Margaret Thatcher secretly entertained proposals to privatise the NHS and end of welfare state

Margaret Thatcher - Image credit: PA Images

Margaret Thatcher secretly pursued a plan which proposed ending the NHS, despite claiming the health service was “safe with us,” newly released Treasury documents have revealed.

Other proposals drawn up by Whitehall advisers included dismantling the welfare state and ending public funding for higher education.

A plan commissioned in 1982 by the former prime minister and her chancellor Sir Geoffrey Howe proposed introducing compulsory health insurance and a network of private medical facilities to replace the NHS.

The proposal by the Central Policy Review Staff said it “would, of course, mean the end of the National Health Service,” according to the newly released papers.

The plan, alongside the proposal for the benefits system and universities, nearly caused a “Cabinet riot,” according to Nigel Lawson's memoirs, while Thatcher's own account claims she was “horrified” and never seriously entertained them.

Downing Street insisted it had been “shelved” after it was partially leaked to the press, but the new documents show Thatcher had far from ditched it.

She intended to hold a series of meetings after three key by-elections were out of the way “to soften up the big three spenders” and “resolve any immediate political anxieties”.

That was despite Howe having previously warned: “Every proposal will be seized on and hung (round) our necks.”

But he was told, ahead of the meetings: “Your main aim, I suggest, should be to ensure that no sacred cows are prematurely identified. Given the prime minister’s concern about the NHS, this may be difficult. 

"But we want to make sure that the ministers concerned do not close off any options at this stage, and, if possible, put their personal weight behind the exercise.’’