“There is clear evidence that public spending worked, contrary to popular belief.” Nor did Labour overspend. It inherited “a large deficit and high public sector debt”, with spending “at a historic low” – 14th out of 15 in the EU.
Labour’s spending increased, and money was invested in public services and social programs, and until the crash was still “unexceptional”, either by historic UK standards or international ones. Until 2007 “national debt levels were lower than when Labour took office”.
After years of neglect during the previous Conservative administration, Labour inherited a mess: public services in very poor state, shabby and squalid public buildings and unforgivably neglected human lives that formed a social deficit much more costly than any Treasury debt. Labour Ministers set about addressing the causes and devastating effects of poverty and social marginalisation. Both poverty and inequality had risen to levels unprecedented in post-war history.
This process accelerated during the 1980s. Unlike every other post-war decade, in which the benefits of economic growth had been shared across social groups, the economic gains of the 1980s disproportionately benefited the rich at the expense of the poor (Hills, 2004). Social inequality on such a gross level was not only the result of Thatcher’s policies, she celebrated it. She declared that inequality is essential to fostering “the spirit of envy” and hailed greed as a “valuable spur to economic activity”.
The “mess” that Thatcher left is verified by several longitudinal studies. Dr. Alex Scott-Samuel and colleagues from the Universities of Durham, West of Scotland, Glasgow and Edinburgh, sourced data from over 70 existing research papers, which concludes that as a result of unnecessary unemployment, welfare cuts and damaging housing policies, the former prime minister’s legacy “includes the unnecessary and unjust premature death of many British citizens, together with a substantial and continuing burden of suffering and loss of well-being.”