On 28 November 1990, Margaret Thatcher left Downing Street for the last time. Speaking to a crowd of journalists, she described how she was proud to have left ‘the United Kingdom in a very much better state than when we came here’. The never-ending debate on Thatcher’s legacy is constantly reviving itself, and many of her actions have been discussed to death; one area that goes broadly untouched, though, is her economic legacy.

It seems to have been widely accepted that Thatcher was the saviour of the economy. The narrative tends to go something like this: she might have caused damage to communities across the country, from coal miners to LGBT people, but that can be excused given how well she managed the economy. That narrative is far from the truth.

It’s undeniable that the UK economy had its fair share of problems when Thatcher came to power. Inflation had risen above 25%, which forced Britain to seek a bailout loan from the IMF, and the government and trade unions were constantly at odds. Change was needed. But it’s easy sometimes, when looking at history, to assume that what did happen is what needed to happen. Thatcher’s policies in fact had a disastrous effect on the UK’s economy and its workers, both then and to this day.

For one, economic growth slowed under Thatcher. Annual real GDP growth per capita in the UK fell to 2.09% during the 1980s and early 90s. Since Thatcher’s rule, each subsequent government has underperformed its predecessor in terms of growth. Household income lagged behind GDP for most of the country, with incomes falling for the poorest. Household debt increased from 37% to 70% of GDP as people began to rely on credit to spend money; this same household debt would go on to worsen the effects of the 2008 financial crash. Unemployment hit 9.5% by April 1984 – the highest joblessness rate in postwar history and far above some of the highest estimates for the unemployment likely to be caused by Covid. None of this suggests a healthy economy.

Thatcher’s policies also helped to wipe out 15% of the UK’s industrial base in just a few years. Previously stable jobs in mining, manufacturing, steel and more disappeared, and with that came the deaths of the communities that relied on those jobs. In Thatcher’s first two years in power, Scotland lost a staggering 20% of its workforce. De-industrialisation disproportionately hit the North, the Midlands, and the home nations other than England – places that the Prime Minister then failed to invest in or support to develop new industries. It goes without saying that abandoning whole swathes of the country has dire consequences. These regions were on the receiving end of soaring poverty and deprivation that has lasted for decades. They’re the same areas being promised the tenuous chance to ‘level up’ by Boris Johnson.

In addition, Thatcherite policy caused a huge rise in inequality. In 1979, Britain was at a postwar peak of economic equality, with just 21% of total income going to the top 10% of earners. By 1991, the gap between the richest and poorest had hit a record high. You could defend this kind of inequality if it meant everyone was getting richer, just at different rates, but under Thatcher incomes soared for the wealthiest and fell for the poorest. This isn’t just a moral issue; as a general rule, money concentrated in the hands of the wealthiest is less likely to be spent and generate economic growth than money spread more equally across society.

Thatcher also undercut trade unions with an array of laws that made it harder for workers to strike, restricted where they could picket, and limited the ability to strike in solidarity with others. This had an obvious and disastrous impact on workers’ rights and welfare, and it undermined the vital role unions play in the economy as a whole. In 1979, when Thatcher took office, 82 percent of UK workers were covered by a collective agreement. That fell to 35 percent by 1996 and 26 percent today. These were not minor reforms to curtail union excesses – Thatcher drove a horse and cart through workers’ rights, and that is directly related to the increase in inequality we see today.

Famously, the ‘Iron Lady’ presided over a huge wave of privatisation. Government-run companies in everything from steel, oil, water, gas and telecoms were sold, while Thatcher also unleashed the earliest waves of outsourcing on the NHS. John Lister has already written about the latter problem in detail, and about how, even at the time, the ‘internal market’ led to slipping standards and exploitative contracts for workers.

Then there was housing. Thatcher’s government brought in the Right To Buy scheme in 1980, which allowed council housing tenants to buy their properties from their local authority. While the scheme led to a short-term financial boost, it also dried up the government’s supply of social housing. Matched with declining housebuilding and an ongoing surge in cost of houses—house prices have risen by over 1000% since 1980—this has meant around 40% of young adults are now too poor to afford the deposit to buy even the cheapest homes in their area. From higher demand for housing benefit to social housing shortages, the cost of the policy is falling on local councils and their communities. Meanwhile, almost half of the homes sold under Right to Buy have been turned into private lets.

What does this all mean in long term? To put it simply, Thatcher created a weaker, more unequal economy. Whole regions were ‘left behind’ when their industries were battered, the gap between the wealthiest and the poorest soared, and government support for the worst-off was decimated. More than that, wages fell, growth fell, housing became less accessible, and spending was mismanaged. Future generations were left to deal with the fallout. Instead of funding government support or economic investments, Thatcher halved income taxes for the country’s wealthiest.

All this is despite the fact that luck was on her side. A boom in North Sea oil alongside a rise in the price of oil meant the government saw a £270 billion windfall in today’s money – roughly enough to cover the entire cost of running the NHS for the first eight years of Thatcher’s premiership. In countries like Norway, this type of fossil fuel wealth was used to create a sovereign wealth fund; under Thatcher, the scale at which oil was exported and the damage it was having on the exchange rate and the economy led one expert to warn at the time that it would have been better to ‘leave the bloody stuff in the ground’.

During her tenure, Thatcher repeatedly argued for a new ‘moral economy’ – in essence, individualist capitalism steeped in key conservative values, like marriage, family, and security. But under her premiership, the number of thefts per 10,000 people increased by 53% between 1981 and 1991 and the overall crime rate increased by 34%. Divorce rates rose by 11%, too, and while that may be part of a wider trend, it took place under Thatcher’s ‘pro-marriage’ leadership. The number of single-parent households sharply rose. Many economists have said that these changes were driven by the rising inequality and poverty of the 1980s. To put it simply: even by her own conservative standards of ‘family and security’, Thatcher failed.

And here lies the real problem at the core of Thatcherite thinking. It’s unlikely her government sought to undermine conservative values, but doing so was the inevitable consequence of an ideology that treats societies and economies as completely separate. Inequality is allowed to skyrocket without provision for the knock-on effect on people’s wellbeing. Unions are undermined without acknowledgement of their key role not just for workers, but for the economy. Whole regions are ravaged and then abandoned without thought for lasting cost.

Remembering that matters – not just for coping with the concrete political problems facing us today, but for how we understand them. For years, we have been sold a narrative which paints the Conservatives as the party of economic competence, despite a litany of failures that have both hurt working people and cost the economy dearly. This is all underpinned by the idea that Thatcher was an economic saviour and a moderniser. As we recently faced the largest crisis since World War II, commentators suggested that we might need to turn back to ‘competent’ Tory economic policies like austerity to cope with it all. If the Left wants to convince the country otherwise, we have to unpick the historical myths that underlie our world.