paying the top rate; the freezing of personal allowances; rises in stamp duties on houses and a hike in national insurance. In addition, some central government costs were palmed off onto the devolved administrations or local government, so that council tax rose sharply, and tax credits for share dividends were removed. Sold at the time as a ‘prudent’ technical reform, enabling companies to reinvest in their core businesses, this latter measure had a devastating effect on the portfolios of pension funds, wiping a hundred billion off the value of retirement pensions. This was a staggering sum, amounting to more than twice as much as the combined pension deficits of Britain’s top 350 companies. Pensioners and older workers were angered when faced with great holes in their pension funds. They were even more outraged when Treasury papers released in 2007 showed that Brown had been warned about the effect this measure would have. The destruction of a once-proud pension industry had more complex causes than Brown’s decision; Britain’s fast-ageing population was also a major factor, for one. But the pension fund hit produced more anger than any other single act by the New Labour Chancellor.

Perhaps the most striking long-term effect of Brown’s careful running of the economy was the stark, dramatic shape of public spending. For his first two years, he stuck fiercely to the promise he had made about continuing the Major government’s spending levels. These were so tight that even the man who set these levels, Kenneth Clarke, said that he would not actually have kept to them had the Tories been re-elected and had he been reappointed as Chancellor. Brown brought down the State’s share of public spending from nearly 41% of GDP to 37.4% by 1999-2000, the lowest percentage since 1960 and far below anything achieved under Thatcher. He was doing the opposite of what previous Labour Chancellors had done. On arriving in office, they had immediately started spending, in order to stimulate the economy in classical Keynesian terms. When they had reached their limits, they had then had to raise taxes. He began by putting a squeeze on spending and then loosening up later. There was an abrupt and dramatic surge in public spending, particularly on health, back up to 43%. The lean years were immediately followed by the fat ones, famine by the feast. But the consequence of the squeeze was that the first New Labour government of 1997-2001 achieved far less in public services than it had promised. For example, John Prescott had promised a vast boost in public transport, telling the Commons in 1997:

I will have failed if in five years’ time there are not many more people using public transport and far fewer journeys by car. It’s a tall order, but I urge you to hold me to it.

Because of ‘Prudence’, and Blair’s worries about being seen as anti-car, Prescott had nothing like the investment to follow through and failed completely. Prudence also meant that Brown ploughed ahead with cuts in benefit for lone-parent families, angering Labour MPs and resulting in a Scottish Labour conference which labelled their Westminster government and their own Scots Chancellor as economically inept, morally repugnant and spiritually bereft. Reform costs money and without money, it barely happened in the first term, except in isolated policy areas where Blair and Brown put their heads down and concentrated. The most dramatic programme was in raising literacy and numeracy among younger children, where Number Ten worked closely with the Education Secretary, David Blunkett, and scored real successes. But unequivocally successful public service reforms were rare.

At first, Labour hated the idea of PFIs, which were a mixture of two things associated with Thatcherite economic policies, the privatisation of capital projects, with the government paying a fee to private companies over many years, and the contracting out of services – waste collection, school meals, cleaning – which had been imposed on unwilling socialist councils from the eighties. Once in power, however, Labour ministers began to realise that those three little letters were political magic because they allowed them to announce and oversee exciting new projects and take the credit for them in the full knowledge that the full bill would be left for the taxpayers of twenty to fifty years hence. In this way, spending and funding of new hospitals or schools would be a problem for a future health or education minister.

PFIs were particularly attractive when other kinds of spending were tightly controlled by ‘Prudence’. Large amounts of capital for public buildings were declared to be ‘investment’, not spending, and put to one side of the public accounts. The justification was that private companies would construct and run this infrastructure so much more efficiently than the State and that profits paid to them by taxpayers would be more than compensated for. Ministers replied to criticisms of these schemes by pointing out that, without them, Britain would not get the hundreds of new school buildings, hospitals, health centres, fire stations, army barracks, helicopter training schools, prisons, government offices, roads and bridges that it so obviously needed by the nineties. Significantly, the peak year for PFIs was 1999-2000, just as the early Treasury prudence in conventional spending had bitten hardest and was being brought to an end.

Sources:

Andrew Marr (2008), A History of Modern Britain. Basingstoke: Pan Macmillan.

Simon Schama (2000), A History of Britain: The Fate of Empire, 1776-2000. London: BBC Worldwide.

Peter Catterall (et. al.) (2001), The Penguin Atlas of British & Irish History. London: Penguin Books.

Posted November 23, 2018 by TeamBritanniaHu in Affluence, Agriculture, Balkan Crises, BBC, Belfast Agreement, Birmingham, Britain, British history, Britons, Brussels, Celtic, devolution, Education, Ethnic cleansing, Europe, European Union, History, Immigration, Integration, Irish history & folklore, John Major, Margaret Thatcher, Migration, morality, nationalism, Nationality, New Labour, Population, privatization, Quakers (Religious Society of Friends), Reconciliation, Respectability, Social Service, south Wales, Thatcherism, Unionists, Wales, War Crimes, Welsh language, Yugoslavia

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Years of Transition – Britain, Europe & the World: 1992-1997.   Leave a comment

Epilogue to the Eighties & Prologue to the Nineties:

I can recall the real sense of optimism which resulted from the end of the Cold War, formally ending with President Gorbachev’s announcement of the dissolution of the Soviet Union on Christmas Day 1991. Although never an all-out global war, it had resulted in the deaths of up to forty million people throughout the world, involving more than a hundred and fifty smaller ‘proxy’ conflicts. Moreover, we had lived under a continual sense of doom, that it was only a matter of time until our brief, young lives would be snuffed out by a nuclear apocalypse. Now, politicians and journalists in the West talked of a coming ‘peace dividend’ and the end of the surveillance, spy and secret state in both east and west. The only continuing threat to British security came from the Provisional IRA. They hit Downing Street with a triple mortar attack in February 1991, coming close to killing the new Prime Minister, John Major, and his team of ministers and officials directing the Gulf War.

Margaret ThatcherBy the time Margaret Thatcher left office in tears on 28 November 1990, ‘Thatcherism’ was also a spent force, though its influence lingered on until at least the end of the century, and not just among Conservatives. Only a minority even among the ‘party faithful’ had been true believers and the Tory MPs would have voted her out had her cabinet ministers not beaten them to it. As Andrew Marr has written, History is harshest to a leader just as they fall. She had been such a strident presence for so long that many who had first welcomed her as a ‘gust’ of fresh air now felt the need for gentler breezes. Those who wanted a quieter, less confrontational leader found one in John Major.

Yet most people, in the end, had done well under her premiership, not just the ‘yuppies’ but also her lower-middle-class critics who developed their own entrepreneurial sub-cultures rather than depending on traditional sponsorship from arts councils and local authorities. By the early nineties, Britons were on average much wealthier than they had been in the late seventies and enjoyed a wider range of holidays, better food, and a greater variety of television channels and other forms of home entertainment. Nor was everything the Thatcher governments did out of tune with social reality. The sale of council houses which corresponded to the long passion of the British to be kings and queens of their own little castles. Sales of state utilities, on the other hand, presupposed a hunger for stakeholdership that was much less deeply rooted in British habits, and the subsequently mixed fortunes of those stocks did nothing to help change those habits. Most misguided of all was the decision to implement the ‘poll tax’ as a regressive tax. In the end, Thatcher’s 1987-90 government became just the latest in a succession of post-war British governments that had seen their assumptions rebound on them disastrously. This ‘trend’ was to continue under John Major. The upper middle-class ‘Victorian Values’ of the grocer’s daughter from Grantham were replaced by the ‘family values’ of the lower middle-class garden gnome salesman from Brixton, only for him to be overwhelmed by an avalanche of sexual and financial scandals.

The single most important event of the early nineties in Britain, possibly globally too, had nothing to do with politics and diplomacy or warfare and terrorism, at least not in the nineties. Tim Berners-Lee, a British scientist, invented the World Wide Web, or the Internet. His idea was for a worldwide ‘hypertext’, the computer-aided reading of electronic documents to allow people to work together remotely., sharing their knowledge in a ‘web’ of documents. His creation of it would give the internet’s hardware its global voice. He was an Oxford graduate who had made his first computer with a soldering iron, before moving to CERN, the European Physics laboratory, in Switzerland in 1980, the world’s largest scientific research centre. Here he wrote his first programme in 1989 and a year later he proposed his hypertext revolution which arrived in CERN in December 1990. The ‘internet’ was born the following summer. He chose not to patent his creation so that it would be free to everyone.

The Election of 1992 – A Curious Confidence Trick?:

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John Major called an election for April 1992. Under a pugnacious Chris Patten, now Party chairman, the Tories targeted Labour’s enthusiasm for high taxes. During the campaign itself, Major found himself returning to his roots in Brixton and mounting a ‘soap-box’, from which he addressed raucous crowds through a megaphone. John Simpson, the BBC correspondent, was given the task of covering Major’s own campaign, and on 15 March he travelled to Sawley, in the PM’s constituency of Huntingdon, where Major was due to Meet the People. I have written elsewhere about the details of this, and his soap-box campaign, as reported by Simpson. Although Simpson described it as ‘a wooden construction of some kind’, Andrew Marr claims it was ‘a plastic container’. Either way, it has gone down in political history, together with the megaphone, as the prop that won him the election. The stark visual contrast achieved with the carefully stage-managed Labour campaign struck a chord with the media and he kept up an act that his father would have been proud of, playing the underdog to Neil Kinnock’s government in waiting. Right at the end, at an eve of poll rally in Sheffield, Kinnock’s self-control finally gave way and he began punching the air and crying “y’awl’ right!” as if he were an American presidential candidate. It was totally ‘cringe-worthy’ TV viewing, alienating if not repulsing swathes of the very middle England voters he needed to attract.

On 9 April 1992 Major’s Conservatives won fourteen million votes, more than any party in British political history. It was a great personal victory for the ‘new’ Prime Minister, but one which was also based on people’s fears of higher taxes under a Labour government. It was also one of the biggest victories in percentage terms since 1945, though the vagaries of the electoral system gave the Tories a majority of just twenty-one seats in parliament. Neil Kinnock was even more devastated than he had been in 1987 when he had not been expected to defeat Thatcher. The only organ of the entire British press which had called the election correctly was the Spectator. Its editor, Dominic Lawson, headlined the article which John Simpson wrote for him The Curious Confidence of Mr Major so that the magazine seemed to suggest that the Conservatives might pull off a surprise win. Simpson himself admitted to not having the slightest idea who would win, though it seemed more likely to him that Labour would. Yet he felt that John Major’s own apparent certainty was worth mentioning. When the results started to become clear on that Friday morning, 10 April, the Spectator stood out favourably from the shelves of newsagents, surrounded by even the late, or early editions of newspapers and magazines which had all been predicting a Labour victory.

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The only politician possibly more disappointed than Neil Kinnock, who immediately left front-line politics, was Chris Patten, who had been the real magician behind Major’s remarkable victory. He lost his seat to the Liberals in marginal Bath and went off to become the final governor of Hong Kong ahead of the long-agreed handover of Britain’s last colony in 1997. Kinnock, a former long-term opponent of Britain’s membership of the EEC/ EC went off to Brussels to become a European Commissioner. Despite his triumph in the popular vote, never has such a famous victory produced so rotten an outcome for the victors. The smallness of Major’s majority meant that his authority could easily be eaten away in the Commons. As a consequence, he would not go down as a great leader in parliamentary posterity, though he remained popular in the country as a whole for some time, if not with the Thatcherites and Eurosceptic “bastards” in his own party.  Even Margaret Thatcher could not have carried through her revolutionary reforms after the 1979 and 1983 elections with the kind of parliamentary arithmetic which was dealt her successor. In Rugby terms, although the opposition’s three-quarters had been foiled by this artful dodger of a full-back, he had been dealt a ‘hospital pass’ by his own side. For the moment, he had control of the slippery ball, but he was soon to be forced back into series of crushing rucks and mauls among his own twenty-stone forwards.

 John Smith – Labour’s lost leader and his legacy:

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After Neil Kinnock gave up the Labour leadership following his second electoral defeat in 1992, he was replaced by John Smith (pictured above), a placid, secure, self-confident Scottish lawyer. As Shadow Chancellor, he had been an effective cross-examiner of Nigel Lawson, John Major and Norman Lamont and had he not died of a heart attack in 1994, three years ahead of the next election, most political pundits agreed that, following the tarnishing of the Major administration in the mid-nineties, he would have become Prime Minister at that election. Had he done so, Britain would have had a traditional social democratic government, much like those of continental Europe. He came from a family of herring fishermen on the West Coast of Scotland, the son of a headmaster. Labour-supporting from early youth, bright and self-assured, he got his real political education at Glasgow University, part of a generation of brilliant student debaters from all parties who would go on to dominate Scottish and UK politics including, in due succession, Donald Dewar, Gordon Brown, Alistair Darling and Douglas Alexander. Back in the early sixties, Glasgow University Labour Club was a hotbed not of radicals, but of Gaitskell-supporting moderates. This was a position that Smith never wavered from, as he rose as one of the brightest stars of the Scottish party, and then through government under Wilson and Callaghan as a junior minister dealing with the oil industry and devolution before entering cabinet as President of the Board of Trade, its youngest member at just forty. In opposition, John Smith managed to steer clear of the worst in-fighting, eventually becoming Kinnock’s shadow chancellor. In Thatcher’s England, however, he was spotted as a tax-raising corporatist of the old school. One xenophobic letter he received brusquely informed him:

You’ll not get my BT shares yet, you bald, owl-looking Scottish bastard. Go back to Scotland and let that other twit Kinnock go back to Wales.

Smith came from an old-fashioned Christian egalitarian background which put him naturally out of sympathy with the hedonistic culture of southern England.  Just before he became Labour leader he told a newspaper he believed above all in education, because…

 … it opens the doors of the imagination, breaks down class barriers and frees people. In our family … money was looked down on and education was revered. I am still slightly contemptuous of money.

Smith was never personally close to Kinnock but was scrupulously loyal to him as his leader, he nevertheless succeeded him by a huge margin in 1992. By then he had already survived a serious cardiac arrest and had taken up hill-walking. Though Smith swiftly advanced the careers of his bright young lieutenants, Tony Blair and Gordon Brown, they soon became disappointed by his view that the Labour party needed simply to be improved, not radically transformed. In particular, he was reluctant to take on the party hierarchy and unions over issues of internal democracy, such as the introduction of a one-member, one-vote system for future leadership elections. He was sure that Labour could regain power with a revival of its traditional spirit. At one point, Tony Blair was so dispirited by Smith’s leadership style that he considered leaving politics altogether and going back to practising law. Smith died of a second heart attack on 12 May 1994. After the initial shock and grief subsided, Labour moved rapidly away from his policy of ‘gradualism’ towards ‘Blairite’ transformation. One part of his legacy still remains, however, shaping modern Britain today. As the minister who had struggled to achieve devolution for Scotland in 1978-9, he remained a passionate supporter of the ‘unfinished business’ of re-establishing the Holyrood Parliament and setting up a Welsh Assembly. With his friend Donal Dewar he had committed Labour so utterly to the idea in Opposition, despite Kinnock’s original strong anti-nationalist stance, that Blair, no great fan of devolution himself, found that he had to implement Smith’s unwelcome bequest to him.

Black Wednesday and the Maastricht Treaty:

The crisis that soon engulfed the Major government back in the early autumn of 1992 was a complicated economic one. From August 1992 to July 1996 I was mainly resident in Hungary, and so, although an economic historian, never really understood the immediate series of events that led to it or the effects that followed. This was still in pre-internet days, so I had little access to English language sources, except via my short-wave radio and intermittent newspapers bought during brief visits to Budapest. I had also spent most of 1990 and half of 1991 in Hungary, so there were also longer-term gaps in my understanding of these matters. I have written about them in earlier articles in this series, dealing with the end of the Thatcher years. Hungary itself was still using an unconvertible currency throughout the nineties, which only became seriously devalued in 1994-96, and when my income from my UK employers also fell in value, as a family we decided to move back to Britain to seek full-time sterling salaries. The first thing that happened was that they lost their fiscal policy in a single day when the pound fell out of the ERM (European Exchange Rate Mechanism). In his memoirs, John Major described the effect of this event in stark terms:

Black Wednesday – 16 September 1992, the day the pound toppled out of the ERM – was a political and economic calamity. It unleashed havoc in the Conservative Party and it changed the political landscape of Britain.

For Major and his government, the point was that as the German central bank had a deserved reputation for anti-inflationary rigour, having to follow or ‘shadow’ the mark meant that Britain had purchased a respected off-the-shelf policy. Sticking to the mighty mark was a useful signal to the rest of the world that this government, following all the inflationary booms of the seventies and eighties, was serious about controlling inflation. On the continent, however, the point of the ERM was entirely different, intended to lead to a strong new single currency that the countries of central Europe would want to join as members of an enlarged EC/EU. So a policy which Margaret Thatcher had earlier agreed to, in order to bring down British inflation, was now a policy she and her followers abhorred since it drew Britain ever closer towards a European superstate in the ‘Delors Plan’. This was a confused and conflicted state of affairs for most of the Tories, never mind British subjects at home and abroad.

The catalyst for sterling’s fall was the fall in the value of the dollar, pulling the pound down with it. Worse still, the money flowed into the Deutschmarks, which duly rose; so the British government raised interest rates to an eye-watering ten per cent, in order to lift the pound. When this failed to work, the next obvious step would have been for the German central bank to cut their interest rates, lowering the value of the mark and keeping the ERM formation intact. This would have helped the Italian lira and other weak currencies as well as the pound. But since Germany had just reunited after the ‘fall of the wall’, the whole cost of bringing the poorer East Germans into line with their richer compatriots in the West led to a real fear of renewed inflation as well as to memories of the Berlin Crisis of 1948-49 and the hyperinflation of the Weimar period. So the Germans, regardless of the pain being experienced by Britain, Italy and the rest, wanted to keep their high-value mark and their high interest rates. Major put considerable and concerted pressure on Chancellor Kohl, warning of the danger of the Maastricht treaty failing completely since the Danes had just rejected it in a referendum and the French were also having a plebiscite. None of this had any effect on Kohl who, like a previous German Chancellor, would not move.

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In public, the British government stuck to the line that the pound would stay in the ERM at all costs. It was not simply a European ‘joint-venture’ mechanism but had been part of the anti-inflation policy of both the Lawson and Major chancellorships. Then, the now PM had told the unemployed workers and the repossessed homeowners in Britain that if it isn’t hurting, it isn’t working, so his credibility had been tied to the success of the ERM ever since. It had also been, as Foreign Secretary and now as Prime Minister, his foreign policy of placing Britain ‘at the heart of Europe’. It was his big idea for both economic and diplomatic survival in an increasingly ‘globalised’ environment. Norman Lamont, who as Chancellor was as committed as Major, told ‘the markets’ that Britain would neither leave the mechanism nor deviate from it by devaluing the pound. ERM membership was at the centre of our policy and there should not be one scintilla of doubt that it would continue. Major went even further, telling a Scottish audience that with inflation down to 3.7 per cent and falling, it would be madness to leave the ERM. He added that:

“The soft option, the devaluer’s option, the inflationary option, would be a betrayal of our future.”

However, then the crisis deepened with the lira crashing out of the ERM formation. International money traders, such as the Hungarian-born György Soros, began to turn their attention to the weak pound and carried on selling. They were betting that Major and Lamont would not keep interest rates so high that the pound could remain up there with the mark – an easy, one-way bet. In the real world, British interest rates were already painfully high. On the morning of ‘Black Wednesday’, at 11 a.m., the Bank of England raised them by another two points. This was to be agonising for home-owners and businesses alike, but Lamont said he would take whatever measures were necessary to keep the pound in the mechanism. Panic mounted and the selling continued: a shaken Lamont rushed round to tell Major that the interest rate hike had not worked, but Major and his key ministers decided to stay in the ERM. The Bank of England announced that interest would go up by a further three points, to fifteen per cent. Had it been sustained, this would have caused multiple bankruptcies across the country, but the third rise made no difference either. Eventually, at 4 p.m., Major phoned the Queen to tell her that he was recalling Parliament. At 7.30 p.m., Lamont left the Treasury to announce to the press and media in Whitehall that he was suspending sterling’s membership of the ERM and was reversing the day’s rise in interest rates.

Major considered resigning. It was the most humiliating moment in British politics since the IMF crisis of 1976, sixteen years earlier. But if he had done so Lamont would have had to go as well, leaving the country without its two most senior ministers in the midst of a terrible crisis. Major decided to stay on, though he was forever diminished by what had happened. Lamont also stayed at his post and was delighted as the economy began to respond to lower interest rates, and a slow recovery began. While others suffered further unemployment, repossession and bankruptcy, he was forever spotting the ‘green shoots’ of recovery. In the following months, Lamont created a new unified budget system and took tough decisions to repair the public finances. But as the country wearied of recession, he became an increasingly easy ‘butt’ of media derision. To Lamont’s complete surprise, Major sacked him as Chancellor a little over six months after Black Wednesday. Lamont retaliated in a Commons statement in which he said: We give the impression of being in office, but not in power. Major appointed Kenneth Clarke, one of the great characters of modern Conservatism, to replace him.

In the Commons, the struggle to ratify the Maastricht Treaty hailed as a great success for Major before the election, became a long and bloody one. Major’s small majority was more than wiped out by the number of ‘Maastricht rebels’, egged on by Lady Thatcher and Lord Tebbit. Black Wednesday had emboldened those who saw the ERM and every aspect of European federalism as disastrous for Britain. Major himself wrote in his memoirs that it turned …

… a quarter of a century of unease into a flat rejection of any wider involvement in Europe … emotional rivers burst their banks.

Most of the newspapers which had welcomed Maastricht were now just as vehemently against it. The most powerful Conservative voices in the media were hostile both to the treaty and to Major. His often leaded use of English and lack of ‘panache’ led many of England’s snobbish ‘High Tories’ to brand him shockingly ill-educated and third-rate as a national leader. A constantly shifting group of between forty to sixty Tory MPs regularly worked with the Labour opposition to defeat key parts of the Maastricht bill, so that Major’s day-to-day survival was always in doubt. Whenever, however, he called a vote of confidence and threatened his rebellious MPs with an election, he won. Whenever John Smith’s Labour Party and the Tory rebels could find some common cause, however thin, he was in danger of losing. In the end, Major got his legislation and Britain signed the Maastricht Treaty, but it came at an appalling personal and political cost. Talking in the general direction of an eavesdropping microphone, he spoke of three anti-European ‘bastards’ in his own cabinet, an obvious reference to Michael Portillo, Peter Lilley and John Redwood. The country watched a divided party tearing itself apart and was not impressed.

By the autumn of 1993, Norman Lamont was speaking openly about the possibility that Britain might have to leave the European Union altogether, and there were moves to force a national referendum. The next row was over the voting system to be used when the EU expanded. Forced to choose between a deal which weakened Britain’s hand and stopping the enlargement from happening at all by vetoing it, Foreign Secretary Douglas Hurd went for a compromise. All hell broke loose, as Tory MPs began talking of a leadership challenge to Major. This subsided, but battle broke out again over the European budget and fisheries policy. Eight MPs had their formal membership of the Tory Party withdrawn. By this point, John Smith’s sudden death had brought Tony Blair to the fore as leader of the Opposition. When Major readmitted the Tory rebels, Blair jibed: I lead my party, you follow yours. Unlike Lamont’s remark in the Commons, Blair’s comment struck a chord with the country.

The concluding chapter of the Thatcher Revolution:

While the central story of British politics in the seven years between the fall of Thatcher and the arrival to power of Blair was taken up by Europe, on the ‘home front’ the government tried to maintain the momentum of the Thatcher revolution. After many years of dithering, British Rail was divided up and privatised, as was the remaining coal industry. After the 1992 election, it was decided that over half the remaining coal mining jobs must go, in a closure programme of thirty-one pits to prepare the industry for privatization. This angered many Tory MPs who felt that the strike-breaking effect of the Nottinghamshire-based Union of Democratic Mineworkers in the previous decade deserved a better reward, and it aroused public protest as far afield as Cheltenham. Nevertheless, with power companies moving towards gas and oil, and the industrial muscle of the miners long-since broken, the closures and sales went ahead within the next two years, 1992-4. The economic effect on local communities was devastating, as the 1996 film Brassed Off shows vividly, with its memorable depiction of the social impact on the Yorkshire village of Grimethorpe and its famous Brass Band of the 1992 closure programme. Effectively, the only coalfields left working after this were those of North Warwickshire and South Derbyshire.

Interfering in the railway system became and remained a favourite ‘boys with toys’ hobby but a dangerous obsession of governments of different colours. Margaret Thatcher, not being a boy, knew that the railways were much too much part of the working life of millions to be lightly broken up or sold off. When Nicholas Ridley, as Transport Secretary, had suggested this, Thatcher is said to have replied:

“Railway privatisation will be the Waterloo of this government. Please never mention the railways to me again.”

It was taken up again enthusiastically by John Major. British Rail had become a national joke, loss-making, accident-prone, with elderly tracks and rolling stock, and serving curled-up sandwiches. But the challenge of selling off a system on which millions of people depended was obvious. Making it profitable would result in significant and unpopular fare rises and cuts in services. Moreover, different train companies could hardly compete with each other directly, racing up and down the same rails. There was, therefore, a binary choice between cutting up ‘BR’ geographically, selling off both trains and track for each region, so that the system would look much the way it was in the thirties, or the railway could be split ‘vertically’ so that the State would continue to own the track, while the stations and the trains would be owned by private companies. This latter solution was the one chosen by the government and a vast, complicated new system of subsidies, contracts, bids, pricing, cross-ticketing and regulation was created, but rather than keeping the track under public control, it too was to be sold off to a single private monopoly to be called Railtrack. Getting across the country would become a complicated proposition and transaction, involving two or three separate rail companies. A Franchise Director was to be given powers over the profits, timetables and ticket-pricing of the new companies, and a Rail Regulator would oversee the track. Both would report directly to the Secretary of State so that any public dissatisfaction, commercial problem or safety issue would ultimately be the responsibility of the government. This was a strange and pointless form of privatization which ended up costing the taxpayer far more than British Rail. The journalist Simon Jenkins concluded:

The Treasury’s treatment of the railway in the 1990s was probably the worst instance of Whitehall industrial management since the Second World War.

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One success story in the rail network was the completion of the Channel Tunnel link to France in 1994 (the Folkestone terminal is pictured above), providing a good example of the inter-relationship between transport links and general economic development. The Kent town of Ashford had a relationship with the railways going back to 1842, and the closure of the town’s railway works between 1981 and 1993 did not, however, undermine the local economy. Instead, Ashford benefited from the Channel Tunnel rail link, which made use of railway lines running through the town, and its population actually grew by ten per cent in the 1990s. The completion of the ‘Chunnel’ gave the town an international catchment area of eighty-five million within a single day’s journey. The opening of the Ashford International railway station, the main terminal for the rail link to Europe, attracted a range of engineering, financial, distribution and manufacturing companies. In addition to the fourteen business parks that were opened in and around the town itself, four greenfield sites were opened on the outskirts, including a science park owned by Trinity College, Cambridge. As the map above shows, Ashford is now closer to Paris and Brussels in travelling time than it is to Manchester and Liverpool. By the end of the century, the town, with its position at the hub of a huge motorway network as well as its international rail link, was ready to become part of a truly international economy.

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Many of the improvements in transport infrastructure on both islands of Britain and Ireland were the result of EU funding, especially in Northern Ireland, and it was also having an impact on transport planning in Britain, with projects in the Highlands and Islands. In 1993 the EU decided to create a European-wide transport network. Of the fourteen priority associated with this aim, three are based in Britain and Ireland – a rail link from Cork to Northern Ireland and the ferry route to Scotland; a road link from the Low Countries across England and Wales to Ireland, and the West Coast rail route in Britain.

As a Brixton man, Major had experienced unemployment and was well prepared to take on the arrogant and inefficient quality of much so-called public service. But under the iron grip of the Treasury, there was little prospect for a revival of local democracy to take charge of local services again. This left a highly bureaucratic centralism as the only option left, one which gained momentum in the Thatcher years. Under Major, the centralised Funding Agency for Schools was formed and schools in England and Wales were ranked by crude league tables, depending on how well their pupils did in exams. The university system was vastly expanded by simply allowing colleges and polytechnics to rename themselves as universities. The hospital system was further centralised and given a host of new targets. The police, faced with a review of their pay and demands by the Home Secretary, Kenneth Clarke for their forces to be amalgamated, were given their own performance league tables. The Tories had spent seventy-four per cent more, in real terms, on law and order since 1979, yet crime was at an all-time high. Clarke’s contempt for many of the forces as ‘vested interests’ was not calculated to win them round to reform. Across England and Wales elected councillors were turfed off police boards and replaced by businessmen. In 1993 Clarke, the old Tory dog who had clearly learned new tricks during his time at the Department of Health where he was said to have castrated the regional health authority chairmen, defended his new police league tables in the ‘newspeak’ of governments yet to come:

The new accountability that we seek from our public services will not be achieved simply because men of good will and reasonableness wish that it be so. The new accountability is the new radicalism.

Across Britain, from the auditing of local government to the running of courts and the working hours of nurses, an army of civil servants, accountants, auditors and inspectors marched into workplaces. From time to time, ministers would weakly blame Brussels for the imposition of the cult of central control and measurement. But this was mostly a home-grown ‘superstate’. Major called this centralising policy the ‘Citizen’s Charter’, ignoring the fact that Britons are ‘subjects’ rather than citizens. He himself did not like the ‘headline’ very much because of its unconscious echoes of Revolutionary France. Every part of the government dealing with public service was ordered to come up with proposals for improvement at ‘grass-roots level’, to be pursued from the centre by questionnaires, league tables and a system of awards, called ‘Charter Marks’ for organizations that achieved the required standards. He spoke of ’empowering’, ‘helping the customer’ and ‘devolving’ and thought that regulation from the centre would not last long, rather like a Marxist-Leninist anticipating the ‘withering away’ of the state. In his case, though, this would come about as the effects of growing competition are felt. In practice, of course, the regulators grew more powerful, not less so. Despite the rhetoric, public servants were not being given real freedom to manage. Elected office-holders were being sacked. Major’s ‘withering away’ of the state was no more successful than Lenin’s.

Britain and Ireland – first steps on the road to peace:

009Above: US President Bill Clinton addressing a peace rally in Belfast during his visit in 1995. Clinton played a significant role as a ‘peace broker’ in negotiations leading up to ‘the Good Friday Agreement’.

In December 1993, John Major stood outside the steel-armoured door of Number Ten Downing Street with the ‘Taoiseach’ of the Irish Republic, Albert Reynolds. He declared a new principle which offended many traditional Conservatives and Unionists. If both parts of Ireland voted to be reunited, Britain would not stand in the way. She had, said Major, no selfish strategic or economic interest in Northern Ireland. He also stated that if the Provisional IRA, which had lately bombed the very building Major was standing in front of and murdered two young boys in Cheshire, renounced violence, Sinn Fein could be recognised as a legitimate political party. In the run-up to this Downing Street Declaration, which some saw as a betrayal of the Tory Party’s long-held dedication to the Union of Great Britain and Northern Ireland, the government had been conducting ‘back channel’ negotiations with the terrorist organisation. In August 1994 the IRA finally declared a complete cessation of military operations which, though it stopped a long way short of renouncing the use of violence altogether, was widely welcomed and was followed a month later by a Loyalist ceasefire. A complicated choreography of three-strand talks, framework documents and discussions about the decommissioning of weapons followed, while on the streets, extortion, knee-capping and occasional ‘executions’ continued. But whereas the number of those killed in sectarian violence and bombings in 1993 had been eighty-four, the toll fell to sixty-one the following year, and in 1995 it was in single figures, at just nine deaths.

Long negotiations between London and Dublin led to cross-border arrangements. These negotiations had also involved the United States, where an influential pro-Irish lobby had helped to sustain the IRA campaign into the nineties through finance provided through ‘Noraid’. In the mid-nineties, President Clinton acted as a peace-broker, visiting Belfast in 1995 and helping to maintain the fragile cease-fire in the North. The contradictory demands of Irish Republicanism and Ulster Unionism meant that Major failed to get a final agreement, which was left to Tony Blair, with the ongoing help of the American ex-senator George Mitchell. The fact that in 1991 both countries had signed the Maastricht Treaty for closer political and economic unity in Europe, set a broader context for a bilateral agreement. However, while Irish political leaders eagerly embraced the idea of European integration, their British counterparts, as we have seen, remained deeply divided over it.

Economic decline/ growth & political resuscitation:

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The closure of the Swan Hunter shipyard on the Tyne in May 1993 is an illuminating example of the impact of de-industrialisation. Swan Hunter was the last working shipyard in the region but had failed to secure a warship contract. An old, established firm, it was suffering some of the same long-term decline that decimated shipbuilding employment nationally to 26,000 by the end of a century. This devastated the local economy, especially as a bitter legal wrangle over redundancy payments left many former workers with no compensation whatever for the loss of what they had believed was employment for life. But the effects of de-industrialisation could spread much further than local communities. The closure of the shipyard, as shown in the map above, but the failure of the firm also had a ‘knock-on’ effect as suppliers as far afield as London and Glasgow lost valuable orders and, as a result, jobs.

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By 1994, employment in manufacturing in Britain had fallen to four million from the nine million it had reached at its peak in 1966. The resulting mass unemployment hurt the older industries of the Northwest worst, but the losses were proportionately as high in the Southeast, reflecting the decline in newer manufacturing industry. Across most of Britain and Ireland, there was also a decline in the number of manufacturing jobs continuing into and throughout the 1990s. The service sector, however, expanded, and general levels of unemployment, especially in Britain, fell dramatically in the nineties. Financial services showed strong growth, particularly in such places as London’s Docklands, with its new ‘light railway’, and Edinburgh. By the late nineties, the financial industry was the largest employer in northern manufacturing towns and cities like Leeds, which grew rapidly throughout the decade, aided by its ability to offer a range of cultural facilities that helped to attract an array of UK company headquarters. Manchester, similarly, enjoyed a renaissance, particularly in the spheres of music, the media and sport.

In July 1995, tormented by yet more rumours of right-wing conspiracies against him, Major riposted with a theatrical gesture of his own, resigning as leader of the Conservative Party and inviting all-comers to take him on. He told journalists gathered in the Number Ten garden that it was “put up or shut up time”. If he lost he would resign as Prime Minister. If he won, he would expect the party to rally around him. This was a gamble, since other potential leaders were available, not least Michael Heseltine, who had become Deputy Prime Minister, and Michael Portillo, then the pin-up boy of the Thatcherites, whose supporters prepared a campaign headquarters for him, only for him to then decide against standing. In the event, the challenger was John Redwood, the Secretary of State for Wales and a highly intelligent anti-EU right-winger. Major won his fight, though 109 Tory MPs refused to back him.

Fighting the return of Fascism in Europe:

Major was also having to deal with the inter-ethnic wars breaking out in the former Yugoslavia, following the recognition of Slovenia, Croatia and Bosnia as independent states in the early nineties. The worst violence occurred during the Serbian assault on Bosnia (I have written about the bloody 1992-94 Siege of Sarajevo, its capital, in an article elsewhere on this site based on John Simpson’s reporting). The term ‘ethnic cleansing’ was used for the first time as woeful columns of refugees fled in different directions. A nightmare which Europeans thought was over in 1945 was returning, only a couple of days’ drive away from London and half a day’s drive from where I was living on the southern borders of Hungary with Serbia and Croatia.

Six years after the siege, during a school visit to the Hague, I sat in the courtroom of the International War Crimes Tribunal on the former Yugoslavia and listened, in horror, to the testimonies of those who had been imprisoned and tortured in concentration camps during the Bosnian War. I couldn’t believe that what I was hearing had happened in the final decade of the twentieth century in Europe. Those on trial at that time were the prison camp guards who had carried out the atrocities, claiming what had become known as the Nuremberg Defence. Later on, those giving the orders, both Mladko Radic and Radovan Karadzic (pictured below with John Simpson in 1993), the military and political leaders of the Bosnian Serbs, went on trial in the same courtroom, were convicted of war crimes and duly locked away, together with the former Serbian President, Slobodan Milosevic. Major had asked how many troops it would take to keep the warring three sides apart and was told the number was four hundred thousand, three times the total size of the British Army at that time. He sent 1,800 men to protect the humanitarian convoys that were rumbling south from the UN bases in Hungary.

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Although many British people sent food parcels, warm clothes, medicine and blankets, loaded onto trucks and driven across the Croatian border and into Bosnia, many in the government were reluctant for Britain to become further involved. But the evening news bulletins showed pictures of starving refugees, the uncovered mass graves of civilians shot dead by death squads, and children with appalling injuries. There was a frenzied campaign for Western intervention, but President Clinton was determined not to risk the lives of American soldiers on the ground. Instead, he considered less costly alternatives, such as air strikes. This would have put others who were on the ground, including the British and other nationalities involved in the UN operation, directly into the line of retaliatory fire of the Serbian troops. When the NATO air-strikes began, the Serbs took the UN troops hostage, including British soldiers, who were then used as human shields. When the Serbs captured the town of Srebrenica and carried out a mass slaughter of its Muslim citizens, there were renewed calls for ‘boots on the ground’, but they never came.

Following three years of fighting, sanctions on Serbia and the success of the Croat Army in fighting back, a peace agreement was finally made in Dayton, Ohio. The UN convoys and troops left Hungary. Major became the first British Prime Minister of the post-War World to grapple with the question of what the proper role of the West should be to ‘regional’ conflicts such as the Balkan wars. They showed quite clearly both the dangers and the limitations of intervention. When a civil conflict is relayed in all its horror to tens of millions of voters every night by television, the pressure to ‘do something’ is intense.  But mostly this requires not air strikes but a full-scale ground force, which will then be drawn into the war itself. Then it must be followed by years of neo-colonial aid and rebuilding. Major and his colleagues were accused of moral cowardice and cynicism in allowing the revival of fascist behaviour in one corner of Europe. Yet, especially given the benefit of hindsight of what happened subsequently in Iraq and Afghanistan, perhaps Western leaders were right to be wary of full-scale intervention.

Back to basics?

For many British voters, the Major years were associated with the sad, petty and lurid personal scandals that attended so many of his ministers, after he made an unwise speech calling for the return as old-style morality. In fact, back to basics referred to almost everything except personal sexual morality; he spoke of public service, industry, sound money, free trade, traditional teaching, respect for the family and the law and the defeat of crime. It gave the press, however, a fail-safe headline charge of hypocrisy whenever ministers were caught out. A series of infidelities were exposed; children born out-of-wedlock, a death from a sex stunt which went wrong, rumours about Major’s own affairs (which later turned out to be truer than realised at the time). More seriously, there was also an inquiry as to whether Parliament had been misled over the sale of arms to Iraq, but these were all knitted together into a single pattern of misbehaviour, referred to as ‘sleaze’.

In 1996, a three-year inquiry into whether the government had allowed a trial to go ahead against directors of an arms company, Matrix Churchill, knowing that they were, in fact, acting inside privately accepted guidelines, resulted in two ministers being publicly criticised. It showed that the government had allowed a more relaxed régime of military-related exports to Saddam Hussein even after the horrific gassing of five thousand Kurds at Falluja, also revealing a culture of secrecy and double standards in the process. Neil Hamilton MP was accused of accepting cash from Mohammed al-Fayed, the owner of Harrods, for asking questions in the Commons. One of the most dramatic episodes in the 1997 election was the overwhelming defeat he suffered in his Tatton constituency by the former BBC war reporter, Martin Bell, who had been badly injured in Sarajevo who became Britain’s first independent MP for nearly fifty years. Jonathan Aitken, a Treasury minister was accused of accepting improper hospitality from an Arab business contact. He resigned to fight the Guardian over the claims, with the simple sword of truth and the trusty shield of fair play. He was found guilty of perjury, spending eighteen months in prison.

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By the end of Major’s government, it seemed that the Tories might have learned the lesson that disagreements over the EU were capable of splitting their party. However, there was a general mood of contempt for politicians and the press, in particular, had lost any sense of deference. The reforms of the health service, police and schools had produced few significant improvements. The post-Cold War world was turning out to be nastier and less predictable than the early nineties days of the ‘peace dividend’ had promised. The Labour Opposition would, in due course, consider how the country might be better governed and reformed, as well as what would be the right British approach to peace-keeping and intervention now that the United States was the last superpower left standing. But in the early months of 1997,  Tony Blair and his fresh young ‘New Labour’ team, including Alistair Campbell (pictured above), were oiling their effective election-winning machine and moving in to roll over a tired-looking John Major and his tarnished old Tories.

Sources:

Andrew Marr (2008), A History of Modern Britain. Basingstoke: Pan-Macmillan.

Simon Schama (2018), A History of Britain, 1776-2000; The Fate of Empire. London: BBC Worldwide.

John Simpson (1999), Strange Places, Questionable People. Basingstoke: Pan-Macmillan.

Peter Caterall, Roger Middleton, John Swift (2001), The Penguin Atlas of British & Irish History. London: Penguin Books.

Posted October 17, 2018 by TeamBritanniaHu in Apocalypse, Arabs, Balkan Crises, Britain, British history, Britons, Brussels, Christian Faith, Christian Socialism, Christianity, Church, Coalfields, Cold War, devolution, Egalitarianism, Ethnic cleansing, Europe, European Economic Community, European Union, Family, France, Genocide, German Reunification, Germany, Gorbachev, Humanism, Hungary, Immigration, Ireland, Irish history & folklore, Italy, Journalism, Labour Party, manufacturing, Margaret Thatcher, Marxism, morality, National Health Service (NHS), Refugees, Revolution, Scotland, Security, terrorism, Thatcherism, Unemployment, Wales

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