Conservatives Under Major 1990-1997 Flashcards
What were Major’s moves as Chancellor of the Exchequer?
- Oct 1990
- persuaded Thatcher to abandon long-standing opposition to EMS
- Britain’s inflation at time 3x that of Germany (had reason)
- Short term triumph long term disaster
- New savings scheme - TESSA - popular
Describe Major’s cabinet
- Exchequer: Norman Lamont
- Foreign: Douglas Hurd
- no women
Towards General Election
What were early problems for Major + why was it a likely defeat?
- Recession continued
- By election results, opinion polls the European Parliament elections (1989) - pointed to C defeat in 1992
- Conservatives lost 900 council seats in local election May 1991
- April Opinion poll: L:41%, C: 35%, Lib dem: 20%
Towards General Election
Economic problems?
- Unemployment grew in year 1991 from 1.9mil to 2.6 mil
- Interest rate cut but housing market depressed
- Business and consumer confidence remained poor
- record number of business failures + flat repossessions
- trade deficit fell but Britain’s trade balance remained in red
- inflation fell (higher than other industrialised nations)
Towards General Election
What was the State of Labour?
- Election campaign positive + concentrated on moderation
- Neil Kinnock enthusiastic and effective campaigner
- Could not shake off old Labour image
- “shadow budget” - drew attention to likelihood of tax increases
- this and press undermined Labour’s position
Towards General Election
How did the British Electoral System influence Conservative win?
- Of the 651 MPs elected in 1992, 170 had majorities of 10% or less
- Conservatives won seats more “cheaply” in terms of votes than other parties
- organisation of system helped them
- 250,000 poll tax evaders likely harmed labour not C
Towards General Election
How did the press influence the conservative win of election?
- Out of National daily papers 7/11 backed C only 3 L
- C supporting papers accounted for 67% of newspaper sales
- 3 tabloids vigorously campaigned for C: Sun, Daily Mail and Daily express
Towards General Election
How did the Tory election campaign influence their win?
- main issue: economy, taxation and welfare
- C attacked labour’s spending plans claiming they would lead to higher inflation and taxation
- Rhetoric of classless society and Citizens Charter - which obliged to NHS, British Rail and other public bodies, sought to win wavering SDP/ Lib dem voters
Towards General Election
Describe Major’s win
- narrow but unexpected victory: 42% vs L: 35%
- Labour still tainted with extremist view had in early 1980s
- L failed to secure more than half working class vote
After the election nothing went right for Major:
Briefly describe this
- Controversy over Maastricht Treaty divided CP: Had to come to understanding with Ulter Unionists to protect gov majority
- Economy remained depressed
- housing market remained stagnant
- Problems with ERM
How were taxation levels under Major?
- Higher by 1990s than had been in 1970s
- Britain’s long term economic decline not halted
Why did Black wednesday happen?
- Unsustainable position of Britain in ERM
- Required Britain to maintain fixed rate of exchange (2.95 German marks to pound)
- Sep 1992 British currency came under pressure
- had to devalue or face even greater collapse of output
What was Black Wednesday?
- Instead of devaluing ERM, spent Britain’s currency reserves against wave of selling that ended Black Wednesday - 16 Sep 1993
- Lamont announced decision to leave on TV
- left ERM with value of sterling down by 20%
- £5 bill wasted trying to stay in ERM
- interest rates increased dramatically
- loss of credibility of gov
What were the effects of Black Wednesday on the Conservatives and Major?
- Within relatively short time - economy stabilised + leaving ERM had many benefits
- Political consequence - disastrous
- steep drop for support for C in opinion polls
- JM authority weakened
- criticised by newspapers
What was the effect of Black Wednesday on the economy?
- leaving prevented Britain from having to keep high interest rates
- thus exchange rate decreased
- Unemployment rates slowed down; housing market picked up
- American economy was coming out of recession - world trade expanding
- British economy benefited from impact of financial deregulation
What was the economic situation by 1997?
- Mostly positive:
- unemployment down
- productivity up (not much)
- Car ownership increased
- House prices rose - negative equity thing of past
-Business in support of gov policies - people reluctant to give major credit for this
What were the political problems under Major?
- Gov rep never recovered after withdrawal of ERM and Major’s government lost every by-election it fought
- May 1983 Tories lost 452 local council seats
- 1995: 1,800 council seats lost
- eventually C lost HoC majority
- By 1996 Major forced to rely on support from Ulster Unionists for majority which ruined plans for dealing with NI
What was the relationship with the miners like under Major?
- continued to close pits and cut jobs
- Political storm
- Felt that Hesseltine was going back on repeated assurances given to UDM: pits would be open -loyal UDM pits closed
- A privatised electricity industry unable to buy British coal
- Plan went ahead and sold remaining industry to private company - undervalued
- June 1993: workforce down to 44,000, less than half 1990 level