Thatcher - Rolling Back the State

Question 1

What was Thatcher’s opinion on state intervention?

Answer 1

• Felt state intervention was too high
• The state owning too many industries discouraged innovation, competition and efficiency (no incentive for profit).

Question 2

What did Thatcher believe about taxation?

Answer 2

She believed that high taxation discouraged entrepreneurship (no incentive to work hard).

Question 3

What did Thatcher think about dependency culture?

Answer 3

She believed people were too dependent on state welfare provision.

Question 4

How was Thatcher’s rolling back of the state successful? (1)

Answer 4

The state intervened less in the economy and in people’s lives than had been the case in the previous decade.

Question 5

How was Thatcher’s rolling back of the state successful? (2)

Answer 5

Thatcher was willing to put theory into practice. Market forces and individual freedom were allowed to determine whether industries failed or succeeded.

Question 6

How did Thatcher’s rolling back of the state fail? (1)

Answer 6

• Thatcher ultimately failed to prevent the state from growing throughout the 1980s.
• The cost of welfare and maintaining law and order actually went up.

Question 7

How did Thatcher’s rolling back of the state fail? (2)

Answer 7

Increasing regulation → private industries regulated by a new layer of ‘watchdogs’ like Oftel and Ofgas (made them accountable but increased govt’s role).

Question 8

How did Thatcher shrink the public sector?

Answer 8

• Privatisation: 600,000 fewer people employed by the state
• Sale of Council Homes: 500,000 people a year became home owners rather than public sector tenants in 1980-89

Question 9

What did Thatcher do with the economy?

Answer 9

Ensures prices and wages are determined by the free market by:
→Ending Prices and Incomes Policies and their oversight by government
→Ended consultations with unions and employers over economic planning on pay/prices etc (corporatism).

Question 10

What was the Law and Order Spending and Interference?

Answer 10

• Restricts press freedoms: e.g. press banned from interviewing members of the IRA
• Defence spending rose by 20%
• Passed laws enhancing police power: stop and search powers, powers to arrest and charge people involved in protests.

Question 11

How was there increased regulation?

Answer 11

Increasing regulation → private industries regulated by a new layer of ‘watchdogs’ like Oftel and Ofgas. National curriculum and standard testing in schools (made them accountable but increased govt’s role).

Question 12

How did welfare spending increase?

Answer 12

• NHS spending rose by 35%
• Social security spending rose despite ‘means test’.

Question 13

What was the problem with the civil service?

Answer 13

• Thatcher believed the civil service did nothing to create wealth, it was efficient and needed reduced in size
• She believed it was too powerful and had vested interests.

Question 14

What was the efficiency unit Thatcher established?

Answer 14

Established an Efficiency Unit to make the civil service more efficient.

Question 15

What was the Management Information System Thatcher introduced?

Answer 15

Introduced a Management Information System to monitor and reduce costs.

Question 16

What was the Next Steps Report?

Answer 16

Commissioned the Next Steps Report - changed nature of management
→Civil Service had to set targets, evaluate how far they had met targets and publish progress reports.

Question 17

How was Thatcher successful in rolling back the civil service? (1)

Answer 17

By 1989, govt had achieved over £1 billion in efficiency savings, mostly due to reducing jobs by almost 25%.

Question 18

How was Thatcher successful in rolling back the civil service? (2)

Answer 18

Due to her distrust, she increasingly relied on policy advisors rather than civil servants for advice → reduced civil service power.

Question 19

How was Thatcher successful in rolling back the civil service? (3)

Answer 19

By 1997 76% of the civil service worked in 100 different agencies, which made the civil service more coordinated and efficient.

Question 20

How did Thatcher fail to roll back the civil service?

Answer 20

Largely a success!

Question 21

What was the problem with local government? (1)

Answer 21

Local govt took up 28.1% of public spending.

Question 22

What was the problem with local government? (2)

Answer 22

Some local govts tried to introduce ‘socialist’ policies
→ The Greater London Council (GLC) ‘Fare’s Fair’ Campaign subsidised London Underground travel, sought nuclear disarmament and protecting minority rights using govt power and money.

Question 23

What actions did Thatcher take against local government? (1)

Answer 23

Cut govt funding of local authorities by £5m by 1984.

Question 24

What actions did Thatcher take against local government? (2)

Answer 24

1981, Heseltine introduced maximum spending targets
→local govt who exceeded them had govt funding cut
Local govt responded by increasing rates (local taxation) so…

Question 25

What actions did Thatcher take against local government? (3)

Answer 25

Rates Bill 1984 allowed govt to introduce a cap on local taxation.

Question 26

What actions did Thatcher take against local government? (4)

Answer 26

Local Government Act 1988 forced local govt to ‘buy-in’ services from the private sector → e.g. private rubbish collectors.

Question 27

What actions did Thatcher take against local government? (5)

Answer 27

Introduced the Poll Tax 1988: local taxation became a flat-rate tax instead of based on property value.

Question 28

What was the success of Thatcher’s actions towards local government? (1)

Answer 28

Although campaigns against rate capping continued until 1984, the govt were successful with their rate caps.

Question 29

What was the success of Thatcher’s actions towards local government? (2)

Answer 29

The GLC was abolished in 1986 - ended their efforts to use government power and money to protect minority rights etc.

Question 30

What was the success of Thatcher’s actions towards local government? (3)

Answer 30

Local councils ‘buying in’ services from private sector reduced local govt size →Wandsworth local council staff cut by 30%.

Question 31

What were the failures of Thatcher’s actions towards local government? (1)

Answer 31

By 1997, local govt spending was almost 14% higher than in 1979
→ BUT it was a slightly smaller proportion of GDP than in 1979

Question 32

What were the failures of Thatcher’s actions towards local government? (2)

Answer 32

Local govt’s power was reduced, but it had to be more closely supervised by central government → e.g. central govt could force local govt to accept most competitive private sector contracts, govt had to extend role to abolish GLC.

Question 33

What was the problem with the NHS?

Answer 33

• Huge public sector institution funded by taxation.
  Highly inefficient - partly due to aging population.

Question 34

What actions did Thatcher take towards the NHS? (1)

Answer 34

Appointed Sir Roy Griffiths to advise on making the NHS more efficient 1983
—> Introduced new layer of management
—> NHS hospitals required to buy-in services from private sector.

Question 35

What actions did Thatcher take towards the NHS? (2)

Answer 35

1989 White Paper Working with Patients created internal market
→Govt money given to district health authorities
→They bought services from local hospitals
→Thatcher argued this would encourage competition and efficiency as hospitals have to compete for funding.

Question 36

Did Thatcher roll back government intervention in the NHS?

Answer 36

Government spending on NHS grew by 35% from 1979 to 1989.

Question 37

What were the problems with education?

Answer 37

Concerns about quality of education

Question 38

What did Thatcher do to roll back education? (1)

Answer 38

• Strengthened central state control of schools
• Introduced a National Curriculum focusing on maths, english and science
• Introduced standard tests - results informed league tables.

Question 39

What did Thatcher do to roll back education? (2)

Answer 39

• Allowed schools to become ‘grant-maintained’ (they could opt-out of local authority control and receiving direct funding from govt)
• John Major introduced Ofsted to monitor schools in 1992.

Question 40

Was Thatcher successful in rolling back education?

Answer 40

Allowed the govt to break up local education authorities (LEAs)
→e.g Inner London Education Authority - believed it was run by dangerous socialists
BUT
Greater central state control required and no reduction in spending.

Question 41

What did the government do to roll back intervention in housing?

Answer 41

• 1980 Housing Act: Council house tenants have the right to buy their home with a 33% discount if they’ve lived there for 3 years. 50% if you had lived there 20 years.
• The government told councils not to build any more council houses as they wanted it to become a private sector responsibility.

Question 42

What was the success of housing?

Answer 42

500,000 people a year became home owners rather than public sector tenants in 1980-89

Question 43

What were the failures of rolling back housing?

Answer 43

• High interest rates meant many people had their homes repossessed as they couldn’t pay off their mortgage.
• Lack of available council houses made it harder and more expensive for councils to house the poorest in society. This was largely a consequence of govt taking more control of local councils.

Question 44

What was Thatcher’s approach to pensions?

Answer 44

Made the pension scheme introduced under Labour less attractive → encouraged people to opt out into private schemes.

Question 45

What were the limits to Thatcher’s approach to pensions?

Answer 45

Government spending on pensions remained almost exactly the same → fell from 6.7% of GDP in 1979 to 6.5% in 1990.

Question 46

What was Thatcher’s approach to the welfare state?

Answer 46

1986 Social Security Act: ‘Means testing’ for some universal benefits → designed to stop rising costs and make some claims harder.

Question 47

What was the success of Thatcher’s approach to the welfare state?

Answer 47

Limited some people from claiming government money

Question 48

What were the limitations to Thatcher’s approach to the welfare state?

Answer 48

Measures increased poverty amongst the poorest fifth of Britons.

Did not lead to a long-term reduction in the social security bill.

Question 49

What was Thatcher’s approach to the media?

Answer 49

1988: Government banned broadcast of interviews with members of the Irish Republican Army (IRA)
Broadcasters put under pressure to drop programmes on Northern Ireland conflict.

Question 50

What were the limitations to Thatcher’s approach to the media?

Answer 50

State increasingly intervening to remove free speech

Question 51

What was Thatcher’s approach to privatisation?

Answer 51

• Deregulation of the Stock Market: fewer controls and rules and regulations from government
• Privatisation: companies sold off to the private sector.

Question 52

What were the successes of Thatcher’s approach to privatisation?

Answer 52

• Privatisation led to 600,000 fewer people working for the state
  Shifted balance of the economy away from public sector to private sector
• Policy of Privatisation continued after Thatcher’s fall.

Question 53

What were the limitations to Thatcher’s approach to privatisation?

Answer 53

The government remained heavily involved through ‘industry watchdogs’: regulatory bodies to ensure privatised companies met standards. E.g. Oftel, Ofgas.

‘Quangos’ emerged: organisations outside of the civil service that received government funding.