Ditching values for money

According to Albert Cilia-Vincenti (November 22) "economist Prof. Patrick Minford forecast that if the British welfare state was not rolled back, employees' national insurance contributions would have to rise from nine per cent then to 25 per cent this century".

The professor gives the impression that the welfare state was funded solely with national insurance contributions. But he also recommended other stringent measures to roll back the welfare state.

In an article entitled "Is the government's economic strategy on course?", published in Lloyds Bank Review, April 1981, Patrick Minford and D. Peel maintained that unemployment could only be reduced by such measures as: 1. cutting unemployment benefits; 2. repealing minimum wage regulation; 3. cutting taxes and 4. reducing trade union power.

Commenting on this article, Ian Gilmour, who served under Margaret Thatcher as Lord Privy Seal 1979-1981, had this to say in his book Dancing with Dogma: Britain under Thatcherism:

"(Yet) the arch-monetarist Professor Patrick Minford suggested that over the three years 1982-1984 real social security benefits should be reduced to 15 per cent and the money thus saved used to cut income tax on lower income taxpayers 'in order to reinforce the incentive effect of reducing benefit'. 'Those who remain unemployed will be worse off', said Minford and Peel (which was obvious enough), but their decision to remain unemployed will be a voluntary one (which was breathtaking)... From his vantage point at Liverpool University, Professor Minford might be expected to spot that for every managerial vacancy on Merseyside in 1983 there were 18 people available and for every general labourer's vacancy there were 1,700 available".

Baron Gilman concluded that rightwing economists and Thatcherite politicians blamed the unemployed for not finding non-existent jobs.

Prof. Cilia-Vincenti then affirmed: "Within a few years Mrs Thatcher's team transformed Britain from the 'sick man' of Europe". He, however, omitted, for instance, the two dreadful recessions, particularly the catastrophic one of 1979-1981, with their enormous rise in unemployment, the greater destruction for industry, the assault on the welfare state and the diminishing quality and quantity of public services.

The cuts in public expenditure on capital programmes and increases in taxes, the brunt of which was borne by the less well-off, brought forth the famous letter from 364 academic economists which mentioned that deflation of demand alone would never generate a recovery.

Little did Prof. Minford imagine that Mrs Thatcher's government would not only be "cutting unemployment benefits" but make no fewer than 38 changes to these benefits between 1979 and 1988 and perhaps still more up to 1992, the year of Mrs Thatcher's downfall.

Contrary to Prof. Cilia-Vincenti's opinion neither Britain nor any other country having naval ships ever considered dockyards as money-making enterprises.

He then stated that Mrs Thatcher's government "instructed hospital directors to deliver more services for less money". As if hospital directors were to deal with patients in the same way executive managers shed workers to increase their shareholders' earnings per share.

Mrs Thatcher did roll back the welfare state as much as she could and she did subdue the trade unions but she did nothing to shrink the role of the central government. On the contrary, she was a relentless centraliser of government power.

The tax burden was higher when Mrs Thatcher left than when she took power and the overall tax burden was deliberately shifted from direct to indirect taxation much to the detriment of the low-income earners.

Prof. Cilia-Vincenti conveniently ignores the poll tax enacted by Mrs Thatcher's government which caused gross social injustice to the working class. It was because of the great unpopularity of the poll tax that Mrs Thatcher was thrown out of No. 10 by her own party.

To conclude, a report in the Guardian Weekly of December 12, 1990 provides one poignant instance of the injustice of the poll tax. Incidentally, it was in Mrs Thatcher's home town, so goes the report, that a self-employed bricklayer became the first person to be jailed for non-payment of the tax.

The defendant, Brian Wright, aged 21, lived at home with his parents and two brothers. "Why should we have to pay his tax when he lives at home and we are paying it," asked his mother. "Our rates for the house used to be £300. Now all five of us have to pay £277 each which is a disgusting increase".

Whether one agrees or not, greed, not compassion, was the core value of Thatcherism.