Thatcher's Impact Flashcards
What was Thatcher’s first priority?
Tackling inflation - she was the first prime minister to do so in a long time
What was inflation at when she first started?
13%
How much did productivity improve?
Up 77%
What did unemployment rise from and to between 1980 and 1990?
3.4% to 9.1%
How much does public expenditure rise from and to by 1997?
39% to 44%
What economic model did Thatcher follow between 1979 and 1983?
Monetarism
What was monetarism?
Theory that the primary driver of inflation is how much money is in the economy - the more money circulating, the higher prices rise. Managing money supplies.
How did Thatcher control money supplies?
Raising interest rates, slash government spending and accept unemployment and inequality
What economic model did Thatcher follow in 1983-1990?
Supply side theory
What is supply side economics?
Policies that increase productivity and how much the economy provides. Idea of Thatcher and Reagan - economic growth comes from lots of supply in the economy.
How did Thatcher increase productivity?
Cut tax for businesses to invest, free market economic, deregulation, privatisation and spending cuts
What was the issue with supply side economics?
Reduces funding for social and welfare provision
What did Thatcher want to end?
Post War Consensus
How did Thatcher explain her economics?
Housewife economic - living within your means
What other aim did Thatcher have?
Reducing the power of the Unions
What did she want to do with nationalised industries?
Make them more efficient - privatise if possible
What kind of capitalism did she want?
Popular capitalism - owning property and shares
What was Thatcher against?
State intervention
What were these policies?
Highly controversial - based on short term pain for long term gain - accusation was that not everyone felt the pain equally
What was inflation in 1980?
22%
What caused many businesses to go bust?
Rising interest rates
What policies did Thatcher adopt?
Milton Friedman - New Right Thinker
Where was the only place where monetarism was implemented?
Chile - military dictatorship
What was the issue with Thatcher using monetarism?
She didn’t really understand it and there was no agreed definition of money supply
Where were there huge cuts in public spending?
Welfare and Housing
What did unemployment rise to?
3 million
How much did production fall?
14%
Where were there riots?
Toxteth, Handsworth and Brixton - some had a racial element
What was inflation at in 1982?
9%
What stopped Thatcher from losing the 1983 election?
The Falkland’s War and the Weakness of the Opposition
What would privatisation do?
Reduce government expenditure
What would the sale of companies do?
Generate income that could fund tax cuts
What would privatisation encourage?
Innovation and competition - get rid of monopolies
When was BT sold?
1984
When was British gas sold?
1986
When was British Aerospace sold?
Before 1983
What did share ownership rise to and from?
3 to 11 million
How many council houses were sold between 1979 - 1988?
1 million - Right to Buy Scheme
What group were most likely to buy shares?
Already affluent individuals
What did competition lead to?
Better customer service - in telecoms
How much money was raised from selling of state owned businesses?
£19 million
What % of the working class owned shares?
9%
By 1990, what % of shares were owned by individuals?
20% - the rest were owned by pension funds and investment firms
What had to be sold off?
Family silver
What happened in many sectors?
No competition so prices rose - benefitted shareholders and executives
What watchdogs were created to monitor prices?
OffWat, OffGas and OffTel
What was privatised in 1994-1997?
British Railways
What was the issue of the privatisation of British Railways?
V complicated - track v rolling stock. Government spends 2x on railways since 1994 and the service is still bad!
What was established in 1992?
Private Finance Initiative and Public - Private Partnerships were set up
What were Public-Private Partnerships?
Private companies would invest in public sector concerns such as schools and hospitals - they would build and operate services (eg new hospital wards
Why did PPPs cost a lot of money?
Infrastructure was leased - it was also controversial to have private money in the NHS
What did Thatcher believe?
Rules and regulations around the economy should be removed to make the market ‘free’ and promote competitiveness and innovation.
What did Thatcher do in 1979?
Removed exchange controls - limits on how much money could be converted into foreign currency and spent abroad
What did this removal of exchange control do?
Encouraged overseas investment and led to a huge increase in spending on foreign goods
When was the Big Bang?
1986
What was relaxed?
Rules around the operation of the banks
What did the Big Bang do?
The City of London became the financial centre and huge profits were made
What became popular?
Get rich quick culture - financial products became riskier.
How much did personal debt rise to?
£16 billion in 1980 to £47 billion in 1989
What did mortgage debt reach in 2003?
6 million families (20%) were in debt due to spiralling house prices
What did Thatcher reject?
The idea that the rich should taxed to help the poor (wealth distribution). She thought this created a culture of dependency
What is trickle down economic?
Belief that tax cuts for the rich would promote economic growth and everyone would benefit
What was the tax rate in 1980?
High rate of tax cut from 80% to 60%
What was the tax rate in 1988?
40%
What financed the tax cuts?
North Sea Oil revenue
What did the government cut down on?
Tax avoidance - claimed the richest paid the same despite the rate cut
What was basic rate reduced from and to?
33% to 25%
What was inheritance tax cut from and to?
75% to 40%
What happened to the overall tax burder?
Rose by 6%
Why did the tax burden rise?
VAT rose in 1979 from 5% to 15% - regressive tax - impacts the poor the most
What did Thatcher think about Unions?
They were socialist and undemocratic
What did Thatcher want to promote?
Individualism
What did she want the economy to move away from?
Heavy industry and towards financial services
Why did she target unions?
Revenge for the 1970s strikes and the 1974 election
What did she think Unions did?
Forced workers to go on strike and bullied union members
When was the Employment Act?
1980
What did the Employment Act 1980 do?
Workers did not have to join a union when they joined a particular firm (“closed shop”): also meant unions could only organise strikes against their direct employers, not allowed to strike in sympathy.
When was the second Employment Act?
1982
What did the 1982 Act do?
Meant that Unions could be sued for illegal strike action.
When was the Trade Union Act?
1984
What did the 1984 Act do?
Strikes had to be approved by a majority of the union’s members in a secret ballot before it was legal
How did Thatcher prepare for strikes?
Built up coal reserves so that they did not have to resort to a three day week
When was the Miners Strike?
May 1984 - March 1985
When was the Battle of Orgreave?
June 1984
What happened at the Battle of Orgreave?
Over 10,000 arrests, 3 murder and 2 suicides
What was the impact of the season?
Less demand for coal - therefore the strike impact wasn’t as significant
Who was the leader of the NUM?
Arthur Scarsgill
What did Scarsgill do?
Failed to ballot for strike action and used flying pickets (strikers who travelled to different coalfields to prevent miners from working)
What happened as a result of his extreme tactics?
Nottinghamshire miners broke away and formed a new Union (Union of Democratic Miners (UDM) which continued working
What happened to union membership?
13.5 million to under 10 million in 1990
What happened to the number of strike days lost from 1980-84 and 1990-94?
10.5 million to 0.8 million
What did the coal industry become?
Increasingly uncompetitive - likely they would’ve been scaled back slower if the strike had not occurred
What impacted small communities?
Affected small communities - Sunderland for Shipbuilding and steel in Sheffield
Who was Von Hayek?
Social and political philosopher and theorist - Hayek’s Constitution of Liberty was the basis for Thatcher’s economic plans.
Who was Geoffrey Howe?
Thatcher’s chancellor till 1983, then took on the role of Foreign Affairs and then Deputy Prime Minister - resigned and openly criticized Thatcher. Monetarist.
Who was Nigel Lawson?
Chancellor of the Exchequer after Howe - resigned due to tensions between him and Thatcher.
What united the nation?
Foreign Policy
What was stressed in speeches?
The threat of Russian Communism
What did the Falklands present?
An affront to the British values of democracy and the rights of British people.
Initiated a complex and difficult military operation to take back the islands to restore “honour”.
What undermined national unity?
Class, unions
What increased class conflict?
Increasing class inequality
Why did Thatcher lose Scotland and Wales to Nationalism?
Inequality
What emerged?
An underclass
What meant that the country was less reliant on coal?
Alternative sources of power - gas and nuclear
How many pits were closed?
20 - intended to close 70 pits
Who was the head of the National Coal Board?
Ian MacGregor
What did MI5 DO?
Infiltrated the NUM to find out strategy
Who supported the miners?
WAPC - rallies in London - formed by Anne Scargill - soup kitchens.
Race Today Collective support.
Lesbian and Gay support the Miners - marches.
How did Labour split?
Labour split - right wing believed that union power was out of hand and refused to support the illegal strike.
Left supported the strike - defending the jobs across an entire industry.
Who opposed the strike?
Tabloids and media opposition and public disapproval
What % of its members did the NUM lose?
84%
What years reduced striking rights further?
1988, 1989, 1990, 1993
What happened in 1988?
Legal protection for crossing picket lines.
What happened in 1993?
Forced ballots and submit voting process to independent scrutiny.
How much did overall trade union membership decline?
40%
What did Labour do?
Distance itself from unions
How many pits were closed by the end of the period?
94/170
What did Thatcher believe?
Public sector was too big
What was she afraid of?
People becoming too reliant on the state - lead to them being lazy and dependent - Nanny State
What assumption did Thatcher make?
Everyone is able to work
Why did Thatcher dislike nationalised industries?
Monopolies and little innovation and choice because of lack of competition
What stopped innovation and people becoming entrepreneurs?
High taxation
What work did Thatcher follow?
Road to Serfdom by Von Hayek - the role of the state was to give people the freedom to be individuals
Who was her UK political inspiration?
Keith Joseph
What did she want to do to bureaucracy?
Make it small
What was MINIS?
Management Information System for Ministers
Who introduced MINIs?
Michael Heseltine - Environment Minister
What did MINIS allow?
Allowed him to closely monitor the roles and responsibilities of the civil servants
What would happen when inefficiencies happened?
People would be fired - one in four workers in the Environment ministry were sack in three years
What did Thatcher abolish in 1981?
Civil Service Department
What was the Civil Service Department?
Existed to protect and supervise members
What was the civil service department like?
Hugely complicated, over 100 agencies - less centralised
What did Thatcher think the department waS?
Glorified Trade Union
What % of the civil service worked in almost 100 different agencies by 1997?
76%
What was the Financial Management initiative?
Large scale review of departmental systems of managerial, economic and analysing public expenditure. The way in which MINIS was rolled out.
What % of the civil servants had been sacked by 1988?
22.5%
How much money did sacking these civil servants save?
£1 billion
How many flexible agencies were there by 1991?
57
Why did Thatcher dislike local government?
Thought it was bloated and part of the big state - also Left wing
Who annoyed Thatcher?
The Legend that was Ken Livingstone of the GLC
What did local governments use?
Local taxes - rates - to provide services for people - making them “dependent”
What was passed in 1985?
Local Government Act
What did the Local Government Act do?
Ban the GLC - an attack on the left wing - six other met councils were dissolved
What was government payments cut from and to?
60% to 49%
What did local governments use to plug the funding gaps?
Rates
What happened in 18 councils?
Rate caps were introduced - Rates Act 1984
Who had to pay rates?
Only those who were living in a house of a certain value - bought or rented - didn’t really impact poor people
What did Thatcher try to introduce?
Poll Tax
What was contracting out?
Services given to private firms in bids - rubbish collection
How had staff numbers fallen in Wandsworth by 1985?
Fallen by one third
What was the national fall between 1979 and 1995?
2.5 million to 2.1 million
What act was passed in 1980?
Housing Act
What did the Housing Act do?
Enables those who had lived in a council house for three or more years to buy their house from the council
How many houses were bought between 1982 and 1983?
204,000
What did house ownership rise to between 1979 and 1990?
55% to 63%
What did the lack of availability do?
Made it harder and more expensive for councils to house the poorest in society by 1997
What did Thatcher see the NHS as?
Huge inefficient monopoly with no choice or competition
What was Thatcher’s ideal aim for the NHS?
Break it up, and take away funding through taxation– bring in private health insurance.
When did Thatcher start reforming the nHS?
1987
What White Paper was presented in 1989?
Working for Patients
What was the Working for Patients White Paper?
Introduced the ‘internal market’. Health care services purchased by Hospital Trusts.
What were introduced in the NHS?
Performance targets introduced and professional managers rather than doctors ran hospitals
When was Working for patients introduced?
1990
What was the response to the reforms?
Hugely unpopular with doctors and costs were going down
How much did costs rise by between 1985 and 1991?
25%
How many trusts were in debt?
36
How much did money spent on managers increase?
£25.7 million to £383.8 million
What were Thatchers aims in education?
Raise educational standards and reduce the power of the Local Education Authorities
What did she think LEAs were?
‘Left wing’ and protected incompetent teachers and had ‘modern’ approaches rather ‘traditional’ ‘academic’ ones.
What was introduced in 1986?
GCSEs
When was the Education Act?
1988
What did the Education Act do?
Introduced the National Curriculum and ‘key stages’, league tables, creation of grant-maintained schools
Who was the mastermind behind GCSEs?
Keith Joseph
Who was the mastermind behind the EA?
Kenneth Baker
How were poorer families were adversely affected in education?
Oversubscription and catchment areas
How many schools became grant maintained?
1,200
What was Section 28?
Made it illegal for the promotion of homosexuality to occur in schools
When was Section 28 repealed?
2003 - Stonewall formed in 1989 to repeal it
What happened in 1981?
Racial conflict in Brixton
What was Operation Swamp?
Mass stop and search of young black people - appeared to be an attack
When was Black People’s Day of Action?
1981
How many people were protesting?
20,000 - against the lack of investigation surrounding the New Cross Fire
What did Thatcher want to do?
Restore Harmony
What did she want to create harmony around?
Common sets of values and morals
What did she not believe in?
State working towards social justice or to improve quality of life
What did she want to promote?
Family Values
What did she believe weakened social bonds
Diversity and alternative lifestyles and immigration
What did she believe about foreign values?
They relied on the state
What did Thatcher attack?
The permissive society
What did she think about class?
Hated it – thought it undermined British identity - fought the Unions to reduce power
How much less did the bottom 10% pay in tax?
£400 million
How much less did the top 10% pay in tax?
£9.3 billion
How much of the post tax income did the top 10% take in 1974?
25%
How much of the post tax income did the top 10% take in 1997?
35%
How much of average earnings were welfare payments in 1978?
61%
How much of average earnings were welfare payments in 1997?
53%
What was reduced?
Housing benefits
How much did income increase for the top 10% between 1979-1992?
61%
How much did income reduce for the bottom 10% between 1979-1992?
18%
How much of the wealth was held by the top 10%?
1979: 20%
1998: 26%
What happened to the proportion of pensioners in poverty?
Increased from 13% to 43%
How much more did top earners have than low earners?
3x more in 1970s
4x more in the 1990s
What was Thatcher accused of?
Widening the North South divide - London and South East got rich whereas industrial areas got poorer
What did unemployment in mining areas increase from?
10 to 20%
What were created?
Enterprise zones - limited success
How many seats did the Tories win in Scotland in 1979?
21 out of 71
How many seats did the Tories win in Scotland in 1987?
10
What was Welsh unemployment in 1979?
73,000
What was Welsh unemployment in 1986?
166,000
What happened to the number of those employed in deep mining in Wales?
1974: 34,000
1980: 28,000
How many Welsh people worked in deep mining in 1990?
3,000
How much of the workforce was lost?
90%
How many drug offences were recorded in 1990?
1,308
How much did nHS spending in Wales increase?
£500 million in 1979 to £1.5 billion in 1990
What was GDP per person
£7072 in 1979 to £20,306 in 1990
What happened to the number of people seeking further education?
20% to 47% by 1991
What did Thatcher deliberately use?
Nationalist language
What did she think had happened to British culture?
It was being swamped by immigration - called for integration on the part of immigrants
What happened in Jan 1981?
The New Cross Fire. 13 black party goers were killed when the National Front allegedly set fire to a house
What did the New Cross Fire spark?
March 1981: Black Peoples Day of Action – Darcus Howe organised a march of 20,000 through London
What did the Police launch in response to the march?
Operation Swamp
Where did rioting happen?
Brixton, Toxeth and Manchester
What did Lord Scarman’s report conclude?
There was clear evidence of disproportionate stop and search of young black men by the police
Economic factors like unemployment, poor housing and poverty had caused the riots
What did Thatcher say about the riots?
‘Nothing but nothing’ justified the riots.
What happened in 1993?
A young black man, Stephen Lawrence was murdered by white youths in London in an unprovoked attack. The police were accused of failing to investigate adequately.
What was the MacPherson Report?
Met police were ‘institutionally racist’. Major’s government accepted the report – times had changed
What did Thatcher think about gay marriage?
Hated it
What did Thatcher think Britain was experiencing?
A ‘moral decline’ with permissive and liberal values leading to an erosion of moral standards.
What campaign was started to tackle permissiveness?
Safe Sex campaign
What was the 1986 Education Act?
Sex education must promote family life
What was Section 28?
Outlawed the promotion of homosexuality and any publication which promoted it. It was also illegal to ‘promote’ it in schools. This was not repealed until 2003.
When was homosexual age of consent lowered to 18?
1994
What did she believe about women?
Equality of opportunity for women but did not accept that women’s role in the family was an obstacle
What happened to the number of female conservative MPs?
8 to 17 - no female cabinet members
What did Heath do to the Tories?
Moved the party away from the domination of aristocrats - like Macmillan or Douglas-Home
What did he try to implement?
Free market policies - no bailing out
What was inflation under Heath?
15% in 1971
What businesses did Heath bail out?
Rolls Royce and Upper Clyde Shipbuilders
Who did One Nation Conservatives tend to be
Upper class men believing in paternalism
Who were the Wets?
The oldies - one nation conservatives
Who were the dries?
People who accepted her free market policies
Who was promoted in 1981?
Norman Tebbitt and Nigel Lawson - Jim Prior moved to NI
Who was sacked?
Sir Ian Gilmour
Which Wets were kept?
Willie Whitelaw - personal friend
Who challenged her unemployment policies?
Heseltine
What policies did Heseltine develop?
Enterprise Zones and Development Corporations
When did Heseltine resign?
1986
What did Major rethink?
Poll tax
Why did government spending increase under Major?
Needed to make local governments more accountable
Who was to blame for the issues of Major?
Thatcher
How much was the poll tax bill reduced in 1991?
50%
Who was appointed to do council tax?
Heseltine
What exemptions were there for council tax?
Single household
What was sold off in 1991?
Bulk of the state’s electricity companies - rest sold in 1995
When was British rail privatised?
1992
How mcuh did water bill rise?
40%
What did CEOs do?
Received bonuses - neglected issues
How much were utilities sold for?
Way below market value - tax payers didn’t get the value
What was abolished in 1992?
National Economic Development council
What implemented the internal market in the NHS?
National Health Service and Community Care Act.
What got tougher under Major?
Policing
What lead to the Criminal Justice and Public Order Act 1994?
Concerns over the rave scene
What did the Criminal Justice and Public Order Act do?
Gave the police power to target raves - removed the right to remain silent and unauthorised camping
What happened to prison populations?
Continued to rise
What was Major’s main campaign?
Back to Basics
Who had a love child in 1993?
Tim Yeo
Who had 5 affairs?
Steve Shagger Norris
Who was found dead with an orange in his mouth?
Stephen Milligan
How many MPs went to public schools by 1987?
75% to 66%
How many women MPs in total?
19 to 41
Who was handbagged?
Lawson - resigned in 1989 - Thatcher refused to consider linking the value of the pound to the value of the Deutschmark.
Why did Geoffrey Howe resign?
November 1990 resignation - resistance to further integration into the EEC.
Who was labour leader in 1980?
Michael Foot - radical left wing
What was his 1983 manifesto described as?
The longest suicide note in history
What did the 1983 manifesto include?
· A commitment to Unilateral disarmament
· Nationalising all the industries that had been privatised
Who took over Labour after 1983?
Kinnock - began a series of Reforms
What had been created in 1997?
Neo-liberal consensus
What is a Mondeo Man?
A working-class man who has benefitted from Thatcher’s policies
What was there a split of in Labour?
Labour and the Social Democrats made it harder for moderates to combat the left wing
What did Kinnock do?
Took action against the Militant Tendency and unite the party if Labour wanted to regain power.
What did Labour become?
More pro-European
What happened in 1988?
trade unions lost the casting vote on candidates.
What happened in 1989?
Dropped support for union closed-shop practice.
Who were Blair supporters?
Middle class
What did Labour do in 1994?
Ditch Clause IV
What did Labour do in terms of society?
Dependency and spent billions on trying to help the poorest in society.
What did Labour focus on?
Social justice - close the gap between the rich and poor - equal opportunities
When was minimum wage introduced?
1998
What policies attacked Thatcherism?
· Protection of liberties (Human Rights Act (1998)
· Protection of minority Rights
· Introduction of minimum wage
More worker protections
When did the SDP rise?
1981 - response to the growth of influence of the far left
Who were the SDP gang of four?
Roy Jenkins, David Owen, Shirley Williams and William Rodgers - believed there needed to be a centre left party
Who did the SDP ally with in 1983?
Liberals - gained a quarter of the popular vote - only 23 seats
When were the Lib Dems formed?
1988
When was the SNP founded?
1934
What did the SNP call for?
Powers - leading to full independence for Scotland.
What was their electoral performance?
Performed badly at 1979, 1983 and 87 but Thatcher’s government decided to use Scotland to trial poll tax - anti-Thatcher sentiment peaked.
What did Thatcher start to be seen as?
Anti-Scottish - lead to SNP starting to make inroads
When was Plaid Cymru founded?
1925 - general left wing
What happened in Wales?
Increased dissatisfaction with Thatcher’s policies - Tories declined
What did Plaid Cymru secure?
Referendum for devolution
