4 graphs on Thatcher’s legacy: a richer but more unequal nation.

by Stephen Tall on April 11, 2013

A generation on, the Thatcher legacy continues to provoke and divide. One of the questions it poses for liberals is one this government is still wrestling with: does inequality matter if everyone’s getting richer?

Margaret Thatcher’s answer was that it did not — as she famously illustrated in one of her last Commons performances in response to a question from Simon Hughes:

(Click here to watch on YouTube.)

Here are three graphs which show the post-war record of governments, including Mrs T’s…

Yes, earnings did go up for everyone, including the poorest

thatcher - earnings_1
(Graph from Channel 4 FactCheck.)

And the UK’s wealth grew faster than in other countries

(Graph from John Van Reenen on the LSE Politics and Policy blog.)

But the poor were actually worse off if you include housing costs

(Graph from Jonathan Jones at The Spectator.)

And inequality widened dramatically

(Graph from Jonathan Jones at The Spectator.)

These are just four snapshots of Margaret Thatcher’s economic legacy. But they tell a story — of a nation which got richer but more unequal.

The poor were better off in absolute terms, worse off in relative terms. That’s a fact which gets to the heart of the dilemma which still causes friction in the Lib Dems: the tension between equality of opportunity and equality of outcome.

Does the job of government stop at offering the former (which is more or less the post-Thatcher consensus), or should it also try actively to deliver the latter?

* Stephen Tall is Co-Editor of Liberal Democrat Voice, a Research Associate for the liberal think-tank CentreForum, and also writes at his own site, The Collected Stephen Tall.

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