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Rachel Reeves is cherry-picking Thatcher’s legacy – and not just the good bits

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Rachel Reeves talks of a 1979 moment - but some policies veer away from those that Margaret Thatcher would have approved
Rachel Reeves talks of a 1979 moment - but some policies veer away from those that Margaret Thatcher would have approved

Why is everyone talking about Margaret Thatcher? First the V&A labelled her a “contemporary villain” in an exhibit about Punch and Judy, then last night the Shadow Chancellor evoked her by promising a “1979 moment” in her Mais Lecture.

So which was this country’s first female Prime Minister? Britain’s abusive partner in a seaside puppet show or the woman who turned the country around? The answer, as with so much in politics, is a bit of both. The real paradox, though, is the logic dictating Labour’s recent embrace of the Iron Lady.

Because what the election of Margaret Thatcher in 1979 represented was not just the rejection of James Callaghan’s Labour government, but of the entire post-war socialist consensus.

As Dr Rainer Zitelmann has explained on these pages, Thatcher and her fellow travellers believed that the economic disasters of the 1970s – with rampant inflation, anaemic growth, political instability and countless days lost to strikes – was a direct result of the inexorable expansion of the state since the Attlee era. It’s astonishing to reflect that until the privatisations of the 1980s, the government owned not only airlines, freight and telecoms, but also a sugar company.

By acknowledging 1979 as an “inflection point”, Reeves is tacitly admitting that Thatcher’s changes were both necessary and, to a degree, successful. And while her speech last night included welcome references to “wide-ranging supply-side reform” she also promised a period of “active government… invest[ing] in the industries of the future”. This sounds worryingly like a return to “picking winners” and the failed economic model of the past.

Reeves may be taking the wrong lessons from history, but City PM readers should remember this: directly after the “1979 moment” Thatcher’s government tanked in the polls and the economy entered a recession. The reason a shadow Chancellor on the cusp of government is talking about her today is that, to some extent, she was vindicated.