It’s interesting, I think the fundamental problem of Thatcherism came via the message itself. Because it was telling people that accruing unearned wealth, via housing windfalls or otherwise, was a result of thrift and hard work, once they did it they became entitled because they had internalised those beliefs.
This is, I think, a central point which underlines Ben Ansell’s recent (excellent) work about wealth taxes. It also comes up when you talk about pensions, where people think they paid into some pension pot and they’re just taking out what they put in when that’s not how the state system works.
People of my generation (millennials) don’t believe this because they view the system as a sham. There is no amount of thrift and hard work that can help you buy a house when prices are rising much faster than your earnings are. Even people who have recently bought realise this because their own experience is likely one of getting where they got to despite the system, not because of it (E.g. parental help or a tax break).
My generation also experienced the backwash of ideologies like Thatcherism, which has been all this garbage about self-improvement or manifesting. But that turns out to be a sham too. Changing your sleep schedule or simply taking a positive attitude won’t stop your rent from increasing, help you pay your bills, or get you a big pay rise. Even when you do everything ‘right’, nothing works and then what you hear from politicians and many older people is that it’s somehow your fault.
Excellent article Sam. Well thought through analysis. As a Boomer who over time has benefited massively from Thatcher’s reforms - whilst hating the further inequalities that emerged, I mix with many people in my age group who feel as strongly as Millennials about this. We think the younger generation have been robbed to our advantage. I don’t think the Conservatives have a lot to lose if they seriously act on your advice because so many of us are deeply entrenched in our political views at our age. There are many I talk to who would only ever vote conservative whatever happens and still, after all the scandals of the last years and the Brexit disaster continue to insist ‘they’re still better than the other lot’ or ‘all politicians are the same’. Whilst others, a much smaller group in my experience, would never vote conservative anyway. I would be interested to know how many genuine floating voters there are amongst the over 65s. Not many I suspect. So a shift in policy may cause less damage than expected.
Fascinating post. I do think the "cosplaying Thatcherism" goes wider than just Truss in the party eg I think it explains what has been puzzling you about the Government's seemingly inexplicable refusal to negotiate with public sector unions. It's cosplaying Thatcher - she "confronted unions", so we must "confront unions". The fact that the circumstances are totally different and it's not really "confrontation" in any meaningful sense is not the point: with no coherent ideology or strategy, all that remains is cosplay.
That's an excellent description, and gets right to the heart of it: their shallow and historically inaccurate understanding of Thatcher leads them into ever more-damaging errors because they can't distinguish between the reality and 'popular view' of Thatcher, nor can they really distinguish between 1983 and 2023. A lot of this is due to their supportive press churning out 'the same old hits' for their readers, and forms a very interesting feedback loop.
“How disappointed Margaret would be that her vigorous voters have decided to live the quiet life in their fully owned bungalow rather than continue working for the good of the nation.”
This points back to members of the landed gentry who never participated in agricultural production - and certainly did not live within sight of their own warehouses in Cheapside!
My wife showed me lovely Lewis Baston quoting the “Thatcher sought to make a country fit for people like her father, but actually made a country only fit for people like her son.” line. For the record, I’m pretty sure that’s one of mine.
As people are still periodically liking this sentence, I feel I should say that if they want to read more like it I have my own Substack. Which you can get to by clicking on my face. It is almost entirely devoted to Doctor Who deep dives, though. So is a pretty specialised. E.g. currently working on a post about the impact of the 1972 miners’ strike on the series recoding dates, viewing figures and decision two years later to do a story about a revolution spearheaded by miners. No, really.
Totally agree with this. I’m a boomer who has worked hard, also made money out of property and am now retired early. My kids will not be able to do this and I do see entitlement among my group of boomer friends- not all, but there’s definitely a NIMBY crew. Time for a change to give our kids their fair share
Feb 1, 2023·edited Feb 1, 2023Liked by Sam Freedman
My father was a Visiting Professor at the University of Nottingham in 1977-78 so I got to experience the collapse of Labour firsthand. The British Leyland car that made the junk General Motors was making at the time look good by comparison. The rolling power outages due to striking unions. The various other strikes. I thought at the time, and still think today, that excessive union power was wrecking the UK economy.
But SOME worker power is essential to prevent exploitation. SOME regulations are needed to make sure markets don't ignore externalities.
And invoking a past icon as a means of ending debate is rarely good for any organization.
Hi Sam, Thank you - this is far and away the best and most concise assessment I've yet read on why long-term Conservative policy intentions are self-defeating. I'm fairly sure Tony Benn made a diary comment around 1974/5, to the effect that the way we organise our societies changes roughly every 35-40 years, and that he felt another such change was coming (cf, Callaghan's famous comments, then the 1979 GE). Since 2008, many commentators and analysts have predicted that the UK system would have to change. What I think no one predicted was the exact extent to which the Conservatives would double down on protecting a single defined group of economic beneficiaries (their over 65 voter base) at the obvious and undisguised expense of so many other groups in society. Has there ever been a comparable example of a party/movement pushing itself so effectively into electoral oblivion? I don't think the inter-war collapse of the Liberal Party really compares to this?
"What I think no one predicted was the exact extent to which the Conservatives would double down on protecting a single defined group of economic beneficiaries (their over 65 voter base) at the obvious and undisguised expense of so many other groups in society."
Er every political party does this. Why? Because the over 65s have the highest propensity to vote.
During New Labour they invented the winter fuel allowance for the elderly. Post GFC New Labour undertook multiple rounds of Quantitative Easing which resulted in an asset price boom (house prices) fuelling age inequality, which the Conservatives continued. New Labour introduced student loans further fuelling age inequality.
The current Labour party is proposing free personal care, increased care packages, enhanced social care provision (as far as I can ascertain) essentially pushing enhanced welfare payments to the elderly.
Reasonable space in a comment does not allow for all the SNP has thrown at the retired and elderly in Scotland!
I have to disagree. I think it's unprecedented for a party to risk its electoral and therefore political positions to the extent that the Conservatives have since 2010. Yes, all governments tend to have favoured groups or sections of society towards which they will aim their public policy positions and towards which they will attempt to channel resources (including but not limited to public money). Partly because of that, all governments will eventually become unpopular and can/will lose support. But I can't recall a single other example of where a political party have narrowed their favoured group down to such a small section of the electorate that they *knowingly* risk electoral catastrophe. Many Conservative-leaning commentators and analysts have been worrying about this for some years, but they seem to have made no headway against the prevailing attitudes and methods of the Conservative Party. Although the US Republicans have been incredibly reckless, they can reliably reckon on a certain 'floor' of electoral support. By contrast, the current Conservative Party have made themselves unpopular with all but one section of the UK electorate, pretty much deliberately.
All political parties throw money at the retired and elderly, the Tories are absolutely no different. Why do you think what they have done is any any way unique?
I'm struggling to understand in what sense you think they have channeled resources and risked its electoral welfare? All parties are affected by electoral gravity - the Tories have had a longer than average run which is now coming to an end. The same fate will eventually consume Labour over the coming years.
The largest wealth transfer to asset owners came as a result of the 2008 GFC and the waves of QE that took place - this caused an asset bubble in the equity markets and property markets. This was a Labour policy.
Of course both parties to some extent cater to the elderly - for both moral and electoral reasons. Pensioners who have little wealth are on average in a worse position than similar working age people as have little opportunity to change that and worse health on average. Labour is not going to take away every bung offered pensioners' way overnight as they're not stupid. Though have less incentive to keep it up given have fewer than usual votes to lose there given voting patterns. And will likely devise Brownesque ways of clawing money back in ways people don't immediately notice the pain of or that are framed as essential. What's different is the scale of generational difference and that the Conservatives have become so entirely reliant on that voter bloc as Millennials reaching middle age now have stopped shifting to become more conservative as they age as was the time honoured pattern. And then that grey voter bloc's steadfast demands to protect and hoard their entitlements and enforce its preferences, even if it's to the detriment of others and entirely undermines any attempt to pursue Thatcherite policies or sketch out a new phase of Conservatism. The essential promise of Thatcherism was that low taxes, regulation and more private ownership would be better for everyone, not just the rich as it would reward enterprise and endeavour and create a more dynamic economy. That's largely now failing and falling apart because the boomers who gained from it personally have tended to hoard those gains, opposing attempts to tax them, and demand welfare spending like their parents enjoyed, while opposing the kinds of policies that might just provide some dynamism (eg housebuilding, infrastructure, immigration, EU membership) in order to pay for it all and offer similar opportunities to their children, while the same demographics that give them electoral power puts a squeeze on spending. That leaves modern Conservatism at something of a dead end, with little to offer but mindless populism that promises people they can have it all but falls apart when it meets reality. Truss attempted rhetorically to break out of this trap but couldn't as her solutions such as they were, were just big giveaways and not an attempt to challenge those vested interests - so markets simply didn't believe it'd work or add up. Labour in contrast has no real philosophical problem with reliance on the state, and will face significant pressure to reward its younger working-age voters with some of their policy preferences and financial boosts. It's also not actively hostile to business friendly policies older voters don't like. So it's in much less of a bind and can probably do a significant chunk of the things would like to do anyway while maintaining some philosophical coherence and economic literacy.
Yes we agree parties throw money at the elderly for a variety of reasons but the actions of Labour in office are directly contrary to your point about Labour having 'less incentive'.
The scale of generational differences have been driven by asset inflation and student taxation. This is a direct consequence of 3 policies: 1) Quantitative easing (aka debt fuelled epic spending) 2) Open border immigration 3) Student loans
These are all *Labour Policies*.
The hoarding of gains point is mystifying, 'boomers' are not sat on vast unearned wealth; they are sat on generous pensions that no longer exist (Thanks G Brown, Labour again) and assets in the form of housing. I direct you to my point above.
If you think boomers are stopping infrastructure then what is HS2, Elizabeth line, fibre broadband, rail electrification etc. You can argue we are not spending enough sure but that is nothing to do with your argument.
Your argument is damaged by ideological confirmation bias and is at variance to economic facts.
A really interesting analysis and I think bang-on-the-money. The generational divide is incredible: as a 'geriatric millennial' I'm amazed at how I know perhaps only a handful of Tories, despite living/working in circles that would traditionally have been true blue. Financial services workers, homeowners, privately educated, six-figure salaries - these people would normally be considered as slam-dunk Conservative voters and yet none are.
The question I have is, who do you think in the Parliamentary party might act on this analysis? Seems a few MPs will admit the existential threat when talking to journalists on background, but I just can't see who'll be leading the charge in opposition. Indeed, looking at the bank benches yields more Lee Andersons than Tony Blair types and the few that see the iceberg on the horizon seem to be stepping down. So whilst I think the analysis and advice above is sound for the Tories, do we think there's any prospect of them acting on it? Or will it take several election losses?
My guess (for what it's worth) is that they will head even more to the right, and take several election losses (at least 2 if not 3) before they even start to recover. For example, I can see a Braverman-led party appealing to fewer and fewer people as it becomes more and more extreme and kneejerk in its reactions....
Sam, for somebody who normally bases his arguments on facts rather than emotion, this statement struck me as uncharacteristic of your style. About your description of Boomers, 'They have become spectacularly entitled - but not my dad.' How would you summarise Generation X, Y and Z? How about dripping with useless degrees and grievance - but not my son and daughter? Generational stereotypes really don't get us much further forward, do they.
Let's take it as read that there will be a Labour Government at the next election. I would much prefer to see you using your considerable intelligence and experience to detail what tangible difference it would make to the mega issues facing the UK and in what timescale.
That's not what I said! I said I was talking about averages not individuals. But if the majority of boomers refuse to accept house building in their area or taxes on unearned wealth that would seem to merit calling them entitled.
I am sorry Sam, how but how can you make these statements? What's an average Boomer? How do you know what they think? So the definition of 'entitled' is not accepting unspecified taxes on capital gains? I have yet to hear of any of my friend's children refusing their parent's help to purchase a house because the monies haven't been taxed.
Average as in a majority say X or Y in polling. And I think it's reasonable to say a group that refuse to consider any taxes on unearned wealth; any reduction in welfare benefits; *or* new infrastructure/house building in their area are entitled. You are welcome to disagree with that of course but I do want to make it clear that this v much does not include all boomers, as other comments make clear.
OK Sam, I don't think we will get any further with this exchange. Being more constructive, I would think at the next election the Labour Party will propose a wealth tax (with your support, I guess). Perhaps you will put that on your list of subjects to write about. Knowing the workings of government, as you do, how feasible is it to make that work in a single term?
Why don't you get your mum to write about how a wealth tax (the resolution foundation disguises this as LVT) would work in practice and the pitfalls. You could cover the politics and why this wouldn't be the greatest political gift to the Tories since Jeremy Corbyn
That's not what I said! I said I was talking about averages not individuals. But if the majority of boomers refuse to accept house building in their area or taxes on unearned wealth that would seem to merit calling them entitled.
The sense of hurt you expressed from a statement the author carefully qualified as "not all boomers" simply reeks of entitlement. You were welcome to exclude yourself from the group the statement refers to yet by emotionally lashing out, you've made the point.
Thanks for this really interesting piece. I think there is a more profound element to the shadow of Thatcherism. I agree that the effect on wealth inequality has been staggering and generally contributes to a lot of the disenfranchisement of young people at the moment, as well as the huge number of problems caused by this intergenerational inequality that are coming at us in the near future. It is certainly true that the effect of Thatcherism has been worsened by an inability to replace sold off housing stock because the beneficiaries of Thatcherism have, after realising the benefits, pulled up the ladder for the generations that have followed. This is obviously exacerbated by the population demographics that are causing the pension crisis that we have at the moment. However, on a deeper level, I think a lot of the current dysfunction of our state (the managerialism, declinism, and the general failure of government) stems from the Thatcherist consensus. Since Thatcher left, the state has been spending and taxing at nigh on record peacetime levels (certainly far higher than under Thatcher). However, the Thatcher/Reaganist doctrine of limited government has become a deeply engrained part of the government psyche. So whilst the government is doing more than it has done for a long time, the philosophy of limited government remains, which, I think, has filtered into a lack of ambition in government projects over the past 50 years. Not enough nuclear investment, not enough rail investment, a grid that is overused, no government housebuilding and plenty of government house blocking. Compared to the French, who have a very different philosophy on the virtues of government, it feels like we have not been ambitious enough in setting up a country that continues to work; whether that's a reliance on foreign energy or high house prices. This legacy is also seen in the PE ownership of so much of the care sector and private sector involvement (though some of it is good) in public sector provision. This might work if you are going to genuinely have a small state but it makes our government so much less dynamic and effective because there is a reticence in government to interfere. If we are going to have such a large state, we might as well make use of it by properly investing in infrastructure, pushing government to override local planning complaints and to genuinely reform key parts of the state such as the pension system, the tax system and investment. Until we shake the burden of Thatcherism, we will be condemned to continuing this weird path of big state spending and tax with small state ambition which is basically the managerialism that we see today.
"Beyond Tory politics the changes Thatcher introduced have become part of a consensus that is only now starting to come under sustained challenge, as economic stagnation and social decay create a sense of perma-crisis."
May I ask what if any of Thatcher's changes beyond union regulation exist today and were not undone by New Labour followed by the Cameron then May/Johnson Conservatives (in reality New Labour branded differently)? Now we have a "Conservative" government substantially to the left of Tony Blair.
There's not that much left to place under 'sustained challenge' imho. We are a completely different country than the UK Thatcher left some 33 years ago.
Thatcher merely exists today as a cipher, a strawman onto which everyone can project either the evils of capitalism and failures of conservatism; or the abject failure adopt low-tax supply side reforms and drive growth through entrepreneurship and wealth creation. You take your choice.
Her changes that were not undone: unions reforms; shift of taxation to consumption over income (highest rate remains only 5p abov Thatcher's); right to buy; privitisation of utilities; quasi-market in health and education; outsourcing in central and local govt; new public management processes (targets etc) in the civil service; major reduction in local govt power and finance raising ability; scrapping incomes policy..... I'm sure I'm missed a few!
All the significant reforms she made have basically been ground away by New Labour then New Labour (with conservative branding) so that little remains after 33 years or so. It was hidden but now it is biting us economically.
Specifically
Union reforms - I already mentioned this above
shift in taxation - taxation as a % of GDP is far higher than when Thatch left office. If you think the highest marginal rate in tax raises more than a fiscal 1p then I have a beach house in central London to sell you
Right to buy; sure but I'm not sure it has and fiscal significance
Market in health & education; if you think health and education services and markets today bare any relation to 1979-1990 then again my house is still for sale. It is completely different. If by which you mean the principle of private sector involvement then yes but Blair did more than Thatch
Outsourcing in government; see above
public management processes; Blair
reduction in local govt power; true
Incomes policy; that is more a transformation in economic thinking than Thatcher but I'd agree she brought it about even though bitterly opposed (364 wrong economists anyone?)
Basically the significant reforms have been lost in an orgy of debt financed spending and significant increases in the tax base. If you had told Thatcher that to move house in the SE would cost £100,000 in tax she would have been amazed.
Another interesting thought for me in this is Generation Z. They seem a much ‘quieter’ group politically in some ways. More thoughtful and harder working when in school according to surveys. But arguably they have and will suffer even more than recent previous generations from the inequalities, the inability to own their own homes, the pandemic during the period when they could have expected to be most socially active etc. How are their politics emerging?
I really enjoy your newsletter- thanks for introducing me to the world of Substack too.
Regarding the opinion polls and the next election, when will we have enough information to get an idea of the effect of voters having to show ID? After the May local elections?
It’s interesting, I think the fundamental problem of Thatcherism came via the message itself. Because it was telling people that accruing unearned wealth, via housing windfalls or otherwise, was a result of thrift and hard work, once they did it they became entitled because they had internalised those beliefs.
This is, I think, a central point which underlines Ben Ansell’s recent (excellent) work about wealth taxes. It also comes up when you talk about pensions, where people think they paid into some pension pot and they’re just taking out what they put in when that’s not how the state system works.
People of my generation (millennials) don’t believe this because they view the system as a sham. There is no amount of thrift and hard work that can help you buy a house when prices are rising much faster than your earnings are. Even people who have recently bought realise this because their own experience is likely one of getting where they got to despite the system, not because of it (E.g. parental help or a tax break).
My generation also experienced the backwash of ideologies like Thatcherism, which has been all this garbage about self-improvement or manifesting. But that turns out to be a sham too. Changing your sleep schedule or simply taking a positive attitude won’t stop your rent from increasing, help you pay your bills, or get you a big pay rise. Even when you do everything ‘right’, nothing works and then what you hear from politicians and many older people is that it’s somehow your fault.
Excellent article Sam. Well thought through analysis. As a Boomer who over time has benefited massively from Thatcher’s reforms - whilst hating the further inequalities that emerged, I mix with many people in my age group who feel as strongly as Millennials about this. We think the younger generation have been robbed to our advantage. I don’t think the Conservatives have a lot to lose if they seriously act on your advice because so many of us are deeply entrenched in our political views at our age. There are many I talk to who would only ever vote conservative whatever happens and still, after all the scandals of the last years and the Brexit disaster continue to insist ‘they’re still better than the other lot’ or ‘all politicians are the same’. Whilst others, a much smaller group in my experience, would never vote conservative anyway. I would be interested to know how many genuine floating voters there are amongst the over 65s. Not many I suspect. So a shift in policy may cause less damage than expected.
Fascinating post. I do think the "cosplaying Thatcherism" goes wider than just Truss in the party eg I think it explains what has been puzzling you about the Government's seemingly inexplicable refusal to negotiate with public sector unions. It's cosplaying Thatcher - she "confronted unions", so we must "confront unions". The fact that the circumstances are totally different and it's not really "confrontation" in any meaningful sense is not the point: with no coherent ideology or strategy, all that remains is cosplay.
That's an excellent description, and gets right to the heart of it: their shallow and historically inaccurate understanding of Thatcher leads them into ever more-damaging errors because they can't distinguish between the reality and 'popular view' of Thatcher, nor can they really distinguish between 1983 and 2023. A lot of this is due to their supportive press churning out 'the same old hits' for their readers, and forms a very interesting feedback loop.
“How disappointed Margaret would be that her vigorous voters have decided to live the quiet life in their fully owned bungalow rather than continue working for the good of the nation.”
This points back to members of the landed gentry who never participated in agricultural production - and certainly did not live within sight of their own warehouses in Cheapside!
My wife showed me lovely Lewis Baston quoting the “Thatcher sought to make a country fit for people like her father, but actually made a country only fit for people like her son.” line. For the record, I’m pretty sure that’s one of mine.
It's a great line!
As people are still periodically liking this sentence, I feel I should say that if they want to read more like it I have my own Substack. Which you can get to by clicking on my face. It is almost entirely devoted to Doctor Who deep dives, though. So is a pretty specialised. E.g. currently working on a post about the impact of the 1972 miners’ strike on the series recoding dates, viewing figures and decision two years later to do a story about a revolution spearheaded by miners. No, really.
Totally agree with this. I’m a boomer who has worked hard, also made money out of property and am now retired early. My kids will not be able to do this and I do see entitlement among my group of boomer friends- not all, but there’s definitely a NIMBY crew. Time for a change to give our kids their fair share
My father was a Visiting Professor at the University of Nottingham in 1977-78 so I got to experience the collapse of Labour firsthand. The British Leyland car that made the junk General Motors was making at the time look good by comparison. The rolling power outages due to striking unions. The various other strikes. I thought at the time, and still think today, that excessive union power was wrecking the UK economy.
But SOME worker power is essential to prevent exploitation. SOME regulations are needed to make sure markets don't ignore externalities.
And invoking a past icon as a means of ending debate is rarely good for any organization.
Hi Sam, Thank you - this is far and away the best and most concise assessment I've yet read on why long-term Conservative policy intentions are self-defeating. I'm fairly sure Tony Benn made a diary comment around 1974/5, to the effect that the way we organise our societies changes roughly every 35-40 years, and that he felt another such change was coming (cf, Callaghan's famous comments, then the 1979 GE). Since 2008, many commentators and analysts have predicted that the UK system would have to change. What I think no one predicted was the exact extent to which the Conservatives would double down on protecting a single defined group of economic beneficiaries (their over 65 voter base) at the obvious and undisguised expense of so many other groups in society. Has there ever been a comparable example of a party/movement pushing itself so effectively into electoral oblivion? I don't think the inter-war collapse of the Liberal Party really compares to this?
Really?
"What I think no one predicted was the exact extent to which the Conservatives would double down on protecting a single defined group of economic beneficiaries (their over 65 voter base) at the obvious and undisguised expense of so many other groups in society."
Er every political party does this. Why? Because the over 65s have the highest propensity to vote.
During New Labour they invented the winter fuel allowance for the elderly. Post GFC New Labour undertook multiple rounds of Quantitative Easing which resulted in an asset price boom (house prices) fuelling age inequality, which the Conservatives continued. New Labour introduced student loans further fuelling age inequality.
The current Labour party is proposing free personal care, increased care packages, enhanced social care provision (as far as I can ascertain) essentially pushing enhanced welfare payments to the elderly.
Reasonable space in a comment does not allow for all the SNP has thrown at the retired and elderly in Scotland!
Your analysis is way off beam.
I have to disagree. I think it's unprecedented for a party to risk its electoral and therefore political positions to the extent that the Conservatives have since 2010. Yes, all governments tend to have favoured groups or sections of society towards which they will aim their public policy positions and towards which they will attempt to channel resources (including but not limited to public money). Partly because of that, all governments will eventually become unpopular and can/will lose support. But I can't recall a single other example of where a political party have narrowed their favoured group down to such a small section of the electorate that they *knowingly* risk electoral catastrophe. Many Conservative-leaning commentators and analysts have been worrying about this for some years, but they seem to have made no headway against the prevailing attitudes and methods of the Conservative Party. Although the US Republicans have been incredibly reckless, they can reliably reckon on a certain 'floor' of electoral support. By contrast, the current Conservative Party have made themselves unpopular with all but one section of the UK electorate, pretty much deliberately.
All political parties throw money at the retired and elderly, the Tories are absolutely no different. Why do you think what they have done is any any way unique?
I'm struggling to understand in what sense you think they have channeled resources and risked its electoral welfare? All parties are affected by electoral gravity - the Tories have had a longer than average run which is now coming to an end. The same fate will eventually consume Labour over the coming years.
The largest wealth transfer to asset owners came as a result of the 2008 GFC and the waves of QE that took place - this caused an asset bubble in the equity markets and property markets. This was a Labour policy.
Of course both parties to some extent cater to the elderly - for both moral and electoral reasons. Pensioners who have little wealth are on average in a worse position than similar working age people as have little opportunity to change that and worse health on average. Labour is not going to take away every bung offered pensioners' way overnight as they're not stupid. Though have less incentive to keep it up given have fewer than usual votes to lose there given voting patterns. And will likely devise Brownesque ways of clawing money back in ways people don't immediately notice the pain of or that are framed as essential. What's different is the scale of generational difference and that the Conservatives have become so entirely reliant on that voter bloc as Millennials reaching middle age now have stopped shifting to become more conservative as they age as was the time honoured pattern. And then that grey voter bloc's steadfast demands to protect and hoard their entitlements and enforce its preferences, even if it's to the detriment of others and entirely undermines any attempt to pursue Thatcherite policies or sketch out a new phase of Conservatism. The essential promise of Thatcherism was that low taxes, regulation and more private ownership would be better for everyone, not just the rich as it would reward enterprise and endeavour and create a more dynamic economy. That's largely now failing and falling apart because the boomers who gained from it personally have tended to hoard those gains, opposing attempts to tax them, and demand welfare spending like their parents enjoyed, while opposing the kinds of policies that might just provide some dynamism (eg housebuilding, infrastructure, immigration, EU membership) in order to pay for it all and offer similar opportunities to their children, while the same demographics that give them electoral power puts a squeeze on spending. That leaves modern Conservatism at something of a dead end, with little to offer but mindless populism that promises people they can have it all but falls apart when it meets reality. Truss attempted rhetorically to break out of this trap but couldn't as her solutions such as they were, were just big giveaways and not an attempt to challenge those vested interests - so markets simply didn't believe it'd work or add up. Labour in contrast has no real philosophical problem with reliance on the state, and will face significant pressure to reward its younger working-age voters with some of their policy preferences and financial boosts. It's also not actively hostile to business friendly policies older voters don't like. So it's in much less of a bind and can probably do a significant chunk of the things would like to do anyway while maintaining some philosophical coherence and economic literacy.
There's a lot to unpack there
Yes we agree parties throw money at the elderly for a variety of reasons but the actions of Labour in office are directly contrary to your point about Labour having 'less incentive'.
The scale of generational differences have been driven by asset inflation and student taxation. This is a direct consequence of 3 policies: 1) Quantitative easing (aka debt fuelled epic spending) 2) Open border immigration 3) Student loans
These are all *Labour Policies*.
The hoarding of gains point is mystifying, 'boomers' are not sat on vast unearned wealth; they are sat on generous pensions that no longer exist (Thanks G Brown, Labour again) and assets in the form of housing. I direct you to my point above.
If you think boomers are stopping infrastructure then what is HS2, Elizabeth line, fibre broadband, rail electrification etc. You can argue we are not spending enough sure but that is nothing to do with your argument.
Your argument is damaged by ideological confirmation bias and is at variance to economic facts.
A really interesting analysis and I think bang-on-the-money. The generational divide is incredible: as a 'geriatric millennial' I'm amazed at how I know perhaps only a handful of Tories, despite living/working in circles that would traditionally have been true blue. Financial services workers, homeowners, privately educated, six-figure salaries - these people would normally be considered as slam-dunk Conservative voters and yet none are.
The question I have is, who do you think in the Parliamentary party might act on this analysis? Seems a few MPs will admit the existential threat when talking to journalists on background, but I just can't see who'll be leading the charge in opposition. Indeed, looking at the bank benches yields more Lee Andersons than Tony Blair types and the few that see the iceberg on the horizon seem to be stepping down. So whilst I think the analysis and advice above is sound for the Tories, do we think there's any prospect of them acting on it? Or will it take several election losses?
My guess (for what it's worth) is that they will head even more to the right, and take several election losses (at least 2 if not 3) before they even start to recover. For example, I can see a Braverman-led party appealing to fewer and fewer people as it becomes more and more extreme and kneejerk in its reactions....
Sam, for somebody who normally bases his arguments on facts rather than emotion, this statement struck me as uncharacteristic of your style. About your description of Boomers, 'They have become spectacularly entitled - but not my dad.' How would you summarise Generation X, Y and Z? How about dripping with useless degrees and grievance - but not my son and daughter? Generational stereotypes really don't get us much further forward, do they.
Let's take it as read that there will be a Labour Government at the next election. I would much prefer to see you using your considerable intelligence and experience to detail what tangible difference it would make to the mega issues facing the UK and in what timescale.
That's not what I said! I said I was talking about averages not individuals. But if the majority of boomers refuse to accept house building in their area or taxes on unearned wealth that would seem to merit calling them entitled.
I am sorry Sam, how but how can you make these statements? What's an average Boomer? How do you know what they think? So the definition of 'entitled' is not accepting unspecified taxes on capital gains? I have yet to hear of any of my friend's children refusing their parent's help to purchase a house because the monies haven't been taxed.
Average as in a majority say X or Y in polling. And I think it's reasonable to say a group that refuse to consider any taxes on unearned wealth; any reduction in welfare benefits; *or* new infrastructure/house building in their area are entitled. You are welcome to disagree with that of course but I do want to make it clear that this v much does not include all boomers, as other comments make clear.
OK Sam, I don't think we will get any further with this exchange. Being more constructive, I would think at the next election the Labour Party will propose a wealth tax (with your support, I guess). Perhaps you will put that on your list of subjects to write about. Knowing the workings of government, as you do, how feasible is it to make that work in a single term?
Always a bit nervous writing about tax given the other Prof Freedman (Mum) is the expert on that but it's an interesting Q.
Why don't you get your mum to write about how a wealth tax (the resolution foundation disguises this as LVT) would work in practice and the pitfalls. You could cover the politics and why this wouldn't be the greatest political gift to the Tories since Jeremy Corbyn
That's not what I said! I said I was talking about averages not individuals. But if the majority of boomers refuse to accept house building in their area or taxes on unearned wealth that would seem to merit calling them entitled.
The sense of hurt you expressed from a statement the author carefully qualified as "not all boomers" simply reeks of entitlement. You were welcome to exclude yourself from the group the statement refers to yet by emotionally lashing out, you've made the point.
Thanks for this really interesting piece. I think there is a more profound element to the shadow of Thatcherism. I agree that the effect on wealth inequality has been staggering and generally contributes to a lot of the disenfranchisement of young people at the moment, as well as the huge number of problems caused by this intergenerational inequality that are coming at us in the near future. It is certainly true that the effect of Thatcherism has been worsened by an inability to replace sold off housing stock because the beneficiaries of Thatcherism have, after realising the benefits, pulled up the ladder for the generations that have followed. This is obviously exacerbated by the population demographics that are causing the pension crisis that we have at the moment. However, on a deeper level, I think a lot of the current dysfunction of our state (the managerialism, declinism, and the general failure of government) stems from the Thatcherist consensus. Since Thatcher left, the state has been spending and taxing at nigh on record peacetime levels (certainly far higher than under Thatcher). However, the Thatcher/Reaganist doctrine of limited government has become a deeply engrained part of the government psyche. So whilst the government is doing more than it has done for a long time, the philosophy of limited government remains, which, I think, has filtered into a lack of ambition in government projects over the past 50 years. Not enough nuclear investment, not enough rail investment, a grid that is overused, no government housebuilding and plenty of government house blocking. Compared to the French, who have a very different philosophy on the virtues of government, it feels like we have not been ambitious enough in setting up a country that continues to work; whether that's a reliance on foreign energy or high house prices. This legacy is also seen in the PE ownership of so much of the care sector and private sector involvement (though some of it is good) in public sector provision. This might work if you are going to genuinely have a small state but it makes our government so much less dynamic and effective because there is a reticence in government to interfere. If we are going to have such a large state, we might as well make use of it by properly investing in infrastructure, pushing government to override local planning complaints and to genuinely reform key parts of the state such as the pension system, the tax system and investment. Until we shake the burden of Thatcherism, we will be condemned to continuing this weird path of big state spending and tax with small state ambition which is basically the managerialism that we see today.
"Beyond Tory politics the changes Thatcher introduced have become part of a consensus that is only now starting to come under sustained challenge, as economic stagnation and social decay create a sense of perma-crisis."
May I ask what if any of Thatcher's changes beyond union regulation exist today and were not undone by New Labour followed by the Cameron then May/Johnson Conservatives (in reality New Labour branded differently)? Now we have a "Conservative" government substantially to the left of Tony Blair.
There's not that much left to place under 'sustained challenge' imho. We are a completely different country than the UK Thatcher left some 33 years ago.
Thatcher merely exists today as a cipher, a strawman onto which everyone can project either the evils of capitalism and failures of conservatism; or the abject failure adopt low-tax supply side reforms and drive growth through entrepreneurship and wealth creation. You take your choice.
Her changes that were not undone: unions reforms; shift of taxation to consumption over income (highest rate remains only 5p abov Thatcher's); right to buy; privitisation of utilities; quasi-market in health and education; outsourcing in central and local govt; new public management processes (targets etc) in the civil service; major reduction in local govt power and finance raising ability; scrapping incomes policy..... I'm sure I'm missed a few!
We will have to disagree.
All the significant reforms she made have basically been ground away by New Labour then New Labour (with conservative branding) so that little remains after 33 years or so. It was hidden but now it is biting us economically.
Specifically
Union reforms - I already mentioned this above
shift in taxation - taxation as a % of GDP is far higher than when Thatch left office. If you think the highest marginal rate in tax raises more than a fiscal 1p then I have a beach house in central London to sell you
Right to buy; sure but I'm not sure it has and fiscal significance
Market in health & education; if you think health and education services and markets today bare any relation to 1979-1990 then again my house is still for sale. It is completely different. If by which you mean the principle of private sector involvement then yes but Blair did more than Thatch
Outsourcing in government; see above
public management processes; Blair
reduction in local govt power; true
Incomes policy; that is more a transformation in economic thinking than Thatcher but I'd agree she brought it about even though bitterly opposed (364 wrong economists anyone?)
Basically the significant reforms have been lost in an orgy of debt financed spending and significant increases in the tax base. If you had told Thatcher that to move house in the SE would cost £100,000 in tax she would have been amazed.
At least Ayn Rand isn't quite as popular in the UK as she is among the US right wing...
Another interesting thought for me in this is Generation Z. They seem a much ‘quieter’ group politically in some ways. More thoughtful and harder working when in school according to surveys. But arguably they have and will suffer even more than recent previous generations from the inequalities, the inability to own their own homes, the pandemic during the period when they could have expected to be most socially active etc. How are their politics emerging?
Hi Sam
I really enjoy your newsletter- thanks for introducing me to the world of Substack too.
Regarding the opinion polls and the next election, when will we have enough information to get an idea of the effect of voters having to show ID? After the May local elections?
Regards
Andrew
During Margaret Thatcher’s years, the bank rate averaged 11.46%.
During the Blair Brown years, it averaged 4.7%.
https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp