1979 - 1990 Flashcards
THATCHER: STYLE AND IDEOLOGY
What was Thatcher a striking example of?
A conviction politician
THATCHER: STYLE AND IDEOLOGY
What did Thatcher have a strong aversion to?
Consensus politics, her 11 years in power ended consensus
THATCHER: STYLE AND IDEOLOGY
Why was Thatcher angry at Heath?
Abandoning new right policies and going back to Keynesianism
THATCHER: STYLE AND IDEOLOGY
What did Thatcher hate?
State spending, inefficiency and low growth
THATCHER: STYLE AND IDEOLOGY
What was Thatcher’s large majority after the general election, and what did this mean?
43, meaning she could easily implement drastic reform
THATCHER: STYLE AND IDEOLOGY
What did Thatcher believe Heath did?
Pushed Britain further towards socialism then the Labour governments
THATCHER: STYLE AND IDEOLOGY
Describe Thatchers early life
- Born the daughter of a grocer 1925
- Chemistry and law at Oxford
- First female party leader and PM
- An ardent anticommunist
MONETARISM
Define monetarism
The theory or practice of controlling the supply of money as the chief method of stabilizing the economy
MONETARISM
What is monetarist view on unemployment?
Not worry about rising unemployment so long as inflation was kept low, because some unemployment is generally healthy for the economy
MONETARISM
Who was Thatcher’s 1st chancellor of the exchequer?
Howe
MONETARISM
What did Howe reduce the standard rate of income tax to?
33% - 30%
MONETARISM
What did Howe reduce the marginal rate for higher earners to?
83% - 60%
MONETARISM
What did tax on unearned incomes fall to?
98% - 75%
MONETARISM
To make up for the impact tax cuts had on government income, what did Howe do?
Increase VAT by 4%
MONETARISM
What were the results of Howe’s tax cuts?
The rich paid less tax, the poor paid more, and the cost of living went up
MONETARISM
What was Howe’s calculation
Cost of living going up caused inflation, but once this was fought off everybody would be better off
MONETARISM
What was Howe forced to do when inflation rose?
Raise interests to 14% June 1979 and 17% in December
MONETARISM
What happened to public spending under Howe?
It went in the wrong direction and people, aswell as businesses, were impacted
MONETARISM
Did inflation eventually come down?
Yes, and the 2nd chancellor of the exchequer Nigel Lawson remained true to tax cuts. However, the cuts in direct taxes were balanced by an increase in other general taxes
SUPPLY SIDE ECONOMICS
By mid 1980s what was largely abandoned?
Monetarism, in favour for supply side economics
SUPPLY SIDE ECONOMICS
Define supply side economics
Supply-side economics holds that increasing the supply of goods translates to economic growth for a country.
SUPPLY SIDE ECONOMICS
Give examples of supply side economic policies
- Reducing taxation to give greater incentive
- Encourage competition to lower prices
- Limit power of trade unions so they couldn’t block productivity or hinder modernisation
- Cutting wasteful welfare payments as a way of saving public money and reducing dependancy
DEREGULATION
Define deregulation
A concerted effort to remove financial and legal restrictions thatcher believed prevented efficiency and profitability in many areas of socio economic activity
DEREGULATION
Give examples of areas in the deregulation programme
- Finance
- Transport
- Education
- Health
DEREGULATION
How was finance deregulated?
Credit and exchange controls abolished
DEREGULATION
How was transport deregulated?
Bus companies denationalised
DEREGULATION
How was education deregulated?
Schools entitled to opt out of the state sector and become responsible for own financing
DEREGULATION
How was health deregulated?
Hospitals required to operate within an internal market by taking control of their own finances and matching needs to resources
HOUSING: THE RIGHT TO BUY
Define the housing act of 1980
Council house tenants could buy the house they were renting
HOUSING: THE RIGHT TO BUY
What did critics argue?
It undermined the principle of social housing and reduced the availability
HOUSING: THE RIGHT TO BUY
What did defenders say?
It provided poorer members of society the opportunity to own their own houses
HOUSING: THE RIGHT TO BUY
What did Thatcher view the right to buy council houses as?
The flagship of her economic policies. A further move towards Britain as a property owning democracy.
HOUSING: THE RIGHT TO BUY
What did this policy show about Thatcher’s economics?
Along w growing numbers ordinary people taking out building society accounts and becoming shareholders, it represented her belief in enlightened capitalism as the great bond which could unite all classes of society
HOUSING: THE RIGHT TO BUY
Was this a popular move among target audience?
Yes, by 1985 800,000 tenants had began to purchase property previously rented
HOUSING: THE RIGHT TO BUY
How many pp in Britain owned homes by 1990?
68% up 15%
PRIVATISATION
What was deregulation complemented by?
A policy of privatisation
PRIVATISATION
What did privatisation provide?
The state with extra funds, the policy aimed at increasing popular capitalism by giving much greater numbers of ordinary people the opportunity to become shareholders.
PRIVATISATION
What was the number of shareholders in Britain by 1990?
9 million
PRIVATISATION
What large enterprises were sold off?
British airways, steel, coal, and telecom
PRIVATISATION
What did financial deregulation encourage?
Banks and building societies to advance larger loans to their customers.
PRIVATISATION
What was the deficit by 1989?
£47 billion from £16 billion
INFLATION
What were interest rates used as?
A mechanism to control inflation
INFLATION
What were interest rates raised to in 1979?
17%
INFLATION
What did higher interest rates mean?
Made it more expensive for businesses to borrow
INFLATION
What did the government do to the £?
Made it more difficult for businesses to export
INFLATION
What did inflation initially go up to?
22% may 1980
INFLATION
What was the low of inflation?
2.5% 1986
INFLATION
What did methods of control lead to?
Recession
INFLATION
What did high interest rates n the early 1980s lead to?
Decline in both demand and output, economy went into recession w many businesses going bankrupt, leading to high unemployment
INFLATION
What did a 2nd recession lead to?
Eventual entry into the ERM
ECONOMIC REALIGNMENT
Even with the govs policies what happened?
Long term economic trends impact british industry
ECONOMIC REALIGNMENT
What were two issues for british industry?
Foreign competition and technological innovation
ECONOMIC REALIGNMENT
What was the shift in the British economy?
A move away from manufacturing to services. Thatcher embraced this change.
ECONOMIC REALIGNMENT
What was the downside of economic realignment?
In areas where people had never known different, there were painful adjustments. Sharpened NS divide.
ECONOMIC REALIGNMENT
What can economic realignment further be seen in?
The urban decay of many city centre areas. There were increased problems of alcohol, depression and drugs.
ECONOMIC REALIGNMENT
Where was focus shifting to?
London and the South, Howe told Thatcher in 1981 cities such as Liverpool could be left to ‘manage decline’
ECONOMIC REALIGNMENT
In 1981 April - July where were there riots?
Brixton, London, Birmingham, Liverpool, Leeds
ECONOMIC REALIGNMENT
Describe the Scarman Report
Commissioned to examine the causes of riots and it identified poverty and race as a key component.
ECONOMIC REALIGNMENT
What were areas of rioting suffering from?
High levels of unemployment and deprivation. This was exacerbated by the ‘sus law’ which unfairly targeted BAME groups
ECONOMIC REALIGNMENT
When were there further riots?
1985
UNEMPLOYMENT
Was unemployment seen as an aim?
No, instead British industry had to be prepared to be more competitive and this meant higher levels had to be accepted.
UNEMPLOYMENT
Describe monetarist impacts on industry
Many industrial plants closed permanently, worst hit areas were Midlands, the North, central Scotland and South Wales
UNEMPLOYMENT
What did some call Thatcher’s policies?
The deindustrialisation of Britain
UNEMPLOYMENT
What did manufacturing output fall by?
15% in 2 years, in the West Midlands this was 25% and steel production alone was 30%
UNEMPLOYMENT
What did unemployment rise to by 1983?
Over 3 million, highest of the post war period
UNEMPLOYMENT
Describe schemes introduced
Youth employment scheme subsidies for young workers, and lower national insurance rates for employers
UNEMPLOYMENT
Were schemes introduced any good?
No unemployment didn’t even go under 3 million until 1987
UNEMPLOYMENT
Where was unemployment the highest?
Areas reliant on heavy industry such as Liverpool (25%)
THE WESTLANDS AFFAIR 1986
What did this affair reveal?
Government divisions
THE WESTLANDS AFFAIR 1986
What was Westland?
A failing helicopter company. Defence secretary proposed to save by making part of a European Consortium
THE WESTLANDS AFFAIR 1986
What did the industrial secretary propose?
Have it taken over by US company Sikorsky
THE WESTLANDS AFFAIR 1986
Who did Thatcher back?
Sikorsky, defence secretary pushed to resign 2 weeks later
THE WESTLANDS AFFAIR 1986
What did the affair show?
Thatcher bullying her cabinet and not standing ground against America
NORTH SEA OIL
What did Thatcher do with NSO?
Privatise it, previously nationalised by Labour 1976
NORTH SEA OIL
What was the justification for privatisation?
Industry in relative long term decline
NORTH SEA OIL
What did critics say?
Gov squandered national asset for short term benifit
LABOUR IN OPPOSITION
Describe feelings within the Labour party by 1979
Both left and right wings disillusioned.
LABOUR IN OPPOSITION
Why was the left disillusioned?
The trade unions were antagonised by extensive periods of pay restraint, which bought them few benefits. Some, particularly skilled workers, voted Tory in 79. The left was also angered by it’s own inability to persuade the leadership to accept a radical plan of campaign
LABOUR IN OPPOSITION
Why was the right disillusioned?
It was increasingly isolated, and disaffected by the failure of revisionist policies, the parties lack of commitment to Europe, and the increasing determination of unions
LABOUR IN OPPOSITION
What did the economic recession between 79 and 82 do for the Labour party?
It strengthened the left. It was believed such deep a recession could mean that capitalism was on the verge of collapse, offer a socialist alternative. However, popularity grew with Falklands
LABOUR IN OPPOSITION
When did the disenchantment of the right of the party manifest itself?
When the ‘gang of four’ signed the limehouse declaration on 25th of January 1981, launching the birth of the SDP
LABOUR IN OPPOSITION
Who were the gang of four?
Roy Jenkins, Shirley Williams, William Rodgers, David Owen
LABOUR IN OPPOSITION
How many MPs joined the SDP?
30, 27 of whom had been Labour MPs
LABOUR IN OPPOSITION
When was the SDP liberal alliance formed?
Late 1981
LABOUR IN OPPOSITION
What did the gang of four contain?
Well-known, experienced, and popular politicians. The formation of the SDP is therefore a controversial subject within the Labour party
LABOUR IN OPPOSITION
Where did the SDP take support from?
Important sections of previous labour supporters and seriously damaged labours electoral chances. In the 1983 election it took a large share of the anti-thatcher vote
LABOUR IN OPPOSITION
Did the alliance do well at the 1983 general election?
Yes - winning 25% of vote compared to Labour’s 28%. However, first past the post, only 23 MPs
LABOUR IN OPPOSITION
To many observers what was the SDP for Labour?
A great benefit, forcing the party ‘back to sanity’ by bringing into the open how unselectable Labour had become
LABOUR IN OPPOSITION
Who was Labour leader in 1980?
Michael Foot
LABOUR IN OPPOSITION
Who ran unopposed as deputy?
Denis Healey
LABOUR IN OPPOSITION
Describe Tony Benn vs Denis Healey
Benn challenged Healey for the deputy leadership, Healey won, but it emulated the left right divisions
LABOUR IN OPPOSITION
What was Foot’s manifesto dubbed?
The ‘longest suicide note in history’
LABOUR IN OPPOSITION
What did Foot’s manifesto call for?
- Unilaterism
- Withdrawal from the EEC
- Direct control over bank lending
- Minimum wage
- Hunting to be made illegal
IMPACTS OF THE 1983 ELECTION FOR LABOUR
Who replaced Michael Foot as Labour leader?
Neil Kinnock
IMPACTS OF THE 1983 ELECTION FOR LABOUR
What occurred when Kinnock became leader?
A wide-ranging policy review
IMPACTS OF THE 1983 ELECTION FOR LABOUR
What did Kinnock denounce at the 1985 party conference?
Militant tendency councillors
IMPACTS OF THE 1983 ELECTION FOR LABOUR
What did Kinnock do in many ways?
Sacrifice his own political career by carrying out so many U turns. Lost trust. Replaced by popular John Smith who died very unexpectedly in 1994.
IMPACTS OF THE 1983 ELECTION FOR LABOUR
What was Kinnock?
A turning point for Labour’s fortunes. He was left but realised the hard left policy was not going to lead Labour back to power.
IMPACTS OF THE 1983 ELECTION FOR LABOUR
What did Kinnock believe about reform?
It was necessary for Labour to be elected. Roy Hattersley from the right of the party became his deputy
IMPACTS OF THE 1983 ELECTION FOR LABOUR
What was Kinnock’s strategy from the outset?
To regain power for Labour. This meant a shift to the right - a discussion was started on how to manage prosperity better. A radical change was not needed but a more egalitarian distribution of the surplus which capitalism produced. Revisionism was therefore back on the agenda
IMPACTS OF THE 1983 ELECTION FOR LABOUR
Why was the miners strike a major problem for Labour?
It split the party and bought the leadership into a bad light. It bought the end of deep mining in Britain and many of these communities had been traditional Labour supporters. In the long term, however, arguably a benefit for labour leadership as it was a lesson in the need of moderation and caution.
IMPACTS OF THE 1983 ELECTION FOR LABOUR
Describe militant tendency
Became a revolutionary party within the party