CM HISTORY OF THE UK 1979-1997 PDF

# CM HISTOIRE DU ROYAUME-UNI ## THE UK FROM 1906 TO 2016 ### Part 3: From 1979 to 1997 ## Chapter 1: The unity of the kingdom ### I- Margaret Thatcher and John Major - The Conservative Party led by Thatcher was very different. Thatcher would be Prime Minister from 1979 to 1990. She was succeeded...

# CM HISTOIRE DU ROYAUME-UNI ## THE UK FROM 1906 TO 2016 ### Part 3: From 1979 to 1997 ## Chapter 1: The unity of the kingdom ### I- Margaret Thatcher and John Major - The Conservative Party led by Thatcher was very different. Thatcher would be Prime Minister from 1979 to 1990. She was succeeded by John Major until 1997. Margaret Thatcher was the very first female PM in Britain. At the time, there were very few female senior politicians in Western democracies. There were also very few women in the British Parliament. In 1979, women represented only 3% of MPs. The Conservative Party is traditionally the party of the upper classes. - She came from a middle-class background. For many of her colleagues, she was only a grocer's daughter. She was often despised by Conservative leaders because of her background. She had attended a State school not an expensive Private school. She had benefited from a grant to study at Oxford University. She also stood out from her predecessors because she was a right-wing politician committed to free-market ideas. She thought that individuals had to provide for themselves and their families and that they should not become dependent on the State. Likewise, businessmen had to make decisions for their companies without much state interference. Her predecessors, previous Conservative PMs, had more social concerns than her. Her style was also different, quite authoritarian. - John Major was far less authoritarian. He came from a background that was much poorer than Margaret Thatcher. His education had not been as prestigious. He pursued quite the same policies, those that had been conducted by Thatcher. ### II- Regional institutions in the 80s and 90s #### A- Scotland and Wales - There was a referendum on devolution in March 1979. But the majority was too narrow so devolution was not enforced. The referendums were held at the end of the Winter of Discontent. After the referendums, there was a motion of new confidence in the Labour Party. The government was voted down in Parliament which then triggered a general election that was won by the Conservatives. - The Conservatives had campaigned against devolution. They were the unionist party defending the Union as it was. So devolution would not be enforced while they were in power. However, they led free-market policies that were deeply resented in Scotland and in Wales. The Scots and the Welsh still trusted the State. They wanted the State to continue to interfere to redistribute money. In response, the Scots and the Welsh increasingly voted Labour. In Britain, there was already a North-South political divide that resulted from the economic divide. The economic North voted Labour. But the gap/divide between the North and the South increased in the 80s and 90s. In the 1987 elections, the Scots elected 72 MPs, 50 of them belonged to the Labour Party, only 10 belonged to the Conservatives. Likewise, in Wales at the same elections, out of 38 Welsh MPs, 24 belonged to the Labour Party. - The legitimacy of the Conservative government was increasingly questioned in Scotland and in Wales. The government was lawful because it relied on the majority of seats in the House of Commons but this majority was mostly due to the vote of voters in the South-East of England. The British government was lawful but not legitimate in Scotland and in Wales. - Labour had to react: they decided to devise a new devolution scheme that would be ready and that could be enforced as soon as it came back to power. In Scotland, Labour set up a constitutional convention with the Liberal Democrats and members of the Civil Society: representatives of Trade Unions, representatives of the main Christian Churches (Church of Scotland + Catholic Church), representatives of teachers and doctors, all those who disagreed with Margaret Thatcher's free-market policies. So the scheme would be fully representative of the population. In Wales, Labour worked on its own. Reports were published in the mid 90s. For Scotland and Wales, devolution was not regarded as an end but as a means to achieve an aim that is to say, the Welsh and the Scots would elect their own representatives to make their own decisions in devolved matters. They would abolish free-market policies and restore social democracy. The SNP and Plaid Cymru didn't join, because both parties were still committed to full independence. Devolution would not be sufficient for them. Both parties were then committed to European integration. As a result, they thought the parties would be increasingly attractive on their own as they would promise the newly independent state to be part of the European Union. #### B- Northern Ireland - There was still a Civil War. Devolution had been abolished. All governments tried to find a solution. Thatcher was very authoritarian, in particular with the IRA that planted bombs not only in Northern Ireland but also in England. Targets were symbols of the British power. They even planted bombs at a Conservative party conference. Some IRA leaders were imprisoned as a result of their actions, but they argued that they were political prisoners so they shouldn't be prisoners at all. Some went on hunger strike. Thatcher didn't want to surrender so a few of these hunger strikers died. The most famous is Bobby Sands. This fueled discontent amongst Catholics in Northern Ireland. - Meanwhile, Thatcher was still determined to go ahead and find a solution. So in 1985, an important agreement was signed with the Republic of Ireland known as "The Anglo-Irish Agreement". The deal provided for cooperation on legal matters (justice, security). Everybody realised that the Republic had to be involved in any piece agreement given Irish History. Politicians in the Republic also made concessions. Indeed, in 1921, when Ireland became independent, there was a commitment to reunification between the Republic and Northern Ireland. The 1936 constitution included such a provision. Under the 1985 deal, Irish leaders conceded that reunification could only be achieved with the consent of the majority of the population in Northern Ireland. It was a major step forward. It was a guarantee for Protestants. Reunification would not be imposed on them. Negotiations between the British government and the government of the Republic were easier because both countries were part of the European Economic Community. They had entered the EEC in January 1973. - Another important step was achieved under John Major. The negotiated peace agreement had to be discussed with all 4 parties including Sinn Féin (the hardline catholic party). In 1993, John Major announced that there were talks with Sinn Féin. This was only the beginning. In fact, there would be talks during the 90s with a key issue: the use of weapons. The British government would only negotiate under a ceasefire with the Republic. There were also the involvement of American politicians in the piece talks and there were still the involvement of some European leaders. When John Major left power in 1997, there were still talks but no proper peace agreement yet. There were fewer casualties. Almost 4,000 individuals died over 30 years. The peak was in the early 70s. ## Chapter 2: Free-market economic policies - Margaret Thatcher introduced radical changes. Britain faced major economic difficulties. She had to tackle them, but she also seized the opportunity to enforce new policies that were inspired by Hayek Friedman (free-market ideas). All her predecessors, including Conservative PMs since WW1, aimed at full employment thanks to redistributive policies. She had another priority, completely different: cutting the inflation rate thanks to monetary policies. She raised interest rates when the inflation rate decreased. But, as a result, unemployment increased. There was a surge in unemployment with double digits figures. Unemployment would then decrease in the 80s. - She contended that the State should not interfere in the economy so she privatised on a large scale most public corporations that had been nationalised in 1945. The process was gradual. She first privatised corporations that became competitive (airways, telecoms, gas). Then, she privatised corporations that faced difficulties that were no longer profitable in particular heavy industries (steel, coal). Very often, the newly privatised had to dismiss some of their workers as they faced increasing competition. That first privatisation was quite popular in particular because Thatcher enabled ordinary citizens, workers, to become shareholders. Workers could afford to be shareholders (take advantage of the profits). The privatisation of British coal and steel were less popular. But the privatisation carried out in the late 80s would be much more controversial. Indeed, the distribution of water and electricity were privatised, regarded as essential public services. Competition was supposed to lead to lower prices for consumers, but in fact bills seemed to increase. - There was a final privatisation carried out under John Major in the mid 90s: British Rail. The corporation was broken about 30 private companies. Some of them were in charge of trains, others dealt with stations, others ran tracks. They all had to operate on the same network and they were all supposed to make profits. But, in the first few years, there were major incidents/crisis. Overall, these privatisations were accepted by the British. They became an established fact. As a result, Labour, in opposition, that had a new leader in the 1990s, Tony Blair, dropped its old clause 4. Labour was no longer committed to renationalising. - Thatcher also reckoned that there were too many regulations on businesses so she removed many of them, in particular she deregulated financial services, mostly in the City of London. She removed many legal constraints, so the City was opened to all sorts of operators whatever their nationality or their legal status. Thanks to these deregulations, London would become the largest financial place in the European Union. Meanwhile, Thatcher didn't want to support ailing industries that are in particular the manufacturing factories that experienced difficulties. So the government would not provide any support when coal mines or factories had to close down. Manufacturing that still accounted for 32% of Gross Domestic Product (GDP) in 1970, only accounted for 20% of GDP in 1997. The decline of manufacturing industries hit the North of the country in particular. The North-South economic divide widened. - Margaret Thatcher and John Major couldn't abandon the North of the country. But, at the same time, they didn't want to provide private companies with money. There were still some regional policies but the number of assisted areas was reduced. So private companies that settled in these areas could no longer apply for government grants, they could only claim tax relief which was more in keeping with the ideology of the government. However, there were 2 exceptions in the North: Scotland and Wales. Scotland and Wales somehow benefited from some privileges because they were nations within the UK alike the North of England, they had their own voices in the British government, the Secretaries of State for Scotland and for Wales. These two secretaries had succeeded in obtaining development agencies for their nations in the mid-70s under Labour. These agencies were maintained under Thatcher and Major. They attracted companies to Scotland and Wales, in particular companies working in the new high-tech industries, the companies that manufactured the first computers. - So, in the early 90s, about half of personal computers sold in Western Europe were manufactured in the region between Glasgow and Edinburgh which was nicknamed "The Silicon Glen". But this didn't last long (South-East Asia). - The growing North-South economic divide would fuel the growing North-South political divide, with the North increasingly voting Labour. - As for taxes, Thatcher and Major cut direct taxes, so taxes on individuals' incomes and taxes on companies' profits. Nevertheless, the government still had revenues thanks to privatisation on a large scale and also thanks to oil and gas in the North Sea. Oil companies still had to pay specific taxes on top of the Corporation Tax. Conservative governments decided to raise indirect taxes. For example, you pay a tax on the goods that you purchase (VAT). Indirect taxes are not related to individuals' incomes. So they are not fair. Those on low incomes are particularly hit. Thatcher went further in the late 80s, she decided to reform local taxes that are taxes charged by local authorities. Until then, such taxes were based on the value of houses, so they were more or less related to individuals' incomes. These taxes were replaced by a new community charge soon nicknamed "The Poll Tax". The Poll Tax was set by every local community but it was the same for every tax payer in the same local area. This reform triggered opposition on a large scale across the whole country. There were massive demonstrations, even riots in some places, because the tax was regarded as unfair from the very beginning and also because many tax payers on low income couldn't afford to pay it. Discontent was particularly wide-spread in Scotland. This Poll Tax is one of the 2 reasons why the Conservative Party elected a new leader John Major and forced ## Chapter 3: Free-market social policies - From 1979, Margaret Thatcher's government had to save money. They had to balance the books. But, in addition, the Conservatives under Thatcher were committed to reforming the Welfare State and the public services as they argued individuals had become too dependent on them. - As for public services, they encouraged individuals to resort to the private sector. They created assisted places to enable bright pupils from poor background to attend Public Schools (private and expensive). They also encouraged individuals to take out private health insurance so that they would be able to attend private clinics. Such policies were not successful. The British prefered the National Health Service and State Education. But Thatcher thought that the NHS ans State Schools were not efficient. So she decided to introduce more competition within these public services. - As for the NHS, she created an internal market: General Practitioners would be regarded as purchasers of healthcare and hospitals would be providers. So there would have to be negociations between them over prices and conditions. There were also some managers in the NHS for the first time. The system remained free for patients but it was supposed to become more competitive, health professionals had to be concerned with profits. - As for State Schools, the government introduced a national curriculum which was new in the UK. There had never been national curriculums in the UK because State Schools were run by local authorities so they devided their own curriculum. As there was a national curriculum, there would be new tests taken when children were 7 and 11. So schools would be assessed and ranked in a League Table. The government contended that the schools that were at the bottom of the League Tables would then do their best to improve and move up in the rankings, especially because they would be under pressure from parents. Parents would tend to chose better schools for their children. This was criticised because the schools that were at the bottom were those that were located in poor areas so it would be very difficult for them to improve in the short term. The reasons why they were at the bottom were social reasons. So teachers were discontent like doctors in the NHS that had to deal with managers. In addition, the government decided that, locally, parents and teachers could take their State schools out of local authority control so they created what they called "opt-out" schools. These schools were still funded by the government but they were no longer subjected to local authority control. - In other fields, the government decided that some public services could be run by the private sector, in particular ancillary services (for example laundry and catering). In the NHS or State Schools, these services would be run by private companies. - The most important reform was about housing. Thatcher was very clear, local authorities should not be in charge of housing. Obviously, she referred to Council Houses that had developed across the whole country that had benefited the working classes in particular. So she decided to encourage tenants to purchase their Council flat or house at discounted prices and low-interest rates. This policy was enacted early in the 80s. It was immediately a success because many individuals in particular from the working classes wanted to become owner-occupiers but they couldn't afford it. So skilled workers seized this opportunity. This policy was so successful that it is probably the main reason why skilled workers then turned to the Conservative Party. This enabled the Conservatives to remain in power for such a long time. There were still individuals that couldn't become owner-occupiers. They would deal with new housing associations that were private organisations called "Not For Profit organisations" (NFP). They could make profits but all their profits had to be reinvested in the organisation. The rents would be moderate. Local authorities were no longer providers except for the poorest. - By 1990, 2/3 of the population had become owner-occupiers. - As for benefits, the Conservative governments couldn't go too far because the British praised their Welfare State first. Secondly, there were some benefits that couldn't be cut in particular unemployment benefits as there was a surge in unemployment in the early 80s. Yet, the government changed the definition of unemployment many times in the 80s, so that fewer jobless individuals were allowed to claim benefits. Under Major, in the 90s, there would also be stricter conditions to reclaim benefits, the long-term unemployed would have to accept any job after 2 years. Such social policies also fueled discontent in Scotland and Wales in particular. Most people in both nations trusted their public services run by public authorities. Many people in Scotland also argued that the 1707 Treaty of Union between England and Scotland was betrayed in particular because it protected Scottish education. So the Scots and the Welsh only enforced the reforms that were compulsory but didn't enforce those that were optional. There were only 2 Scottish State Schools that opt and out of local authority control and the proportion of Council House tenants that purchased their local Council flat was much lower than in England. This would fuel discontent and demand for devolution. The new Parliaments in Scotland and Wales would run public services: health, housing, education, and would restore state provisions. ## Chapter 4: Britain in the EEC/EU - In 1979, Thatcher was very enthusiastic about EEC membership. There was one issue that she regarded as an emergency: Britain's contribution to the European budget. Indeed, Britain's contribution was too high compared to what Britain received from the European budget, because Britain had fewer subsidies in particular for farmers. So Thatcher repeatedly demanded the money back, and she succeeded in 1984. As her claim was justified, she obtained the permanent rebate on Britain's contribution. Every year, Britain would get money back from the EEC, amounting to 2/3 of the gap between its contribution and its receipts. It soon became obvious that Britain was taking full advantage of EEC membership. - As for trade, about half of British trade was with the EEC. Thanks to EEC membership, foreign direct investment in the UK increased, so the investments of foreign companies, in particular car manufacturers. British car manufacturers were declining. Some of them were taken over by foreign companies that manufactured cars and other commodities that could be then sold easily in the EEC. - British GDP that used to be lower than the European average became close to it and would soon exceed it. Britain also took advantage of regional policies, that are European policies supporting European regions in decline, in particular because of the collapse in manufacturing industries. Such policies benefited the North of Great Britain and European funds tended to replace British funds that were being cut. That is why Thatcher remained very enthusiastic when it came to negotiating the new single market. The agreement would be signed in 1985 and the single market would come into force in 1993. The old Common Market was only about some goods such as agricultural products. The new single market would be for all goods as well as all services, capitals and people (workers). There would be no customs duties on goods, no protectionist regulations on services. - Thatcher was full of praise for this single market based on free trade. She expected British companies to be ahead of their rivals in the new competition, in particular because many had been privatised: companies producing goods and companies delivering services, whereas on the continent these companies were still under state ownership. But the privatised companies had to be competitive. Thatcher had also deregulated the City of London. Thatcher was really full of praise for this forthcoming single market. - A few years later, in 1988, the European Commission, led by a French politician Jacques Delors, decided to introduce social regulations. These social regulations would provide European workers with basic rights in order to try and compensate for some possible adverse effects of the single market. Companies would have to become more competitive so some of them would probably dismiss some employees. Thatcher immediately responded that this was unacceptable. She delivered a speech in Bruges in September 1988. She explained that she had deregulated the British Economy and had reformed social policies. So she didn't want Trade Unions to recover some of their powers then because of the EEC and its social policies. She didn't want Britain to leave the EEC, but she became eurosceptic. Conversely, some Labour politicians, who were still reluctant, became very enthusiastic about the EEC because of these forthcoming social policies. From then onwards, Labour would be quite united and in favour of European integration whereas the Conservatives would be increasingly divided. - The Scottish and Welsh nationalist parties were also increasingly enthusiastic about European integration. They claimed that the independent Scotland and Wales they expected would not be isolated, they would be part of a wider market. - In 1990, there was another issue that further fuelled Thatcher's discontent : the Exchange Rate Mechanism (ERM). There was an Exchange Rate Mechanism in the EEC including some national currencies but not the British Pound. But fluctuation rate between these currencies was at most 2.25%. The aim was to make it easier for European companies to trade. Thatcher had refused to join the mechanism because maintaining such a limited fluctuation rate would have an impact on Britain's financial and economic policies. But, by 1990, she was forced to join the mechanism with very special fluctuation rate about 6%. She was not satisfied, she sounded increasingly eurosceptical. Her attitude is one of the 2 reasons why the Conservative Party decided to have a new leader, John Major. - Major came to power and had to negotiate another major treaty: the Treaty of Maastricht. He signed it but after demanding some concessions for Britain. In particular, the treaty contains a social chapter that is about social regulations and Major negotiated an "opt-out", meaning that the social chapter would not be enforced in Britain. There were also provisions for a new single currency that would become the Euro. Major negociated an "opt-in" meaning that the UK government would make a decision later, a decision based on British interests. Everybody understood that Britain was unlikely to join the Euro, especially because of what recently happened with the exchange rate mechanism. The British had proved unable to maintain the Pound within the 6% fluctuation rate. So, in September 1992, Britain was forced to leave the exchange rate mechanism, two years after joining it. - The Maastricht Treaty then had to be ratified in the British Parliament. Conservative MPs proved increasingly divided. - There was also a brand new party called the "United Kingdom Independence Party" (UKIP), a party founded in the early 90s in response to the Maastricht Treaty. Initially, it was a single-issue party, so it was only concerned with the Maastricht Treaty and the European Union. UKIP argued that, as the EEC would turn into a European Union (including single currency), the sovereignty of member states would be weakened. So UKIP wanted Britain to leave the European Union. UKIP was and remained a small party without any MPs. Nevertheless, UKIP would be increasingly influential first on the Conservative Party because UKIP was a right-wing party, a potential rival for Conservative MPs. So many Conservative MPs paid attention to the arguments put forward by UKIP. Eventually, UKIP would have a major impact on British politics because UKIP was the very first party to demand what would become Brexit. UKIP was never represented in the House of Commons but gained MPs in the European Parliament (MEPs). The Maastricht Treaty was eventually ratified. - The Maastricht Treaty was a turning point for the British press. In the campaing leading to the 1975 referendum, most papers were in favour of the EEC. But, in the 1990s, a growing number of papers, in particular the popular press, turned against the European Union, they would publish eurosceptical articles. - As the census contained plenty of data about housing, education, unemployment, then it is very easy to notice differences in achievements between communities. Some of these differences may have cultural reasons (lower employment rate for women). But other gaps may be put down to discrimination, and public policies may then be enacted accordingly. These ethnic statistics (forbidden in France) are appreciated in the UK and that is why the words "white" and "black" can be used and are used on a daily basis. - There was one field, in particular, without any individuals from ethnic minorities: Parliament. Individuals from the Commonwealth living in the UK had the right to vote but they were not elected because not selected as candidates by parties. So Labour decided to promote them within the party. They were selected in winnable seats for Labour. As a result, from 1987, the first MPs from ethnic minorities entered the House of Commons. In the following years, the Conservatives would have to do the same.