Thatcher Revolution PDF

Thatcher Revolution Vanessa Lincoln Terminale History Key Terms and Key Issues Key Terms Thatcherism, Privatisation (Britain), Key Issues Was there a Thatcher Revolution, 1979-1990? ‘A radical and successful break with the past.’ Assess the validity of this view of Thatch...

Thatcher Revolution Vanessa Lincoln Terminale History Key Terms and Key Issues Key Terms Thatcherism, Privatisation (Britain), Key Issues Was there a Thatcher Revolution, 1979-1990? ‘A radical and successful break with the past.’ Assess the validity of this view of Thatcherism. In what context did Thatcher become Prime Minister? Context: Thatcher’s Election in May 1974 Failures of British governments in 1970s to resolve the UK’s economic issues Winter of Discontent & social divisions Oil crisis of 1979 (linked to Iranian Revolution) Margaret Thatcher Unconventional politician What were Thatcher’s main policies?  Main ideas: Margaret Private enterprise and initiative Thatcher Reduced role for the state ‘There is no such thing as society’  Economic liberalism Privatization, deregulation, Margaret reduced role for state in economy Thatcher Social conservatism Traditional view of society  First advanced by U.S. economist Milton Friedman Focus on money supply as key to Early inflation Policies: Restriction of money supply, cuts in Monetarism government spending, rise in interest rates in order to curb inflation https://www.youtube.com/watch?v= YWrWQ4TUVW0  Inflation from 18% in 1980 to 5% in 1983 Results of Increase in unemployment (2.2 million in 1980 to 3.2 million in Monetarism 1983) Rioting in inner cities, e.g. Brixton in London in 1981  Falklands https://www.youtube.com/watch?v=VCBTCtnMi War, 1982 yM  Assertion of sovereignty Falklands War, 1982 Increases Thatcher’s popularity, helps win elections of 1983 Miners’ Strike, Reaction to closure nationalized 1984-5 coal mines that were unprofitable  Strike fails due to: Miners’ Government stockpiling Strike, Employment Acts: no closed 1984-5 shop, union vote for strike required Uneven participation  Economic Policies: Deregulatio Deregulation, inc. finance, n transport (bus), education, hospitals, housing Economic Policies: Deregulation Most significant was deregulation of financial sector Day deregulation took effect in 1986 called the ‘Big Bang’: boom in finance and trading in London https://www.bbc.com/news/business-37751599 London reinforced as a premiere international financial center Strengthened North/South divide  Economic Policies: Privatization Cable and Wireless British Telecom (1981, 1933) (P) (1984) (P) British Steel Water 1981 1981 1984 1987 1988 80s 1989 British Aerospace British Airways (1987) British National Oil (1981, 1985) (P) (P) Corporation (North Sea oil) (80s) (P) (P) Denotes a profitable industry before privatization  Aims of Privatization Market-based economy characterized by profitability, efficiency and productivity ‘Popular capitalism’: everyone can own property and shares https://www.youtube.com/watch?v=nedVpG-GjkE Generate revenue for government through sale of shares Reduce public sector borrowing Weaken power of trade unions (secondary) Consequences of Privatization Increase in government revenues through sale of shares: £34 billion from 1979-1991 Modest overall impact on efficiency, productivity and profitability: e.g. Privatization did lead to the steel industry regaining profitability by the 1990s Increased profitability at British Telecom – but more due to deregulation Increase in efficiency and profitability at British Airways more significant before privatization Increase in number of shareholders: 3 million in 1980, 11 million in 1991  Local Central government involvement in Governmen local government spending (Standard Spending Assessments) t Reform Competition between service providers (compulsory competitive tendering) Education Reform More choice to local actors: Local management of schools - financial autonomy School choice But also greater role for central government: Option to receive funding from central government National Curriculum with core and foundation subjects School selection for 11 plus  Welfare State Welfare state programs (child allowances, social insurance, NHS) largely maintained But: Reduction of unemployment benefits and end of tax benefits for the unemployed Increased outsourcing + compulsory competitive tendering at NHS hospitals, charges for optical and dental services Poll Tax Introduced in 1989/90, aka Community Charge Flat tax raised by local councils, replacing tax system based on property values Poll Tax Poll Tax A 1990 demonstration in London ended in violence, over 300 arrests Foreign Affairs Friendly relations with Reagan Anti-communism Critique of European institutions Thatcher and Reagan Thatcher’s Anti- Communism Thatcher and Solidarity https://www.youtube.com/watch?v=E52Ay3q4Sd0  Critique of Sovereignty & federal Europe European Institutions Budgetary contributions  Supports UK membership in EEC in 1970s But - believer in Europe of Thatcher ‘independent sovereign states’ rather than federal Europe based and Europe on supranationalism Comes to see EC as representative of protectionism, centralism, bureaucracy  1985 “rebate” UK a net contributor to EC -> 1979 comment to EC leaders: ’I Thatcher want my money back’ and Europe Rebate = 66% of difference between UK contributions to EC/EU budget and receipts from EC/EU Thatcher and Europe Does not join Schengen Agreement in 1985 Thatcher and Europe Signs Single European Act in 1985/6 Single European Act, 1986 Single European Act, 1986 Single market European Political Cooperation (foreign policy) Qualified Majority Voting Thatcher and Europe Vocally opposes German reunification Thatcher and Europe Reluctantly joins Exchange Rate Mechanism (ERM) in 1990 believing it will help fight inflation (UK withdrawal 1992 after overvaluation provokes currency crisis) Thatcher 1990 ‘No, no, no’ speech in the House of Commons vs supranational Europe Why did Thatcher’s Premiership come to an end? End of Thatcher’s Premiership Loses Conservative Party leadership contest in 1990 Major issues include: Poll tax Germany unification Europe: ERM, Single European Act What were the impacts of Thatcher’s policies?  Resolved major issues of 1970s (inflation, power of unions, low economic growth) Impacts of Domestic But contributed to inequalities Policies and divisions Changed role of the state, new political discourse Impacts of Domestic Policies Impacts of Domestic Policies GDP Growth & Greater Wealth  Decline in power of the unions Impacts of Legal restrictions - Employment Domestic Acts Policies Decline in numbers: 230,000 coal miners in 1980 vs 57,000 in 1990 (but one million jobs lost 1920-1980) Impacts of Domestic Policies Increase in Poverty  Rise in unemployment due to: cuts in nationalized industries privatization monetarism (increased interest rates) Increase in globalization Poverty Reduction of unemployment benefits Decline in availability of council housing Increase in Inequality Impacts of Domestic Policies Impacts of Domestic Growing North/South Policies Divide Impacts of Domestic Policies: Role of State Public spending as % of GDP: From 44.6% in 1979 to 39.1% in 1990 Reduced government role in economy through privatization and deregulation Impacts of Domestic Policies Decline in social housing and rise in home ownership  Consequences of ‘Right-to-buy’: Housing prices triple from 1979- Impacts of 1990 Domestic Independence for home owners Policies Long waiting times for social housing Difficulties for owners to pay mortgages, with interest rates at 7- 17% under Thatcher (monetarism) Impacts of Domestic However, the role of the state was Policies: not always reduced: Role of Local government reform State Education Welfare state maintained Impacts of Domestic Policies Taxes differently raised but at nearly the same level Impacts of Domestic Policies Impacts of Domestic Policies New political discourse, emphasis on individualism Impacts of Thatcher’s Foreign Policy Strengthened relations with US Contribution to the end of the Cold War Renewed Euroskepticism but a unique role for the UK in the EU Revolution “radical and profound change” (Britannica) Discussion Was there a Thatcher Revolution, 1979-1990? ‘A radical and successful break with the past.’ Assess the validity of this view of Thatcherism.