A Neoliberal Revolution? Thatcherism and the Reform of British Pensions

A neoliberal revolution? examines the Thatcher government’s attempt to privatise and individualise Britain’s pension system, thereby transforming workers into risk-taking savers with a stake in capitalism. The book explains why this revolution failed and charts the malign legacy left by the evolutionary reforms which ministers salvaged from it.

In the mid-1980s, Margaret Thatcher’s government attempted to revolutionise how Britons saved for old age. The widely-supported partnership built in the late-1970s between the state and employers would be swept away. In its place, a low-hanging state safety net would be set beneath a marketplace of privatised and compulsory personal pensions. Through these individual rather than collective investments, the state would reconfigure workers as capital-owning, risk-taking entrepreneurs with a personal stake in capitalism.

Yet, this revolution failed. Instead, the government hastily layered financialised personal pensions on top of existing collective institutions but made these considerably less generous or attractive. In doing so, ministers left the UK with the ‘worst of both worlds’.

A neoliberal revolution? uses recently-released records to trace this revolution’s origins, explain its failure, and chart the aftermath. The authors show Thatcherism to have been a surprisingly unstable political project and demonstrate the difficulties of marketising welfare states. The book presents new evidence of the role that neoliberal ideas played inside the Thatcher governments but also reveals the complex and contingent ways in which those ideas shaped policy. It argues that histories of neoliberalism must better explain how and why political actors pursued neoliberal aims through different forms of neoliberal policy change.

A neoliberal revolution? comes to the striking conclusion that the neoliberal vision of pensions actually implemented was salvaged from the ruins of a failed revolution, one defeated not by trades unions or political opponents but by the very financial services companies said to embody neoliberal capitalism.

This book examines the Thatcher government’s attempt to revolutionise Britain’s pensions system in the 1980s and create a nation of risk-taking savers with an individual stake in capitalism. Drawing upon recently-released archival records, it shows how the ideas motivating these reforms journeyed from the writings of neoliberal intellectuals into government and became the centrepiece of a plan to abolish significant parts of the UK’s welfare state and replace these with privatised personal pensions. Revealing a government that veered between political caution and radicalism, the book explains why this revolution failed and charts the malign legacy left by the evolutionary changes that ministers salvaged from the wreckage of their reforms.

The book contributes to understanding of policy change, Thatcherism, and international neoliberalism by showing how major reforms to social security could reflect neoliberal thought and yet profoundly disappoint their architects.