Chapter 6 - Thatcher and the end of Consensus
Terms in this set (57)
What was the result of the 1979 elecion?
• Conservatives - 13.6 M
• Labour - 11.5 M
• Liberal - 4.3 M
Why did the Tories beat Labour in 1979?
Previous Labour voters began to give their votes to the Tories, because:
• Labour failed to deal with inflation - Switch to Tories was a punishment
• Labour failed to deal with unemployment
• Labour failed to tackle the "Over mighty" Trade Unions
• Winter of Discontent - People's last view about the Labour party/ Symbollic for a decline in standards
Why did Liberal votes drop?
• Lib Lab pact - Accused of keeping Calaghan in office through their support
What were the results of the 1983 election?
• Conservatives - 13 M
• Labour - 8.4 M
• Liberal - 4.2 M
Why was there another sucess for Thatcher in 1983?
• Victory of Falklands War - Sign of Britain's greater confidence, gave Thatcher a personal appeal.
• Weak opposition - Disastrous split in Labour! Michael Foot (new leader) lacked an assured manner, had old fashioned policies - Manifesto described as "Longest suicide not in history"
What were the results of the 1987 election?
• Conservatives - 13.7 M
• Labour - 10 M
• Liberal - 4.1 M
Why did Thatcher win a 3rd election in 1987?
• Factors that helped Tories win in 1983 less important, e.g. Weakness of labour policies/leadership, no "Falklands factor" or "Winter of Discontent", but...
• Policies were approved and economy was doing well
• New Labour Leader KINNOCK has little appeal, and Thatcher seems stronger
Reasons for Thatcher's victory over time - Why were people supporting her?
• Policies on selling council houses/ shares in privatised industries appealed to middle/working class voters
• People better off and had faith in the Government supporting their desire increase wealth and status
• Unemployment falling, and pound was strong
• Benefitted from split in the Labour party in 1983 and 1987
The Labour Party - Why was Thatcher in the lead?
• Michael Foot replaced by Neil Kinnock - Criticised left wingers and brought them back to centre
• Labour gained 1.5 M more votes than in 1983 & 20 more seats
• However, Kinnock's style didn't appeal to many voters - Long winded speeches
• Thatcher seemed to be stronger - Firm hold over her colleagues & growing reputation
What were some of the policies of traditional Government consensus since 1945? (What ideas have stuck since the end of the war?)
• Keeping unemployment low by Governmnet spending (Keynesianism)
• Nationalised industries were necessary to maintain esseential sevices - Coal, gas, electricity etc.
• Government should try to control prices and wages
• Make negociations with Trade Unions in emergency cases
Some of the conservative politicians wanted to challenge this, including Thatcher's key advisor
What were Thatcher's main points for
economic policy/ Thatcherism
• End inflation - Belief in Monetarism
• Lower taxes
• Privatisation/ denationalisation
• Increase power of Central Government
What were Thatcher's views on inflation?
• Economic recovery depended on conquering inflation
• Inflation hit social stability by eroding middle class savings/ Causing strikes for higher wages
• Made British industry over priced
• It was a harmful result of "Keynesinism"
How did Thatcher want to tackle inflation?
She was prepared to tackle high levels of unemplyment to bring it down - Howe and Thatcher were prepared to create an "economic slump" in order to kill inflation
What were Howe's Taxation policies?
• Cut Government expenditure
• Reduce Governmnet borrowing
• Increase taxes
Economic problems (as a consequence of the conquering of inflation)
• Rate of price rises reduced to 4.5% in 1983
• Manufacturing output fell/ firms out of business
• Unemployment more than doubled between 1979 and 1983 to
over 3 million
• Government not helping industries that faced problems
• Value of the £ increased, so exports were more expensive
What is monetarism?
The belief that inflation is
caused by the amount of money in the economy
. Governments should
reducing public spending
instead of controlling wages/prices
When were the inner city riots? Where were the 4 main ones?
• Brixton, London
Causes of the riots?
• Serious social/economic problems (Caused by tackle of inflation!!!)
• Racism - Black people being stopped by the police, racial tension
• High unemployment
• Poor housing
What was Thatcher's views on the riots?
• Law and order issue
• Believed the riots were caused by young people getting into trouble out of bordeom
• Thiught young people should be constructive - cut grass, clean up etc.
Did not believe her economic policies were to blame
Evidence that the Government's tough policies were working?
• Although unemployment continued to rise,
growth rate and productivity in recovery by 1982
• Wage demands and inflation
stronger ones thrived
What did people blame mass unemployment on?
The reduction of Government spending (in the mid 80's)
What were Thatcher's policies on Privatisation?
• After 1983, Britain sold its state owned enterprises into private hands (privatised them)
• Thatcher thought privatising was "Fundamental for improving GB's economic performance"
• She believed nationalised industries wer inefficient and would be better when out of Government hands
immensely popular with share holders
• 3 million private shareholders in 1979, almost 11 million in 1990!
• However it caused the value of shares to climb
Examples of industries privatised by Thatcher...
• British Petroleum
• Cable and Wireless
• Enterprise Oil
• British Gas
• British Airways
• Rolls Royce
• British steel
• British Telecommunications
What were Thatcher's policies on Tax cuts and deregulation?
• Lawson continued Howe's policies of shifting revenue from direct to indirect taxes, reducing tax rates
• Inheritance tax reduced, British incomes were more lightly taxed
, e.g. VAT, Petrol tax
What happened in the "Big Bang" of October 1986?
Regulations, which made it difficult for London's financial markets to compete with foreign banking centres, were abolished - "Big Bang" (referring to creation of the Universe) because expected increase of trade.
What were the policies (the "Lawson Boom") doing to the classes?
Gap between high earning, thriving financial sector based in London, and the depressed areas of traditiional industry and mining in South Wales/Scottland/ Noth England, was
Economic record of Thatcher Government - Sucesses...
bringing down inflation
Privatisation improved performance
, and it
s* (consumers had more choice)
of London ensured it remained at the
centre of the global financial market
Extension of shareholding
gave many more people a
stake in the sucess of the economy
Economic record of Thatcher Government - Failures...
• Economic sucesses of the 80's came from
bonaza of the North Sea
a* not Thatcher's policies
• Too many privatised services were being run for the profit of a few big shareholders instead of in the interest of the customers
• Deregulation in London encouraged selfish
"Get rich quick" attitude
badly with unemployed/
e* in society
• Social cost of policies - Outweighed the benefits
What were Thatcher's main points for
• Council house sales
Proposals for the NHS
• Hospitals have self governing NHS trusts in control of their own budgets
• NHS services expected to compete with one another
• GPs became fund holders with their own budgets
These changes helped NHS with financial discipline
Proposals for schools
• O Levels and CSE replace with GCSE in 1986
• Governemnt introduced national curriculum with regular national testing
• Schools could control their own budgets
Concerns about school proposals...
• Thatcher thought GCSE would lead to lowering standards
• GCSEs said to be not strict enough
• Schools could control their own budgets - Government being lazy?
Proposals for Universities
• Budget cuts in 1981 - Universities needed to accept more students
• University funding Council - Ensured Uni education reflect the needs of the economy
• Government removed polytechnics - higher institutions specialising in vocational courses
Changes were contoversial - Oxford refused to grant Thatcher an honoury degree
Proposals for council house sales
• "Property owning democracy"
• She wanted to reward those who shared the values she admired - hard work, self reliance, etc - by allowing them to own their own homes
• Believed owning property gave people stake in their communities/ reduced support for socailism
Thatcher and industrial relations - How did she tackle the Trade Unions?
Learnt from 1971 Industrial Relations Act
t* - Had a different strategy:
• 1980 Emplyment Act - Banned secondaary picketing and increased the rights of employees who didn't join a union
• 1982 Employment Act restircted sympathy strikes and allowed closed shops if supported
• 1984 Trade Unions Act - Secret ballots before taking industrial action
What was happening to "working days lost" figures?
Went down from
29.4 M in 1979
2 M in 1990
Why were working days lost decreasing?
• People knew that if they striked they could be easily replaced - High unemployment, spaces to fill
• Trade Union membership was decreasing due to Thatcher's policies, so it was hard for unions to take strike action
When did working days lost rise rapidly? Why
Rose to 27.1 M in 1984 due to the Miners strike
Reason behind Miners strike 1984 - 85...
• National Coal Board facing a loss of £250 M between 1983 and 1984
• Government refused to support loss making nationalised industries - 20 pits were closed
• Mining unions sucessfully challenged Heath's Government - Wanted to try again
Why did people support/sympathise with the miners?
• Dirty/ Dangerous job
• Traditional way of life - clsoing the pits would destroy villages
• Close communities
Why did people support/sympathise with Thatcher?
• Preventing the unrest that had characterised the 70's
• Making the coal industry economic
• A Law and Order issue
Why was the strike defeated?
• Miners not united
• Strike was held in spring and summer when there was a less demand for coal anyway
• Leader of the Nation Union of Mineworkers (NUM) Arthur Scargill not supported - seen as an extremist
• Despite widespread sympathy, violence on the picket lines meant people stopped supporting
What was the impact of the miner's strike?
• NUM membership dropped
• NUM left bankrupt
Divided opinion about Thatcher
though she was
in forcing the miners to come to terms with the fact that
most of their industry is unsustainable
and showing that
Government couldn't be defeated by Trade Unions
believed she willingly
destroyed livelihoods and historic communities
Why did Thatcher find it tough to manage her cabinet to begin with?
• Gender - Controversial
• Limited experience of Government
• Conflict with "one nation" Tories ("wets")
Tory disagreements/growth of opposition in cabinet...
Thatcher's leadership style causing tensions in the party because:
• She was confrontational
• She didn't seek compromise
• Most Tories believed in the idea of "One Nation" conservatives
• Fallouts (Nigel Lawson and Geoffrey Howe)
• Howe's resignation - IMPORTANT in Thatcher's downfall
Thatcher in the eyes of...
• Determined, clear sighted leader, confident
• A clear and needed set of principles "Thatcherism"
• Brought about financial dispiline, privatisation, deregulation, council house sales etc -
People benefitted massively
• Personal toughness
• "You turn if you want to; The lady is not for turning" - Unlike Heath and his U Turn, she shows strength
• Focus on Falklands War Victory in 1982
Thatcher in the eyes of...
• Contoversial from the start
• Direct to indirect taxation - criticised for hitting the poor
• Those who lost their job in industries hit hardest by her policies
• Created a culture of vulgar greed "Get rich quick" - Only benefitted the rich
•Cardboard cities -Desperate and homeless people all in one place
• "There is no such thing as society" - Heartlessness!!!
Why did Thatcher resign as PM in November 1990?
• Impact of the
withing cabinet about
policies towards Europe
• Her growing
• Government had been charging "rates" since 1925 - Tax on the owners of property and business
• Over half of local electorate not paying rates - Unfair system
• Hence, beginning of community charge, aka "poll tax" -
Original rates replaced with flat rate tax on every person ,despite clath, weaalth and status
• Cabinet and many Tory MP's opposed poll tax - Knew it would be hugely unpopular!
Public reaction to Poll Tax...
• First introduced in Scotland - Refused to pay it as suggested by SNP
• March 1990 - Masses of
became violent riot
• 300 arrested & 400 policemen injured
warnings from cabinet and minsters
Thatcher still went ahead with it -
suggests her style is dictorial and ineffective
Divisions over Europe...
• Countires of the EU want closer economic reunion
• Want to set up ERM to minimise exchange rates
• Howe and Lawson kee to join ERM to
end constant change to interest rates
- Believed it would
undermine British supremacy
• Thatcher reluctantly agreed to join in 1990
Why did Nigel Lawson resign in 1989?
Thatcher's resistance to ERM - Sick of her lack of compromise?
Why did Geoffrey Howe resign in 1990?
Disliked Thatcher's anti European speeches & her strident tone - His resignation speech caused a commotion by criticising Thatcher for not wanting to join ERM
Economics difficulties in 80's...
Stock Market Crash, 1987
7*, wiped 24% off the share
• Lawson reduced income tax - This
increased consumer spending
- Tried to reduce it by
raising interest rates
REACHED 15% BY OCTOBER 1988
y* for the houses they were once encouraged to buy
• People no longer convinced Thatcher could bring about an "Economic Miracle"
What 3 main problems did Major face when he became PM?
• He lacked authority
• The conservatives were divided about Britain's role in Europe
• Labour Party was revitalised
Why did he lack authority of the Conservative party?
• Only elected MP because they didn't want it to be Heseltine - He was blamed for Thatcher's fall from power
• Lack of experience
John Major summary
• He unexpectedly won the 1992 election, but with a
much reduced majority
. This gave conservative backbencher's more influence and the
growing divisions of Europe seriously weakened him
witness a landslide
. The image of Blair contrasted with that of Major, and people
ready for change
18 years of conservative rule
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