Monetarism - Restricting government spending and controlling inflation
through use of interest rates and restriction on the money supply
Free-market economics - Thatcher believed that without the interference of
government, the free-market forces would allocate resources to optimum efficiency
Right-to-buy scheme allows council house tenants to but their own homes
Deregulation of the financial sector in late 80s abolishes
exchange and credit controls and leads to financial boom
Howe's first budget 1979
Income tax reduced, especially for rich - 80% to 60%
Interest rate raised to 14% to lower inflation
Resulted in huge reduction in inflation - down to 5% by 1983
Privatisation and
Small Government
Thatcher's emphasis on supply-side economics led to huge
privatisation of industry, utilities, transport etc to make them more efficient
Lots of British public became share-holders - 3 million in 1979 to 9 million in 1990
Jaguar 1984, making loss of £32million, but after privatisation in 1985 it
was making a profit of £121million on a turnover of £747miilion
Many businesses and industries had subsidies cut, and plants
and pits closed at the loss of thousands of jobs
British Steel Corporation losing £7million a week in '79, but after cuts and
closures, became the most efficient steel producer in Europe within 2 years
Overall - Thatcherism was a huge break from the consensus Keynesian
economic theories of post-war Britain. Undoubtedly, it served to streamline
British industry and business and make it much more effective, but at the loss
of thousands of jibs and social turmoil.
North Sea Oil
Elections
1979
The Conservatives won with a landslide in 1979, after support for
Callaghan plummeted after huge strikes of the 'Winter of Discontent'
1983
The Falklands War
Argentine General Galtieri invades the Falkland Islands in 1982, but swift and decisive
action by Thatcher routs the Argentinian forces within 2 months, and total victory ensures
The 'Falkland Factor' as it became known, was a
huge contribution to the landslide Tory victory in 1983
The leadership of Michael Foot was to prove a catastrophe for Labour. His far left-wing policies were to alienate
many voters, and combined with the SDP split in 1981, the Labour party suffered hugely in the '83 election
1987
The 1987 election was an unexciting affair,
rising affluence and growth led to a
convincing Tory victory
Neil Kinnock, Labour leader, was still struggling to
pacify the unelectable hard left of the party.
Overall - Thatcher is notable as a Prime Minister as never actually having lost an election in
her time in Office. Both 1979 and 1983 were huge landslide victories for the Tory party, whilst
the continuation of Tory power in 1987 proves that, whatever her critics may say, she clearly
still possessed the favour of the majority of voters throughout the 1980s.
The Trade
Unions
Miner's Strike
1984-85
Government closure of uneconomic pits leads to strike
action from NUM leader Arthur Scargill
Scargill calls strike in Spring 1984 - proves to be a huge mistake
'Battle of Orgreave' June 1984, public opinion turns against miners
Strike ends in February 1985, as government coal stocks outlast the
striking miners. Huge victory for Thatcher
Norman Tebbit forces through Employment Acts in 1982 and 83, ending
'closed shop' trades and making ballots before strikes compulsory
Overall - Throughout Thatcher's time in Office she faced down many Trade Unions who stood in
the way of her plans for development by attempting to retain old, outdated work practices and
avoid more efficient mechanisation. She was undoubtedly a success, but in the process caused
big social unrest in the North, Wales and Scotland.
The Thatcher
Downfall
Resignations
The Westland
Affair 1986
Westland, an ailing British helicopter company caused a split in opinion between
Michael Heseltine and Leon Brittan. Heseltine wanted it to be made part of a European
consortium, whilst Brittan wanted to sell it to American company Sikorski
Thatcher sided with Brittan, so Heseltine stormed out of Cabinet meeting and resigned - but so did Brittan, after it
emerged that he had put pressure on the European consortium to withdraw. No one came out with any credit
Geoffrey Howe and
Nigel Lawsom
Nigel Lawson resigned as Chancellor when Thatcher began taking
more note of Alan Walter's, her personal economic advisor
Geoffrey Howe's resignation after Thatchers disagreement over him with Europe proved to
be devastating. The usually docile man's speech in the Commons showed great personal
injury to the man who had been a loyal Thatcherite since 1979.
The Poll Tax
Attempts to introduce standard community charge instead of old
system of council tax based on property valuation
Proves to be hugely unpopular, leading to mass riots across the country
Last attempt at poll tax had led the the
Peasants Revolt in 1381
Europe
Controversy and debate over whether to join the Exchange Rate Mechanism (ERM)
a precursor to the Euro, caused deep split between Howe and Lawson and Thatcher
Overall - Thatcher's downfall was a combination of high profile
resignations and party divisions over Europe (that would continue into
the Major government) and the highly unpopular Poll Tax. After a decade
in power, the Tory's began to view her as an electoral liability.