Chapter 6 - Thatcher and the end of consensus Flashcards
When did the conservatives and Thatcher win a 43 seat majority?
May 1979
When were there inner-city riots in Brixton and Toxeth?
April and July 1981
When was the Falklands war?
April-June 1982
When did the conservatives win a 144 seat majority?
June 1983
When did the miner’s strike begin and end?
March 1984 to March 1985
When did Michael Heseltine resign in Westland affair?
January 1986
When was the ‘Big Bang’ in the city of London?
October 1986
When did the conservatives win a 102-seat majority?
June 1987
When was there violence at anti Poll Tax demonstration in Trafalgar Square?
March 1990
When did Britain join the exchange rate mechanism?
October 1990
When did Thatcher resign and who replaced her?
November 1990, replaced by John Major.
When did Poll Tax get replaced by Council Tax?
April 1991
When was the Maastricht Treaty signed?
February 1992
When did the conservatives win a 21 seat majority under Major?
April 1992
When was ‘Black Wednesday’ Britain leaving the ERM?
September 1992
When did Parliament ratify the Maastricht Treaty?
July 1993
When was Tony Blair elected labour leader?
July 1994
When was the conservative party leadership election won by Major?
July 1995
When did Labour win a 179 seat majority in the general election?
May 1997
What was Thatcher’s first government (1979-83) dominated by?
Economic issues. Thatcher brought ideas based on a firm belief of reducing state intervention and promoting private enterprise. She was determined to reduce inflation and believed she could do this by severely reducing the amount of money spent by the government combined with increased taxes and high interest rates.
Why did Thatcher’s government initially plummet in support?
A rise in unemployment to the highest post-1945 levels. There were criticisms of the policy in the cabinet and there were damaging inner-city riots.
How was Thatcher’s popularity restored?
Partly because the economy began to recover but mainly due to the win in the Falklands.
Why was Thatcher able to make extensive reform after 1983?
She had a huge majority of 144 seats after a landslide election.
What did Thatcher’s reforms after the 1983 election look like?
She privatised major nationalised industry and challenging some Labour-controlled inner-city municipasl councils. A series of laws between 1980 and 1984 reformed industrial relations, limiting the use of strikes.
How was the economy in the mid 1980s?
It was booming, in part due to deregulation of the City of London in 1986 and tax-cutting policies of the Chancellor of the Exchequer, Nigel Lawson. BUT unemployment remains higher that in preceding decades.
What reforms did Thatcher make after her third victory in 1987?
The government reformed schools and universities and brought in some changes to the NHS. She allowed tenants to buy their council houses still.
What was happening to cause difficulty in the end of the 1980s?
Inflation returned, there were disagreements among ministers about Britain’s relationship with the EEC. The government made the unpopular decision to replace local property tax with poll tax.
How much support did Thatcher have by Nov 1990?
She had lost the support of a sufficiently large section of her party, triggering a series of events that led to her resignation.
What style did John Major have?
He lacked her force of personality and had a less aggressive style.
What dominated John Major’s period in power?
Divisions over Europe. Major successfully negotiated some concessions for Britain in the 1991 Mastricht Treaty which committed the member states to a closer European Union. He won in 1992 with a reduced majority.
What reduced the confidence of the conservatives to manage the economy?
Humiliation of having to withdraw from the Exchange Rate Mechanism in 1990.
What did prolonged parliamentary discussions about europe show about the conservatives?
It showed deep Conservative divisions over Europe.
What are the factors you could use in a question saying ‘Why did Thatcher win three general elections in a row’?
State of the conservatives.
State of labour.
Shift of votes from the South and Midlands from Labour to Conservatives.
Liberal losing votes.
Falklands victory.
Anti-thatcher votes were split between Labour and Liberal-SDP alliance.
How did Thatcher want to change inflation? What did she think it caused?
Pre-thatcher, prices had doubled from 1973-79, she thought economic recovery depending on tackling inflation.
She thought it:
-Hit social stability as it eroded middle class savings causing strikes.
-Made British industry overpriced due to rising prices and wages.
-Reduced incentives and enterprise as higher prices led to higher taxes.
-Was fueled by government spending and a lack of effective control of the money supply.
-Needed to be controlled by reducing money in circulation, not other policies that had been ineffective.
What taxation policies did Thatcher and Chancellor of the Exchequer, Geoffrey Howe, have?
Significantly shifted the tax burden from direct to indirect taxation, this initially worsened inflation.
-VAT pushes up prices of goods,
As a result, Howe resorted to deflationary measures, he cut spending, cut gov borrowing, increased taxes.
He described his 1981 budget as the most unpopular in history.
What did Howe’s economic policies do to the economy?
They had a positive effect on inflation but also a negative downturn in the economy.
-Inflation down from 18% in 1980 to 4.5% in 1983.
-Manufacturing output fell 14% as many firms went out of business.
-Unemployment more than doubled between 1979 and 1983 to over 3 million.
-Government did not act to support industries which were facing problems.
-High interest rates which boosted overseas confidence made it difficult to repay loans.
-Value of £ increased which made exports dearer.
What was the social cost of Howe’s economic policies in the early 1980s?
April 1981 riots in Brixton and Toxteth in Liverpool - places of high unemployment, poverty and racial tension. Over next 3 weeks more riots in 6 other cities. Thatcher doesn’t accept policy is to blame.
What were the positives to Thatcher and Howe’s early economic policies?
Growth rate and productivity showed signs of recovery by 1982.
Weaker businesses were failing but stronger ones were thriving, wage demands and inflation falling and Britain was becoming more competitive, partly due to North Sea oil causing Britain to be a net exporter of oil.
How did Thatcher think that privatisation would improve Britain?
After the emphatic 1983 election win, Thatcher accelerated privatisation.
She thought it would be more efficient and would be better able to raise investment capital once out of government control. Also the revenue made could fund tax cuts and boost investment and enterprise.
How did privatisation have a positive impact?
It was immensely popular with those who bought the shares in the new companies, when she came to power there were 3 million private investors in Britain and by 1990 there were 11 million.
How did privatisation have some negatives?
The government tended to undervalue the assets of each industry being privatised, the value of the shares usually climbed steeply after issue, this encouraged many shareholders to sell their allocation for a quick profit and small shareholders were bought by big financial operations.
What effects did tax cuts under Lawson have?
1983-89.
Continued Howe’s policy of shifting revenue from direct to indirect taxes, reducing further both the top and basic rates of income tax, capital gains and inheritance tax also decreased.
HOWEVER, indirect taxes such as VAT, petrol tax and other duties were increased
What effects did deregulation under Lawson have?
The Financial Services Act of 1986 deregulated the London stock market in the so-called ‘Big Bang’ of October 1986. This revitalised the City of London’s money market by ending the stock exchange’s monopoly on share dealing.
Positives of Thatcher’s overall economic record?
-Succeeded at bringing down the rate of inflation.
-Privatisation improved performance, lowered prices and offered consumers more choice.
-Deregulation of the City ensured that London remained at the centre of a global financial market.
-The extension of shareholding gave many more people a stake in the success of the economy.
How can Thatcher’s economic record be criticised?
-Economic success may have come from the bonanza of North Sea oil, not from her policies.
-Too many privatised services and utilities were run for profit rather than interest of consumers.
-Deregulation of the City encouraged a selfish ‘get-rich-quick’ attitude among bankers and currency dealers that contrasted badly with the bleak prospects for the unemployed and disadvantaged in society.
-Social cost, pushed up unemployment, destroyed communities with the fall in manufacturing, social cost may outweigh the benefits.
Were the social policies of Thatcher’s government controversial?
YES
How did Thatcher reform the NHS?
She wanted to make it more efficient by applying business principles to it.
Hospitals were allowed to become self-governing NHS trusts in control of their own budgets.
NHS services were expected to compete with one another to provide the most efficient and cost-effective service to GPs.
GPs also became fund-holders with their own budgets to manage.
How were the reforms to the NHS controversial?
Supporters argued that these changes injected some much-needed financial discipline into the NHS.
Critics argued it was the first stage in the privatisation of the NHS, in which the profit motive would overtake patient care, and that business methods were inappropriate for a public service.
How did Thatcher’s government reform schools?
The two-tier system of CSEs and O levels for different abilities was in question. CSEs did not easily lead onto further education or training.
The GCSE in 1986 replaced these 2, open to all levels of ability.
In 1988 there was a bigger change when the government introduced a national curriculum with regular national testing of pupils at different stages of their school career.
What were the concerns with the reform to the school system?
-Thatcher was doubtful but persuaded by Keith Joseph that GCSEs would not lead to a lowering of standards.
-Some argued that GCSEs weren’t academically rigorous enough.
-Content of the national curriculum caused disagreement and some argue that it was restrictive and that testing too frequent.
How did Thatcher’s government reform universities?
She thought universities needed to be more self-sufficient.
She;
-Cut uni budgets in 1981, forcing them to look for different sources and seek more students.
-In 1988 a University Funding Council was created to make sure that university education was focused on the economy’s needs, not pure research.
-Some uni staff lost security of tenure.
-Removal of polytechnics from local authority control and brought them under control of the Universities Funding Council.
-Did NOT abolish grants to young people to go to uni.
What was Thatcher’s policy on council houses?
She wanted to create a ‘property-owning democracy’. She wanted to reward those who shared the values of hard work, self-reliance and initiative by enabling them to own their own homes. She allowed long-term tenants to buy their houses.
During her time in premiership, gov money spent on subsidising mortgages doubled and property ownership went up 12%.
What were Thatcher’s aims for dealing with industrial relations?
She knew that she’d need to tackle the power of trade unions. She believed that:
-Existing laws on industrial relations had been abused to protect restrictive practices and over-manning, to underpin strikes and coerce workers into participating in strikes.
-Union power made British firms uncompetitive due to higher costs.
-Jobs would become available once industry adjusted to market conditions and unions lost their power to control labour conditions.
What legislation did Thatcher pass to deal with industrial relations?
She adopted a piecemeal strategy, introducing restrictive measures at each stage.
The Employment Act of 1980 outlaws secondary picketing and increases the rights of employees not in a unions. Government money made available to encourage unions to hold secret ballots.
The 1982 Employment Act restricted sympathy strikes and allowed closed shops only if a ballot showed 85% support. Anyone sacked for not joining a unions became entitled to high rates of compensation.
Trade Union Act of 1984 required unions to hold secret ballots of their members before launching industrial action
How did union membership and days lost to strikes change from 1979 to 1990?
Union membership fell from 12,128,000 to 8,405,000.
Days lost to strike fell from 29,474,000 to 1,903,000.
How did increased unemployment change union action?
High levels of unemployment deterred strike action, workers less ready to strike knowing that they could easily be replaced from the large pool of unemployed.
Why did the miner’s strike of 1984-85 happen?
The National Coal Board was facing a loss of £250 million for 1983-84 alone. The strike began in March 1984 after it was announced that 20 uneconomic pits were due to close, with a loss of 20,000 jobs.
How did the government prepare for the strike?
In 1981, a secret Whitehall committee was set up to organise the stockpiling of enough coal to keep the power stations running through a long dispute.
The Central Electricity Generating Board built up large stocks of coal and oil into power stations.
Home Secretary, Leon Brittan, set up a National Reporting Centre in New Scotland Yard as soon as the strike began. This was to ensure central control of policing, coordinating intelligence and the movement of police officers to trouble spots.
What were the 7 reasons that the miners were defeated?
-They weren’t united. Those who wanted to continue working created a breakaway union - the Union of Democratic Mineworkers - in December 1984.
-Strike held over spring and summer where coal was less demanded. Deprived the key weapon as stocks were adequate.
-Labour was reluctant to support the NUM leader Arthur Scargill who received little public sympathy and seen as extremist.
-Violence undermined public support.
-Many saw it as impossible to subsidise the industry due to cheaper fuel sources, regardless of it’s history.
-Government were prepared to use considerable force to protect the rights of miners who wanted to work and it was not swayed by the scale of industrial unrest and violence.
- In April 1984, Scargill refused to hold a national ballot of miners on whether to continue the strike, deprived the strike of legal legitimacy and alienated many mine workers.
What was the impact of the miners strike?
NUM membership dropped from 250,000 in 1979 to under 100,000 by 1987, and the union ended the strike virtually bankrupt.
The strike divided opinion about Thatcher more than any other issue.
To her supporters it was a success in terms of forcing the miners to see that their industry was unsustainable and demonstrating that the government could defeat unions.
BUT, enemies said it destroyed livelihoods and historic communities.
How and why did Thatcher not have backing of her cabinet in early years of power?
-She had few allies in her Shadow cabinet, many were older and more experienced and had been loyal to Heath. They saw themselves as ‘one-nation’ Conservatives, meaning they wanted to maintain unity by ensuring that government spent money to maintain employment and welfare. They shared Labour’s view that government should actively manage the economy but Thatcher wanted to increase private initiative and called these people the ‘wets’.
-She had limited experience of government, the only cabinet position she held was Minister of Education under Heath.
-Her gender divided opinion.
How did Thatcher survive not being supported by the cabinet?
-She established a small band of loyalists. The most prominent were her deputy, William Whitelaw, and Keith Joseph, her main economic adviser.
-She was backed in the commons by an energetic group of supportive MPs.
-She was very popular with grassroots members of the party where her emphasis on economic prudence, defeating socialism and restoring Britain’s greatness.
How did Thatcher master her cabinet in her first term?
When first choosing her cabinet she felt obliged to appoint some wets, namely Jim Prior, Francis Pym and Michael Heseltine. But she made sure the dries occupied key positions such as Geoffrey Howe as chancellor of the exchequer and Keith Joseph in the department of trade and industry.
She was careful to keep support of key figures like William Whitelaw, deputy PM.
How did Thatcher manage the cabinet after the 1983 election?
It allowed her to make more commanding decisions.
The leading ‘wet’, Francis Pym was sacked as foreign sec and Geoffrey Howe replaced him. Nigel Lawson was made chancellor of the exch and was to be a large part in Thatcher’s radical economic policy.
She did not suffer from wooly thinking or weak argument, she had considerable charm.
Her Brighton Bombing incident in 1984 gave her more support and admiration.
HOWEVER, her downside was that she was inflexible and unwilling to accept other arguments without confrontation.
How did the opposition to Thatcher grow after 1983?
-Her mastery of the cabinet made her increasingly intolerant of disagreement even from her most loyal supporters.
-Heseltine, a long surviving ‘wet’ resigned n 1986 over the Westland Affair. Thatcher survived the difficulties this caused he, but he became a potential candidate for those in the party who didn’t like her.
-December 1987 she lost William Whitelaw after he had a stroke.
-1989 fell out with both Nigel Lawson and Geoffrey Howe over economic policy and role in Europe.
-Howe’s resignation speech in November 1990 played a significant part in her downfall.
Why did Thatcher inspire such passionate support and hatred? Part 1 - support,
To supporters, she was a resolute, clear-sighted leader who brought about extensive, much-needed change and arrested the national decline symbolised by the industrial unrest and rampant inflation of the 1970s. She had a coherent plan, ‘Thatcherism’ as defined by Lawson in 1981 as ‘a mixture of free markets, financial discipline, firm control on public expenditure, tax cuts, nationalism, privatisation and populism’.
They also credited her with influencing other parts of the world like Reagan.
Also admired her toughness and unwavering hostility to the USSR.
Why did Thatcher inspire such passionate support and hatred? Part 2 - criticisms.
Controversial policies, shifting tax from direct to indirect hit the poor hard.
Jobs losses in coal mines and other industries hit hard by her policies.
Some of the middle class thought she created a vulgar greed that rewarded selfishness, but ignored the plight of dispossessed people.
Inner city poor and homelessness.
In October 1987, she criticised the dependency that the welfare state had created which to critics, confirmed her heartlessness.
How did the Poll tax influence her resignation in November 1990?
It replaced the rates that were in place before and that had not been paid by more than half of the local electorate, with a flat-rate tax with concessions for the least well off.
Some cabinet and MPs opposed as it was highly unpopular, first introduced in Scotland in 1989, millions of Scots refused to pay it .
The day before it’s introduction in March 1990 there were massive demonstrations in Trafalgar Square and turned violent, 300 arrested and 400 police hurt.
Her decision to press on without cabinet support suggested a more dictatorial role.
How did economic difficulties affect Thatcher’s resignation in November 1990?
In Oct 1987, a stock market crash wiped 24% of share prices. Nigel Lawson thought it might trigger recession so in 1988 reduced income tax rates but this pushed up spending and inflation was at 8.3% in 1989. This was combated with interest rates which reached 15% in 1989. Big damage to mortgage payers that Thatcher had admired and encouraged to buy.
Thatcher’s claims that she wrought an economic miracle were now looking unconvincing.
How did divisions over Europe affect Thatcher’s resignation in November 1990?
Thatcher had accepted the Single European Act of 1986, believing that it was essential to the kind of free market Europe that she believed in, but later regretted it as it committed members to working towards closer monetary union.
She disagreed with joining the ERM, which Howe and Lawson wanted to do. She demoted Howe from Foreign office to Deputy PM. Lawson resigned as chancellor. This rift weakened her authority and made her more isolated as she alienated two important allies.
Britain joined ERM anyway in 1990 after Major persuasion. Yet she still denounced further unity with Europe as she said ‘No, No, No’.
How was Thatcher becoming more personally isolated and unpopular and how did this lead to her resignation?
Conservatives were losing by-elections in 1989 and 1990, labour was becoming more popular as seen by the elections to a European parliament and opinion polls.
Many MPs feared they’d lose election if Thatcher remained PM.
1989 a little known MP Anthony Meyer challenged her leadership and gaines 33 votes whilst 30 odd abstained. This showed that Thatcher was losing support and may struggle against a more credible candidate.
Geoffrey Howe had endured years of bullying and had grown to dislike her tone of anti-europe speeches. He resigned with TV cameras watching in 1990 and called for a challenge to leadership. He also clearly said that Thatcher’s gov was divided.
How did the Conservative leadership election cause Thatcher to resign?
Michael Heseltine followed up on Howe’s speech and threatened Thatcher for leadership. Thatcher won but not by enough to prevent a second round of voting. Despite efforts to drum up support she was advised to resign and did so on on 22nd November 1990
What were the 5 main factors that caused Thatcher to resign?
Poll tax
Relations with ministers
Attitude of MPs
State of economy
Divisions over Europe
What were the 3 main problems when Major became Prime Minister?
He lacked authority.
Conservatives were divided about Britain’s role in Europe
The Labour Party was revitalised under New Labour.
How did Major’s lack of authority lead the conservatives to a heavy defeat in 1997?
-He was elected because majority of conservatives didn’t want Heseltine as he was seen to engineer Thatcher’s downfall.
-Thatcher had said he should be successor, not him winning votes.
-He was not bossy like Thatcher.
-He had limited experience, only been in cabinet since 1987.
-Uncharismatic personality soon ridiculed in the media.
What were the positives about Major’s campaigning?
He vigorously campaigned and won a surprise 1992 general election, although majority was slashed to 21 seats.
How did Conservative divisions about Britain’s role in Europe lead to a bad loss in 1997 under Major?
Eurosceptics loathed the European Community’s moves to closer monetary and political union. But there was also a sizeable part of the party that believed that Britain should play it’s full part in Europe.
In Dec 1991 Europe members signed the Maastricht treaty, Major managed to get two opt-outs, currency and Social Chapter.
Major had to get the ratification bill through Parliament by saying that unless MPs voted for it, the government would resign.
What was Black Wednesday and how did it lead to defeat in 1997 under Major?
By 1992, ways to curb inflation had tipped the economy into depression. As unemployment rose, businesses failed and GDP fell and it was clear the exchange rate was too high.
£ fell sharply and lenders sold it at artificially high price before devaluation.
Major and his chancellor set interest higher and asked BoE to buy bonds.
The episode ruined the Conservatives reputation of economic management and also emboldened Eurosceptics.
What happened during Major’s leadership election and what was the significance of this?
Major had been severely weakened by the displays of dissent from Eurosceptics in the party and cabinet.
He was caught talking about ‘the bastards in the cabinet’. He didn’t name them but also didn’t sack them.
It seemed that he wasn’t in control of his party.
1995 he held a leadership election and won easily but the fact that 1/3 of the party hadn’t voted for him showed the divisions.
How did a ‘New Labour’ affect the Conservative heavy loss under Major in 1997?
Neil Kinnock, leader from 1983-92 had made the party electable again, he expelled extreme left who had infiltrated in the 1970s.
Tony Blair took over in 1994 and set about reconciling the Labour Party to Thatcher’s reforms and succeeded in abolishing Clause IV of the Party’s 1918 constitution that said they’d nationalise British industry.
As well as modernising, Labour was rebranded as New Labour and Blair appealed to Conservative-supporting businessmen and city bankers by reassuring them about Labour policies, he also won support of the Sun Newspaper.
What happened in the 1997 general election?
Resulted in the worst defeat for the Conservatives since 1906. The labour party won a 180 seat majority.
Why did Labour win the 1997 general election? (summary points)
Blair’s youth and optimism appealed to voters.
It’s media presentation was slick and effective.
Blair’s reform of Clause IV and wooing of businessmen made nonsense of the Tory campaign that he was a socialist.
