Peter Cuthbertson: How would the 1990s have been different if Thatcherism had continued under a Tebbit premiership?

Peter Cuthbertson wrote the Prime Minister Tebbit chapter for the book The Prime Ministers Who Never Were, released by Biteback today (RRP £15). The book is available for ConservativeHome readers for the special price of £12 plus free UK P&P. Please contact [email protected] to take advantage of this offer.

It is difficult to see how, if Margaret Thatcher had stood down after ten years in Downing Street, the then Chief Secretary to the Treasury John Major would have succeeded her as Prime Minister. Given the support of Thatcher and her followers, especially in the Tory press, it is more plausible to envisage her right-wing lieutenant Norman Tebbit stepping up to continue her legacy.

It is impossible to know the exact implications of this alternative history, but informed speculation helps understand what actually did happen. Some of the broadest implications of this history are clear, and in my chapter for The Prime Ministers Who Never Were, I write this history.

Most important, it is unlikely that Prime Minister Tebbit would have felt forced, as Thatcher was in 1990 by her Chancellor, to take Britain into Europe’s Exchange Rate Mechanism. A policy of freely floating exchange rates would not necessarily have prevented the recession of the early 1990s. After all, Nigel Lawson’s policy of shadowing the Deutschmark had led to high inflation, which the government rightly fought with higher interest rates. But the insanity of the ERM policy was the way it forced Britain to retain those higher interest rates long after both inflation and economic growth rates had tanked. A much more brutal recession than necessary ensued. In combination with Black Wednesday, when Britain was ignominiously forced out, the ERM did enormous and entirely preventable damage to the Conservative Party’s reputation for economic competence. A little more euroscepticism would have saved countless jobs – including those of many Conservative MPs!

A few still defend the ERM on the grounds that it might have worked if only Britain hadn’t entered at the “wrong rate”. This argument largely concedes the whole argument for freely floating exchange rates: that the right £/DM rate in late 1990 is unlikely to be the right rate two years later. It is also utterly fanciful to believe any government could have anticipated what the right exchange rate would be in 1992, forced sterling down to this level in 1990, locked in that exchange rate, and made it work year after year.

A shallow, brief recession in the 1990s would probably have led to an election victory in 1991 or 1992 more on the scale of 1987 (with a majority of 101) than 1992 (with a majority of 21). Ironically, the economic consequences of a more Thatcherite leader than John Major could have ensured that a europhile MP like Chris Patten kept his Bath seat and had a flourishing career in the House of Commons.

It is also difficult to imagine that other great European issue of the 1990s, the Maastricht Treaty, being whipped through the House of Commons by Norman Tebbit. Two decades later, I struggle to think of a single benefit that Britain has derived from signing the Treaty (only a series of successor Treaties each more federalist than the last). But certainly the efforts to do so created painful and embarrassing divisions within the Conservative Party. The whole European federalist project could even have taken an entirely different direction had Britain joined the French public in saying No to Maastricht.

The Major Government should certainly be credited with its phenomenal success in bringing down crime. But I am inclined to believe that Tebbit could also have chosen a Home Secretary as capable, courageous and sceptical of the conventional wisdom as Michael Howard. Major was also electorally shrewd in moving away from the poll tax. Would Tebbit have been? Would he have reached such an agreement with his Cabinet?

Then there is Northern Ireland. Every year it becomes clearer that the Callaghan and Thatcher governments' determined military campaign worked. Dean Godson has demonstrated beyond reasonable doubt that IRA murderers came to the negotiating table in the 1990s because they eventually recognised they could never beat Her Majesty’s Armed Forces. A more robust Ulster policy by a Prime Minister whose own wife had been crippled by terrorists could have ensured a better peace process, in which moderate politicians on both sides continued to hold sway, while terrorists on both sides served their full sentences.

Then imagine ‘free schools’ fifteen years early – or how the Gulf War might have gone…

Buy the book to see my take – and the way in which thirteen other Prime Ministers who never were might have governed.

> Also on ConHome this morning: Nigel Jones: Who are the best Prime Ministers we never had?