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Thatcher and the end of the consensus, 1979-97

Election victories:
1979, 1983, and 1987
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Labour's overall vote increased, but the electoral system favoured the Conservatives; Thatcher
appealed to marginal voters, and marginal seats were key
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Labour seemed divided and had no strategy with attacking the problems such as inflation,
unemployment and economic stagnation
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The Falklands War, 1982:
Argentinian dictator sent forces
to capture the British colony of
the Falkland Islands in April
Argentinians always claimed that
as their land despite how the
majority of the population were
British
Thatcher sent 400 troops in to
recapture the island
short war followed
655 Argentinians and 255 British
servicemen died
Argentinian forces surrendered in
June
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5m to 8
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Despite rising unemployment and controversial policies, the
victory of the Falklands war in 1982 put Thatcher into
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personal popularity from the British population; seen as
leading a national revival
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Labour party had split in 1981, moderates breaking away from
the party after the election of Foot as leader in 1980
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7m votes, splitting the anticonservative vote
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Foot was not concerned enough with his image and stood no chance next to confident Thatcher
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SDP Liberal alliance polled 7
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Conservative policies that were successful under Thatcher were:
The growth in shareholding and the ownership of council homes appealed to the middle class voters
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Privatisation had increased and seemed to be working
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The deregulation of financial sector has produced a financial boom
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She had good relations with the USA and USSR
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Trade unions had been damaged by the Miners’ Strike of 1984-85, but government stood firm; contrasts
with much less successful union regulation attempts from Wilson, Callaghan and Heath
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Thatcher felt that inflation: hit social stability by wasting away the middle class savings causing strikes
and higher wages; made British industries overpriced due to the constant spiral of rising prices and
rising wages; was fuelled by government spending and lack of effective control of money
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Howe resorted to deflationary methods previously used by
previous governments to tackle inflation
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expenditure; reduced Gov
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Monetarianism and the free market:
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Direct and Indirect taxes:
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Direct taxes levied on
individuals income
Usually taxes are levied
on the wealthy at higher
rates
Indirect taxes are levied
on goods bought
Indirect taxes hit
hardest on those with
lower incomes

Joseph was a conservative intellectual
Influenced by the free market economists such as Friedman in the US
Rejected post-war trend of increased Gov interference
Wanted market to be allowed to determine wages and prices, Gov should help by reducing money
supply
Means that deflation and a reduction in jobs in the ST, but LT would establish basis of economic growth
Opposed by many in the Conservative party who feared the social consequences of this policy

Howe's policies and economic problems:
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Howe's policies benefitted inflation but also contributed to an economic downturn; the rate at which
prices rose dropped from 18% in 1980 to 4
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Social cost became evident as in April 1981, riots in Brixton broke out, and in July in Liverpool - places
of high unemployment, poverty and racial tension
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Unemployment continued to rise but Britain’s overall growth rate was showing signs of recovery by
1982; Thatcher and supporters believed it was because the policies were working; stronger businesses
thrived and wage demands and inflation was falling
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Not possible for Thatcher to reduce Gov
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spending was reduced as a percentage of the economy
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Expenditure as the
cause of the high employment of the mid-80s

Economic Policies
Privatisation:
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After the 1983 victory, gov
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Thatcher believed nationalised industries; were inefficient and overmanned; and would be better able
to raise investment capital once released from Gov
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Really popular; many bought shares in the new companies
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Thatcher hoped the policy would reward the hardworking families whose small shareholdings would
give them a modest stake in businesses; gov
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Tax cuts and deregulation:
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Deregulation of the City of London and the ‘Big
Bang’

Lawson, CofE from 1983-89, continued Howe's policy
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Before Oct 1986 City of London’s had
many regulations which made it
of shifting revenue from direct to indirect taxes;
difficult for it to compete with foreign
reducing income tax
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Expected increased amount of trading
Indirect taxes such as VAT, increased
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1986; revitalised the City of
London
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Seemed the gap between the thriving and high earning financial sector and the depressed areas of
traditional industry and mining had gotten greater
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Thatcher's supporters argue: she brought down inflation; privatisation improved performance
and lowered prices; shareholding gave public a chance to have a stake in economic success
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Social Policies:
The NHS:
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Gov
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Gov
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Gov
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Schools:

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Quality of Secondary schools were a concern; had O Levels and CSE’s; feeling Britain was lagging behind
in terms of education and not quality controlling their teachers
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1988: new national curriculum in schools; as well as frequent testing
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Concerns included: GCSE’s were not academically tough enough; national curriculum was too restrictive
and tests were too frequent; Thatcher was not consistent enough by allowing schools to manage their
own budgets as it gave them more freedom from gov
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Universities:
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Believed unis should be more self-sufficient
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Cut uni budgets in 1981 – forcing unis to accept more students and find alternative sources of
funding
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Gov
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Gov
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Controversial; 1985 Oxford University refused to give Thatcher an honorary degree which was given to
the 6 previous oxford-educated prime ministers after ww2
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She believed owning property gave you a stake in the community; allowed long term council
tenants to be allowed to buy their homes
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During her premiership, Gov
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Industrial Relations:
Thatcher’s aims/beliefs:
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Existing laws on industrial relations had been
abused to protect the practices, underpin strokes,
and to coerce workers into joining unions against
their judgement
Union power made British firms uncompetitive,
and lose out to more efficient overseas companies,
with their higher labour costs and restrictive
practices
Jobs to be available once industry adjusted to
market conditions
Union to lose their power over labour conditions

Thatcher’s legislation:
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Pickets:
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Groups of striking workers who congregate outside
their place of work
Prevent other workers or suppliers from entering

Secondary picketing:
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Adopt the same tactics outside workplaces linked
to the dispute

The closed shop:
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Made membership of some trade unions
compulsory for all workers in a specific profession

Sympathy strikes:
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Workers not involved in the dispute take strike
action to support those in the dispute

1971 Industrial Relations Act – incorporated all the
measures to restrict union power into one Act; easier for unions to mobilise their opposition
Brought in restrictive measures in short stages

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1980 Employment Act - outlawed secondary picketing and increased rights of employees who didn’t
want to join a union – Gov money introduced to encourage unions to hold secret ballots
1982 Employment Act – stopped sympathy strikes and allowed closed shops if a ballot showed 85%
support – those sacked from not joining a union were awarded compensation
1984 Trade Union Act – required unions to hold secret ballots of their members before launching
industrial action
Working days lost to strikes decreased
High levels of unemployment stopped strike action – knew they could be replaced easily
Union membership started to fall making it harder for unions to mobilise effective strike action

Miner’s strike 1984-5:
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National Coal Board faced a loss of £250m from
1983-4
To demonstrate the governments seriousness
about refusing the support for loss-making
industries; started closing pits
Knew this would be challenged by the coal unions
like they did in Heath’s government
March 1984 – coal strike began in response to 20
uneconomic pits being closed and the loss of 20,000
jobs
Neither side was prepared to compromise

Scargill and the miner’s strike:
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Leader of National Union of Mineworkers
Pioneered use of ‘flying pickets’ – successful in
the 1972 strike against Heath
Used this strike as an opportunity to inflict
another defeat for the Conservatives
Wanted a national strike but some mining areas
were against strike action
Sent flying pickets to deter them from working
and prevent transport of coal
Miners fought with each other and the police

Preparation for the strike:
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Prepared carefully
1981 a secret Whitehall committee organised the stockpiling of enough coal to keep power stations
running through the strike
Central Electricity Board built up large stocks of coal and oil in the power stations
Home Secretary, Brittan, set up National Reporting Centre in New Scotland Yard when strike began –
ensured central control of policing, and their movement to troubled spots

Why the Miner’s Strike was defeated:
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Not united – December 1984 a breakaway union was created for those who didn’t want to strike
anymore, the Union of Democratic Mineworkers
Strike started in March and continued through spring and summer when there was less demand for coal
– deprived them of their main weapon
Labour Party didn’t support Scargill – widely seen as an extremist and had little public sympathy
Widespread sympathy for the minors BUT violence on the picket lines lost support
Suffered from cheaper power sources and falling demand – many saw it impossible to keep funding
mining just because it had British industrial history
Gov was prepared to use considerable force to protect the miners who wanted to continue working –
not swayed by unrest and violence
April 1984 – Scargill refused to hold a national ballot for miners on whether to continue strike action –
deprived the strike of legal legitimacy and alienated many mine workers

Impact of the Miner’s strike:
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NUM membership dropped from 250,000 in 1979 to less than 100,000 by 1987 – ended the strike
almost bankrupt
Led to a more divided view of Thatcher

To her supporters she was successful as:
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She forced miners to come to terms with the fact that much of their industry was unsustainable
Demonstrated that trade union power could not be used to defeat the Gov

To her critics:
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She had destroyed the livelihoods and historic communities

Thatcher and her ministers:
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First years were difficult
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; they wanted to maintain unity by making sure gov
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running the economy
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Called 'one nation' Conservatives, 'wets'
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Her gender divided opinion
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Backed by some supportive MPs
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When Thatcher first organised her cabinet she felt obliged to appoint a number of 'wets' to senior
position in her gov
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Heseltine and Brittan resigned
Heseltine became a potential alternative
leader for those who disliked her in the Party
December 1987 – Whitelaw retired after a stroke, lost an ally
1989 she fell out with Lawson and Howe over economic policy and their role in Europe
Howe resigned in 1990

Passionate support and hatred:
Support:
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She was seen as a resolute, clear sighted leader
Brought much needed change and arrested the national decline symbolising the industrial unrest an
inflation of the 70s
‘Thatcherism’ – Lawson 1984, a mixture of free markets, financial discipline, firm control over public
expenditure, tax cuts, ‘Victorian values’, and privatisation
Radically different with her approach than had been since WW2
Credited her helpfulness with Raegan
Many benefited economically from her – those from council house sales, privatisation and deregulation
of the City
Personal toughness in the face of adversity
1980 – feared Thatcher would do a similar thing to Heath’s U-Turn – ‘lady is not for turning’
Defiance made her into the ‘iron lady’
Image also changed due to the Falklands War victory in 1982 and hostility to USSR
Determination and self-confidence made her different to other politicians at the time; even some critics
commented well on her ability to handle crisis’s

Criticism:
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Policies were controversial from the start
The shifting of taxes from direct to indirect was criticised for hitting the poor
Those who lost their jobs in the industries were hit hardest by her policies – especially coal miners
Middle class felt she had created a culture of greed – rewarded selfishness and ignored dispossessed
Middle class were disturbed by growth of ‘cardboard cities’ – homelessness
Church of England bishops drew attention to inner city poor
October 1987 – intending to show her disapproval of the reliance on the Welfare State, Thatcher
claimed ‘no such thing as society’ – showed her to be heartless



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