The Impact of Thatcherism 1979-87 Flashcards
What were the key economic features of Thatcher and the New Right?
Privitisation, free market economics (Milton Friedman) and reduce direct taxes in order to encourage wealth creation and stimulate the free market.
What were the key social features of Thatcher and the New Right?
Traditional social values (e.g. The nuclear family unit as the building blocks of society. Roll back the state to reduce” dependency culture” and lower government spending. Rugged individualism.
What were the key political features of Thatcher and the New Right?
Anti-union stance - they were a blight on the free market. Eurosceptic. A willingness to take unilateral action in order to protect the national interest.
What were Thatcher’s economic goals when she came to power?
To restore a buoyant economy, free from crippling inflation, rising unemployment and the seemingly flawed policies of the post-war consensus.
What were Thatcher’s political goals when she came to power?
To maintain party unity and discipline in the face of her “New Right” departure, to increase her majority of 43 seats at the next election and restore Britain’s status as a global power following the “IMF Crisis” humiliation of 1976.
What was instate monetarism?
Controlling inflation and cutting government expenditure in an effort to limit the total money in circulation. It also meant that people would pay higher interest rates and higher taxes. Thatcher claimed to have created a “share-owning democracy”.
What evidence was there that instate monetarism was successful?
Trade union membership rapidly fell. Home ownership rates rose throughout the 80s, as did house building.
What evidence was there that instate monetarism wasn’t successful?
Job losses and unemployment continued to rise year on year in Britain from 2.2 million in 1980, to 3.4 million in 1987. Privatisation and selling of shares led to increased inequaltiy as the rich became richer. the Lawson boom of 1985 showed after ditching monetarism in 1984, UK economic growth reached 4-5% per year, long time high.
Why did Thatcher aim to reduce taxation?
To incentivise wealth creation and stimulate the free market. She lowered income tax, especially for the wealthy in an attempt to ecourage people to start business and press forward in their careers, helping stimulate the British economy
What evidence was there that reducing taxation was successful?
She reduced tax rates with the top rate reduced from 83% to 40%. Britain’s GDP improved. Competitive tendering led to the stimulation of the free market in an attempt to provide more efficient value for money.
What evidence was there that reducing taxation wasn’t successful?
Led to a dramatic rise in inequality in Britain. She did reduce income tax, but she raised other taxes such as sales tax and VAT. Introduction of the poll tax. Real GDP growth slowed to 2.09% showing the market was not being stimulated. Household debt almost doubled showing wealth was not being created for most people.
Why did Thatcher begin the process of privatisation?
Provides the state with large additional funds, aimed at increaasing ‘popular capitalism’ by giving a much greater number of ordinary people the chance to become shareholders - creating a “share-owning democracy”
What evidence was there that privatisation was successful?
British industry was becoming more streamlined and cost-effective techniques resulted in higher productivity. Between 1979 and 1989 manufacturing productivity grew at an annual rate of 4.2%. Financial deregulation meant banks and building societies advanced larger loans to their customers - a significant amount of the money borrowed was then spent on consumer goods from abroad.
What evidence was there that privatisation wasn’t successful?
Between 1980 and 1989, Britain’s balance of payments deficit rose from £16 billion to £47 billion. Critics viewed privatisation as a squandering of national assets for short-term gain - British National Oil Corporation. Increased unemployment.
What was the stop and search law?
A law that permitted a police officer to stop, search and potentially arrest people on suspicion of them being in breach of section 4 of the vagrancy act of 1824
What evidence was there that the stop and search law was successful?
The powers given to police officers gave them powers to fight suspected terrorists. Matched the party line of increased law and order.
What evidence was there that the stop and search law wasn’t successful?
Highly controversial repealing of civil liberties. Resulted in mass arrests at Brixton, London and Birmingham during the race riots with the majority of those arrested being ethnically black resulting in accusations of racism. The policy was repealed on 27 August 1981.
Describe the events of the Brixton riots.
At New Cross Road, London, a fire went through the road, killing 13 young people. The case wasn’t solved, considered to be a racist attack. Police were accused of mishandling the investigation. Led to Black people’s day of action - thousands of black people went to the road. Communities thought back against the police and the sus laws. Inflamed and caused further race riots across Britain.
What was the Housing Act?
Offered tenants who had lived in their houses for 3 years a 33% discount on the market value of their house. Increased in stages up to 50% for a tenancy of 20 years. Tenants could put down a £100 deposit, stalling the sale for two years, then buying at the earlier value. Guaranteed 100% mortgages available from the local authority - a move to ‘rugged individualism’ and decreasing the dependency on the state.
What evidence was there that the housing act was successful?
By 1985, over 800,000 tenants had begun to purchase the properties they had previously rented. Overall, by 1990 home ownership had increased by 15%.
What evidence was there that the housing act wasn’t successful?
Council housing dropped from 33% to 8%. Critics argued that as no new council houses were built, the number of council houses around never recovered. Some argued that by selling houses for under market value, this substantially contributed to the housing crisis
Describe some of the union legislation that was introduced in 1980.
Forbade mass picketing. Introduced ballots on “closed shops” (where all the employees belong to a certain union) so that at least 80% of the workers in any particular industry had to support them for their maintenance.
Describe some of the union legislation that was introduced in 1982.
Deemed it unlawful to sack a worker for not being a trade union member in a closed shop if the closed shop arrangements have not been approved in the previous five years by the necessary percentage of workers. Outlawed “trade union only contracts”. Empowered employers to fire striking workers and not face unfair dismissal claims if all strikers get sacked.
What were the impacts of the union legislation?
One of the reasons for the 1984-5 miners’ strike. Undermined the miners’ legal defences, which made the strike less likely to succeed.
