(!) 5:17 The fall of Thatcher and the rise of Major Flashcards
The decline of Thatcher can be traced back to…
1987, when a number of problems began to surface
What was the problem with Thatcher’s economic policies?
> In 1987, the stock market crashed following the Big Bang, the deregulation of the City in 1986
> Thatcher’s Chancellor, Nigel Lawson’s policies led to the rapid expansion of the economy in the ‘Lawson boom’, which resulted in a balance of payments problem
> By 1990, inflation had risen to 10.9%, higher than in 1980. This was a significant problem, as this government had set its key economic objective as low inflation
What were the political problems in Thatcher’s later years?
> Many Conservative MPs feared defeat at the next election.
The loss of the seat of Eastbourne, which was previously thought safe, to the Liberals in the October 1990 by-election was especially alarming.
The Conservatives’ unpopularly was significantly due to…
the introduction of the Community Charge/poll tax
> Thatcher was strongly advised to drop the scheme, but she ignored this advice
> After the poll tax riot in March 1990, the government’s popularity in the opinion polls fell sharply
These problems helped to heighten…
divisions within the Conservative Party, over economic policies, Europe and Thatcher’s style.
By 1990, what was Labour’s situation?
Labour had evidently recovered well under Neil Kinnock and John Smith. Throughout 1990, it beat the Conservatives in opinion polls
Tensions in the Conservative government reached a peak when…
Sir Geoffrey Howe resigned from the government
> This resignation motivated Michael Heseltine, a long-standing critic of Thatcher, to take action
> He announced a leadership challenge
What happened in the first ballot of the leadership election?
> Thatcher got 204 votes against Heseltine’s 152
This meant a second ballot was needed, and initially Thatcher intended to continue. However, most of her cabinet ministers advised that she would not win.
Therefore, she resigned
What happened in the second ballot of the leadership election?
Douglas Hurd and John Major entered the race, with John Major winning with 185 votes
What was unique about John Major?
> He was very unexpected to become Prime Minister, as he was such an undistinguished figure: he had been in the Cabinet for just 3.5 years.
> He had a working class background, living in Brixton, did not attend higher education
> He was one of the youngest PM’s of Britain
Just 18 months before he became prime minister…
only 2% of the public had heard of him
Major said he wanted to create…
a classless society
What assumptions were made about Major when he became PM?
> That he would not last long as PM, since the Conservatives were now in their third term
That he would simply be a ‘caretaker’ PM, holding the position after Thatcher’s mess before a ‘proper’ PM would take power
That Thatcherism would live on under Major
Were these assumptions correct?
> Surprisingly, Major was PM for 7 years, making him the third-longest post-war PM in power
Rather than being a ‘caretaker’ PM, he made some important changes
What were the initial problems Major had when he became PM?
> He only had a majority of 21 seats, which was barely sufficient
> He has to deal with significant economic problems: 10% inflation, 12% interest rate - high interest rates seemed to have no effect on inflation
> He has to deal with the poll tax, losing opinion polls and Conservative party divisions
What happened in the 1992 election?
> Major had an unexpected victory, winning over 14 million votes. This was the highest number of votes ever gained by a British political party
What did the 1992 election prove?
> That Thatcher’s policies were still popular, but not her as an individual. The Conservatives could win without Thatcher, despite what some people thought.
> That Major wasn’t simply going to be a ‘caretaker’ PM.
What was the economic situation when Thatcher left office?
> 10% inflation
> Rising unemployment
> High interest rates - 12%, which were not effective at lowering inflation
Major’s government had inherited a difficult economic situation at the end of 1990:
> Declining manufacturing output
High interest rates
A steep rise in unemployment
Slump in house prices
From mid-1991 to early 1992, unemployment rose…
from 1.6 million to 2.6 million
Many homeowners were trapped in…
‘negative equity’ (having to repay mortgages that were higher than the current value of their home)
> many had their homes repossessed
> this affected traditional Conservative voters
With an election coming soon, what did Major’s government do?
Resort to high public spending
> half of this spending was forced, as a result of rising unemployment
> huge government borrowing was used for subsidies on transport and increased spending on the NHS
What happened within a few months of winning the 1992 election?
Britain was suffering an economic crisis and was forced to leave the Exchange Rate Mechanism (ERM)
This became known as Black Wednesday
Why was Britain forced to leave the ERM?
To stay, Britain was supposed to keep the pound above the lower currency exchange limit mandated by the ERM.
Britain’s inflation rate was too high.
When was Black Wednesday?
16th September 1992
How much did Black Wednesday cost the British government?
An estimated £3.3 billion
What were the other impacts of Black Wednesday?
> It put Britain into a recession; large numbers of businesses failed and the housing market crashed
> The value of the pound dropped by 20%
How was Major’s drop in the value of the pound compared to Wilson’s in 1967?
> Major’s, 20%; Wilson’s, 14%
Major’s was unplanned; Wilson’s was planned and necessary
How the the devaluation hurt the Conservative Party?
This was the most important outcome of Black Wednesday
> It gave them a bad reputation in the headlines
> They lost their reputation as ‘the party of the economy’
> Now had bad similarities to Labour; people now no longer trust them more than Labour
Black Wednesday caused negative equity:
> when a house or flat is worth less than the mortgage you took out on it
house prices go up, but mortgage prices don’t go up with them
Who was worst impacted by negative equity?
Homeowners, who mostly voted Conservative
By 2000, house prices had recovered, but…
this still hurt the Conservatives before the election; contributed to their loss
Why might Major be to blame for Black Wednesday?
He had already been in power for 2 years, some may have thought he could have prevented this
Why might Major not be to blame?
> 2 years in power was not long enough to prevent this
He had to deal with the problems inherited from Thatcher (10% inflation; 12% interest rates)
No one foresaw being kicked out of the ERM
How well did Major deal with unemployment?
Unemployment was on a constant decrease during his premiership, so making good progress
1992: 10.7% (highest)
1997: 6% (lowest)
How well did Major deal with inflation?
Well; although it peaked in his earlier years, it significantly dropped from 1992
1991: 8.7% (highest)
1994: just under 2% (lowest)
How well did Major deal with inflation rate?
He made it better, although could have been better
1990: 12%
From 1993: average of 6%
6% is still slightly high, 3-5% would have been preferable
How was GDP growth after Black Wednesday?
Good, consistent, stable growth: around 1% growth annually
What does ‘sleaze’ refer to?
Scandals that involve things like corruption, immoral behaviour, lying, extra-marital affairs
What is the impact of sleaze for a political party or government?
> It tarnishes a politician’s reputation
Causes a lot of media frenzy
Makes the party look less credible and trustworthy
People often argue a politician should be suspended, or they should resign
What was the Cash-for-questions affair?
Began October 1994
> Neil Hamilton and other Conservative MPs were accused of accepting money in return for lobbying (asking questions in Parliament)
> Hamilton refused to resign, which irritated Major
Hamilton tried to…
sue The Guardian for slander
What was the Back to Basics campaign?
Announced by Major at the Conservative Party conference in 1993
> intended as an appeal to traditional values such as ‘neighbourliness, decency, courtesy’
> however, interpreted as a campaign for socially conservative causes such as promoting the traditional family, though Major denied this
How did people react to the Back to Basics campaign?
> People thought Major was being harsh to some members of society: single mothers, homosexuals
> Hypocrisy, as Major was having an extra-marital affair
> A strongly anti-single mother MP was also having an affair
How did Major respond to the Cash-for-questions affair, in an attempt to resolve the reputation of sleaze?
He created the Nolan Committee of Standards in Public Life. However, nothing sufficient came out of it.
How did ‘Cash-for-questions’ affect Major’s government?
> The affair lasted for so long, so it kept ‘Tory sleaze’ in the news right up until the 1997 election campaign, which he lost
How did Back to Basics affect Major’s government?
> He gave them the label as ‘the party of morality’
> His government was now vulnerable to every personal moral disclosure
> Indeed, there was a series of accusations against Conservative politicians following this
How responsible was Major for the Cash-for-questions affair?
> He was not directly responsible since it was the actions of other politicians that caused it
However, he didn’t punish harshly for sleaze: he could have encouraged MPs to resign, or made a statement about scandals
Why might Major not have made a statement or punished harshly?
This could have harmed party unity
How responsible was Major for the Back to Basics issue?
> He has more responsibility here since he introduced the campaign
However, he can’t have predicted that these scandals would have come out after making the campaign
At the same time, perhaps he shouldn’t have conducted such a provocative campaign, and also, he himself was having an affair
Sleaze made Major’s government ripe for satire:
> TV shows targeted the government, criticised it
It gave writers something to work with
What impact did Back to Basics have on the Conservative Party itself?
It made some feel alienated due to their identity and damaged unity, e.g. Michael Brown on the basis of his homosexuality
What does the ‘nasty party’ refer to?
The idea of the Conservative Party being immoral, lacking in standards or not having care for the people
> traditional conservative stances such as being anti-gay, anti-minorities and lacking concern for the poor
After the Cash-for-Questions affair, Major…
created the Nolan Committee of standards, however nothing came out of this
How was Major’s overall response to sleaze?
Weak
> He himself was having an extra-marital affair
> He could have made statements apologising for scandals
> He could have encouraged MPs to resign
However, this could have harmed party unity
