|Margaret Thatcher was bold, single-minded, and – in the words of George Osborne – an “optimist about the human spirit”. Beyond that, though, she had what Napoleon famously believed was a great leader’s most essential quality. She was lucky.
The Chancellor, who is attempting perhaps the biggest structural reform of the state since Mrs Thatcher, must wish he had just a modicum of her good fortune. Tuesday’s batch of economic data provided a rude reminder of just how difficult life is for the Coalition, three years since the election.
The rebalancing of the economy towards exports simply isn’t happening. Goods exports have fallen by 7.5pc already this year. The eurozone crisis may be largely to blame, but British manufacturers are still struggling to get a toehold in the fast-growing emerging markets – despite a 20pc devaluation in the pound.
Exports to the BRICS in February fell by £178m – or 8pc – on the previous month, and were lower than last year too. Manufacturers may have enjoyed a resurgence in February, but it only partially reversed January’s losses. A triple dip looks like being averted, but only by a whisker.
Like Mrs Thatcher, the Chancellor is trying to transform the economy and, simultaneously, get the public finances under control. But Mrs Thatcher had a trump card. North Sea oil.
In her first four year term, North Sea revenues contributed £20.3bn to the exchequer – 8pc of the total £258bn of tax receipts over that period, official figures show. Today, as a proportion of the total tax take, that would translate into a £45bn annual windfall – a sum larger than the entire corporation tax bill. Instead, the oil and gas industry is forecast to contribute just £6.8bn this year, just 1.1pc of tax revenues. In the 1980s, the oil boom also supported 200,000 jobs and vastly improved the nation’s trade position.
North Sea oil provided Mrs Thatcher the cover to implement essential reforms to modernise Britain. Mr Osborne’s best hope came from the 4G spectrum auction and a sell-off of the state bank shares. 4G raised £1.2bn less than hoped, and the disposal of Northern Rock stock – the only financial sector exit to date – was priced at a loss. Making a profit from either Lloyds or RBS looks a very forlorn hope.
The Chancellor’s aims today are perhaps just as vital for long-term national prosperity as Mrs Thatcher’s were 30 years ago. Britain can not hope to return to its pre-2008 strategy of pinning economic hopes on rampant credit growth. Mr Osborne may have inherited a 21st century version of Mrs Thatcher’s problems. Now he needs a little of her luck.