As David Cameron prepares to embark upon his first cabinet reshuffle, parallels can be found in Margaret Thatcher’s radical 1981 reshuffle, also made in tough economic times.
The 1981 budget, called by its architect Geoffery Howe ‘the most unpopular budget in history,’ came as a surprise to the "wets” of Thatcher’s government who had not been consulted. Howe argued that only further aggressive cuts in public spending could revive the economy. £7 billion was to be extracted from the economy in taxes.
Thatcher’s criticism of party detractors was somewhat more direct than Osborne’s statement on Sunday’s Andrew Marr Show, "I read all these people coming up with different proposals of what we should do, quite often they are mutually contradictory." Her approach was to condemn them by name in public speeches. She said they lacked courage. They wanted increased public expenditure without the taxes which would subsidise it. Their proposed alternative was “to print the money...the most immoral path of all.”
A special cabinet, in which the wets were included, was held on 23 July for a discussion on the post-budget agenda. The cabinet was intended to be conciliatory. But the wets’ anger resurfaced when Howe proposed deeper spending cuts and even the 'dries' expressed opposition. Thatcher later said of the incident “I too became extremely angry. I had thought we could rely on these people [the dries] when the crunch came."
Faced with soaring unemployment rates, growing inflation and incessant public-sector strikes, Thatcher ignored the wets' calls to moderate her policies. Like Cameron, she refused to bow to her critics. She opted, instead, to purge the wets from the cabinet.
Exiles included Mark Carlisle, the education secretary, Christopher Soames, the Leader of the Lords, and the Lord Privy Seal Ian Gilmour. The secretary of state for employment James Prior, reputed by the press to be a conspirator, was sent to Northern Ireland. Norman Tebbit, who linked trade unions to “Marxist collective totalitarians”, was put in his place. Supporters of Thatcher’s monetarism Nigel Lawson and Cecil Parkinson were promoted to energy secretary and Paymaster General respectively.
Thatcher reshaped her cabinet into one more sympathetic to her economic agenda. By contrast, Cameron is expected to use this week’s reshuffle to placate the disaffected Tory Right who urge for increased tax and public spending cuts. Baroness Warsi in her role as party chairman is predicted to be replaced by a member of the party’s traditional wing, while Chris Grayling, Michael Fallon and Owen Paterson are thought to be in line for promotion.