Thatcher's Big Bang is a distant memory under Burnham and Healey, says RUTH SUNDERLAND
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What a bitter irony that John Healey should deliver his deadening first Budget in the week of the 40th anniversary of Big Bang, the reforms that turned the City from a snobby, boozy male backwater into a global force.
Two weeks after Big Bang, Mrs Thatcher gave a speech at the Lord Mayor’s Banquet in the Guildhall in the heart of the Square Mile.
It is not remembered in the same way as her great rhetorical phrases such as ‘The lady’s not for turning’, but for economists it was a highly significant early statement of her vision of popular capitalism.
In her eyes, it went beyond economics and was a social and moral philosophy. The great reform of her time was to make more and more people owners, just as democracy and the right to vote had been the mission for earlier generations.
The opening up of the Square Mile went hand-in-hand with a wider transformation of the economy that lifted the pall of the 1970s. Her reforms included scrapping exchange controls, enabling the City to compete on a world stage.
The City wishes for a Prime Minister in Thatcher's mould, says Ruth Sunderland
Some 2.8m council and social homes have been sold under her right-to-buy reforms. Building societies, which previously had been operating a cosy cartel, were allowed to float on the stock market.
The privatisation of state utilities was, in the words of one economist, the largest transfer of power and property since the dissolution of the monasteries under Henry VIII. It served as a blueprint for the world.
Britain regained international prestige thanks to Mrs Thatcher’s relationship with Ronald Reagan. The Berlin Wall came down and liberal capitalism seemed to have won a decisive victory.
Plenty of people hated it at the time. Some, including Prime Minister Andy Burnham, hate it still.
There were unintended consequences: demutualised building societies were engulfed by the financial crisis.
Paternalistic final-salary pension schemes are heading for extinction in the private sector. Privatised utilities such as the egregious Thames Water have made fools of us all.
With fiscal drag pulling millions of modestly better-off people into rates meant for the rich, we can only hanker for Nigel Lawson’s great tax-cutting Budget of 1988.
Individual share ownership has dwindled and the City is a ghostly facsimile of its brash, buoyant Big Bang era incarnation.
Hiking taxes on banks will hurt growth, which Healey realises, even if some of his Left-wing colleagues do not. (Informed sources tell me the chief executives of High-Street lenders have been getting calls from the Treasury assuring them it is temporary and imploring them not to protest.)
The Chancellor could have scrapped stamp duty on share deals to lift City spirits. He could have given inheritance tax relief on pensions invested in the UK, as the Capital Markets Industry Taskforce has suggested.
Several chief executives I have recently spoken to say they wish for a Prime Minister in the Thatcher mould.
At the Guildhall 40 years ago, she said people need incentives, the freedom and dignity of ownership, the resources to support a family, a sense of security as they approach retirement and something to leave as an inheritance.
The strength of this creed is its simplicity. Her belief in the best instincts of the British people, for thrift, hard work and fair reward, remains the underpinning for a sound economy.
But with Burnham and Healey at the helm, we are less likely to have another Big Bang than an Epic Fail.
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