Thatcher 1979-90

Question 1

Conviction politician

Answer 1

Political practice of campaigning for one’s genuinely-held political convictions rather than adjusting one’s political opinions to adhere to a political consensus

Question 2

Monetarism

Answer 2

• Economic theory says inflation is caused by government spending.
• The solution to inflation is, therefore, for governments to control the money supply and reduce public expenditure.
• In 1979 inflation was running at 19% which she wanted to tackle.

Question 3

What did Geoffrey Howe do in 1979 budget?

Answer 3

• Standard income tax was lowered from 33% to 30% and tax for the highest earners dropped from 83% to 60%. This was meant to provide people with the incentive to work harder because they could keep their money to spend.
• VAT was increased.
• Subsidies for nationalised industries were reduced.
• Government spending cuts were introduced.
• Howe also abolished the Price Commission and exchange controls on the movement of currency in order to allow the free market.

Question 4

What changes were there in the 1980-81 budget?

Answer 4

• £900 million was taken out of public spending.
• There were heavy cuts to higher education.
• Prescription charges were raised.
• Taxes on petrol and alcohol increased.
• Taxes were increased by £4 million to reduce inflation.

Question 5

What happened to employment levels by 1983?

Answer 5

• Unemployment had reached over 3,225,000 million.
• Riots broke out in London, Manchester, Bristol and Liverpool due to the lack of job opportunities and racial discrimination.

Question 6

Supply side economics

Answer 6

Demands lower taxes, decreased regulation and government interference with trade practices, and allowing a free market.

Question 7

What happened to the number of trade union members voting for Thatcher?

Answer 7

Between 1979 and 1987 it dropped from 30% to 22%.

Question 8

What fortunate events helped Thatcher to victory in 1983?

Answer 8

• Inflation fell rapidly.
• Economic growth created high-tech industries in the South and the Midlands (the M4 corridor).
• Oil had been discovered in the North Sea, producing a lot of revenue.

Question 9

Poll Tax

Answer 9

Community Charge - it was unpopular, everybody paid the same regardless of income or the value of their house.

Question 10

Falklands war

Answer 10

~ Territorial dispute between Argentina/Britain over Falklands off the coast of Argentina - South Atlantic
~ The Falklands were important to Britain because of: Oil prospecting, Fishing, Rights of self-determination, Political posturing. Also proved helpful as Military Bases.
~ Causes: War was ‘last gamble’ to gain support from public as winning Falklands would have helped Argentinian nationalist ideology.
~ Results of invasions. UN supports British, affirming right to the Islands. - initially feared as decolonisation resolution. EEC provided economic support by imposing economic sanctions on Argentina Chile supports.
~ What happened: HMS Conqueror sinks the Belgrano, over 300 dead Argentinians. Military success but political disaster. It broke the rules of engagement for war as it was outside territory and ruined any talks of peace.
~ Impacts: Direct; -
- PTSD and deaths (just over 900).
- Political - In Argentina: Democracy is established.
- In UK: Thatcher wins by a landslide- encourages withdrawal of Argentinian troops from the Chilean area.
- Public- In Argentina: Anti-colonialism

Question 11

Miners strike 1973

Answer 11

~ The industry was nationalised
~ Coal became more difficult to mine
~ Government unwilling to fund mining
~ Closure made many redundant
~ Scargill wanted to stop closure but Tebbit tried to weaken TU power, but this was unsuccessful
~ Strike saw violent clashes between the miners and the police
~ Other TU’s supported the strike
~ Employment act restrained miners
~ Britain no longer needed the industry and the police finally broke the strike

Question 12

Consequences of the strikes

Answer 12

• From 1985 onwards the closure programme sped up.
• The divide between the North and the South became bigger than ever.
• Thatcher and British employers were more confident about their abilities to control workers.

Question 13

What businesses were privatised by Thatcher?

Answer 13

• Cable and Wireless in 1981 for £240 million.
• Jaguar Cars in 1984.
• British Telecommunications in 1984.
• British Gas in 1986 for £5.5 billion.
• British Airways in 1987.

Question 14

Privatisation

Answer 14

Privatisation and deregulation of national companies, such as British Rail/British Airways
Attempt to encourage companies to grow without being bogged down in government red tape.
This would then lead to more employment and stronger economy

Question 15

What was the ‘right to buy scheme’?

Answer 15

• Legislation that allowed the tenants of council houses to buy their properties at a discounted price if they had lived there for over three years.
• It was hugely popular; over a million council houses were sold in the 1980s.

Question 16

Anglo-Irish agreement 1985

Answer 16

~ Despite the violence talks between all parties had been ongoing
~ Attempt to halt violence in Ireland but proved more divided than unifying
~ Signed by Thatcher and Irish MP
~ Gave South a say in North to satisfy IRA but this was not liked by SDP
- Key Features:
~ It established intergovernmental conference by the UK and Ireland
~ Gave Republic of Ireland a say in North Irish affairs
~ It was first time British government said it would allow a united Ireland
~ Attempted a devolved government

Question 17

Changes in education

Answer 17

• 1988 Thatcher passed the Education Reform Act which aimed to give parents and governors more power over their schools by taking it away from the local authorities.
• Schools were given greater control over their own budgets and league tables were introduced along with the ability to choose schools where possible in order to promote competition between schools.
• Also, a national curriculum was introduced and key stages were provided with aims to be achieved at each level.

Question 18

Changes in health sector

Answer 18

• In 1989 Thatcher introduced health reforms which gave more control to GPs in regards to budget controls.
• Hospitals were encouraged to compete in order to achieve greater efficiency, but in reality costs went up as more managers were hired to cope.

Question 19

Economic problems 1987

Answer 19

• There was a stock market crash in October.
• Inflation increased.
• The pound’s value decreased dramatically.

Question 20

2 main disagreements in the party emerged

Answer 20

• Lawson and Howe were in favour of joining the European Exchange Rate Mechanism (a precursor of the Euro) but Thatcher wouldn’t agree.
• Thatcher insisted on retaining the services of Professor Alan Walters as her independent financial adviser which angered her cabinet whom she didn’t listen to.

Lawson resigned in October 1989 as a result of this.

Question 21

How did the poll tax lead to the fall of Thatcher?

Answer 21

• It caused resentment to develop among the middle class which would damage the Conservatives’ chances in the forthcoming general election.
• Many Conservative MPs began to criticise Thatcher, saying that more should be done to help the poor and unite the nation as under Macmillan.

Question 22

How did the opinion polls lead to the fall of Thatcher?

Answer 22

In April 1990 they showed that Labour had a 20 point lead, with Thatcher’s personal rating at its lowest ever.
There was a general consensus within the party that the Conservatives would not win if Thatcher stayed on and so she was encouraged to stand down despite coming out of the leadership vote on top.

Question 23

Single European Act 1986

Answer 23

Main purpose was to set a deadline for creation of a full single market by 1992.
It created integration by making it easier to pass laws, strengthening the EU Parliament and laying the basis for a European foreign policy

Question 24

The Bruges Speech 1988

Answer 24

• By Thatcher to College of Europe at the Belfry of Bruges, Belgium, 1988.
• Thatcher was opposed to moves to transition the EEC into federal Europe that would take powers from members

Question 25

What was the ‘Big Bang’?

Answer 25

• In 1986 the stock exchange was reformed to reduce state controls and restrictions.
• This allowed for increased foreign investment, making the stock exchange expand rapidly.
• This made London the world’s leading financial centre by the start of the 21st century, enriched the traders and increased the national wealth.

Question 26

The fall of Thatcher 1990

Answer 26

~ Internal Squabbling (Foot and Benn) rise of SDP
~ She turned against Europe, promised to sort economy but by 1990 the economy got out of hand again (high unemployment and inflation)
- Poll tax split her party resulted in resignations
~ Single European act 1986 - Despite her fighting words, Britain was drawn even closer into Europe. She excepted this act which marked the biggest step towards centralised Europe that had been taken
~ Exchange rate mechanisms - was told it would provide a means of fighting inflation but did the opposite
~ Thatcher refused for Britain house the euro as its currency, in her ‘Nono no’ speech, even though her cabinet signed Britain up for it behind her back
~ Howe’s resignation speech galvanised Heseltine, a long standing critic of Thatcher since the Westland affair. He announced a leadership challenge.
~ After failing to win the first ballot, Thatcher resigned. (She called individual cabinet members to her office and most said they don’t think to continue but they’d support her if she decided to) Heseltine announced his candidacy for leadership of the party.
~ First ballot - Thatcher 204 vs. Heseltine 152. Margin of victory was not big enough to rule out second ballot as Thatcher lost support of 2/5 of party.
~ Thatcher’s intentions to fight ended following individual discussions with ministers. Consultations found most of them advised her to resign). Thatcher resigned two days later - of the regicide
~ She said ‘It is something I will never forget and never forgive’