Thatcher and the end of consensus, 1979-97

Question 1

Why Thatcher won 1979 - conservative Campaign?

Answer 1

-Conservative campaign focused on earning votes of traditional labour voters, first time voters and voters in marginal constituencies.
-Populism was used in attempt to win over working class labour voters (E.g. Thatcher was photographed tasting tea and holding a calf.) Portrayed as a “Housewives friend”. to win over working class housewives, traditional Labour voters.
-“Labour isn’t working” campaign 1978 - picture of snaking queue to unemployment office - Labours negative impact on economy.

Question 2

Why Labour lost 1979?

Answer 2

Election largely decided in London and Midlands, 40 seats changed hands from Labour to Conservative.
Winter of discontent, 78-79:
-Public services strikes demanding 40% pay rise. (leading to piling of rubbish in the streets etc.)
-Press unsympathetic/sensational to Labour/Unions presented labour as weak - used WOD as decline of country.
-Government caved to pay rise, perceived as weak and not in control of unions.
Economic Issues:
-Unemployment went from 542,000 in 74 to over 1.3 mil 2 years later.
-Stagnating with growth rates, low productivity, low investment.
-Wilson resigned - March 76 - lack of confidence in the pound - value fell.
- Solution - IMF loan 1976 - Healy asked International Monetary Fund for loan of 3600million dollars - to support pound.
-problem - meant GOV spending cut by 2 billion.

Question 3

Outcome of 1979 election - Liberal vote?

Answer 3

Liberal Vote
-liberal kept hold of most strongholds.
-However, total vote dropped by over a million.
-Voters blamed them for keeping Callaghan’s government in office since 1977 (The Lib-Lab Pact - By election loses meant labours slim majority in HOC disappeared. Deal between Callaghan and Lib leader steel - 13 Lib MPS agreed to support gov.)
-Midland areas, collapse of Lib vote, hand seat to Conservative, even though labour vote did not significantly decline.
Most Important reasons was the economic circumstances and labour inability to deal with them.

Question 4

Why Thatcher won 1983 - conservative strengths?

Answer 4

-Conservative majority of 144 – second largest majority in 20th century.
-Conservatives’ share of the vote fell by 1.5 per cent from 1979.
-Falklands war victory in Argentina, despite criticism of the war and how it was fought, received favourable press coverage – leading a national revival.
-Privatisation policies increased public shareholding and selling off council houses appealed to many middle-class and working-class skilled voters.
-Economic policies reduced inflation.
-Benefitted from the split in the Left-wing vote.

Question 5

Why Labour lost 1983 - Labour weakness?

Answer 5

• Michael Foot’s Labour party fell by 9.3%, highlighting Labour weaknesses
  -Labour vote dropped from 11.5 million to 8.5 million, giving Thatcher the stronghold, despite the conservative vote decreasing.
  -Labour party had split in 1981.
  -New Social democrat party allied with liberals won 7.7 million votes - splitting the anti-conservative vote, allowed conservative gains in traditional labour seats up North.
  -Previous labour voters turned away - unpopular policies, Michael Foot as leader - Foot lacked assured manner on TV - his unilateral nuclear disarmament, nationalisation of industry and government regulation seemed old fashioned.
  -Labour manifesto described as ‘longest suicide note in history’ - so out of touch with country.

Question 6

Why Labour lost 1987?

Answer 6

Labour weakness:
-Kinnocks style: long winded in speeches compared to Thatcher - very strong leader - strong hold and colleagues and growing international reputation.
-However Labour gained 1.5 mil votes and 20 seats since ‘83.
-more affected by Alliance who contested every seat 1987 – splitting the left-wing vote.

Question 7

Other reasons for the outcome of 1987 election?

Answer 7

-Conservatives won more votes than ‘79 or ‘83 despite losing twelves seats.
-Unemployment was falling, and the pound was strong.
-Conservative benefitted from left-wing vote.
-Labour actually gained 1.5 mil votes - so not as weak as 83.

Question 8

Thatcher’s View on the Economy

Answer 8

• Four main issues:
  o Inflation – prices had doubled since 1970’s.
  o Lack of investment, modernization and economic stagnation.
  o Costly + unprofitable publicly owned industries.
  o Lack of incentive to modernize and increase productivity.
• Believed state sector had been allowed to grow too much at expense of private business.
• Privatizations – enterprise encouraged through reduction of direct taxation.
• Deal with inflation – reduce amount of money in circulation.
• Did not believe regulation of wages or income would work – market would determine the wages and prices – unemployment preferable to increased inflation.

Question 9

Thatcher’s Economic Policies?

Answer 9

• Privatisation began in October 1979 – sale of British Petroleum – continued throughout the 1980s.
• No longer support for failing industries – stopped production – leading to unemployment.
• Budgets 1980 and 1981 – reduce money in circulation – decreasing government spending – raising indirect taxation.
• Increase confidence abroad – pound value rose.
• Direct taxes + taxes on business – reduced – free money for investment.
• Interest rates remained high through 1980s.
• Financial services Act 1986 – deregulated dealing in stocks and shares and opened up share trading. ‘Big Bang’ -revitalised London’s money making market.

Question 10

The Impact of Thatcher’s economic policies?

Answer 10

• Privatisation popular with those who bought shares in new companies. In 1979 there were 3 mil private shareholders - by 1990 - 11 million. gave many people a stake in success of economy.
• Prices rise fell: 1980 = 18%, 1983 = 4.5% - further fall in 1985-6.
• Stronger pound, changes in taxation, financial deregulation – growth in financial sector.
• Unemployment rose sharply – 1980s – initially 1.5 million – 3 million by 1983.
• Did not begin to fall substantially till 1986 – still over 2 mil 1990.
• Foreign investment increased – Japanese’s car firm Nissan – plant in North East.
• New industries emerged in 1980s – no big employers.
• Critics argues economic improvement was due to increase in North Sea oil production – tuning Britain into a net exporter of oil by 1980.

Question 11

Was there an economic revolution under Thatcher?
Agree

Answer 11

o Shift from public to private sector.
o Privatised industries remained in private hands – after end of Thatcher.
o Encouragement of enterprises, small businesses + investment on stock market.
o More home ownership.
o Industries forced to become more competitive – fewer restricted practices + lower labour costs.

Question 12

Was there an economic revolution under Thatcher?

Answer 12

o Thatcher’s policies were a selfish ‘get rich quick’ culture – disregard for rights and conditions of workers.
o Decline in manufacturing industry – Britain lost 15% manufacturing base.
o Greater divide between prosperous London, The Midlands and South-east and older mining + industrial areas.
o Gov spending as a percentage of GPD fell after 1984-95 – however not permanent figure in 2010-11 higher than 1979 – also cuts ot gov expenditure – not new – Labour CotE Healy – unpopular cuts in 1970s.

Question 13

Was there an economic revolution under Thatcher?
Conclusion

Answer 13

o Economy did offer more consumer choice.
o Balance between states role in the economy and private sector did change.
o Movement in employment from trad industries to services was accelerated.

Question 14

NHS reforms under Thatcher?

Answer 14

• Aimed to make NHS more efficient by applying business principles to its administration.
• Hospitals became self-governing trust, had to look after their own budget.
• Gps became fund-holders - hand to manage their own budgets.
• NHS services expected to compete to provide the most efficient and cost-effective service to GPs.
• Many believed in was much needed financial discipline for NHS.
• However, some people were highly critical of this, claiming first stage of privatisation, putting profit motive above patient care.

Question 15

Education reforms under Thatcher?

Answer 15

Schools:
* Concern about education system:
* Quality of secondary education: two tier qualification - O levels +CSEs.
* thatcher’s solution: GCSE - replaces both in 1986, qualification for all levels of ability.
* 1988 - national curriculum introduced - regular testing.
* However, there were strong oppositions to these educational changes:
* Concern GCSE not academically rigorous enough.
* Content of curriculum (e.g. English and History) disputed.

Universities:
* Cut budgets - forced unis to seek alternative budget/accept more students.
* 1988 - Uni Funding Council - reflect the needs of economy, not just focusing on pure research.
* Removed polytechnics from local authority control - under control of University Funding Council.

Question 16

Housing reforms under Thatcher?

Answer 16

Council house sale:
* Thatcherism valued self-reliance and individualism.
* one of her first action, allowed long-term council tenants the right to buy their houses.
* encourage home-ownership - tax relief on mortgages.
* during her premiership - gov spending on subsiding mortgages doubled - house sales up 12%.

Question 17

Unrest under Thatcher?

Answer 17

• Occupation and wealth balance shifted – away from trad mining industry towards finance, services, consumer goods, entertainment, manufacture, new use of tech.
• Criticism employees had fewer rights, employers concerned with profit.
• Poverty more apparent – ‘cardboard cities’ – homelessness.
• Urban centres in manufacturing – run down- London and south-east – more prosperous.
• Rioting in Brixton, Liverpool and 6 other urban centres – summer and spring of ’81.
• Miners’ Strike – 1984-85
• 1989 – demonstrations against poll tax.
• However, domestic unrest distracted by Falklands War 1982.

Question 18

Miners’ Strike – 1984-85

Answer 18

o Violence and battles between strikers and police. National Coal Board – facing loss of 250 million for 1983-84.
o Gov serious about refusing to support loss making – pit closure programmes was essential – announcement in March 1984 – 20 uneconomic pits closing – loss of 20,000 jobs - provoked coal strike.
o However – Whitehall committee 1981 – stock pile coal – power stations running through dispute – Leon Brittan HS - National Reporting Centre in New Scotland Yard– control of policing.
o Union of Democratic Mineworkers – continued working – break away union – minors not united.
o Labour Party reluctant to support Arthur Scargill – seen as a extremist.
o Violence on picket line limited public support/sympathy.
o NUM membership dropped from 200,500 in 1979 to 100,000 by 1987 – union ended bankrupt.
o Divided opinion about Thatcher – supporters thought she was successful in demonstrating TU power could not defeat government. Enemies – believed she had willingly destroyed lively hoods.

Question 19

The Impact of a woman Prime minister - Thatchers cabinet management?

Answer 19

• Faced hostility from senior members of the shadow cabinet – she was a woman and had controversial political style/convictions.
• Loyal support: William Whitelaw, Sir Keith Joseph.
• Had to keep balance between those supporting radical change and more cautious ‘wets’ – Michael Heseltine.
• Support form backbench, MPs, local constituencies – ousted ‘wets’ – replaced with those supporting her views.
• Popular with grassroots of party – emphasis of economic prudence, defeating socialism and restoring Britain greatness.

Question 20

Thatchers Mastery of the Cabinet?

Answer 20

• Originally felt obliged to keep old wets – however allies of her economic policies held key ministries – Geoffrey Howe – Chancellor of the Exchequer – Keith Joseph – Department of Trade and Industry.
• Removed: Jim Prior form Department of Employment – replaced with loyal Norman Tebbit.
• However, after 1983 win of the second election + strength in Falkland’s war – allowed her to be more commanding.
• Fired leading ‘wet’ Francis Pym (foreign secretary) – replaced by Geoffrey Howe.
• New Chancellor – Nigel Lawson – implementing Thatcher’s radical economic policies.
• 1986 – cabinet entirely dominated by those sharing her views.

Question 21

Opposition to Thatchers Cabinet?

Answer 21

• Michael Heseltine – last surviving ‘wets’ – willing to express his view – resigned in 1986 – however mastery of cabinet made her intolerant to disagreement even from most loyal supporters.
• Loss of main adviser – William Whitehall – retired 1987.
• 1989 – fell out with key figures – Lawson and Howe – over economic policy + Britain’s role in Europe.
• Howes resignation speech 1990 – key to her downfall.

Question 22

Impact of Poll Tax of the fall of Thatcher?

Answer 22

• Since 1925 – source of local gov income ‘the rates’ tax on businesses and property owners.
• More ½ local electorate did not pay ‘the rates’ – Thatcher saw as unfair,
• Local Government Finance Act of 1988 – Community charge – ‘poll tax’ – replaced ‘rates’ with ‘flat-rate tax’ – on every individual – concession for poorest.
• Opposed by many – 1st introduced in Scotland 1989 – millions of Scots refused to pay – encouraged by National Scottish Party.
• 1990 – demonstration in Trafalgar Square – day before poll tax introduction – 300 people arrested – 400 policemen hurt – violent riot.
• Went ahead with policy anyways – increasingly dictatorial style of government.

Question 23

Economic Issues - the fall of Thatcher?

Answer 23

• 1987 – stock market crash – wiped 24% off share prices.
• Lawson – 1988 budget – reduced income tax – to prevent recession in aftermath of crash.
• Stimulate consumer boom – pushed up prices.
• 1989 – inflation 8.3%.
• Lawson – raised interest rates – 1989 – 15%.
• Home owning mortgage payers – people benefited most from Thatcher’s policies – suffered.

Question 24

Division over Europe - the fall of Thatcher?

Answer 24

• Thatcher excepted Single European Act 1986 – regretted – led to member states working towards more political and monetary union.
• Speech in Bruges September 1988 – ‘We have not successfully rolled back the frontiers of the State in Britain, only to see them re-imposed at European level’
• Lawson and Howe – keen to join ERM (Exchange rate mechanism) – minimising exchange rate fluctuations between members.
• Thatcher disagreed – demoted Howe for Foreign office to deputy PM.
• Lawson resigned as chancellor.
• Rift weakened her authority.

Question 25

Change in public mood - the fall of Thatcher?

Answer 25

• Tories – badly in European elections of 1989.
• Lost by-elections in 1989 -1990.
• Public opinion polls put Labour sixteen points ahead.
• Tory rebels – put forward little known Sir Anthony Meyer – stand against thatcher’s leadership – won 33 votes.
• Howe – devastating speech against her – 1990 – prompted Michael Heseltine to stand against her for leadership – lost but enough votes for another vote.
• Asked he ministers opinion – consensus was that she should resign – resigned November 1990.

Question 26

Why did the conservatives lose the election of 1997 - Divided over European integration?

Answer 26

• Ongoing point of contention – however despite these divisions they still won the ‘92 election.
• 1991 Maastricht treaty: established European Union, Europe would have a common currency = euro, defence and foreign policy.
• Major managed to negotiate out of single currency and the social chapter.
• However – still opposed by Eurosceptics in own part, and labour party – however the Maastricht treaty signed 2 months before conservative victory (+21) at election.

Question 27

Why did the conservatives lose the election of 1997 - Majors’ leadership?

Answer 27

• -Followed strong leadership of M. Thatcher.
• -Lacked authority, uncharismatic, targeted by the media as a result.
• However:
• -1995 conservative leadership election re-elected Major.
• -and he won (+21 only) the 1992 election.

Question 28

Why did the conservatives lose the election of 1997 - Economic reasons?

Answer 28

• Sep 1992 – inflation tipped British economy into depression.
• Unemployment rose – GDP diminished.
• The exchange rate was too high.
• Value of the pound fell.
• Major and Lamont (chancellor) - tried to sustain pound – increased interest and getting Bank of England to buy pounds – unsuccessful - ‘black Wednesday’ Britain withdrew from Exchange Rate Mechanism.
• ruined idea of good economic management by conservatives – had little to offer Britain.

Question 29

Why did Labour win the election of 1997?

Answer 29

‘New labour’
* Kinnock – 1983-92 – expelled extreme left members of party.
* Tony Blair – only 41 years – became leader in ‘94.
* Blair reconciled labour party to Thatcher’s reforms – manged to get rid of clause IV from party’s 1918 constitution – which had pledged to nationalise Britain’s industry.
* Blair appealed to conservative-supporting businessmen – reassuring them about labours policies.
* Won support of leading figures in Media – Rupert Murdoch – owner of the Sun.