Thatcher - Rolling Back the State Flashcards
What was Thatcher’s opinion on state intervention?
- Felt state intervention was too high
- The state owning too many industries discouraged innovation, competition and efficiency (no incentive for profit).
What did Thatcher believe about taxation?
She believed that high taxation discouraged entrepreneurship (no incentive to work hard).
What did Thatcher think about dependency culture?
She believed people were too dependent on state welfare provision.
How was Thatcher’s rolling back of the state successful? (1)
The state intervened less in the economy and in people’s lives than had been the case in the previous decade.
How was Thatcher’s rolling back of the state successful? (2)
Thatcher was willing to put theory into practice. Market forces and individual freedom were allowed to determine whether industries failed or succeeded.
How did Thatcher’s rolling back of the state fail? (1)
- Thatcher ultimately failed to prevent the state from growing throughout the 1980s.
- The cost of welfare and maintaining law and order actually went up.
How did Thatcher’s rolling back of the state fail? (2)
Increasing regulation → private industries regulated by a new layer of ‘watchdogs’ like Oftel and Ofgas (made them accountable but increased govt’s role).
How did Thatcher shrink the public sector?
- 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
What did Thatcher do with the economy?
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).
What was the Law and Order Spending and Interference?
- 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.
How was there increased regulation?
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).
How did welfare spending increase?
- NHS spending rose by 35%
- Social security spending rose despite ‘means test’.
What was the problem with the civil service?
- 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.
What was the efficiency unit Thatcher established?
Established an Efficiency Unit to make the civil service more efficient.
What was the Management Information System Thatcher introduced?
Introduced a Management Information System to monitor and reduce costs.
What was the Next Steps Report?
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.
How was Thatcher successful in rolling back the civil service? (1)
By 1989, govt had achieved over £1 billion in efficiency savings, mostly due to reducing jobs by almost 25%.
How was Thatcher successful in rolling back the civil service? (2)
Due to her distrust, she increasingly relied on policy advisors rather than civil servants for advice → reduced civil service power.
How was Thatcher successful in rolling back the civil service? (3)
By 1997 76% of the civil service worked in 100 different agencies, which made the civil service more coordinated and efficient.
How did Thatcher fail to roll back the civil service?
Largely a success!
What was the problem with local government? (1)
Local govt took up 28.1% of public spending.
What was the problem with local government? (2)
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.
What actions did Thatcher take against local government? (1)
Cut govt funding of local authorities by £5m by 1984.
What actions did Thatcher take against local government? (2)
1981, Heseltine introduced maximum spending targets
→local govt who exceeded them had govt funding cut
Local govt responded by increasing rates (local taxation) so…
What actions did Thatcher take against local government? (3)
Rates Bill 1984 allowed govt to introduce a cap on local taxation.
What actions did Thatcher take against local government? (4)
Local Government Act 1988 forced local govt to ‘buy-in’ services from the private sector → e.g. private rubbish collectors.
What actions did Thatcher take against local government? (5)
Introduced the Poll Tax 1988: local taxation became a flat-rate tax instead of based on property value.
What was the success of Thatcher’s actions towards local government? (1)
Although campaigns against rate capping continued until 1984, the govt were successful with their rate caps.
What was the success of Thatcher’s actions towards local government? (2)
The GLC was abolished in 1986 - ended their efforts to use government power and money to protect minority rights etc.
What was the success of Thatcher’s actions towards local government? (3)
Local councils ‘buying in’ services from private sector reduced local govt size →Wandsworth local council staff cut by 30%.
What were the failures of Thatcher’s actions towards local government? (1)
By 1997, local govt spending was almost 14% higher than in 1979
→ BUT it was a slightly smaller proportion of GDP than in 1979
What were the failures of Thatcher’s actions towards local government? (2)
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.
What was the problem with the NHS?
- Huge public sector institution funded by taxation.
Highly inefficient - partly due to aging population.
What actions did Thatcher take towards the NHS? (1)
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.
What actions did Thatcher take towards the NHS? (2)
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.
Did Thatcher roll back government intervention in the NHS?
Government spending on NHS grew by 35% from 1979 to 1989.
What were the problems with education?
Concerns about quality of education
What did Thatcher do to roll back education? (1)
- Strengthened central state control of schools
- Introduced a National Curriculum focusing on maths, english and science
- Introduced standard tests - results informed league tables.
What did Thatcher do to roll back education? (2)
- 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.
Was Thatcher successful in rolling back education?
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.
What did the government do to roll back intervention in housing?
- 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.
What was the success of housing?
500,000 people a year became home owners rather than public sector tenants in 1980-89
What were the failures of rolling back housing?
- 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.
What was Thatcher’s approach to pensions?
Made the pension scheme introduced under Labour less attractive → encouraged people to opt out into private schemes.
What were the limits to Thatcher’s approach to pensions?
Government spending on pensions remained almost exactly the same → fell from 6.7% of GDP in 1979 to 6.5% in 1990.
What was Thatcher’s approach to the welfare state?
1986 Social Security Act: ‘Means testing’ for some universal benefits → designed to stop rising costs and make some claims harder.
What was the success of Thatcher’s approach to the welfare state?
Limited some people from claiming government money
What were the limitations to Thatcher’s approach to the welfare state?
Measures increased poverty amongst the poorest fifth of Britons.
Did not lead to a long-term reduction in the social security bill.
What was Thatcher’s approach to the media?
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.
What were the limitations to Thatcher’s approach to the media?
State increasingly intervening to remove free speech
What was Thatcher’s approach to privatisation?
- Deregulation of the Stock Market: fewer controls and rules and regulations from government
- Privatisation: companies sold off to the private sector.
What were the successes of Thatcher’s approach to privatisation?
- 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.
What were the limitations to Thatcher’s approach to privatisation?
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.
