Margaret Thatcher is as divisive in death as she was in life. Many of Margaret Thatcher’s critics blame her for Britain’s current recession. The argument goes that she made Britain a more market-friendly place and so it became subject to the whims of unfettered capitalism. According to former Labour leader Ken Livingstone:
She created today’s housing crisis. She created the banking crisis. And she created the benefits crisis. It was her government that started putting people on incapacity benefit rather than register them as unemployed because the Britain she inherited was broadly full employment. She decided when she wrote off our manufacturing industry that she could live with two or three million unemployed, and the benefits bill, the legacy of that, we are struggling with today. In actual fact, every real problem we face today is the legacy of the fact that she was fundamentally wrong.
Many Britons are struggling in today’s economy. But it’s important to have some perspective. People may feel poorer today than they were a few years ago, but recall what pre-Thatcher life was like. The figure below is the 3rd, 5th, and 7th decile of real income in the UK starting in 1977:
Even low income Britons are better off today. Since 1977, median income increased nearly 33%; it’s up 57% for low-earners.British people have a higher quality of life in many ways. In 1975, only 43% of Britons had central heating in their homes and just 54% had a phone. Now they are universal.
True, the improvement was largely due to technology which made goods cheaper and more accessible to everyone. But Thatcher did contribute to improving Briton’s living standards. She made the UK market a more dynamic place where economic growth could thrive and benefit everyone. Her reforms laid the foundation for Britain to prosper and be an economic leader in the 1990s and 2000s. While Britain’s embrace of markets have made it more sensitive to the global economy, it also ensured London’s place as a global capital of finance and culture.
Thatcher’s legacy remains in the lot of Britons’ today.