Unit 1.4 Flashcards
John Major
From a working-class background in Surrey.
He left school at the age of 16 but worked his way up to executive level in the banking industry. He became a Conservative councillor in the 1970s and was elected as an MP for Huntingdonshire in 1979. He joined Thatcher’s cabinet as Chief Secretary of the Treasury in 1987, and was promoted to Foreign Secretary and then Chancellor in 1989 before becoming prime minister in 1990.
-Major won clearly in the leadership election and was young and different to previous PMs. However, was portrayed as a grey man by satirists and Spitting Image.
-John Major was Thatcher’s choice of successor and one key reason for Major’s rise to the leadership was that Thatcherites saw him as one of them. In fact, this view of John Major was not especially accurate. Major’s natural instincts were to unify the party. This would be a difficult job; there was ongoing hostility to Michael Heseltine and a fierce determination amongst some to take revenge against those who had betrayed Maggie’. Split between ‘wets’ and ‘dries’.
Major’s Initial Action
John Major’s first big task involved foreign affairs and Europe. Britain was already fighting the First Gulf War, which reached a successful conclusion in March 1991. Major then turned his attention to Europe, making a speech that set out his aim to see Britain take a place at the very heart of Europe. Major and his supporters hoped that it would be possible to follow a middle way on Europe. At home Major needed to deal with the poll tax. Many wanted him to scrap it immediately but this risked splitting the party. Only in November 1991, after very lengthy discussions, was the poll tax abandoned in favour of the new council tax. Doing this meant that £1.5 billion had been wasted but it allowed Major to get away from an unpopular policy that could be blamed on his predecessor.
1992 Election
Major called the election in March 1992, almost the last possible moment before the end of the five-year parliamentary term. The opinion polls placed the Conservatives on an average 29 per cent, with Labour ahead on 41 per cent and the Liberals at 15 per cent. Most observers predicted a Labour victory. It seemed as though defeat was inevitable.
John Major himself, however, was surprisingly upbeat and his optimism was vindicated. Towards the end of the longer than usual election campaign, opinion swung back towards the Conservatives.
The Conservatives ran a good campaign. John Major won a lot of respect for his old-fashioned soapbox’ politics, making impromptu speeches on the street in towns like Luton, standing on his soapbox. Although people blamed the Conservatives for the economic recession, they were still seen as the party best able to get the country out of the mess.
Elections are always lost as well as won. In 1992, Labour’s weaknesses mattered as much as the strengths of the Conservative campaign. Many voters probably just did not feel Labour had reformed enough; memories of the 1980s were still too strong.
Con - 336 seats, 51.6% votes
Lab- 271 seats, 41.6%
Lib-20 seats, 3.1 % votes
1992 election - Conservative strengths
-The Sun newspaper was sufficiently convinced to switch its support from Labour to Conservative. This defection to the Conservatives of one of the main voices of popular opinion was a blow to Labour and helped explain the late and decisive swing to John Major.
-John Major won a lot of respect for his old fashioned ‘soapbox politics’.
-From mid-1991 to comy 992, unemployment rose from 1.6 million to 2.6 million. Many homeo high were trapped in negative equity (having to repay mortgages that were higher than the current value of their homes).
Many had their homes repossessed. Unlike in the recession of the early 1980s which largely hit working-class and northern communities, this affected traditional Tory voters.
With an election imminent, Major’s government resorted to high public spending. Falfoment borrowing was forced due to rising unemployment, but huge government borrowing was used for subsidies on transport and increased spending on the NHS. Although able to improve image by increasing spending the negatives suggest it was more about labour weaknesses than conservatives strengths.
1992 election - Labour weaknesses
-The Labour Party led by Neil Kinnock conducted a poorly judged campaign. Having in the early part of the campaign successfully promoted itself as the caring party, it assumed from the opinion polls that it was going to win. This was evident in an ill-conceived rally in Sheffield in the week before the election. Aping the razzmatazz style of US politics, the Labour campaigners put on an extravaganza with blaring music and announcements and spotlights picking out shadow cabinet members who walked to the platform through ranks of cheering admirers. The climax came with Neil Kinnock bounding up to the rostrum and exchanging repetitive shouts with audience as if he were at an American convention. Kinnock later admitted that the triumphalism had been both premature and rather tasteless, although he disputed that it had cost Labour the election.
-More serious damage was done by Labour presenting a shadow budget that seemed to threaten large increases in taxation, which John Major was able to exploit by literally standing on a soap-box and suggesting in a homely way that only the Conservatives could be trusted to run the economy.
Economic Situation before 1992
From mid-1991 to early 1992, unemployment rose from 1.6 million to 2.6 million. Many homeowners were trapped in negative equity (having to repay mortgages that were higher than the current value of their homes).
Many had their homes repossessed. Unlike in the recession of the early 1980s which largely hit working-class and northern communities, this affected traditional Tory voters.
With an election imminent, Major’s government resorted to high public spending. Half of this spending was forced, as a result of rising unemployment, but huge government borrowing was used for subsidies on transport and increased spending on the NHS.
Black Wednesday - what happenened
Within a few months of winning the general election, Major’s government suffered a severe crisis and Britain was forced to leave the Exchange Rate Mechanism (ERM). What became known as Black Wednesday came to dominate the rest of Major’s premiership.
Britain joined the ERM in 1990 when Thatcher was persuaded that it would help to combat inflation which was starting to rise. The ERM required Britain to maintain a fixed rate of exchange (2.95 German marks to the pound) with a narrow band allowed for fluctuations.This was unrealistically high and caused British exports to become overpriced. By September 1992, the British currency (together with several other ERM currencies) came under pressure. International bankers, sensing that the pound sterling was overvalued, began to speculate against it on the money markets.The pound began to fall sharply. In a desperate effort to maintain the pound at the level required by the ERM, Norman Lamont, the chancellor of the exchequer, raised interest levels from ten per cent to fifteen per cent and sold off €30 billion of the UK’s foreign reserves. It was all to no avail. The pressure on the pound was too great. Major’s government was determined to avoid any devaluation of the pound and to remain within the ERM. But despite all the government’s efforts, the pound continued to sink. Major’s government did the only thing it could; on
16 September 1992, known afterwards as ‘Black Wednesday, at 7pm, Norman Lamont announced the decision to leave the ERM live on television.
Black Wednesday - Short term impacts
- The effects of Black Wednesday on the British economy proved much less catastrophic than was feared at the time. Within a relatively short time, the economy stabilised and it could be seen that leaving the ERM had many beneficial effects. The political consequences, however, were disastrous for the Conservative government. The long-standing Conservative electoral asset of being trusted on the economy was thrown away. There was a steep drop in support for the Conservatives in opinion polls. John Major’s personal authority was badly weakened. He was fiercely criticised by newspapers that had previously supported him. The Labour Party shot ahead in the polls, gaining a 15 point lead. Many observers, including John Major himself, looked back at the events of
16 September 1992 as the beginning of the end. - Britain’s economic situation started to improve almost immediately after Black Wednesday in 1992. Leaving the ERM prevented Britain from having to keep high interest rates to protect the stability of sterling and it allowed exchange rates to float downwards, which helped British exporters. Unemployment rates slowed down and the housing market began to pick up. At the same time the American economy was coming out of recession and world trade was expanding. The British economy was also benefiting from the impact of financial deregulation and flexible working practices which the Conservative Party had introduced since 1979. In comparison, the German economy was struggling with the huge costs of unification and had sluggish growth rates compared with Britain.
- The case for Britain’s becoming involved in European monetary union was weakened.
- The argument of the Euro-sceptics against deeper integration with Europe was strengthened.
- Cabinet divisions widened between Euro-sceptics, principally Peter Lilley, Michael Portillo and Michael Howard, and pro-Europeans, principally Kenneth Clarke, Michael Heseltine and Douglas Hurd.
Black Wednesday - Long term impacts
-By 1997 most economic indicators were positive, and Unemployment was down. Productivity was up, though not by much. Consumer spending went up. Car ownership increased. House prices rose and negative equity became a thing of the past. Business was supportive of government policies. Yet people were surprisingly reluctant to give Majors government credit for this. The ‘feel-good factor’ was missing.
-Some observers have called the event ‘White Wednesday’, a reference to the fact that, freed from its artificial ties, the pound began to recover. By 1996 the exchange rate of the pound was DM3, a higher rate than when the pound was in the ERM. What was true of finance was also true of the economy overall.
Britain’s growth rate outperformed that of its European partners. It prompted the Euro-sceptics to question again the supposed benefits of EU membership. Norman Lamont later remarked ‘I know of no single benefit which has come to Britain solely because of its membership of Europe.’
These longer term effects were obviously of no immediate benefit to John Major’s government. The truth was that Black Wednesday left its mark on the remainder of his administration to 1997. A divided Cabinet, uncertainty about Europe, a public who now doubted the government’s financial competence and a Labour Party recovering its confidence: these were the legacies of the ERM crisis.
Majors Unpopular Political Policies - Privatisation
A number of other Conservative policies in the 1990s also proved controversial and confirmed the feeling that the Conservative government was prone to crisis. Majors government continued the policy of privatisation. The coal industry was privatised in 1994, the railways in 1996. The government also set about privatising the Post Office but ran into opposition and eventually abandoned the scheme due to public concern. Major also introduced the Private Finance Initiative (PFI). These were public-private partnerships that meant private companies would fund infrastructure improvements and then deliver public services that the State would pay for over the length of the contract.
Majors Unpopular Political Policies - Citizens Charter
Major also introduced the Citizen’s Charter in 1991. This was an attempt to give public service users more power over the quality of the services they received by providing information about the standards they should expect. For example, in education there would be more testing and schools would publish the results. However, some elements such as the ‘Cones Hotline’ - a phone number motorists could call if motorway lanes were closed off without any sign of roadworks - became targets of the satire.
Majors Unpopular Political Policies - Miners
Pit closures continued. In 1991 Heseltine announced the closure of 31 pits including some in Nottinghamshire; this was seen as a poor reward by Conservatives who remembered that it was the Nottinghamshire miners who had stood against Scargill. The outcry forced Heseltine into a U-turn in the short term though eventually, the closures went ahead. Major was seen to be continuing Thatcherite policies, closing mines and privatising.
Majors Unpopular Political Policies - BSE (Bovine spongiform encephalopathy)
Major’s government also had to deal with the BSE (Bovine spongiform encephalopathy) crisis, better known as Mad Cow Disease. This had been first identified in the mid-1980s but was recognised as a potential threat to human health in 1996. This led to British beef being banned in Europe.
None of these policies or events in themselves appears to be big enough to undermine a government’s reputation. But together, and combined with the other issues discussed in this chapter, they helped to cement an image of incompetence.
John Major - Back to Basics
In 1993, John Major decided to relaunch his leadership and the party.
At the annual party conference, he gave a speech that outlined his anger at those Tory MPs who were causing issues around Europe (among other things)
He also stated a need to return to return to core British values that were still alive, it was time to get Back To Basics, to self-discipline and respect for the law, to consideration for others, to accepting a responsibility for yourself and your family and not shuffling off on other people and the state.
Political sleaze, scandals and satire - Cash for Questions
Finally, the so-called ‘Cash-for-questions affair erupted; it was very damaging to the Major government because it lasted such a long time and kept ‘Tory sleaze in the news right through the 1997 election campaign. The Cash-for-questions affair arose when Neil Hamilton and other Conservative MPs were accused of accepting money in return for lobbying (asking questions in Parliament) on behalf of the controversial owner of Harrods, Mohammed Al Fayed. Hamilton was ruined by losing a very public libel case, but refused to resign, to the intense irritation of John Major. In the 1997 election, Hamilton was humiliatingly defeated by an independent candidate, the former BBC journalist Martin Bell, who made ‘sleaze’ the keynote of his campaign.
