Rachel Reeves is right to want to emulate Margaret Thatcher’s political revolution, though for the wrong reasons. It’s not the economy, stupid, but the politics.

During a set-piece speech in the City of London tonight, the Shadow Chancellor declared that Labour would usher in a “decade of national renewal” similar to the one which occurred, as she put it, at “the end of the 1970s”. For many in the Labour Party, speaking in such reverential tones of Margaret Thatcher’s record is a further sign of Starmerite degeneracy, even though Reeves also said that “unlike the 1980s, growth in the years to come must be broad-based, inclusive and resilient.”

Yet, in one obvious sense, Reeves’s critics have a point. The very notion that the 1980s amounted to a decade of national renewal is far less convincing than the widely-accepted narrative. As Duncan Weldon shows in Two Hundred Years of Muddling Through, another way of telling the Thatcher story is of a remarkably and unnecessarily deep recession at the beginning of her reign followed by an unsustainable boom, which was then succeeded by another deep recession at the end. “Hardly the best of macroeconomic records,” as Weldon puts it. “And yet it is the one that Thatcher’s prime ministership produced.”

In The Rise and Fall of the British Nation, David Edgerton makes a similar argument, pointing out that in pure economic growth terms, the Thatcher revolution was hardly as revolutionary as the myth suggests. “To be sure, from the depths of the early 1980s, the rate of growth was slightly higher than the post-war average,” Edgerton concedes, “but never enough to make up for the effect of the depression.” Rather like those championing Greece’s economic performance by somehow downplaying the fact that its economy contracted by 45% first, it is not credible to only measure the post-recession record of Thatcher’s time in office. As Edgerton points out, once this is taken into account Britain’s rate of economic growth was higher and steadier in the years 1948–79 than between 1979 and 2000.

As always, you can pick and choose the statistics to make whatever argument you like. If you measure 1981-88, Britain was booming. But if you widen the lens even slightly to take in the Thatcherite slump at the beginning, the average growth rate falls to 2.3% from 1979 to 1988. And that’s not even counting the recession that came at the end of Thatcher’s time in office. By 1990, inflation was back over 10%, prompting interest rates to hit 15% and unemployment to steadily rise back to more than 10% by late 1992. Hardly a decade of national renewal.

The problem with the Reeves framing is that it accepts the economics too quickly and does not put enough stress on Thatcher’s real skill: the politics. It is arguably too contrarian, too clever by half, to dismiss the 1980s as just another decade. This overlooks the sense that built up by 1979 that nettles were not being grasped and painful choices were being delayed, only extending the pain. Focusing on the years after 1979 ignored both the IMF bailout and the Winter of Discontent.

The truth is the Thatcher government differed from its predecessors by being willing to pay a much higher price for longer in order to impose its will — and the state’s authority. To do this it had to convince the public that the pain was worth it. This is part of the skill of leadership. You have to tell a story about why the country is in a mess and what is necessary to make things better, providing meaning for the pain to come. This is what Reeves’s framing lacks.

In George L. Bernstein’s The Myth Of Decline, the American economist takes a scythe to the very notion of Britain’s slow postwar slump, dismissing the framing of Thatcherite renewal in the 1980s. But he also points out that focusing too heavily on the raw numbers alone can also miss the point.

“Such arguments are reminiscent of those who claim that the New Deal of Franklin Roosevelt made little difference in pulling America out of the Great Depression,” he writes. “It may be true that Roosevelt’s policies had only a marginal effect on the massive unemployment of the period, much less on the moribund American economy… [but] the reality of what happened was much less important than people’s perceptions of what happened, and to the generation of Americans who lived through the Depression, Roosevelt transformed their experience of it.” Roosevelt made people believe they had some control over their plight. “This is exactly what Thatcher did.”

Thatcher’s skill was as a politician. She convinced the country it was in charge of its own destiny, that the pain would be worth it (though it would not be her voters who would feel the pain). Labour needs its own story with more poetry and fewer numbers — more myth, not less.

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Tom McTague is UnHerd’s Political Editor. He is the author of Between the Waves: The Hidden History of a Very British Revolution 1945-2016, due to be published in September 2025

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