Towards a new consensus, 1987-1997 Flashcards
What were the key reasons for the fall of Margaret Thatcher from power in 1990?
Economic Issues, Political Issues, Poll Tax, Party Divisions, Labour’s Recovery, Geoffrey Howe’s Resignation
- Economic Issues: 1987 stock market crash, ‘Lawson boom’, inflation at 10.9% by 1990.
- Political Issues: Fear of electoral defeat after losing Eastbourne.
- Poll Tax: Unpopular Community Charge leading to riots.
- Party Divisions: Discontent over economic policies and Europe.
- Labour’s Recovery: Increased popularity of Labour under Neil Kinnock.
- Geoffrey Howe’s Resignation: Triggered leadership challenge.
What is John Major’s view of the myth surrounding Thatcher’s fall from power?
The myth that Thatcher was ousted at the height of her powers is false. By 1990, the economy was struggling, the Poll Tax was unpopular, and the Conservative Party was deeply divided.
How did John Major become Prime Minister?
Promoted from Chancellor after Thatcher’s resignation, seen as a compromise candidate
- Supported by Douglas Hurd and others as the anti-Heseltine candidate.
What were the key economic issues faced by John Major’s government?
Economic Recession, Negative Equity, Public Spending
- Economic Recession: Unemployment rose from 1.6 million to 2.6 million.
- Negative Equity: Homeowners owed more on mortgages than homes were worth.
- Public Spending: High public spending due to rising unemployment.
What was ‘Black Wednesday’ and its impact?
Forced to leave the ERM, interest rates raised, pound fell
- Impact: Damaged Conservative Party’s reputation, weakened Major’s authority, economy stabilized afterward.
How did John Major perform in the 1992 General Election?
Conservatives won with 336 seats despite being behind in polls
- Major’s campaign included soapbox speeches, regained Conservative support.
What were the main political scandals during John Major’s tenure?
Sex Scandals, Arms to Iraq, Cash-for-Questions
- Sex Scandals: Involving ministers like David Mellor.
- Arms to Iraq: Scott Enquiry revealed illegal arms deals.
- Cash-for-Questions: Tory MPs accused of taking money to lobby.
What was the ‘Cash-for-Questions’ affair?
Tory MPs accused of accepting bribes to ask questions in Parliament
- Impact: Hamilton lost a libel case, negative perception of Major government.
How did the media and satire portray John Major’s government?
Portrayed as dull and ineffective
- Satire depicted him as a grey superhero, despite personal popularity.
How did John Major’s approach to Europe differ from Thatcher’s?
Aimed for Britain to be ‘at the heart of Europe’, more diplomatic approach
- Thatcher had a more Eurosceptic stance.
How did the British economy perform after Black Wednesday in 1992?
Economy stabilized, unemployment slowed, housing market recovered
- Benefits from financial deregulation and global economic recovery.
What was the state of the British economy in the 1997 election?
Positive indicators: unemployment down, productivity up, consumer spending increased
- Struggled to gain credit for the recovery despite improvements.
What was Major’s stance on the poll tax?
Inherited the unpopular poll tax, replaced it with council tax in November 1991
- £1.5 billion wasted on poll tax prior to its scrapping.
How did Labour’s position in the polls change in 1992?
Labour was ahead in polls before the election but Conservatives gained support
- Labour had 41%, Conservatives 29% prior to election.
What were Major’s major policies and crises during his government?
Privatisation, Private Finance Initiative, Citizen’s Charter, BSE Crisis
- Major policies included privatisation of coal and railways.
What political scandals affected Major’s government?
Over a dozen sex scandals, arms deals to Iraq, Cash-for-Questions
- Included perjury convictions of Jeffrey Archer and Jonathan Aitken.
How did John Major contribute to the Northern Ireland peace process?
Worked with Irish Taoiseach, secret communications with Sinn Fein, Downing Street Declaration
- IRA ceasefire followed by loyalist ceasefire.
Name key events in Northern Ireland from 1987 to 1993.
Gibraltar killings, Milltown Cemetery attack, IRA bombs, Warrington bomb
- Significant violence and unrest during this period.
What were the major divisions in the Conservative Party by the 1990s?
Economic policy divisions, Europe divisions, Thatcher’s leadership style issues
- Rivalries emerged among figures like Michael Portillo and John Redwood.
What happened in the 1995 Conservative leadership contest?
Major triggered it himself, faced John Redwood, won decisively
- Heseltine became deputy PM after the contest.
How was Major portrayed in the media?
Satirised as dull and incompetent
- Mocked by Tony Blair, known for ‘cones hotline’ incident.
What economic problems did John Major’s government face when he became Prime Minister at the end of 1990?
Declining manufacturing output
* High interest rates
* Sharp rise in unemployment
* Slump in house prices
* From mid-1991 to early 1992, unemployment rose from 1.6 million to 2.6 million
* Many homeowners faced negative equity and repossessions
* Recession affected traditional Conservative voters
* Government resorted to high public spending and increased borrowing to support the NHS and transport
Economic challenges were significant and included issues that directly affected the population’s financial stability and the government’s fiscal policies.
What occurred on Black Wednesday and what were the government’s actions?
Britain had joined the ERM in 1990 to combat inflation
* Required the pound to stay close to 2.95 German marks
* In September 1992, speculation caused the pound to fall
* Interest rates were raised from 10% to 12%, then to 15%
* Bank of England used reserves to buy up pounds
* Despite this, pound kept falling
* At 7pm on 16 September 1992, Chancellor Norman Lamont announced Britain was leaving the ERM live on TV
Black Wednesday is a significant event in British economic history, marking a critical failure in monetary policy.
What were the political and economic effects of Black Wednesday?
Politically disastrous:
* Conservatives lost economic credibility
* Major’s authority weakened
* Labour rose in the polls
* Major later called it ‘the beginning of the end’
Economically beneficial:
* Interest rates could now fall
* Exports increased due to devaluation
* Unemployment slowed
* Housing market recovered
* Compared to Germany, Britain had stronger growth
The consequences of Black Wednesday had lasting impacts on both the political landscape and the economic recovery of the UK.