How Much do the Wealthy Have to Thank Margaret Thatcher For? - Spear's Magazine

How Much do the Wealthy Have to Thank Margaret Thatcher For?

An awful lot, says Freddy Barker, who interviewed Eamonn Butler at the Adam Smith Institute and Philip Booth at the Institute for Economic Affairs

Many say that Thatcher dying at the Ritz is apt given the wave of luxury that followed her eleven-year premiership. But just how much do HNWs owe the Iron Lady?

According to Eamonn Butler at the Adam Smith Institute, a lot, as the grocer’s daughter made life significantly better by working with Chancellors Howe and Lawson to abolish exchange controls, deregulate capital markets and cut top tax rates from 98% to 40%.

‘It was really brave stuff: 364 economists, the unions, the intelligentsia, the FT and 400,000 civil servants told her it would cause chaos. But in fact it created recovery and growth.’

Indeed, Butler’s thesis is echoed by Philip Booth at the Institute for Economic Affairs, another free-market think tank that Thatcher relied upon heavily.

The abolition of incomes policy, privatisation and trades union reform also helped create an environment in which business and investment could thrive, says Booth.

‘An indication of the difficulty of such radical reforms is shown by the fact that those areas of policy where she made little impact —health, education and welfare — still remain unreformed today at huge economic cost.’

Who knows how many millionaires Thatcher's free market policies created?

OPENING UP ANOTHER front, Booth says that inflation is a further arena that the wealthy have to thank Thatcher for, as chopping the RPI from 18% in 1980 to 5.9% in 1991 did huge favours to those dependent on savings.

To exemplify the challenge that inflation poses using 2012 stats, at the relatively low CPI rate of 2.8%, HNWs still needed gargantuan returns of 8.1% on £1 million investment portfolios if they were to live to the standards of the average two-worker family and maintain the purchasing power of their investments.

‘Without resolute action,’ says Booth, ‘inflation might have run out of control with devastating effects.’

Indeed, Thatcher not only made life better for the established wealthy, but she also created new wealth by privatising the moribund state-run industries and enabling the working classes to own their council houses, thus giving them an asset on which to borrow for investment.

As Eamonn Butler says, ‘Margaret Thatcher made life a lot better for wealthy people, but her purpose in that was to make life better for everyone. Who knows how many new millionaires her free market policies have created?’
 
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