Thatcher Flashcards
why was 1979 election called
- Called after Callaghan’s government lost a vote of confidence by 1 vote (following the Winter of Discontent and defeat of the Scottish devolution referendum).
1979 election results
- Thatcher’s Conservatives ousted Callaghan’s Labour to win a majority of 44 seats. This was the first of 4 consecutive election wins for the Conservatives, and Thatcher became Europe’s first elected female head of government.
1979 election effect on labour’s politics
- Led to the Labour Party shifting even further to the left in the 1980s (believing their defeat had been due to a lack of ideological commitment), leading to the 1981 SDP (social conservatism with centre left economic policy and support for social market economy- rejected trade unions) break-off and enabling the Conservatives to move further to the right.
1983 election results
- Incumbent Conservatives increased their majority to 144 seats (the most decisive election victory since Attlee’s Labour in 1945).
1987 election results
- Incumbent Conservatives lost 21 seats but retained a large majority.
1992 election results
- Surprise 4th consecutive win for the Conservatives (now under Major) – a narrow majority whilst receiving the largest number of votes in British electoral history.
1997 election results
- Blair’s Labour won a landslide 418 seats ,the most seats the Party has ever held.
- Huge Conservative-Labour swing of 10.2% on a national turnout of 71% (the last national vote where turnout exceeded 70% until the 2016 EU Referendum).
Scottish devolution referendum 1979
64% voted for a Scottish assembly but since less than 40% of the population voted yes(considering turnout), the act was repealed
Heath as photo Thatcher/ right wing
- Cut income tax in his first budget
- Lifted £2bn of corporation tax in his second budget
- Successfully restricted the Post Office strike of 1971.
- Passed the Industrial Relations Act 1971 without consulting the trade unions – required state registration of unions, made collective agreements legally enforceable, and limited ‘wildcat’ (unofficial) strikes.
Heath - economic interventionism
Abolished financial targets for nationalised industries, and provided a fiscal stimulus to the economy through a £100m public works programme.
* 1972-74 actually ended up being the peak of Keynesianism, despite the 1970 ‘A Better Tomorrow’ manifesto promising lower taxes and spending.
pragmatic Tory?
Heath and nationalisation
- Nationalised the aero-engine division of Rolls Royce in 1971 when it went bankrupt (because its production was necessary for the armed forces).
- Bailed out Upper Clyde shipbuilders in 1972 after a Communist-led sit-in.
Heath economic discontent
unemployment had broken 1m in January 1972, and the humiliation of the miners’ strike in February 1972.
inflation – it peaked at 26.9% in the 12 months to August 1975.
international oil crisis which quadrupled energy prices
Heath intervention in wages
Introduced a statutory incomes policy in 1972- wage and price controls
1974 election
Labour emerged as the largest Party despite the Conservatives winning the most votes and, when the Conservative coalition talks failed (the Liberals could not uphold a defeated government), Wilson formed a minority Labour government.
when did thatcher become Tory leader
1975
Tories euro centrism pre Thatcher
Britain’s entry into the EEC in 1973 (it was the Conservatives who were the pro-EEC/EC/EU Party compared to Labour in the 1970s),
Heath on NI
- Short-lived achievements: Power-sharing in Northern Ireland (shattered shortly after February 1974 election).
external opposition to Heath
- Rise of militant unionism and the student movement–law and order was declining, and Heath had to impose five states of emergency.
external economic failures under Heath
o Nixon ended the Bretton Woods Agreement (which had fixed world currencies against the Dollar) in August 1971, creating instability.
o Huge rise in commodity prices when Heath was seeking to curb inflation.
o OPEC oil crisis in 1973, which quadrupled energy prices.
Heath as a wet Tory
- Despite his 1970 ‘A Better Tomorrow’ manifesto promising lower taxes and spending, Heath was ‘wet’ and U-turned on this (e.g. promising a £100m public works programme in the July 1971 Special Budget), and 1972-74 ended up being the peak of Keynesianism.
How Heath’s u turns influenced Thatcher
The abandonment of the 1970 manifesto (based on free-market economic policies) led to the creation of the ‘Selsdon Group’ in 1973, whose policies influenced the Thatcher and Major governments.
Thatcher’s victory in leadership election
- In the 1975 leadership election, she won 130 votes vs. 119 for Heath, due to:
- Her‘ conviction politician’ personality–the facts he was not Heath.
- The fact she was willing to challenge Heath when others would not (she was the only candidate in the first round – Whitelaw entered too late in the second round).
The skill of her campaign manager (Neave) – he deliberately underplayed her strength ahead of the first ballot, thus encouraging MPs to vote for her who would otherwise have abstained. This momentum carried her through the second ballot.
Thatcher as distinctly anti socialist
o By lowering inflation, dismantling the corporate state and ending the rhetoric of class war, Thatcherism promised healing and reconciliation.
o Sutcliffe- Braithwaite: No previous leader had made anti-socialism so central to their message, or talked so confidently of the elimination of socialism from British politics.
Labour defection to Tories
o Crucial role was played by Labour defectors who were drawn to Thatcher in remarkable numbers. Some were instinctive rebels, transferring their allegiance to a new rebel project; others strongly anti-Soviet; while many were essentially libertarians, who now thought union power the chief menace to freedom.
eg Reg Prentice flipped on 1977- not tons of defections but defo him
3 fold charge against Labour
nationalisation programme, punitive tax regime and closed-shop legislation were endangering the freedom of individual citizens to work, spend and save as they chose.
democracy was said to be in jeopardy, as Labour strove to bring the ‘Iron Curtain down on the Mother of Parliaments’. - Labour accused of sidelining Parliament by the suspension of standing orders and guillotining of debate.
Labour stood accused of sponsoring law-breaking and lifting its trade union allies beyond the reach of the courts.
inflations and critique of trade unions
o Inflation was also crucial because in Conservative thinking it was linked directly to the question of the role of trade unions. Traditionally Conservatives grounded much of their hostility to unions on their alleged impact on inflation
Thatcher’s excuse of need for change
Strategic thrust of the Conservatives from 1975 was to treat all economic problems not as the result of conjunctural events or specific policy failings, but as symptoms of a profound, long-terms malaise in the British economy and British society. Hence inflation was central to the Thatcherite claim that only a radical new start could save Britain from ever-worsening decline- She set the groundwork for radical change from the start.
Thatcher as a moderate pre 1975
o She was the daughter of a grocer from Grantham.
o As Education Secretary under Heath, she had never publicly dissented, and had even boasted about high government spending on education.
o She had voted to legalise both homosexuality and abortion in 1967.
seeds of Thatcherism pre 1975
- But the seeds of Thatcherism were there – she was sympathetic to free markets / monetarism, but also supported traditional authority / strong leadership / law and order, so she appealed both to economic liberals and to traditional Conservatives.
How context of 1970s suited Thatcher
- The OPEC oil crisis of 1973, leading to high inflation – crucially, she saw monetarism and cuts in government spending as the solution, not pay policies.
- The fact that Labour was becoming extremely left-wing (see notes above).
- Trade union disruption, culminating in the Winter of Discontent 1978-79.
- Bale- Thatcher didn’t win elections because she converted a majority of citizens to her cause (she didn’t) or because she was personally popular (she wasn’t). She won them because her governments delivered just enough tangible benefits to just enough voters at just the right times in order to defeat an opposition whose record in office was woeful
Thatcher’s initially moderate economic policy
- The ‘Clegg Commission on Pay Comparability’ between the public and private sectors (established by Callaghan) was retained for a year before being disbanded
Thatcher’s initial restraint- privatisation
- Privatisation was confined to undoing Wilson’s nationalisation of road haulage, and Callaghan’s nationalisation of aircraft- and ship-building
- Keith Joseph (Industry Secretary) could not stomach his own pro-market policies and actually increased subsidies to firms like British Leyland.
Thatcher’s initial restraint - striking
- Jim Prior (Employment Secretary) made secondary picketing illegal, but not yet secondary strikes; and he provided finance for strike ballots.
– to avoid an NUM strike, she forced the National Coal Board (NCB) to abandon its plan to close 23 uneconomic coal pits.
o Heseltine’s Housing Act 1980
(‘Right to Buy’) led to 0.5m council house sales by the next election, and more than 1m sales by 1990.
Howe’s 1979 budget
o 1979 Budget cut public expenditure by £4bn, but doubled VAT to 15% in order to cut income tax. N.B. it is interesting the Tories have managed to portray Labour as the Party of taxation, as VAT is almost entirely a Tory tax – introduced under Heath in 1973 (supposedly as an emergency measure), doubled to 15% under Thatcher in 1979, raised under Major to 17.5% in 1991, and raised again under the coalition to 20% in 2011.
1980 budget
abolished exchange controls- the external value of the pound should be left to international market forces- and the banking ‘corset’, paradoxically making it impossible to control the M3 money supply and meet targets set out in the Medium-Term Financial Strategy (MTFS), which set out a gradualist path to a monetary growth target of 6% in 1983-84. Upon calls for a Heath-style U-turn, Thatcher told the 1980 Conservative Conference, “You turn if you want to; the lady’s not for turning”.
1981 budget
was very deflationary, despite being in the midst of recession with rising unemployment – in order to reduce inflation, Howe increased net taxation by almost £7bn and further cut public spending, even though this destroyed much of the UK’s industrial base (led to the UK’s economy becoming service-based) and raised unemployment to over 3m by 1983. Michael Foot (now Labour Leader) declared it a “no-hope Budget produced by a no-hope Chancellor”, and 364 economists condemned it
Thatcher’s unemployment policy
Thatcher had no unemployment policy” – she saw it as simply natural in a free-market economy.
response to 1981 budget
o The 1981 Budget led to widespread rioting (starting in Brixton), and Thatcher faced a Cabinet revolt – she sacked the ‘wets’ (e.g. Gilmour, Soames, and Prior), and appointed Tebbit as Employment Secretary, who promptly made unions liableto be sued for damages in secondary strikes, and gave employers the right to dismiss strikers selectively
1982 policy memo
policy memo suggested the Tories were considering education vouchers, an insurance-based NHS, and the withdrawal of state funding for higher education, but Thatcher quickly retreated – e.g. reaffirmed taxpayer-funded NHS.
effect of Foot’s election as Labour leader
This rightward shift was made possible by Labour moving sharply left (Foot elected Leader in 1980, and adopted mandatory reselection of MPs), with the ‘Gang of Four’ defecting to form the SDP in 1981.
1982 privatisation
November 1982 saw the start of privatisations – e.g. Britoil, BT, British Airways, British Leyland, and British Steel.
Monetarism
Monetarism is a macroeconomic theory stating that governments can foster economic stability by targeting the growth rate of the money supply.
Monetarism is closely associated with economist Milton Friedman, who argued that the government should keep the money supply fairly steady, expanding it slightly each year mainly to allow for the natural growth of the economy
idea that Inflation could therefore be controlled by governments acting on their own, without having to resort to incomes policies which involved them in difficult and dangerous bargaining with unions and employers
Thatcher in the Cold War
- Thatcher did reinvigorate the special relationship and the security community that upheld it by defining a new purpose for it. Her warnings about the new expansionist threat posed by the Soviet Union in the 1970s helped make Soviet intensions towards Western Europe once more the focus of security policy.
- The battle against the Soviet Union engaged all her energy and enthusiasm, and rekindled her trust in the US
How Falklands changed election
- Before Argentina invaded the Falkland Islands in April 1982, most commentators expected a hung parliament (especially with unemployment at 3m by 1983) – Thatcher was dramatically boosted by the Falklands being retaken in June, and won a 144-seat majority in the early 1983 election (the most decisive victory since Attlee’s Labour in 1945).
unemployment in 1983
3 million
Labour’s 1983 manifesto
unilateral nuclear disarmament, withdrawal from Europe, more nationalisations etc.) was branded as “the longest suicide note in history” by Gerald Kaufman (Labour’s Shadow Environment Secretary).
1985 - detectable failings of Thatcher
The Conservatives trailed in the polls by 1985 (only 24% support), with the seeds of Thatcher’s eventual downfall detectable by early 1986
economic factors leading to Tory victory in 1987
– only a credit-stoked economic boom (the Lawson Boom 1986- 88) saved the government in the 1987 election.
* Conservatives were trailing in the polls before the Lawson Boom (24% support in 1985),
post 1983 election Labour changes
o In the Labour Party, Neil Kinnock replaced Michael Foot, and rooted out the Trotskyist ‘Militant Tendency’ (he remained Leader until defeat in the 1992 election, when he was replaced by John Smith).
Thatcher attack on ‘enemies within’ - trade unions
Legislation – secondary picketing was made illegal in 1980; in 1982, Tebbit made unions liable to be sued for damages in secondary strikes, and gave employers the right to dismiss strikers selectively; and the Trade Union Act 1984 required all unions to hold a secret ballot before calling a strike.
decline in trade union power
Deflationary economic policies increased unemployment, thus weakening the bargaining power of the unions.
GCHQ lost the right to union membership in January 1984.
Murdoch dismissed striking print workers when The Times moved production to Wapping in 1986
local gov cuts
Rates were capped in 1983.
Cut funding to polytechnics.
Local Government Act 1985 abolished the Greater London Council (GLC), and 6 metropolitan councils, e.g. Greater Manchester, and Merseyside. The official reason was that they were redundant, though the real reason is that they were under Labour control.
Thatcher’s attack of liberal intelligensia
o University funding was cut by 20% (which explains why Oxford refused to give her an honorary degree).
o Alasdair Milne was forced out as BBC Director-General in 1987 because of Thatcher’s perception that the BBC was biased towards the left
Thatcher on Church of England
o Attacked the CofE following the Archbishop of Canterbury’s post-Falklands sermon (remembered the Argentinian dead as well as the British, and claimed God was on neither ‘side’), and the publication of his ‘Faith in the City’ report (about responsibility for the poor) in 1985 – Tebbit decried it as “pure Marxist theology”.
Lawson boom
1986-88
Growth reached 3% in 1986, having averaged 1.9% since 1979, and unemployment halved from over 3m to 1.6m 1986-89.
Funded by credit (e.g. bank lending was trebled and mortgages were doubled, so short-term consumption was effectively being funded by the North-Sea oil money).
Gilmour: “The lady was for turning after all” – Thatcher had effectively abandoned monetarism.
- Lawson’s economic policies:
o Continued the shift from direct to indirect taxation, e.g. lowered basic income tax from 30% to 29% in 1986 Budget, with 25% as the goal (achieved in 1988).
Lawson disagreements with Thatcher
Wanted to abolish tax relief on mortgages and private payments, but Thatcher was keen to protect these middle-class perks (for ‘aspirational’ people) despite their distorting economic effect.
Secretly adopted an exchange-rate target (shadowing the Deutsche Mark) without Thatcher’s knowledge, as he wanted Britain to join the ERM.
Thatcher’s popular capitalism
e.g. through the 1985 deregulation of financial markets leading to the ‘Big Bang’, and in particular through privatisations:
o Sale of BT began in November 1984.
o Brit oil was sold less successfully in 1985 (under writers took the hit).
o British Gas sale was a political success through the ‘TellSid’ campaign 1986-87.
o Privatisations of water, electricity, Rolls Royce, and the British Airports Authority were promised in the 1987 manifesto.
Nationalisation post 1983
o Very little defence was made of the nationalised industries:
The Labour Party was weak and ineffective during this period.
The trade unions had been severely weakened by legislation (1980, 1982, and 1984), and in the aftermath of the miners’ strike 1984-85 – the number of trade unionists was in sharp decline, a trend which only continued under Blair’s government.
Thatcher and the European market
o Signed the single European act 1986- A core element of the SEA was to create a single market within the European Community by 1992, when – it was hoped – the necessary legislative reforms would have been completed. The belief was that in removing non-tariff barriers to cross-border intra-Community trade and investment such measures would provide the twelve Member States a broad economic stimulus.
o Thatcher believed that the single market did not require supranational regulation, but could remain under the control of the Council of Ministers, and would extend free trade, not bureaucratic powers.
Thatcher’s defeats
seed of downfall were detectable
o She was actively defied in the Commons throughout her second term – e.g. she was defeated on the Shops Bill (Sunday trading) despite a 3-line whip
Thatcher’s economic failure
o the Thatcher Government’s operations did not last long. By the end of 1980s most of the practices associated with it had either collapsed or showed signs of collapsing. It was not just that many of the major indicators of economic performance-prices, taxes, public expenditure, money supply and unemployment-continued to rise whilst production went down.
Thatcher and economic u turn
o The government accepted that the exchange rate could not be left to market forces- changed to dirty floating. The pound was managed down by changes in interest rates.
West Land affair
1985-86:
Thatcher and Brittan (Industry Secretary) supported Westland Helicopters (which manufactured military helicopters) being taken over by an American firm, whereas Heseltine supported a bid by a European firm.
Thatcher denied Heseltine appeal to the Cabinet, leaked a confidential letter, and then tried to cover it up. Led to the resignations of both Heseltine and Brittan (after he misled the Commons) in January 1986.
Before a Commons debate on the affair, Thatcher remarked to one of her friends that she might cease to be PM by 18:00 that evening if things went badly. She was saved by the ineptitude of Kinnock (who made a poor opening speech), but her reputation for integrity had been damaged, and this laid the seeds for Heseltine’s leadership challenge in 1990.
poll tax
o The ‘Paying for Local Government’ Green Paper (January 1986) committed the Conservative Party to the Community Charge (the so-called ‘poll tax’)- contained in 1987 Tory manifesto
This provided for a single flat-rate tax on every adult, to replace the rating system (a tax based on the notional rental value of a house) – this was intended to encourage home improvement and, with everyone paying the same rate, to establish effective accountability of local authorities to taxpayers, thus forcing extravagant Labour councils to reduce spending.
Ineffectual legislation 1987
o Education Bill created the National Curriculum, and stripped future university lecturers of tenure (actually increasing Whitehall power, despite the rhetoric of rolling back the state).
o Housing Bill encouraged council tenants to opt-out of local authority control, but few then went into the private market, so homelessness rose.
o Thatcher dismissed proposals to replace universal child benefit with a more targeted handout, and was reluctant to touch the NHS.
Thatcher’s legislation of intolerance- social conservatism
o Despite Thatcher’s reputation as a libertarian, and despite her being one of the few Conservatives to have voted for both the Sexual Offences Act 1967 (decriminalised homosexual acts, in private, between two consenting men over the age of 21) and for the Abortion Act 1967 (legalised abortions by registered practitioners), she was much more socially conservative in office.
She introduced state regulation of the video market in 1984.
She reportedly said to her adviser: “I hate feminism. It is poison.
Her government implemented ‘Section 28’ in 1988 which stated that local authorities “shall not intentionally promote homosexuality or publish material with the intention of promoting homosexuality”
Lawson boom- unsustainable
o The London Stock Exchange fell 23% on ‘Black Monday’ (October1987).
o Lawson’s 1988 Budget cut the basic rate of income tax to 25% and the top rate to 40% – this produced 5% growth in 1988, but it was unsustainable, with almost 10% inflation by the end of 1989.
o The 1989 ‘Marchioness disaster’ (transport accident on the Thames in which 51 people drowned) indicated problems with infrastructure suffering from years of under-investment.
Thatcher losing personal touch - 1987 election
o During the 1987 election campaign, she was rattled by ‘wobbly Thursday’ (when a poll showed the Tory lead down to 4%), and implied that opted-out state schools would be allowed to charge fees
Thatcher and society
o In an interview with ‘Women’s Own’ magazine in 1987, she seemingly rejected social solidarity, saying “There is no such thing as society. There are individual men and women, and there are families”.
opposition to poll tax
- Whitelaw resigned in January 1988.
- As a flat-rate tax, it was seen as unfairly burdensome on the lower classes – although it benefitted 8m people, 27m had to pay more.
- Prompted riots in London in March 1990, and had a non-payment rate of up to 50%.
Thatcher - anti Europe
o Angered by Delors (predicted 80% of laws would be made at a European level within a decade), Thatcher made her September 1988 Bruges speech: “We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level”.
Thatcher and ERM
o Lawson resigned in October 1989 over the open opposition of Alan Walters (Thatcher’s Chief Economic Advisor) to joining the ERM (claimed it was “half baked”), and was replaced as Chancellor by John Major.
o Thatcher was eventually persuaded to join the ERM in October 1990 by Major (Chancellor) and Hurd (Foreign Secretary).
Thatcher’s euroscpeticism
o Angered by Delors (predicted 80% of laws would be made at a European level within a decade), Thatcher made her September 1988 Bruges speech: “We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level”.
o But the Rome Summit (October 1990) speeded up the move towards the Euro (to which Thatcher was greatly opposed), and Delors spoke of turning the Commission into a European executive – Thatcher dismissed his ideas in the Commons (“no, no, no”), and the Sun’s headline the next day was “Up yours, Delors”.
o Howe (now Deputy PM) resigned 2 weeks later, and his resignation speech in the Commons implicitly called for a leadership contest
Leadership contest against Thatcher
- Following Howe’s resignation, Heseltine challenged Thatcher for the leadership in November 1990 (Meyer had already been defeated in a ‘stalking horse’ challenge in 1989).
- Although Thatcher beat Heseltine in the first round of voting (whilst attending the Fontainebleau Summit on the night of the contest), she fell 4 votes short of outright victory, and was persuaded by Cabinet colleagues to resign before the second round – in the subsequent vote, John Major beat Michael Heseltine and Douglas Hurd.
Major’s persona
- Major was caricatured as a grey and uninspiring loser of no fixed principles - a likeable but weak and needy character who would always cut a deal rather than come out fighting, a Prime Minister whose economic policy ended up around his ankles, who raised rather than reduced taxes, who caved in to Europe, and who presided over a sleazy, divided government that probably deserved to lose in 1997.
Major on poll tax
- Brought in Heseltine to replace the ‘poll tax’ (which had cost £1.5bn)with Council Tax, which was similar to the previous rating system but properties were placed in bands (thus capping the maximum amount), and there was a 25% discount for single occupiers.
Major’s economic progressivism
- Child benefit - which Thatcher had frozen and hoped to see wither on the vine - was up-rated,
Major - compassionate Conservatism
- proper compensation arranged for haemophiliacs given HIV-infected blood. This ‘effort to nudge Conservatism towards its compassionate roots’ was, according to Major, “far more than a calculated remarketing of a brand whose image had become tarnished’. But, along with a later high-profile meeting with the gay actor lan McKellen at Downing Street in September 1991, it alarmed some on the right, including Thatcher herself
1992 election
Major’s second term
man of 21
o Major’s memoirs argued that this victory “killed socialism in Britain” – voters preferred his low-tax scheme to what Kinnock was offering.
Major had an easier ride than Thatcher
- To some extent, Major had an easier task than Thatcher – he did not face trade union problems (they had been dealt with effectively by Thatcher), and he did not face anti- Soviet rhetoric (the USSR had largely collapsed by 1989-90, and was formally dissolved in December 1991). Despite this, his premiership was plagued by problems.
Major’s economic issues
o The term started with disaster when the UK was forced to withdraw from the ERM on ‘Black Wednesday’ (September 1992), after the government had failed to keep the Pound above its agreed lower limit – the Treasury estimated the cost of this day as £3.4bn. This was especially embarrassing for Major given that it was he, alongside Hurd, who had persuaded Thatcher to join the ERM in October 1990.
o Kenneth Clarke (replaced Norman Lamont as Chancellor in 1993) was forced to raise VAT in 1994, in particular introducing VAT on domestic supplies of fuel and power. Major later described this as “a political milestone which cost us dearly”.
Major’s scandals
Back to Basics’ campaign from 1993 (intended as a nostalgic appeal to traditional values), the Party gained a ‘sleaze’ reputation, feeding the belief that they had been in government for too long and had got into bad habits:
o David Mellor (Cabinet minister) was exposed as having had an affair.
o The wife of a Lord committed suicide amongst rumours of the peer having an affair.
o Stephen Milligan MP was found dead having attempted autoerotic asphyxiation.
o Many other Conservative MPs were involved in sexual scandals.
o Major himself had a 4-year extramarital affair with Edwina Currie whilst a backbencher (though this was only revealed in her diaries in 2002).
o 4 Conservative MPs were found to have accepted money in return for asking questions in the House of Commons
Europe causing issues for Major
i. The EU was expanding as a political entity, not just an economic one – EU law was having an increasing influence on British law, and an increasing number of directives were being placed on an unwilling government. Ironically, this concern for British sovereignty was the argument put forward by Labour in the 1970s, when they opposed Heath taking Britain into the EEC in 1973.
iii. Since the early 1920s, capitalism had been united in support of the Conservatives; but, by the end of the 1980s, there was a growing divide between London-based finance capitalism (which become Eurosceptic) and Euro-centric commercial capitalism. This divide only grew greater under Major, and was extremely dangerous for the Conservatives, since both groups were essential backbones of support – the FT actually encouraged people to vote for Labour in the 1992 election.
o Even once Maastricht was ratified, the rebels repeatedly harassed the government on EU issues, ignoring Major’s bluff of an early general election – they came close to bringing down the government 3 times, e.g. over the EC Finance Bill.
divide in Major’s party
o By the late 1990s, the Conservative Party was so divided in itself that it became dysfunctional, not helped by the fact that Heseltine was Deputy PM from 1995 – the Party seemed ‘unleadable’ (the label traditionally given to Labour in the 1960s-70s).
o ByFebruary1997,by-election losses and defections meant that the Conservatives had lost their majority in the House of Commons, so Major survived the remaining months of the parliament as a minority government.
1997 election
Major delayed the election as long as possible in the hope that the still-improving economy would help the Conservatives retain a greater number of seats, and that voters would be deterred from Labour by slogans like “New Labour, New Danger”.
o The Conservatives only saved 165 seats in the 1997 election, which was an electoral earthquake from which it took the Party 20 years to recover
Thatcher on humans
- Thatcherites, saw human nature as self-interested but not wholly individualistic as people embedded in families and communities
- Culture lay at heart of Thatcherite explanation of poverty, seen in Keith Joesphs ‘cycle of deprivation’ theory, idea inadequately parented kids become inadequate parents living irresponsible and unproductive lives’.
o To achieve embourgeoisement must be rewards for success and penalties for failure, meant Thatcherites wanted to reduce tax burden for majority and lower benefits, this drove obsession with expanding in work out of work gap
Thatcher thought poor must pull themselves out of poverty - her ideas rooted in her formative years + upbringing.
Thatcher on morality
- The case against ‘socialism’ was not primarily economic. Thatcher never doubted that socialism was wasteful and inefficient, or that high taxes were damaging productivity. - she told a meeting in 1977 ‘the real case against Socialism is not its economic inefficiency… much more fundamental is its basic immorality.’
Thatcher - justification for free economy
- language of freedom was unapologetically individualist, framed around freedom from state intervention. For Thatcher, too, freedom was usually equated with market choice.
o That gave new importance to private property as ‘the essence of a free economy’.
think tanks and social welfare
- Neoliberals and think tanks: supported a residualised welfare safteynet to take care of the poor, alongside the introduction of user charges, private insurance, and vouchers to break up monopolies such as the NHS and the school system and make them more responsive to individual choice.
Thatcherism and America
o Only towards the end of her 11 years as PM did she begin to define the opposition between Europe and America more sharply and treat them as competing rather than complementary priorities.
o One of Thatcher’s lasting legacies was to link the security arguments for American primacy with the political economy arguments. The US, it was argued, should be Britain’s priority because it alone could guarantee the security of Europe and the wider free world, and it shared with Britain a form of political economy which was superior to anything Europe possessed.
privatisation in Thatcher’s manifestos
- privatisation not mentioned in 1975 or 1979 manifestio, it was simply what Thatcher did when she came to gov
Individualism as a shift from old Conservatism
- Sutcliffe Braithwaite- Thatcherite emphasis on individualism underpinned shift from paternalism to small statism
class appeal of Thatcher
o Thatcher’s victory was seen as a “peasant’s revolt”(or perhaps more accurately a “kulak’s revolt” – Thatcherites had money but not status).
o Electorally, Thatcher did very well with the ‘C2 workers’ (i.e. the skilled workers who had created the Labour Party).
uniqueness of monetarism
Thatcher was not the first monetarist in the Conservative Party (Enoch Powell had been).
Thatcher and one nations
In British slang, “wet” meant weak, “inept, ineffectual, effete”.[1] Thatcher coined the usage in 1979–80, with the meaning of feeble, lacking hardness, or willing to compromise with the unions eg those who opposed monetarism
o Less emphasis on ‘one nation’ policies, which Thatcher regarded as ‘wet’.
Old Conservatism and housing - continuity
o Concern for property–e.g.the Housing Act 1980 gave council Tenants the right to buy (always a conservative intention, perhaps cynically because home-owning gives people conservative values), and direct taxes were continually replaced with indirect taxes, with the base rate of income tax lowered to 25% by 1988.
old conservatism belief in thrift- continuity
o Belief in thrift–e.g. Howe’s 1979 Budget cut public expenditure by £4bn.
Though the 1986-88 ‘Lawson Boom’ was credit-funded, with Gilmour noting that “The lady was for turning after all”.
Old conservatism + striking - continuity
o Anti-union policies were similar to those passed by Baldwin following the General Strike – the Trades Dispute Act 1927 banned solidarity action and mass picketing.
Thatcher’s radical conviction
o Whereas Baldwin attempted to be a ‘healer of the nation’ after the General Strike, Thatcher had a no-nonsense style of leadership – people are right or wrong, and there is no need to achieve consensus for its own sake. Her leadership was all about expressing personal conviction and beliefs, and she became very associated with the slogan “there is no alternative” (leading to her opponents nicknaming her ‘Tina’).
Thatcher as a survivor
The height of Thatcher’s power was as the victor of the Falklands, and the survivor of the IRA bombing at the Conservative Party Conference in October 1984.
3 reasons Thatcherism was an ideology
o According to Oakeshott, Conservative statesmen are there to stop the ship from sinking, rather than sailing it in a particular direction; but Thatcher did attempt to sail in a particular direction.
o Thatcher gave frequent statements of her own beliefs (unlike Heath,who said that “morality is best left to the bishops”), and many of these beliefs were ideological, e.g. quoting Hayek and Friedman.
o Despite aberrations on certain occasions, there were various key strands of thought which pervaded the 1979-97 governments – e.g. belief in free trade, belief in property, belief in thrift, anti-statism, anti-unionism etc.
Thatcherism was contradictory - strong, centralised state but free economy
o There was consistent hostility towards local government, of which the Conservatives had previously been the champions:
o A strong state was also seen as necessary in order to preserve ‘the social order’ (e.g. the implementation of ‘Article 28’ in 1988) – economic freedoms (new ideas for the Conservative Party) were not seen as entailing social freedoms.
Thatcherism was not contradictory - strong, centralised state but free economy
Gamble argues that “the free economy and the strong state” is not a contradiction, as one in fact requires the other – e.g. for free markets to work properly, the state must ensure that industries do not become monopolised (competition is essential).
Free markets as a tool of government not of ideology
o The trade union acts of 1980, 1982, and 1984 were principally designed to reduce the power of the unions in the workplace / in industrial relations – they were anti- unionist and anti-statist, but had little to do with free markets.
o The 1979 manifesto contained very little about free markets, but a lot about ‘the state’ and about providing the right conditions for the ‘aspirational working class’.
o The privatisation programme(largely after the 1983 victory)was implemented to raise government revenue (through asset sales), not for the sake of free markets:
If free markets had been the priority, the government would have given away the industries, not invited people to apply for a small number of shares.
cuts weren’t consistent under Thatcher
Thatcher refused to touch the NHS, as it was the one area of the welfare state that was positively popular, including amongst Conservative voters
Some groups were immune – e.g. police officers / prison officers / army.
Farmers continued to receive subsidies / protections, without free market values being applied to them.
Thatcher dismissed proposals to replace universal child benefit with a more targeted handout.
Thatcher personally insisted on maintaining tax relief on mortgages, which had nothing to do with free markets as it pushed up property prices – the great irony is that Thatcher argued government is like a family (which cannot afford to spend more than it earns) but, by the time Thatcher left office, families were spending far more than they earned due to the explosion in house prices leading to higher personal debt!
lack of free trade did not show Conservatism wasn’t an ideology
o Thatcher’s government lost only one bill at second reading, which was the Shops Bill 1986 – lots of Conservatives were hostile at the idea of Sunday trading due to family values / religious commitments which conflicted with free market values. Indeed, it probably would not have been possible for Thatcher to truly advocate free-market ideology even if she had wanted to:
Hayek argues that free markets only work if people buy into their ideas / values. In protectionist countries, it is difficult to create a market economy (people see it as unfair) without a cultural revolution.
Thatcherism as a political tool not ideology
- Sutcliffe- Braithwaite: In so far as ‘Thatcherism’ had a clear public identity in the seventies, it was descriptive rather than prescriptive: a narrative that cleared the way for policy responses, rather than a policy programme in its own right. - nor just directed against the Labour Party but against rival analyses within her party.
o No coincidence that ‘Thatcherite’ and ‘Thatcherism’ first appeared, not as ideological statements, but as markers of allegiance within Conservative politics, serving as antipodes to ‘Heathism.’
Thatcherism was limited in scope
- Gamble- The Thatcher revolution in policy did not extend to all areas of policy. Defence and foreign policy were untouched. The major area of change has been economic policy. However, even many of these changes, such as the turn from Keynesian to monetarist policies in economic management, were already under way before 1979.
lack of coherence of Thatcherism
- Thatcherite ideas were not very well formulated as a programme for government by 1979, so the programme evolved over time (mainly in Thatcher’s second term when she had political and electoral confidence) – beforehand, Thatcherism had been largely descriptive, identifying what was wrong in the country rather than advocating specific policies to rectify the situation.
- If there was a plan, it was gradually introduced in stages, not laid out as one complete and coherent package. This was possibly forced on Thatcher by the fact that the Cabinet / Party she inherited were initially opposed to many of the ideas – there were only a minority of Thatcherites in the Cabinet in 1979, and the Party seemed to become more Thatcherite over time
Labour as similar to Thatcherism
o In the 1979 election manifestos, all the parties pledged to cut taxes.
o A Labour government may have been forced to privatise various industries, in the same way that any government after WW2 may have been forced to nationalise.
o Similar policies were happening in different countries around Europe, even those with socialist governments.
o Morgan notes that various policies we consider as Thatcherite were actually started under the previous Labour government:
Keynesianism had already been rejected by the time Thatcher came to power, and Callaghan had started to experiment with controlling the money supply.
Despite the common claim that Thatcher ‘destroyed’ the coal mines and the mining communities, far more coal mines were closed under the Wilson / Callaghan governments (272 mines) than under Thatcher (154 mines) – she just put the nail in the coffin of an already-dying industry.
winter of discontent
The “Winter of Discontent” refers to a period of intense industrial unrest in the UK during the winter of 1978-1979. It played a significant role in shaping public perception and contributing to Labour’s election loss in 1979. Britain experienced widespread strikes and labor disputes across various sectors, including transportation, healthcare, and public services. Workers were protesting against government pay policies, which aimed to limit wage increases in order to combat inflation.
The strikes resulted in disruptions to essential services, such as garbage collection, hospital operations, and public transportation. Hospitals faced staff shortages, leading to postponed surgeries and delayed treatments. Rubbish piled up in the streets due to strikes by refuse collectors, creating unsanitary conditions in many urban areas. Public transportation networks were paralyzed by strikes, making it difficult for people to commute to work or go about their daily lives.
pre 1979 Labour’s economic struggle
- High Inflation: Inflation reached double-digit levels during Labour’s tenure, leading to a decline in the purchasing power of the pound and increasing costs for consumers.
- Rising Unemployment: Unemployment rose sharply, particularly in the manufacturing sector, as industries struggled with global competition and technological changes
Callaghan, left office in May 1979 with unemployment higher at 5.3%.
pre 1979 Labour - issue in party
o Factionalism: Labour experienced internal divisions between left-wing and centrist factions, leading to infighting and a lack of unity within the party.
o Leadership Change: The resignation of Prime Minister James Callaghan in 1979 following the election defeat highlighted leadership instability within the party.
o Ideological Confusion: Labour struggled to define a clear ideological direction, with some members advocating for traditional socialist policies while others sought a more moderate approach. This ideological confusion made it difficult for Labour to present a coherent vision to voters.
NUM defeat
NUM was defeated 1984-85 thanks to: a) Scargill’s refusal to contemplate any pit closures or to hold a strike ballot to legitimate the strike (uncertain about the outcome); b) a lack of support from other unions hobbled by legislation and unemployment; and c) the fact that Lawson had spent two years as Energy Secretary building up coal stocks in preparation for the expected showdown with the miners. The NUM subsequently lost 72% of its members (which consequently damaged Labour’s funding).
Major EU support
Britain did sign the Maastricht Treaty. The Maastricht Treaty, formally known as the Treaty on European Union (TEU), was signed on February 7, 1992, in Maastricht, Netherlands.
Thatcher private health insurance
- Governments provided tax incentives to encourage private health insurance, which helped to increase the proportion of the population covered by such schemes from 4% to 13% between 1979 and 1989.
Thatcher NHS internal market
- the 1989 White Paper Working for Patients, and the NHS and Community Care Act of 1990
Thatcher - The top-down bureaucracy of NHS authorities would be dismantled. Instead of authorities using government funds to provide services, purchasing authorities would have funds to buy services and providing authorities would produce and sell them and compete for a market share. Purchasers could pick and choose between providers, and contract for the best services available.
NHS trusts
Hospitals could become NHS Trusts, with independence from health authorities, and freedom to develop in their own way, subject only to winning enough custom. (linked to control)
o The concept of NHS trusts was introduced in the early 1990s as part of the “NHS and Community Care Act 1990.” This legislation aimed to decentralize decision-making within the NHS and give hospitals and other healthcare providers greater autonomy and flexibility in managing their services. The first NHS trusts were established in 1991, and they were designed to operate independently, with their own management structures and boards of directors, while still being part of the NHS
Howe resignation
e criticised Thatcher’s handling of relations with the EEC and further attacked Thatcher in his resignation speech to the Commons on 13 November. The speech was widely seen as the key catalyst for the leadership challenge mounted by Michael Heseltine a few days later, which led to Thatcher’s resignation and her replacement by Major.
