inequality“And you may ask yourself, “Well, how did I get here?” 

Last week’s poll by “Survation” on behalf of Best for Britain confirmed what has been increasingly obvious for a while, the era of Tory dominance that started in 1979 is over. 

The poll predicted a humiliating defeat. Labour would poll 45% of the votes and win 468 seats, with the Tories taking only 98, giving Labour a 286-seat majority. Even the PM’s constituency, the new Richmond & Northallerton seat in North Yorkshire, is deemed at risk. 

I doubt it will be this much of a slaughter, but it will clearly be a heavy defeat. 

Since 1980, the Tories have been in government for 31 of the 44-yrs. This is the first, and by no means the last obituary of their reign. 

Overshadowing all of this is one person, Margaret Thatcher. Who, without doubt, will be remembered as the defining politician of the era. 

Thatcher both defined and dominated the 80s, and the party was shaped by her monetarist beliefs, and reforms of deregulated capitalism. Meanwhile, Labour became less associated with economic equality, and turned towards multiculturalism and social liberalism, through Labour-run bodies such as the controversial but influential Greater London Council (GLC).  

‘Thatcher both defined and dominated the 80s, and the party was shaped by her monetarist beliefs, and reforms of deregulated capitalism’

These roles and identities have, despite being challenged periodically, subsequently osmosed, and have profoundly changed the country. Britain today is ever more accepting of diversity, and ever more damaged by market ideology. In effect, since the 80s, Labour and the Tories have each won one big, society-shaping, battle. 

Going forward, for any substantive changes we need to see the demise of Thatcherism. Part of this must be exposing the many myths built up around her. One of her defining policies was “Right-to-Buy”; whilst this created a new breed of homeowners, the problems it bought are still felt today, as was discussed last week, in “A game of Two Halves”. 

There is the myth that she injected a new entrepreneurial dynamism into the British economy. Whereas, in reality whole sections of manufacturing industry were damaged or even destroyed by her early flirtation with monetarism. In the end, Thatcher resorted to membership of the European single market in 1986 as a means of attracting crucial overseas investment from countries such as Japan, who valued their access to the wider European market from a safe base in the UK 

Alas, this wasn’t to last, and was killed off by a campaign based on fiction during the ill-conceived Brexit referendum of 2016. 

The Resolution Foundation estimates that post-Brexit trade barriers are equivalent to a 13% and 21% increase in tariffs for our manufacturing and service sectors respectively, and the OBR found that GDP is expected to be 4% lower.” 

‘post-Brexit trade barriers are equivalent to a 13% and 21% increase in tariffs for our manufacturing and service sectors respectively, and the OBR found that GDP is expected to be 4% lower’

Privatisation was another flagship policy. As the sunsets on Thatcherism it is fitting that the policy, via the ailing Thames Water, is seen for what it was. 

As a policy it made many small investors into stockmarket tycoons, albeit for a very short time. Thames serves to highlight the dangers of deregulation and modern day capitalism. The business has effectively been drained of capital and investment. The minority did very well, the majority are now paying for it both economically and environmentally with seas and river unfit for humans.     

Whilst I have discussed this subject many times, most recently in “For Whom the Bell Tolls”, an oft overlooked point is that, one of the many benefits of our membership of the EU was steadily tightening anti-pollution rules, which would have prevented water companies dumping raw sewage into our rivers. 

As a direct result of this pollution, waterborne diseases such as dysentery and Weil’s disease have risen by 60% since 2010 in England, from 2,085 in 2010-11 to 3,286 in 2022-23. 

Last week, Environment Agency data showed that raw sewage was discharged for more than 3.6m hours into rivers and seas last year – a 129% increase on the previous 12 months. 

‘raw sewage was discharged for more than 3.6m hours into rivers and seas last year – a 129% increase on the previous 12 months’

Alastair Chisholm, director of policy at the Chartered Institution of Water and Environmental Management, said: “Our research shows 86% of the public want water reformed under the next government. Our river crisis is not only impacting the health of nature, but it’s making people sick too. That has to change. We need urgent reform.” 

Aside from the scandalous dumping of raw sewage, there is our inability to retain water. Despite the last 18- months have been the wettest since records began, we could face water shortages and hosepipe bans if this summer is hot and dry,  

Leading scientists have said that because the UK is not storing its water properly, the country is vulnerable to the “all or nothing” rain patterns being experienced more frequently due to climate breakdown. 

There have been no new major reservoirs built in the past three decades, rivers have been engineered to move water quickly so it runs into towns and cities – causing floods – and the sea, and many wetlands have been drained and farmed or built on. This means the water that pelts the UK in winter is not being stored properly, causing floods followed by water shortages in summer. 

Jo Parker, a chartered civil engineer who has worked in the utility industry for 30 years, said “The amount of untreated water storage in this country is far lower than we need as there have been no reservoirs built for the last 30 years,” 

What Jo mean is, since privatisation no major reservoir were built in the UK. 

‘since privatisation no major reservoir were built in the UK’

Some argue that there is little incentive to invest in infrastructure such as reservoirs when a private company is trying to give as much money to shareholders as possible. England is one of the few countries in the world where water is fully owned by private companies. 

The desire to prioritise shareholders rather than invest in the infrastructure explains the pipe leakage of C. 1 trillion litres of water a year. Many pipes are Victorian and the rate of replacing them is so slow it would take 2,000 years to get them up to scratch at the current rate of repairs. 

In 1989, when the water industry was privatised, Thatcher wrote off £5bn of the water industry’s debts. Since then, shareholders have received £56bn while the companies have been loaded with a collective £60.3bn debt pile, leaving customers paying almost 20p in every pound to service debts. 

The most public miscreant is Thames water, which is so hamstrung financially that is almost certain to fail.  

Last week, investors pulled the plug on £500m of emergency funding amid a standoff with the industry regulator over attempts to raise bills, increasing the prospect that the heavily indebted company may be nationalised. 

Britain’s biggest water company has been lobbying the regulator, Ofwat, to increase bills by 40%, pay lower fines for breaches and keep paying out dividends. The watchdog has been examining the company’s business plan for 2025 to 2030, and Thames said Ofwat’s initial assessments of the plan make the company “uninvestible” for shareholders. 

‘Thames said Ofwat’s initial assessments of the plan make the company “uninvestible” for shareholders’

Michael Gove, the communities secretary, said Thames should not pass on higher bills to consumers. He added: “The leadership of Thames Water has been a disgrace. I think for years now we have seen customers of Thames Water taken advantage of by successive management teams that have been taking out profits and not investing as they should have been.” 

Since privatisation in 1989,  the business which is the biggest water and sewerage company in England serving 15 million people, has transformed from a debt-free public utility into a privately owned investment vehicle carrying the highest debt in the industry. 

During that time management, shareholders, and private equity owners have presided over decades of underinvestment, aggressive cost-cutting and huge dividend payments. 

It became a cash cow for investment firms and private equity companies, none more so than the Australian infrastructure asset management firm Macquarie which, with its co-investors, bought Thames Water in 2006 from the German utility firm RWE for £4.8bn. 

By the time Macquarie sold its stake in Thames Water in 2017, debts had more than tripled from £3.2bn to £10.5bn, unadjusted for inflation. Its pattern was to borrow against its assets to increase dividend payments to shareholders. 

After 2017, when Macquarie sold its last stake, debt continued to accrue. 


Macquarie and its co-investors made their position clear from the start, paying a dividends in the first year of their operations, 2007, of £656m out of profits £241m! 

Over their 11-years of control, Macquarie and its co-investors paid out £2.8bn to shareholders, 40% of the total £7bn in dividends paid out between 1990 and 2022. The average yearly dividends paid during the Macquarie period were 5x higher than those paid after it sold its final stake in 2017. The consortium that took over Thames Water in 2017 has not taken a dividend since, but the company has paid internal dividends – including £37m in the year to 31 March 2022. 


As a result, Thames now has a debt to equity ratio of 80%, against the 60% recommended by Ofwat. Debts total C. £14.3bn. 

Thames’s future could head in several directions, including a cash injection by investors; an administration caused by a cash crunch or enforced by regulators; a government-managed sale of the company, or a break-up into smaller companies. 

In short, the industry, starting with Thames, could revert to some form of state ownership. A fitting end to a very expensive failure, living proof that since 1980 capitalism has served the minority and the expense of the majority. 

‘living proof that since 1980 capitalism has served the minority and the expense of the majority’

In a way, it is a shame that last Tory PM of this era is the technocrat Sunak, rather than his predecessor, Liz Truss, who was a deluded free marketer. 

Recently, Truss, perhaps realising that there are no immediate prospects for her in the UK, has been looking more internationally, especially the US. 

Truss is a very poor Thatcher tribute act. Economically, she is a convert but one so zealous and with so little understanding that she cannot control her actions and thoughts. As we see with her disastrous mini-budget it was all-in. 

‘Truss is a very poor Thatcher tribute act’

The economy aside she is a populist, with a total self-belief that leaves her as both dangerous and deluded. She has total confidence that her ideals of secure borders, lower taxes and an end to burdensome environmental restrictions, are popular with a majority of the public, when the reverse is true. 

Nothing is ever her fault, even the economic disaster she bough upon us was defeated by people misunderstanding her ideas, and by a debilitating form of groupthink, based on a combination of ideology and lifestyle choice.  

The ideology is what she calls communism – by which she seems to mean state interference in the free market coupled with weaponised identity politics. The lifestyle is the old “Islington dinner party chic”. This ideology and lifestyle between them have infiltrated all the commanding heights of the media-legal-bureaucratic complex that runs the country. 

She describes all of this as the “deep state”; quangos, civil servants and law courts. Her economic plans failed only because the deep state set out to destroy them.  

The BoE had objected unnecessarily to her proposals at a time when monetary policy was tightening because of its own inattention to the risks of inflation; the OBR had leaked that it believed there was a £70bn hole in her forecasts without having done the legwork to cost them properly; the BBC and wider media had failed to challenge the quangocrats on these failures while mercilessly laying into Truss and Kwarteng. They were all on the same “London dinner party circuit”. 

Whilst there is no question that the establishment she rails against felt her ideas wrong, it was the reaction of the banks and the currency exchanges that did for both her and her plans. The irony here is that Truss has total faith in the wisdom of the markets. 

Undeterred she will tell anyone stupid enough to listen that markets per se weren’t against her, instead they were unduly influenced by some ideologically motivated media backchat. This simply contradicts her belief in the wisdom of the markets. The whole point of free-market economics, is that markets can see through to the truth.  

Today, £40bn later, she continues to insist that only immediate tax cuts, deregulation and supply-side reforms can rescue the moribund British economy. The markets clearly either didn’t understand her policies, or, more realistically, didn’t believe in them, which means either Truss was wrong in her prospectus for the economy or she is wrong in her faith in the markets.  

‘Scratch the surface and there is little of substance, other than naked ambition’

Truss clearly has issues, but if I had to narrow it down, it is her total lack of humility, and her seemingly unshakable self-belief.  

Scratch the surface and there is little of substance, other than naked ambition. She is reputed to have asked Nicola Sturgeon how to land an interview with Vogue. Politically, she much in-common with many populists, an opportunist of no fixed abode. 

Far from being an outsider who spoke truth to unaccountable powers, she is an insider, whose route to the top involved a series of ministerial roles in the Cameron, May and Johnson administrations, including as minister for women and equalities, where she championed LGBTQ+ rights. She opposed Brexit in 2016. She was once a LibDem.  

How do we summarise all of this? 

Whilst the first 17-yrs of this Tory eras were dominated by Thatcher the person, the past 14 years have been wasted trying to imitate her.  

Ironically, one of the few lasting triumphs of Thatcher’s era, our part in Europe’s free trade, was trashed when it could have been our way forward. Instead, the Conservatives gave us Brexit, an attempt to take a modern social democratic country back to the jingoism and Laissez  faire days of Victorian Britain.  

EU membership and the launch of the single market in 1993 provided significant stimulus for the UK, making it an increasingly attractive destination for multinational investors. The UK car industry was reinvented around European and Japanese car manufacturers investing in order to export to the EU. Financial services also boomed, with the City of London becoming Europe’s financial centre. 

By the eve of the GFC financial crisis, Britain was becoming a fully-fledged European economy. British investment levels equalled the G7 average. British household incomes were actually higher than in France or Germany. London in particular was becoming the New York of Europe. 

But not enough was done to ensure that prosperity was shared around the country, despite the European Investment Bank lending aggressively in Britain’s poorer regions. The UK’s deep problems – the corporate governance regime, the structure of the financial system, the propensity to create monopoly – were masked. But no leading politician and only a handful of businesses spoke up for the EU as a driver of prosperity – let alone how central it was to Britain’s destiny. 

Then we had the double whammy of the GFC and Brexit. The UK’s productivity deficit with France and Germany has almost tripled since 2008. Typical household incomes are now 16% lower in the UK than in Germany, and 9% lower than in France. The City of London is suffering accelerating decline. Had Britain remained in the EU, by 2030 we would have been an economy coequal, if very different, to Germany’s. As it stands, the post-Brexit decade will be a lost one. 

  • The years between 1979 and 1997 were dominated by Thatcher, even though John Major was PM from 1990 onwards. 
  • From 2010 we had a series of tribute acts, and political non-entities. 
  • The Cameron / Osborne axis bought only austerity which has led to much misery and inequality. 
  • Theresa May, poor lady never stood a chance! A remainer asked to deliver Brexit she didn’t believe in, with a party hell bent on behaving like public school hooligans. 
  • Boris Johnson came to define the modern Tory party. An opportunist of no fixed abode, who would say whatever the moment demanded irrespective of any thought for the truth. 
  • Liz Truss, what’s left to say? 
  • Rishi Sunak, technocrat, bucket-list man, married extremely well. As a PM, well……. 
  • The supporting cast were equally odious and too many to mention. But special shout-outs to that Victorian wannabe Rees-Mogg, and the evil racism of Messrs Patel and Braverman. 

However, there are two outliers who cannot be overlooked. 

Nigel Farage, who kept the Brexit fire burning, and did so much to push a terrified Tory party to the right of politics. Alongside him, I put Dominic Cummings the man who delivered both Farage’s Brexit, and Johnson’s populist electoral triumph of 2019. 

If the 80s gave birth to the Tories of monetarism and deregulated capitalism, whilst Labour moved on from economic equality to multiculturalism and social liberalism, the 2020’s have seen a new breed of voters, who I call national socialists. 

They are a hybrid of both parties, economically they are more inclined towards socialist ideals, but culturally they are right-wing, nationalistic and socially conservative. 

To serve them there are two options; either Reform or a reshaped, right-wing Tory party. 

To finish I have isolated three key dates;  9th August 2007, 24th June 2016 and the 23rd March 2020 

9th August 2007 was the day that BNP stopped redemptions on two of its credit hedge funds, and is arguably the day that the GFC began. The resultant fallout of zero interest rates, quantitative easing and austerity, exacerbated inequality that had been on the increase since 1980. For the few it was a beano for the majority it has just meant poverty, and falling living standards. 

24th June 2016, the day after the Brexit referendum which will impact the country for a generation, maybe more. 

23rd March 2020 was the day of the UK first Covid lockdown. It is estimated that C.7m people died globally, with a reported 232,000 deaths in the UK. The fallout from this is still being seen. 

All we have to do now is count the days…… 

“Fit for one who sits and cries 
For all tomorrow’s parties” 

A real treat from Philip, and who better to introduce it:

From a UK centric standpoint it’s a quiet week.

Elsewhere we still have terrible scenes in Ukraine and Gaza, and the Russian and Israeli protagonists continue to misbehave.

As such, I have decided to take the opportunity to write an obituary of the two series of tory governments that form an era. From 1979-1997, which, despite John Major being PM for the last seven year’s was very much the era of Margaret Thatcher.

The second series was more of a shambles, led by a series of wannabee Thatcher tribute acts with little, or nothing in their favour. During this time the party tacked further to the right, and by the time Johnson became PM in 2019, was a populist party.

I have considered Thatcherism economically, and also looked at privatisation, and the EU and Brexit.

The article says it all. IfI had to summarise Thatcherism, I would say that she had some good ideas but the execution was poor.

Right-to-Buy, had it been followed by continued building of council houses, could have been a success. As it was, it has led to a chronic housing shortage and fuelled inequality.

Economically, whilst closing down a failing industry might have made financial sense, there was no follow through. Areas dominated by industries such as steel and coal were left to rot and become ghost towns. Nowhere in the closure plans was what comes next.

Lastly, I have selected three dates that have defined the era; the GFC, Brexit, and Covid. Each was monumental, and, in differing ways, will leave a mark for years to come.

Apologies for such a self-indulgent piece of writing

Lyrically, we start in a somewhat reflective fashion with Talking Heads and “Once in a Lifetime”. To end we look to the future with the Velvet Underground’s “All Tomorrow Parties. Enjoy!


Philip Gilbert 2Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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