Thatcher's decline 1987-1990 Flashcards
What was the October 1987 stock market crash called?
Black Monday
How did Chancellor Nigel Lawson respond to Black Monday?
To avoid a recession he reduced income taxes in 1988 to increase spending
How did the reduction of income tax in 1988 backfire?
Inflation increased due to high consumer spending
How high did inflation reach in June 1989?
8.3%
How did Lawson aim to cut inflation?
By raising interest rates
Interest rates reached 15% by October 1989. Why was this an issue for the Conservatives?
Britain’s homeowners (who Thatcher’s government had focused on) had to pay more for their mortgages
Why did rising inflation affect Thatcher’s popularity?
She had argued that inflation was the main source of Britain’s decline, 1964-1979 and she had provided a solution to this - this now looked unconvincing
How were the Conservatives divided over Europe?
- Thatcher became increasingly Eurosceptic over closer political ties with Europe
- Thatcher opposed joining the Exchange Rate Mechanism (ERM) in 1989
- Howe (pro-Erm) was demoted and Lawson (pro-Erm) resigned out of frustration
- Eventually joined ERM in October 1990 but continued to oppose further integration “No No No”
What had revealed Thatcher’s unpopularity with the public by 1990?
- European Parliament elections: Labour 38.7%/Conservatives 33.5%
- March 1990: Mid-Staffordshire - Conservative majority of 14,600 overturned by a Labour majority of 9,400
- June 1990: Labour ahead of the Conservatives by 16 points in opinion polls
Which key minister resigned in November 1990, triggering Thatcher’s downfall?
Geoffrey Howe
What was the Poll Tax?
Popular name for the Community Charge: flat-rate tax on every individual , although concessions for least well off
Why did the Poll Tax create opposition?
- Members of the cabinet and a number of Conservative MPs thought it would be unpopular
- First Introduced in Scotland in 1989 which created a campaign of opposition and refusal to pay
What was the impact of the Poll Tax?
- 31st March 1990 (day before it was due to start in England and Wales): series of riots. Especially Trafalgar Square. 300 people arrested.
Why was Howe’s resignation significant?
He had been a staunch ally since 1979. His resignation speech on 13th November 1990 was televised and became a sensation
Who challenged Thatcher to a leadership contest?
Michael Heseltine
