Why did Thatcher resign as prime minister in November 1990? Flashcards
(27 cards)
Four main reasons why Thatcher resigned as prime minister November 1990?
- The impact of the poll tax
- Economic difficulties
- Divisions within the cabinet over policy towards Europe
- Her growing personal isolation and unpopularity
What was the principal source of local government revenue since 1925?
‘the rates’ - a tax on the owners of property and business
What were Thatcher’s views on rates?
‘manifestly unfair’ as more than 1/2 the electorate did not pay rates
What did she believe the poll tax could achieve?
- More interest in local politics
- More control over local council spending as more people would pay local taxes
- Because of the rise in house prices, many people lived in homes which were worth a lot but had little money
Who introduced the ‘poll tax’ as a Community Charge?
The Local Government Finance Act 1988
What was the poll tax?
A flat-rate tax on every individual.
Concessions for the least well off.
Reaction to the poll tax in Scotland?
- 1989
- Encouraged by Scottish National Party, millions refused to pay it
Demonstration in Trafalgar Square against poll tax?
- 31 March 1990
- Turned into violent riot
- 300 people arrested
- 400 policemen hurt
Why did the poll tax present Thatcher as dictatorial and alienating voters?
- She pressed ahead policy despite warnings from her Cabinet and party
Economic difficulties under Thatcher?
Stock market crash
October 1987
Wiped out 24% off share prices
- Chancellor Nigel Lawson thought this would trigger recession so, in his 1988 budget, he reduced income tax rates.
- This stimulated a consumer spending boom which pushed up prices.
Economic difficulties under Thatcher:
Inflation by June 1989
8.3%
- Lawson tried to control inflation by raising interest rates.
- By October it reached 15%
Who suffered from Thatcher’s economic policies?
- Home-owning mortgage payers.
- She had encouraged the purchasing of homes.
Divisions over Europe Thatcher:
currency
- Since 1960s European Union wanted economic union and merging of currencies into a single European monetary system.
- Thatcher accepted Single European Act 1986 believing it was essential step towards the kind of free market in Europe she believed in. Regretted later as it committed the member states to work towards closer monetary and political union.
Thatcher’s September 1988 speech in Bruges:
‘We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European superstate exercising a new dominance from Brussels.’
Who was Foreign Secretary?
Geoffrey Howe
What did Lawson and Howe want?
Britain to join Exchange Rate Mechanism (ERM) which aimed to create European monetary stability by minimising the exchange rate fluctuations between members.
- Thatcher agreed and Alan Walters supported her
Who was Alan Walters?
Her unelected economic adviser
Howe’s demotion?
June 1989
- Gave him meaningless title of Deputy Prime Minister
Lawson’s resignation?
- October 1989
- exasperated by Thatcher’s resistance and resentful of her reliance on Walters
Results of Howe and Lawson’s removal from office?
- Rift weakened her authority
- More isolated as she had alienated two important political allies.
Why did Thatcher eventually join ERM?
- Persuaded by Major in October 1990 (New Chancellor of the Exchequer)
Membership would help combat domestic inflation and reduce high interest rates.
After joining ERM what were Thatcher’s plans for further integration into Europe?
‘No, No, No’
Election results:
- Vale of Glamogran
- April 1989
- Labour overturned 6200 Tory majority and won 6000 votes.
Election results:
European parliament
Conservatives: 33.5%
Labour: 38.7%
