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Towards a new consensus 1987-97 - Coggle Diagram
Towards a new consensus 1987-97
The fall of Thatcher and the rise of Major
The fall of Thatcher and her legacy
The decline of thatcher can be traced back to 1987. The first problem was economic. The stock market crashed following the deregulation of the city in 1986. The lawson boom, which was caused by Thatchers chancellor, Nigel Lawson, led to problems with balance payments. By 1990 inflation had risen to 10.9%. this was a problem as the Thatcher Government as one of their goals was low inflation.
The second problem was political. Many Tory's feared defeat at the next election. The loss of Ultra-safe seat of eastbourne to the liberals in 1990's by-election made them believe they could lose anywhere. The Conservatives Unpopularity was partly caused by economic problems. But it was also due to the introduction of the Poll Tax. Thatcher was told to drop the policy but she didn't after the Riot in 1990 the Cons fell sharply in the opinion polls.
These problems increased divisions within the cons due to Economic problems, Europe and Thatchers style. At the same time the Labour party was recovering. After the resignation of Sir Geoffrey Howe. Micheal Heseltine announced a leadership challenge. After failing to win the first ballot, Thatcher resigned.
The legacy of thatcher's years in power is both difficult and controversial. she changed Britain and British policies. However people either think it was great or very bad. Even after she left office she remained an important influence on the conservative party for the next 15 years.
Major as leader
John Major was Thatcher's choice of successor and one key reason for his rise to leadership was that Thatcherites saw him as one of them. Major wanted to unify the party. this would be a difficult task. Nevertheless the Tory's jumped ahead in the opinion polls and the tone of national press was very positive. Major's first big task involved the first gulf war, foreign affairs and Europe. He fixed the gulf problems and reached a successful conclusion in 1991. Then he focused on Europe and set out aims to make Britain take a place at the very heart of Europe. At home major needed to focus on the issues with the poll tax. Many people wanted him to scrap it immediately but that risked splitting the party. In November 1991 poll tax was abandoned for the new council tax. Doing this meant that 1.5 Billion would have been wasted.
Major called for the election in march 1992 almost at the last possible moment before the end of the 5 year term. The opinion polls placed the Tory's at an average 29 percent with labour ahead on 41 percent. Most people predicted a labour victory but John Major remained upbeat and very optimistic. Towards the end of the election campaign the Tory's had gone up in the opinion polls. The Cons ran a good campaign and john Major got lots of respect for his soap-box politics. Although People blamed the Cons for the economic recession they were still seen as the party best able to fix them. Many voters probably did not feel that Labour had not reformed enough.
Economic developments
Major's government had inherited a difficult economic situation, the British economy was suffering from a declining manufacturing output, high interest rates, a steep rise in inflation and a slump in house prices.
From mid-1991 to early 1992, unemployment rose from 1.6 - 2.6 million. Many homeowners were in negative equity. Many had their homes repossessed. Unlike in the lots of other recessions this affected traditional Tory voters. With an election imminent, Major's government resorted to high public spending. Half of this was forced but huge government borrowing was used for subsidies on transport and increased spending on the NHS.
Black Wednesday and its impact
Within a few months of winning the election, Major's government suffered a severe crisis and Britain was forced to leave the Exchange Rate Mechanism. What became known as Black Wednesday would dominate the rest of Major's premiership. Britain joined the ERM in 1990. The ERM require Britain to maintain a fixed rate of exchange. In September by 1992, the British currency came under pressure. It reached a climax on September 16. Major was determined to avoid any devaluation and to remain within the ERM. Despite these efforts the pound continued to sink. The effects of Black Wednesday were less catastrophic than feared. Within a relatively short time the economy stabilised. The Political consequences, however were disastrous for the Cons. There was a steep drop in the opinion polls and the Labour party shot ahead.
Britain economic situation started to improve immediately after black Wednesday in 1992. Learning the ERM prevented Britain from having to keep high interest rates to protect stability of the sterling and it allowed exchange rates to float downwards, which helped British exporters. Unemployment rates slowed down and the house market picked up. at the same time world trade was expanding. By 1997 most economic indicators were positive.
Political sleaze, scandals and satire
Part of the reason that Major's government found it difficult to claim credit when things went right is it became associated with things went wrong. This perception was strengthened by scandals. There were more than a dozen sex scandals involving MPs having extramarital affairs including 2 cabinet members, David Mellor and Tim Yeo. Both were forced to resigned.
Other scandals were centred on corruption. in 1994, the Scott enquiry, set up by major to investigate illegal arms dealing. which found out that two leading conservatives had committed perjury.
Another scandal was the so called "cash-for-questions" affair erupted; it was very damaging to major's government
Political policies
A number of Conservative policies in the 1990's were very controversial and confirmed the feeling that the conservative government was prone to crisis. Major's government continued the policy of privatisation. The coal industry was privatised in 1994, the railways in 1996. The government also wanted to privatise the post office but faced opposition and eventually abandoned it. Major also introduced the PFI. He also introduced the citizens charter in 1991. this was an attempt to give public service users more power over the quality of the services they provide. Pit closures continue. in 1991 Heseltine announced the closing of 31 pits including some in Nottinghamshire. Major's government also had to deal with 'Mad Cow Disease' in 1996 it was first identified as a threat to humans. This led to British beef being banned in Europe. None of these events severely impacted the Government severely but they helped cement an image of incompetence.
Approach to Northern Ireland
Thatcher's policy towards northern Ireland did not change in the final years of her administration The government banned organisations which were believed to support terrorist activities from broadcasting in Britain. However the state's activities during the troubles came under scrutiny. there was accusations of a shoot to kill policy after 3 IRA members were killed by the SAS. There was however, a political breakthrough in northern Ireland under John Major. Unionists were were fearful of being sold out by the British and loyalists still had hostility towards the British. Major had a good relationship with the Irish president, Reynolds. In 1994 Reynolds and Major went public with their Downing Street Declaration. in 1994 the IRA announced a ceasefire. Getting a final agreement was very difficult. Unionists did not believe the IRAs commitment to peace. The IRA got impatient and went back to violent methods. But peace progress continued
Some events of troubles in 1987-93
Mar 1988 two off duty soldiers were killed by a IRA mob at a funeral
july 1989 london stock exchange bombed by IRA
3 mortar shells fired at 10 downing street
March 1993 warrington bomb killed 2 children
Conservative divisions
By the last year of thatchers premiership divisions had become very common in the conservative party. Despite Majors efforts to unify the party, and despite the election success of 1992, the divisions in the conservative party. worsened. Eurosceptics saw an opening to push the government to the edges of Europe, if not out of the EU all together. Press speculation mentioned possible leadership challenges. major felt so insecure that he called for a leadership election. it was a case of 'back me or sack me'. Major won. despite the win 89 had voted against him.
Reasons for the fall of Thatcher
Micheal Heseltine's Leadership challenge.
Economic problems such as Balance as payment problems and extremely high inflation.
Europe divisions
Poll tax
Why did labour win the 1997 election?
Cons divisons over europe
Labour realignment
Cons sleaze and scandals