Thatcher

• Thatchers life

  Her father owned two grocery shops and was active in local politics.She studied Chemistry at Oxford University - working as a research chemist begore becoming a barrister.She won her first election in 1959 in Finchley and became education secretary in 1970 - 'Margaret Thatcher, Milk Snatcher'.Many commentators said that only be winning the Falklands War that saw Thatcher re-elected in 1983.She resigned in November 1990, becoming a Baroness in the House of Lords in 1992.
• Her main aims


  She aimed to reduce government interference with the economy and used the law to smash the power of trade unions
• Inflation

  In contrast to previous post-war govs focusing on employment, Thatcher was willing to risk temporary periods of high unemployment to tackle inflation

  She believed that to do this, access to money should be cut
• was Inflation policies a success?

  Led to higher interest rates(raised to 17%)-many companies stuggled, ei the manufacturing industry1978- inflation 11%1980-inflation 22%. refused to print more money as it punished 'careful savers' and rewarded 'reckless borrowers
• what is Monetarism?


  An economic theory which advocates low inflation through controlling the amount of money in circulation. Involved counting all of the money in circulation- But if this included physical money, or just notes etc posed issues-medium-term financial strategy-Many gave up on the idea by 1983, includingchancellor Nigel Lawson
• What are supply-side

  An economic theory arguing that the gov should encourage production; by removing regulations and cutting taxes

  -Opposite of Atlees labour governments 'demand-side' post war consensus
• Budget cuts 1980-81


  Slashed government spending, including on housing and social security-particularly unpopular for those in inner-city areas-led to riots, particularly inHandsworth(Birmingham),Cahpeltown(Leeds),Toxeth(Liverpool),Brixton(London)-riots were sparked by some racial issues, but predominantly the poverty in those areas
• Were the years 1980-81 a success?

  -manufacturing production fell14%-1982=unemployment rose to3 million, highest since1930s-high unemployment ironically forced more gov spending onto unemployment benefits

  +inflation was reduced tosingle figuresby1982,never rising to above 9%for the rest of the 1980s.
• Why did Thatcher privatise

  -Would cut downexpenditureonloss-makingindustries-cut the number of civil servants, as theyd be replaced by private employees-promotedcompetitionandinnovation-the revenue generated would help tocut down taxes-would help to generate more shares, ordinary peoplewould stand a chance of owning part of a company
• What was privatised before 1983

  -British Aerospace

  -British Sugar

  -British Petroleum
• What was privatised which kicked off 'Popular capitalism'

  -British gas

  -British telecom
• What is 'Popular capitalism'

  The idea that everyone in society should have the opportunity to own property and shares in companies
• The growth of shares (privatisation)


  were sold cheap-1979-1990, share owners increased from3 million to 11 million

  -was not even between classes-only9%of unskilled male workers owned any shares, compared tohalfof all professional workers owning some-many individuals sold their shares to big companies=led to individuals owning38% of shares 1975, vs20% in 1990
• Sale of council houses / 'the right to buy' (housing act in 1980)

  -overa millionwere sold between1979 and 1988-still in place today-home ownership rose from55% to 63% 1979-1990

  -became more expensive for the gov to house poor families by1997-was slow to progress with initially just55homes being purchased.-some regions refused, withGreenwichrefusing to hand out application forms- refusing to acknowledge the act-regional variations: in England, sales werefastest in London,the south-east and the south-west, and slowest in the industrial, or increasingly ex‑industrial,north.-1988 reportfound, almosta tenthof council tenants werecompletely unawareof the scheme at all
• was privatisation a success


  -the sum of£19Bwas raised by the sale of state assets,-this money was used to helplower taxes-2.5 millionpeople applying for shares for privatised water. The offer was nearlysix times oversubscribed

  -prices of water and gas increasedfasterthan inflation-Even Thatcher called the privatisation of British Rail 1994-97 too far
• what are Public-Private partnerships?

  A collaboration between public and priavte sectors- The private company usually provides a lot of financial technical and managerial help in the short term, funded by the state in the long term

  initially helped to produce some impressive buildings, became clear by1997that future gens of taxpayers would have to pay huge amounts back
• what is Deregulation?


  the removal of some government controls over a market
• Examples of deregulation


  -removal of exchange controls in 1979

  =removed the limitation of how many pounds people could convert and spend abroad

  -fuelled greater overseas investment (which returned profits to Britain)

  
  

  -'Big bang' 1986
• Big Bang' 1986


  -'Big Bang' 1986=relaxed rules over ownership and trading. The City of London rapidly grew to become one of themajor financial centresof the world-allowed for people to make a lot of money, inunsustainable(even illegal) ways

  -allowed banks to takemore riskswhen lending and on investments=impacted effects on private individuals;-unregulated financeled to a rise in debt- from16B 1980, to47B in 1989-easier access to mortgages= mortgage debt rose from43Bto235B-By 2003,personal debt, including mortgagesstood at1.3T-highest in Europe

  banks made huge profits, whereas its estimated that6Mfamilies, around20%of the total suffer with debt. The rise of credit cards also contributed, with the first launched in1966-and by1980,existing10Mcredit cards in Britain, rising to27Mby1990
• What happened to tax in the 1980s

  Thetop rateof income tax was cut to40%(these cuts were subsidised by a huge government windfall from the discovery and sale of north sea oil)-the wealthiest5%of individuals paid as much tax in1988,as in1978 when taxed at 83%(many stopped tax fraud etc)-The basic rate of income tax was cut from75% to 40%-the average tax bill rose by6%between1979-90, due to the rise in indirect taxation, (VAT) and from National insurance insurance payments.-1979=VAT increased from8% to 15%-This impacted all classes,'regressive taxes'= those with lower incomes end up paying more in taxes
• Trade union legislation/ employment acts

  -1980 act= workers did not have to join a union when they joined a firm(closed shop). + Unions could only organise strikes against their direct employers, andbannedsympathy strikes

  -1982 act= unions could besuedfor illegal strike action

  -1984 trade union act= a strike had to beapprovedby a majority of union members in a secret ballot before it was legal.Thatcher during this year also built up coal reserves in order to resist a miners strike without being forced to resort to a 3 day week as Heath had done
• What tactical errors did NUM president Arthur Scargill make which undermined the miners strike?

  -The strike began March1984,after winterwhere Britain required more energy-Scargill did not ballot NUM members about strike action, many miners inNottinghamshireleft NUM and set up their own union, which voted to keep their mines open-Scargills public disapproval rating never fell below79%throughout the year long strike, being defeated in march1985-but miners in kent held out for2 more weeks
• What happened after the NUM strike?

  -Unions becamemore willingto work with the gov,-trade union members fell from13.5M (1979)to under10M in 1990-total amount of working days lost from strike action fell from10.5M 1980-84 to 0.8M 1990-94-coal industry scaled back-More employment acts in1988,89,90further weakened trade unions, with membership declining even after Thatcher resigned in 1990. Miners fell from200k to 100k.
• How were communities affected by the end of a major local industry?

  includes;-shipbuilding inSutherland,-1978, 7535people worked in the yards: by1984this was reduced to4337,with Sheffields last yards closing in 1988(had previously been the largest shipbuilding town in the world)-steel manufacturing inSheffield
• The state Thatcher inherited

  -there was a'saftey net',of the nhs, family allowances, council housing etc. She saw this a smaking people lazy, as they knew the state would step in if harship hit. Thatcher did not agree with this'nanny state'.

  -She was inspired by the likes ofKeith Josepthby his brand of free-market liberalism
• The civil service


  With732,00civil servants in1980,Britain had3xas manybureaucrats as comparable nations.

  -Michael Heseltine (environmental minister 1979-83), introduced the management information system for ministers (MINIS)- which closely monitored the cost and responsibilities of civil servants. This resulted in job losses, with1 in 4workers at the Environment ministry sackedover 3 years.-Thatcher abolished the Civil service department in1981,as she saw it as a trade union under a different name

  -MINIS was rolled out to other sectors- by1988, 22.5%of civil servants werefired,saving an estimate of1B-the'next steps' report that year promoted a less centralised civil service and the rise of more flexible agencies-1997= 76%of civil servants worked in almost 100 different agencies. Includes; Benefits agency, the Employment service agency, and the Prison service
• Local government


  The Local Government Act(1985)= allowed the abolishment councils viewed as troublesome-this included theGreater London Council and 6 others-Thatcher was worried about local governments with left wing views, who rejected her policies-Thatcher cut central government payments from60% to 49%of funding,-local councils attempted to plug the funding gap by raising local rates, leading to Thatcher introducing rate'caps'on18councils(Rates act 1984)-many did not have to pay local rates, only those who owned or rented property of a certain value

  -1985saw staff numbers fall by1/3in Wandsworth; nationally the total number of local gov employees fell from2.5M to 1.1Mbetween1979-1995-private companies were encouraged to bid on things like rubbish collection= further took responsibilities and employees required working for the local gov
• Community charge 1989/scotland, 1990/England+Wales


  Poll tax-would be based on individuals instead of the value of property. The charge was the same for everyone, the poor paid a higher % of their income vs the rich. Many protests followed, including inTrafalgar Squareetc. around250kattended protests on the 31st march 1990-conservatives wereforced to abandonthe tax, and introduced a revised council tax linked to property values instead
• The NHS


  -Thatcher had to be cautious, as many people approved and supported the NHS and would notice budgets cuts, vs cuts in bureaucracy-1980-87, spending on the NHS rose by60%, and took up a rise from12% to 15%of total government spending(1979-96)

  -1989- White paper'working for patients'called for the creation of an'internal market'where health authorities would purchase healthcare services from hospital trusts. Was not fully introduced until after Thatcher, but did align with her views-the reforms proved to be highly unpopular with doctors and did not deliver the expected cost savings
• Did Thatcher succeed in rolling back the NHS?

  -No.Costs rose, but not as heavily as in previous governments.-overall NHS cost rose25% 1985-1991, the money spent on NHS managers increased from25.7M to 383.8M.-By1996, 34NHS trusts were indebt, the attempts to cut costs led to worse quality of care, ei2%decrease in hospital beds1990-94-doctors felt they could not fully care for patients, as were too focused on meeting goals/ quotas

  +-number of people withprivate health insurancedid increase from500k 1955 to 6.6M 1990, only1%of manual workers had private cover
• Education


  -Did not like local education authorities(LEAs),felt they were hostile+ engaged in conspiracys to protect inadequate teachers and promote soft child-centered learning

  Keith Josepth (Education minister81-86,introduced a new course to be examined in1988,with a national curriculum
• 1988 education act (Baker)


  included key stages, with gcses at the end of key stage 4. Exam results became the basis forleague tables-better schools became oversubscribed-19%of secondary schools became grant-maintained- which increased independence of the schools, as head teachers could control budgets etc-introduced the basis forOFSTED (1993), and increasedparentocracy-formula funding (based on the amount of students in each school)
• special advisers and career politicans

  -Thatchers gov usedoutsideradvisers rather than career civil servants for policy advice, continuing to be done so even post-thatcher, under new labour-there was a fall of voter turn out, possibly due to people not thinking a new gov would change anything

  -40%increasein the numeber of MPS with a university degree1918-45, to 75% 2010-decrease from1/3 to 1/10coming from a politcial background
• Divisions between left and right

  Thatcher redefined the UK political spectrum - the centre ground shifted right, with New Labour adopting these policies.Thatcherism moved the Conservatives away from the Post-War Consensus and towards free markets and traditional family values.Liberal Democrats adopted Thatcherite policies, with radical left-wing ideals (once more mainstream such as in the1930s)being seen as unusual - such as Michael Foot as Labour leader in the1983general election.
• Divisions between local and national gov

  -due to the roll back of the state, resulted in a loss of power for local govs.-schemes to regain some of this power; ei economic powers taken away from local councils have been replaced by the introduction ofdevelopment corporations, headed by central gov inMerseyside and London
• Social divisions (rich v poor)

  -uneven benefits from cuts in income tax-1989thebottom10%of earners paid£400Mless in income tax vs1979,whereas thetop 10% paid 9.3B less-1974= top 10% received 25%of all post-tax income, increasing again in1997 to 35.2%-pensioners living below the poverty increased from13% to 43%-welfare payments were reduced

  -income of richest10%increased by61%between79-92, the poorest10%saw a reduction of18%in the same period-income oftop 10% of earnersincreased from3xthat of low earners in the late1970s to 4xof low earners in the1990s-only55%of middle class voted conservative1987,fewer than in any other time from 1918
• Regional divisions

  London+ South-eastgot richer and became more productive than thenorth-east and north-west+Thatcher tried to fix these divisions though enterprise zones, giving funding to private firms to generate growth in deprived areas, leading to urban renewal projects such as Albert Docks in Liverpool

  -economically inactive men in former industrial areas continued to increase1990-97, by 2005 1/5men in the former coalfield were unemployed, up from1/10 1981+Yorkshire, south Derbyshireetc did bounce back with creating new jobs, whereas south wales struggled
• Social divisions in wales

  73kwere unemployed in1979, rising to166k 1986-was already a trend of mines closing pre thatcher, with6klosing their jobs1974-80.-yet just4kwere working in deep mines by1990-90% of the workforce was lost, with many turning to drugs etc- with over1kdrug offencesrecorded in1990, compared to605 1979

  +wales did still experience an economic growth in other areas. NHS funding was increased, from500mto1.5B in 1990.+GDP per person grew from7k to 20k+those in further education or training grew from20 to 47% 1974-1991
• The impact of Thatchers approach to politics

  -quoted the old testament, not about'consensus but following beliefs'- she stuck to her own beliefs, despite her neoliberalism being not the main held view
• new innovations and changing party make-up

  -used computers to target and contact potential voters in marginal constituencies-mail campaign which reached500kvoters before the1983election-the proportion of party members educated in public schools dropped from75% to 66% 1974-87.-number of female mps increased from19 to 41(with only8and17being conservative mps)= thatcher was not in favour of positive discrimination-thatcher ignored many conservatives, including Lawson after his suggestion to link the value of the pound to the value of Deutschmark. these people became known as'Big Beasts',whowere alienated.