Fight club: Are we living 1979 all over again?

Is 2009 just 1979 all over again? If so, we're in for a hell of a decade – because the 1980s were a bloody battle between a bankrupt Left and a resurgent Right

One thing is obvious: after an economic crisis of this magnitude, politics isn't going to be the same again. People don't just read the gloomy economic news; they feel its effects in everyday life. Job losses, the sterling crisis, the strikes and the general sense of insecurity mean the assumptions that politicians of all parties have shared for decades are not trusted any more. At the coming election, people will choose between a Prime Minister with 11 solid years of Cabinet experience, or a novice – and will probably back the novice, because the Prime Minister is the voice of a political consensus which has failed.

Welcome to Britain in 1979, 30 years ago today, as the high unemployment, a wave of strikes and a general sense that Britain was becoming ungovernable was about to sweep away the Labour government, led by "Sunny Jim" Callaghan, and bring an unknown named Margaret Thatcher to power.

After the war, the main political parties had all reached agreement on the general way to run the British economy. Key industries would be owned by the government, and subsidised where necessary. The unions would be consulted on pay policy. Unemployment would be low, and there would be a generous welfare state. That agreed way of doing business was wrecked by economic upheaval of the late-1970s, and killed off by the incoming Conservative government.

By the end of the 1980s, everyone agreed that the only way to guarantee prosperity was through a deregulated economy in which every enterprise was privately owned, credit was freely available, the unions were weak, and the rules for hiring and firing labour were highly flexible. That transformation of Britain's political culture is what gives the 1980s a powerful claim to be called the decade of revolution.

However, the similarity between the crisis that Thatcher confronted in 1979, and the one David Cameron will face if he becomes Prime Minister next year is only skin-deep. Most of Britain's problems back then were home-grown. They did not come from too much easy credit, or involve banks going bust. But that was the up side. In almost every other respect, the crisis then was worse than it is now. Not only was unemployment too high, there was also double-figure inflation. Somebody had to decide which to tackle first.

The choice made by Margaret Thatcher and her chancellor, Sir Geoffrey Howe, was to focus ruthlessly on inflation. The budget that Howe introduced in March 1981, for instance, overturned the view held by mainstream economists since the 1930s, that when unemployment was high, governments should spend more to stimulate the economy, allowing government debt to increase. Howe did the opposite; he cut government debt, and let unemployment rip. This achieved its stated objective: by mid-1982, inflation was back down in single figures.

His success looked all the rosier due to the peculiar interlude of the Falklands War. Most people did not know these islands existed until the Argentinians occupied them in 1982. Nonetheless, public opinion was outraged, and Thatcher was presented with a short, clean war that could be won outright – so very different from the intractable mess Gordon Brown faces in Iraq and Afghanistan. That, and a profoundly divided Labour led by Michael Foot, presented Thatcher with an overwhelming victory in 1983.

But there was a heavy price to be paid by people living in the regions where traditional industries were declining. The jobless total was below 1.1m in May 1979, when the Conservatives won an election using that famous slogan "Labour Isn't Working". It was never that low again for the whole of the 1980s. In July 1986, it was over 3.1m.

High unemployment was one of the weapons used to smash the unions. In 1979, there were 12.6m full-time employees in TUC-affiliated unions. Whole industries, from mining to printing, were ruled by closed shops. No union card meant no job. The 1980s began with a national steel strike. In the middle of the decade, there was the year-long miners' strike, one of the longest and bitterest industrial disputes in British history, and the last great national strike. When the miners surrendered, it was obvious that the union movement was beaten. Today, the TUC has barely half the membership it once had.

In 1980, the entire developed world, including Britain, was divided into two ideological camps. The Communist bloc appeared then to be so stable that it would last forever, while serious people wondered how long capitalism could survive. The threat of nuclear war between Nato and the Warsaw Pact was too real for comfort, and vastly overshadowed the terrorist threat, even when the IRA came close to killing Margaret Thatcher by bombing her hotel in Brighton in 1984.

During the rise of Thatcher and the fall of the Berlin Wall, all Britain's political parties arrived at a new consensus: that the big industries that Thatcher privatised should stay private, and that the best guarantee of prosperity was a deregulated, de-unionised economy where credit was freely available. That consensus has been holed by the international banking crisis. But where is the new Margaret Thatcher to create a new politics from the death of the old?

In the US, Barack Obama at least offers the outline of radical new solutions, but he is a Democrat dealing with problems created by Republicans. David Cameron's dilemma is that the regime of easy credit and weak regulation over which Gordon Brown presided is a regime learnt from Margaret Thatcher. Britain has been governed for a quarter of a century Thatcher's way. It would be a very bold Conservative leader indeed who declares that that way is at an end.

Derek Hatton: From 'Loony Left' to Loadsamoney

Of all the characters to step into the media limelight in the 1980s, one of the most colourful and emblematic was Derek Hatton. Somehow his life embodied everything the era stood for, from the militant Labour politics of the first half of the decade, to the wheeler-dealing, loadsamoney excess of the end. An Armani-suited Left-winger, "Degsy" has been called everything from "rabid old militant" courtesy of the Daily Express to "low-grade slob" by Lord Tebbit and everything from scally to sell-out in between.

"I don't know how to respond to accusations that I've sold out," he says from his £1.5m villa in Cyprus. "I'm not sure what a socialist can be any more. I've still got ideals I had in the 1980s, but how do you put them into practice now? Once there were beliefs and battles. Now there's no difference between the parties; politics is nothing but an administrative job. I can't understand why anyone would want to go into politics now. You'd have to be mental."

Hatton was elected deputy leader of Liverpool Council in 1983 and became one of the leaders of the secretive Trotskyist organisation Militant, an increasingly powerful force within the Labour Party. He clashed with the party's leader Neil Kinnock, and was expelled in 1986. "We always said that Militant was just a newspaper but of course it was more than that," he admits. "It was a caucus. There was a group based in London and significant numbers of people involved but we weren't trying to destroy the Labour Party, we were just pursuing a socialist aim."

After his expulsion, Hatton embraced the era of conspicuous consumption. He set up his own PR company, presented a radio show and finally wound up in Cyprus flogging off-plan property. "We've sold 150 properties so far and still have many more to go."

Despite recent wildcat strikes and unemployment figures rising in the UK, Hatton doesn't believe history is repeating itself. "Back then there was organisation and leadership," he says. "All that has gone. Yes, you'll get wildcat strikes, but in the 1980s there was a real opportunity for something to be harnessed. If it couldn't be done in the 1980s, there's no way it can be done now."

During his years in politics, Hatton was a merciless critic of Margaret Thatcher. She continues to be his nemesis to this day and Hatton, despite wholeheartedly exploiting the capitalist system she espoused, believes the current recession is entirely her fault. "Without question, it was Thatcher's belief in greed – that you can have whatever you want without paying for it, that you can buy your own house even if you can't really afford it. All that has led us to the position we are in. She, more than anyone, is responsible." That he drives around Larnaca in his £60,000 Land Rover with personalised numberplates is an irony lost on him. "It's irrelevant," he says, "I was in politics a long time ago – 23 years. But I look back on the 1980s with great warmth. It was a good period. If I had my time over again I wouldn't do a single thing different."

Lena Corner

News
Jennifer Lawrence was among the stars allegedly hacked
peopleActress and 100 others on 'master list' after massive hack
Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
News
people'It can last and it's terrifying'
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
News
i100
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
Arts and Entertainment
The eyes have it: Kate Bush
music
News
Fifi Trixibelle Geldof with her mother, Paula Yates, in 1985
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Senior Asset Manager

£70000 - £75000 Per Annum: The Green Recruitment Company: Katie Robinson +44 (...

KS1 Teacher

£90 - £120 per day: Randstad Education Leicester: KS1 Teaching Specialist Leic...

Y3 Teacher - Loughborough

£90 - £120 per day: Randstad Education Leicester: Are you a Key Stage 2 specia...

KS2 Teacher

£90 - £120 per day + tax deductable expenses: Randstad Education Leicester: At...

Day In a Page

Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor