Postwar: A History of Europe Since 1945

by Tony Judt

Despite this apparent dismantling of the public sector, the share of Britain’s GDP absorbed by public expenditure remained virtually the same in 1988 (41.7 percent) as it had ten years earlier (42.5 percent), notwithstanding Thatcher’s promises to ‘get the state off people’s backs’. This was because the Conservative government had to pay unprecedented sums in unemployment benefit. The ‘scandalously’ high figure of 1.6 million jobless that had so damaged Callaghan’s government in 1977 had reached 3.25 million by 1985 and remained one of the highest in Europe for the rest of Mrs. Thatcher’s time in office. Many of those who lost jobs in inefficient (and previously state-subsidized) industries like steel, coal-mining, textiles and shipbuilding would never find work again, becoming lifelong dependents of the state in all but name. If their former employers went on in some cases (steel, notably) to become profitable private companies it was less through the miracle of private ownership than because Margaret Thatcher’s governments had relieved them of high fixed labour costs, ‘socializing’ the expense of superfluous workers in the form of state-subsidized unemployment. There was something to be said for the privatization of certain public industries and services. For many years vital economic assets had been held in the public sector with little thought given to investment or modernization. They had been starved of cash, their performance cushioned against pressure from competit...