Thatcher Flashcards
(7 cards)
First term economic policy 1979-83
- Thatcher used a policy of monetarism in the first few years, which increased interest rates and supplied less money. This, however, led to unemployment, which rose by 1 million and caused considerable public unrest
- By 1981, many felt Thatcher’s policies were failing. This divided her cabinet into ‘wets’ and ‘dries’
- She also awarded a 25% pay rise to public sector workers and continued to subsidize British Leyland
- The 1981 budget made further cuts to government expenditure and raised indirect taxes. This was controversial, but showed effectiveness in the longer term, helping drop inflation and boost the GDP
ECONOMIC POLICY OF THE SECOND TERM 1983-87
- Monetarism became less significant, and policy shifted to supply-side economics that stimulated the economy by creating greater demand. Involved deregulation, extensions of credit, tax reductions, decline of union power
- Abolished credit controls, deregulated transport and public institutions
- Chancellor deregulated the stock market in 1986, assisting in London becoming a centre of world finance. Hundreds more became employed
- BUT Black Monday - warnings that prices would rise until they were significantly overvalued, then collapse. This occured on Black Monday, values fell by £50 million
- Technology sped up financial transactions and online banking started to grow
- ‘LAWSON BOOM’ =
- Economy grew after 1983 for two reasons
- Deregulation made it easier to get credit, finding it easier
to take out loans and mortgages - Tax cuts of £4 billion. Cuts to small businesses and the
wealthiest, with the aim of growing consumer spending
- Privatisation - gain revenue for the government. British Airways, Telecom and Gas were all sold off, raising £7 billion
EXTENT THE STATE WAS ‘ROLLED BACK’
SUCCESSES:
- Sale of council houses, ‘right to buy’ scheme, 500,000 became house owners
- Privatisation saw 600,000 less employed by the state
- Ending of government oversight of prices and income policies
- Ending of consultations with unions and employers over economic policy
FAILURES:
- Intervention in the local government, abolishing the GLC because of Livingstone’s left wing policies. Increased government supervision
- 1988 Education Act - National curriculum, league tables, OFSTED. Increased intervention in schooling
- NHS - Higher bureaucracy in the NHS, with greater management needed to control its new internal market
- Privatised industries were still monitored by watchdogs like Oftel and Ofgas.
- She still felt that the state needed to be strong in order to protect the citizens and manage the trade unions
- Budget for law and order increased by 36% during her premiership, regularly deployed during strikes
POLITICAL AND SOCIAL DIVISION
- Sale of council houses benefited many WC in helping them own a home, but reduced the number of council houses available on the public sector
MINER’S STRIKE - 1984-85 - The NUM had recently appointed Scargill, a left-winger, as their leader, while Thatcher appointed McGregor to shut down unprofitable coal mines.
- The NUM called for industrial action without a formal ballot
- Thatcher felt that the strikers were the ‘enemy within’ and a threat to British democracy
DEFEAT OF THE NUM - Employment Acts had already limited their power, making it illegal to do mass picketing or ‘closing shop’
- The government had been stockpiling oil for emergencies
- The government set the closures for the months where demand for coal was lowest, so any strikes would occur then and minimise the impact
- The government used both police action and used courts to freeze union assets
- The strike was never solid, and many had to return to work to support their families
EFFECTS OF THATCHERISM - POLL TAX
- Thatcher believed local councils should be more accountable, and felt that if everyone contributed then they would care more about where their money went
- Poll Tax - flat rate tax, applied per individual instead of varying per household
- Was introduced first in Scotland, where it was enormously unpopular
- The largest burden fell on the poorest, and many argued that it cost more to collect than it even raised.
- It spread to England, and huge protests (and many people refusing to pay) forced Thatcher to remove it, later being replaced by a normal council tax.
EFFECTS OF THATCHERISM - PARTY DEVELOPMENT
CONSERVATIVES
- There was a growth of a ‘hard right’ in the party
- The ‘wets’ were often demoted or dismissed from their positions, especially when they were involved in economic positions
- One-Party conservatism with a commitment to welfare ended
- Those promoted tended to be ‘self-made men’ - Traditional wealthy leaders tended to be associated with wets and their influence declined
- After Thatcher, many of her policies were discontinued
LABOUR
- Labour also shifted to the right
- Left-wing groups like Militant Tendencies were expelled
- Left-wing policies were abandoned such as nuclear disarmament and withdrawal from the EU
- Tony Blair refocused labour to appeal more to the middle-class
- The social democrats were formed in 1981 by members of Labour who had disliked the left-wing agenda. In 1988 it merged with the liberal party, eventually becoming the Liberal Democrats.
EFFECTS OF THATCHERISM - 90s
