Thatcher's policies (Social (NHS ( Hospitals and GP's looked…
- Inflation fell from 18% in 1980 to 4.5% in 1983
- By abandoning Keynesianism which believed in govt spending to re-stimulate the economy after WW2 - good for the time, however not as good now.
- Adopted monetarism policy by reducing amount of money in circulation - implemented by Sir Keith Joseph
- Howe used deflationary methods e.g. reducing govt borrowing, expenditure and shifted form direct to indirect tax
However... Howe's economic policies led to the social cost of policies outweighing benefits:
- Unemployment: 3 million and 3.2 million in 1985
- 25% decline in manufacturing capacity = social disorder and Brixton riots 1981 and further riots in Labour favoured areas e.g. Liverpool
- Thatchers idea to cut expenditure failed (rose in real terms by almost 13%)
- moving away from Keynesianism ideas of nationalisation as this would make the economy more competitive
- aimed to break post-war consensus of mixed economy
- no longer supported failing industries as Heath did
- 1st Term privatised BP (1979)
- went onto privatise; Rolls royce and British steel
- Earned the govt £11 billion used to subsidise tax cuts
- increased number of private shareholders from 3 million to 11 million by 1990
However... Middle class ended up selling their shares to big financial operations, opposed to other small shareholders. This defeated the purpose of what she was doing as the middle class families would then save the money they gained from this, and this therefore meant less spending in the economy. Also many big businesses were foreign meaning that the wealth was leaving Britain opposed to staying in the domestic economy.
- reduced taxation as she believed in supply side economics. Top rate fell from 83% to 40%
- Hospitals and GP's looked after own budget
- GP's given competitive choice in which NHS services to use
criticised in her final term for introducing market forces into the NHS. In 1989 Kenneth Clarke introduced the ‘market mechanism’ into the NHS. Prescription charges rose, dental services were increasingly privatised and many were not convinced by her claims that the NHS was safe. - the BMA (British Medical Association) denounced government policy.
- Budgets cut and in control of own budgets
- O levels and CSE's replaced by GCSE's (1986)
- Uni's had more quality control over teaching to become more in line with businesses
British uni’s saw their funding cut and in 1985 Oxford uni voted to deny Thatcher an honorary degree
- Heseltine’s 1980 housing act led to council house sales and 1 million council tenants had bought their own homes and by 1989 65% of the population owned their own home.
- This also had clear political and electoral advantages for the tories as many working class labour voters, could emulate their middle class neighbours and owning their own homes was irresistible
However, Britain’s home-owning mortgage payers, people who had respected Thatcher for her policies, found themselves paying heavily for the houses they had been encouraged to buy. - By 1989 with interest topping 15%, the spectre of negative equity and home repossession had hit home owners hard.
- Also the government froze the receipts gained from sales, making it difficult to build more houses
However, Social and political unrest was low as
- The Falklands War of 1982 distracted opposition to domestic policies
- Won the war = increase in popularity = wins a by a huge majority in 1983 election
- Government ensured that police forces were well paid and strong enough
- Employment acts 1980/82 outlawed flying pickets and made balloting before a strike a legal obligation. The number of strikes fell to 4.2 million per year - these restricted union powers but did not arouse significant opposition
- The 1984-5 miners strike witnessed a victory for the conservatives and the unions ceased to be a serious power for any government
- The Ridley report by Nicholas Ridley in 1978 (battle plan) reduced the demand for coal by converting power stations to gas and oil as part of the ‘clean air act’ - This meant there was no longer a demand for coal and so the powerful coal miners ceased to have as much power
Work closely with press/media
- Rupert Murdoch = POWERFUL - exploits weaknesses of Scargill (NUM president - main union) (not good with PR) to change public perception of miners
- The miners strike lasted for a year and there was a deep disillusionment in the mining communities = hatred for Thatcher as took away their livelihood as they were not trained to do anything else.
- The violent clashes at the incidents like the battle of Orgreave in June 1984 seemed to many to suggest that Britain was close to a class war
- Social impact of actions = 200,000 miners lost their jobs and many claim that this was simply to prove a political point as 40% of electricity still powered by coal (imported) - the Bishop of Durham criticised the government’s handing of the strike
- won 3 elections; partly brought about by her reduction in income tax to 60% and 22% by 1983 and 27% by 1987
- She was admired for her supreme authority over her cabinet. The Wets such as Carrington and Pym were dropped after the first term. she succeeded in establishing a small band of loyalists - William Whitelaw and Keith Joseph. The dries such as Howe (chancellor) and Joseph (top economic advisor) were given the top economic jobs.
- She was popular with grassroots members
- she was admired for the 1986 Local government act which abolished the large metropolitan councils which had assumed to much (often left-wing) power
- Many admired the fact that one of the successes of Thatcher was that socialism as a political force ceased to exist in Britain. One of the most revolutionary aspects of Thatcherism was that it forced the Labour party to change and adapt. She fundamentally changed the political landscape of Britain.
- govt spending had hardly been reduced due to increased welfare bills
- Poll tax was her biggest political failure which led to her decline