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The impact of Thatcherism 1979-87 - Coggle Diagram
The impact of Thatcherism 1979-87
Thatcher's economic policies and their impact
Economic policies
monetarism - from the first budget in 1979, thatchers government set out to reduce government spending. it was believed it would reduce inflation and lead to economic growth. by 1980 the economu had plunged into a serious recession. hit both by unemployment and rising inflation. stagflation was back.
privatisation - privatisation became central to Thatcherite economic policy. the first businesses to be privatised were BP in 1979, british aerospace in 1980. privatisation was. was driven by anti socialist ideology. Just to start right believe that private individuals we're better at spending money than the government it was a civil court belief that the private sector was more dynamic and efficient than the public sector it running and delivering goods and services. Critics argue that privatised enterprises was sold off cheaply in order to ensure all shares were taken up and it did sometimes make life more insecure for many employees some lost jobs as privatise enterprise is cut back on staff others found that they could no long rely on long term job security and pension provision.
deregulation- The other key element of supply side economics was deregulation. The government would interfere as little as possible the government also introduced other measures to encourage start up companies the loan guarantee scheme made it easier for small businesses to borrow money and the enterprise allowance scheme encouraged the unemployed to start up their own businesses by giving them 40 pounds a week for up to a year to get their businesses off the ground. financial deregulation freed up the City of London the financial market from the tight controls of the Bank of England. foreign banks could now operate as stockbrokers it blew away old tradition and is credited with restoring London’s position as a world financial centre.
Issues with inflation
Interest rates were used as a mechanism to control inflation, they were raised to 17 percent in 1979. however a downside was that higher intrest rates made it more expensive for businesses to borrow money. They also increased the value of the pound which made it more difficult for business to export. this led to lots of businesses going bankrupt which led to high unemployment. even worse inflation went up and peaked at 22%
Issues with unemployment and economic realignment
Because the thatcher government saw inflation as the key economic threat, low unemployment was no longer a key aim. instead British industry had to be prepared to be more competitive and if this led to unemployment so be it. many industrial plants were shut down permanently, some people called it the deindustrialisation of britain. by 1983 unemployment rose to over 3 million. it didnt fall under 3 million until 1987.
Realignment
The Thatcher Government
Thatcher as leader
Her leadership style was a conviction politician and was very dismissive of the PWC. her policies reflected her personal beliefs, she had a very middle class back ground and was an outsider as she was not from a traditional conservative background. her ideology "Thatcherism" was based on traditional conservative thinking.
Opposition
although the conservatives won, there were still very many senior conservative that were still opposed to thatcher ideology. she changed all of these people in her cabinet and made it so everyone in her cabinet supported her ideology. the labour party was too dived to make good opposition. some labour politicians left the party and formed the SDP.
Conservative electoral sucess
in 1982 Thatcher was one of the most unpopular prime ministers in memory. yet in 1983 she won by a landslide. and again in 1987 they had a massive win after being disliked again. this happened due to her organising a victory in the Falklands war in 1982. which led to a wave of patriotism around the country and most people support the take back of the falklands. her ability to make tough but successful decisions made people believe she would be a success. labour leadership was very divided between the manifesto was dominated by left wing promises and it was labelled "the longest suicide note in history" more people voted for non conservative parties but it was all split up over lots of parties so there wasn't a majority. this is why the conservatives won the 1983 election.
1987 election- the conservatives fought it on lower taxes, growing economy and strong defence. the labour party were trying to become more credible and Neil Kinnock was restoring party discipline and making the party more efficient but they still suffered a defeat. the SDP began to shrink due to ideological differences opposing Thatcher was not unity enough.
Northern Ireland troubles
there continued to be trouble in northern Ireland. Thatcher was a unionist and believed in not giving up to terrorists. The IRA prisoners started hunger strikes in 1980 and these gained lots of support and attention. some right wing IRA died while on hunger strikes. before the strikes were called of in 1981 10 of them died. these hunger strikes didn't get the IRA what they wanted which was a special category status for IRA prisoners. however they did have a big impact. thatcher became a hate figure for Irish republicans and in 1984 the IRA bombed the grand hotel in Brighton and thatcher was the target but she can out unhurt. this caused outrage. even though thatcher said she doesn't negotiate with terrorists, there were secret meetings between the IRA. There was the Anglo-Irish agreement at Hillsborough in 1985. this mean that the UK and the Republic of Ireland governments had to co-operate. Republicans hated the agreement because they thought that was agreeing that Ireland was part of the UK. it also annoyed the unionists as it gave Ireland an advisory role in northern Ireland. the ulster resistance was set up in response in 1986 and there was violence and retaliation.