Thatcher part 2 - state intervention and the public sector Flashcards
what did Thatcher mean by ‘a free market and a strong state’?
committed to strengthen some parts of the state while rolling back others
believed rolling back the state was essential for creating a free market that would end inefficiency and inflation, which would ensure economic liberty
in what 4 areas did Thatcher want to ‘roll back the state’?
ending Keynesianism
end corporatism
cut government spending on welfare
cut direct taxes
what 3 factors did Thatcher believe threatened political and economic freedom in Britain?
the Soviet Union
powerful unions who wanted to use undemocratic methods for increased wages
those who threatened people with violence
what was corporatism?
a style of economic management in which the government negotiated with unions to create common policy on pay, prices, and industrial development
what view of corporatism did Thatcher and Tebbit hold?
Tebbit argued it was undemocratic and a key characteristic of fascist governments
Thatcher argued it stifled innovation and economic growth
how did Thatcher abandon corporatism in 1979?
government abandoned income policies and effectively stopped negotiating with major unions on economic policy
Department for Trade and Industry reorganised to break its link with the Confederation of British Industry
why did the end of Keynesianism not mark the end of economic intervention?
there was continued economic management
Howe’s budget cut spending to reduce inflation
Lawson cut taxes and manipulated interest rates to stimulate growth and control inflation
what was fundamentally different about the way the Thatcher government related to TUs?
rather than negotiate, they tried to control TUs
passed laws allowed the government to control aspects of union activity
what laws were passed control the unions?
Employment Act (1980) - criminalised secondary action
Employment Act (1982) - union leaders could only impose a closed shop if they had the backing of a majority
Trade Union Act (1984) - forced all unions to call a secret ballot and win a majority prior to starting strike action
how did a strong defence sector fit into Thatcher’s world view?
Thatcher was committed to defending British interests through strengthening the state’s defence policy and resolve to act powerfully when challenged by other nations
how did Thatcher strengthen the state in terms of defence?
1980: bought Trident, a new generation of nuclear weapons, from the USA, believing it would deter a Soviet attack
1981: government committed to increasing defence spending by 3% each year
1982: Thatcher approved operation to retake Falkland Islands from Argentina
1986: Thatcher permitted US bombers stationed in Britain to carry out bombing raids in Libya
how did Thatcher react to the high cost of Trident after 1986?
began to reduce defence spending
1984-86: 18,000 troops made redundant
1986: plans to buy new RAF fighter plane were scrapped
Navy reduced in size
what was the overall picture on defence spending between 1979-97?
defence spending fell by 7% (1979-89)
fell by 12% (1990-97)
Thatcher’s view on the police
significantly extended police powers and allowed extensive use of existing powers
- clearly in favour of increasing this aspect of the state
what were the ‘sus laws’ and their role?
part of Operation Swamp ‘81
used to stop and search black people in London, particularly Brixton
justified by arguing most muggings were committed by black people
aggressive policing led to Brixton Riots
what laws were passed to strengthen police powers?
Police and Criminal Evidence Act (1984) - extended stop-and-search powers
Public Order Act (1986) - gave police powers to arrest and charge people involved in demonstrations and pickets
Criminal Justice Acts (1982, 88) - introduced shorter sentences for young offenders, but also tough conditions
Prevention of Terrorism Act (1989) - extended police powers of stop and search
why do some argue that harsher policing was necessary in creation of the free market?
free-market policies created mass unemployment and social inequality, leading to more crime
Thatcher believed economic freedom was threatened by terrorists and those who threatened others with violence
why was Thatcher concerned about ‘traditional freedoms’ being undermined?
concerned about the threat of Russian-organised communist infiltration which could undermine traditional liberties
what is GCHQ?
Government Communications Headquarters
responsible for providing government with secret intelligence
responsible for keeping top-level government communications secret
how did Thatcher made sure that GCHQ was not part of the ‘enemy within’?
used state power to ban union membership in GCHQ to protect the country from ‘unpatriotic socialists’
argued that unions were socialist organisations and so sympathetic with Soviet Union
what was the Zircon Affair?
involved the banning of a TV documentary about a secret spy satellite
1986: BBC agreed not to show it after pressure from government
Duncan Campbell was determined to expose it so gave the story to the observer newspaper
- police raided his office and confiscated his research
- government banned him from writing or speaking about his research
what does the Zircon Affair show us?
exposed the government’s willingness to interfere with the media and ignore the constitution in order to protect secret security projects
examples of Thatcher’s government interfering with the media to protect the state
1985: ‘Spycatcher’ banned in England and Wales
1988: banned the broadcast of interviews with members of the IRA, the Ulster Volunteer Force and Sinn Fein
why might Thatcher’s government have created a ‘crisis of civil liberties’?
critics of the government claims that sate intervention was being used to take away traditional rights of free speech
in what ways did Thatcher expand the forces of law and order?
1979-89: law and order budget increased by 36%
prison population increased from 42,000 (1979) to 48,000 (1989) to 60,000 (1997)
why is Thatcher’s government described as ‘anticollectivist’ and ‘antistatist’?
anticollectivist - prioritised individual freedom and wellbeing over policies designed to promote the welfare of the whole society
antistatist - claimed that state action was counter-productive and inferior to the action of private companies
why did Thatcher think it was right that all council house tenants should have the right to buy their homes?
believed owning property was an important aspect of freedom
believed the public sector would build better houses so wanted to end public-sector involvement in house building
what did the 1980 Housing Act put into practice?
gave council house tenants who’d lived there for more than 3 years the right to buy their house as a 33% discount from market rate
those who’d lived in their house for more than 20 years could get a 50% discount
what were the consequences of the 1980 Housing Act?
extremely popular
1980-89: 1/2 mill people bought their council house every year
proportion of state-owned houses in Britain fell from 31.5% (1979) to 23.6 (1989)
what did the 1988 Housing Act do?
banned LAs from spending the money earned from the sale of council houses on building new projects
why did Thatcher mistrust the Civil Service?
thought it did nothin to help create wealth, was inefficient, and should be reduced in size
also believed it needed to be placed firmly under government control
how did Thatcher reduce the influence of the Civil Service?
established an Efficiency Unit to find ways to make it more efficient
commissioned the ‘Next Steps’ report, leading to new management culture
- required to set targets, evaluate performance, and publish reports on progress
why did Thatcher mistrust many Labour-led LAs?
believed some were using their power to introduce ‘socialist policies’ which she viewed as a threat to individual freedom
in what ways were Labour-led LAs divided?
decided between the Old Left, committed to traditional Labour policies, and the New Left, associated with a new view of socialism
what % of total government spending were LAs responsible for?
28.1%
how did Thatcher reduce local government spending and how did LAs respond?
79-84: cut funding to from £44 million to £39 million
- LAs responded by increased local taxation
81: LAs were set maximum targets for spending and those who exceeded them had their allowance reduced
- this failed as LAs increased local taxation
1988 Local Government Act
why might Thatcher reducing the power of LAs lead to the argument that she didn’t roll back the state?
each step in the process of reducing the power of local government extended the power of the state
what was the campaign against rate capping?
Labour LAs organised a campaign against the Rates Bill
unsuccessful because government was prepared to compromise and the Labour councils weren’t united
what was the GLC and why was Thatcher so intent on abolishing it?
administered the inner city and outlying boroughs of London
1981: Ken Livingstone elected leader and introduced policies to create ‘Urban socialism’
Thatcher believed the policies represented unacceptable expansion of state power
Thatcher also claimed the GLC was responsible for high taxes and public spending
1986: the Council was abolished
what was the Poll Tax?
introduced a flat rate tax, which was highly controversial as it meant households of very different incomes would have to pay the same rate
highly unpopular
in what ways was Thatcher’s record on rolling back local government spending ‘mixed’?
local government spending increased by 15% between 1979-89, then started shrinking after 1990
Thatcher and the NHS
did not propose privatising it due to its popularity
1983: reformed the NHS by making it more efficient. Roy Griffiths appointed, who added new management and made reforms.
1989: White Paper ‘Working with patients’ led to an internal market created within the NHS
1979-89: government spending on the NHS grew by 35%
what were Thatcher’s actions on social security?
spending increased under Thatcher due to rise in unemployment
1986: Social Security Act tried to stop the rise in social security costs by introducing means testing
- increased poverty amongst poorest 1/5
- didn’t lead to long-term reduction in bill
what were Thatcher’s actions on pensions?
wanted to increase uptake of private pensions
changed State Earning-Related Pension Scheme to make it less attractive and encourage people to opt out of it into private schemes
government spending remained constant - 6.7% of GDP (1979) to 6.5% (1990)
what were Thatcher’s actions on education?
strengthened central state control of schools
introduced national curriculum
introduced standard tests as ages 7, 11, 14, and 16 which would have results in league tables so parents could choose the best schools
allowed schools to opt out of LA control and receive funding directly from the government
- enabled government to break up local educational authorities (they believed the Inner London Education Authority was run by socialists)
