# A Level British Political, Economic and Social History - 1945-2007

## The triumph and decline of Margaret Thatcher

### The high tide of Thatcherism, 1983-87

• The 1983 general election consolidated Thatcher’s position, both as prime minister and as party leader. In her first term in office, she had been an untried leader, surrounded by more experienced colleagues. Some of her policies had made her extremely unpopular. She had been forced to make compromises with elements of the party who did not agree with her political style, The 1983 election victory liberated Mrs Thatcher. Her personal prestige was boosted by her triumph in the Falklands. Most of the ‘wets’ in her party had been marginalized.

• Thatcher had obtained an almost total mastery of the press. Her press secretary, Bernard Ingham, became hugely influential in securing favourable press coverage from informal contacts with journalists and the use of deliberate leaks to the press. She took on, and defeated three main enemies: state controlled industries, left-wing local councils and the unions. In the economy, the key policies were the privatisation of key industries and the stimulation of free enterprise through tax cuts and deregulation.

• The Thatcher government saw left-wing local councils as enemies, both in terms of ideology and because they were blamed for wasting resources. The fiercest battles were fought with the Greater London Council (GLC) headed by a maverick left-winger, Ken Livingstone. Thatcher treated many GLC policies in education and public transport as provocations. Ken Livingstone was demonised as the face of the ‘loony left’.

• In 1986, the Local Government Act abolished the big metropolitan local authorities that had been set up by the Heath government; the powers of the central government were greatly increased at the expense of local government. In the short term, this was clearly a victory against the ‘loony left’ but, in the longer term, it created problems for central government, because central government was now in the firing line dealing with issues it previously had not needed to worry about. In The Times Simon Jenkins called this the ‘nationalisation of blame’.

• Thatcher’s most dramatic victory, however, was not against left-wing councils; it was against the power of the trade unions, in particular against the NUM and its firebrand leader, Arthur Scargill. The outcome of the miners’ strike of 1984-85 is often regarded as the defining event of Thatcher’s years in power; just as the 1974 miners’ strike was the defining event in bringing down Heath. In the process, the NUM was badly split and many traditional mining communities suffered severe hardship. When the last strikers gave up the struggle in March 1985, the Thatcher’s government had indeed ‘smashed the unions’.

• In 1981, a previous dispute had been settled by compromise because the government had not felt ready for a rerun of 1973-74. Now, in 1984, the government was fully prepared and confident. New laws passed in 1982 made strike ballots compulsory and banned mass picketing. Huge stocks of coal had been built up at the power stations. The flow of North Sea oil made it much less likely that there would be an energy crisis like 1973. Ian McGregor, the new chairman of the National Coal Board (NCB) had government backing for taking a tough line.

• Arthur Scargill was a charismatic leader but he did not gain total support for a national strike. His refusal to hold a strike ballot weakened his case and he failed to overcome the historic regional divisions among the miners. The Nottinghamshire miners formed a breakaway union, the Union of Democratic Mineworkers (UDM). Miners who disapproved of Scargill’s radical tactics started drifting back to work. One key factor was the police. The urban disturbances in 1981 had given the police a crash course in containing violent protests. They now had new equipment, more experience of riot control and better tactics. Thatcher’s critics blamed her for the politicisation of the police, claiming they were used to defeat the miners in confrontations such as the ‘Battle of Orgreave’, rather than being impartial protectors of law and order.

• The key factor in the defeat of the NUM was probably Scargill himself. Scargill alienated moderates; he never got the support of the Labour Party leadership. Many people felt sympathy for the mining communities and many disapproved of Thatcher’s description of the miners as ‘the enemy within’ but it was easy for Mrs Thatcher and her allies in the press to condemn Scargill as a dangerous revolutionary challenging the democratically elected government. Scargill’s all-or-nothing tactics almost certainly made the final defeat of the NUM worse; pit closures would have happened anyway but more pits were closed than would have been the case if the NUM had negotiated with the NCB, rather than gamble on a politically motivated strike.

• The results of the miners’ strike went far beyond the coal industry, The power of the unions was dramatically reduced. By 1990, total union membership was only two-thirds of what it had been in 1979. Other state industries such as British Steel and British Airways were reorganised, with massive job losses. The ability of the unions to intimidate government was gone for good. Thatcher drew comparisons between her bold actions and the weakness of Heath in 1973-74, or Callaghan in the winter of discontent. The defeat of the miners played a big part in consolidating Mrs Thatcher’s popularity and authority, as was to be proved in the 1987 general election. She also continued to benefit from the weakness and visions of the opposition parties.

• The density of trade union membership in the total workforce dropped by nearly 10 % between 1981 and 1991, from 43.7 % to 34.3 %. The number of working days lost in strikes declined steeply, from nearly 30 million in 1979 to just under 2 million in 1990.

### The divided opposition, 1983-87

• The parliamentary party had been weakened and left-wing activists in the unions and in local governments had great influence. The hard-left Militant Tendency infiltrated several local councils. Ken Livingstone, the left-wing leader of the GLC, was engaged in running political battles against the government. Scargill’s leadership of the miners’ strike fuelled a great deal of anti-Thatcher radicalism.

• After the collapse of the miners’ strike in 1985, Kinnock attempted to assert control over the parliamentary party and to regain the initiative from the hard left activists. At the 1985 party conference in Bournemouth, he made an outspoken attack on the actions of the Militant Tendency leaders of the city council in Liverpool, blasting them for taking the city to the edge of bankruptcy and for rushing out redundancy notices to 31,000 employees.

• By 1987, Kinnock’s leadership had already done a great deal to restore party discipline and to make the party organisation more efficient but, even so, Labour suffered yet another heavy defeat. From this point on, the modernisation of the party was given high priority. Labour’s image became much more moderate, through reassuring by the shadow chancellor, John Smith, and a group of talented younger politicians including Peter Mandelson, Tony Blair and Gordon Brown. By 1990, the Labour revival progressed far enough for the party to have serious hopes of winning the next election.

• The revival of Labour was matched by a loss of momentum for the SDP-Liberal Alliance, which found it hard to keep the levels of support gained in 1981 and 1982. This was partly due to ideological differences; opposition to Thatcher was not enough to provide unity by itself. There were also personal differences between the two Davids. The Alliance won 24 % of the vote in the 1987 election, nowhere near the peak of 40 % just before the Falklands War. In 1988, the two parties formally merged to form the Liberal Democrats.

• The SDP began to shrink. The reason why the SDP existed at all was the fact that the Labour Party of 1981 was a political basket case. Modern socialists had felt compelled to leave the Labour Party to fight against hard-left extremism. Now, as Neil Kinnock established his grip on the party, it seemed that moderate socialism was back in business and the SDP had no real identity or purpose. David Owen resigned as SDP leader in 1988. Many MPs switched their allegiance back to Labour. The Liberal Democrats remained a force in politics especially through their slick campaigning in by-elections but the hopes of ‘breaking the mould’ faded.

### Margaret Thatcher and Northern Ireland

• Another enemy Thatcher battled against in the 1980s was republicanism in Northern Ireland. Thatcher had strong unionist sympathies and was determined not to give in to terrorism. She soon faced a crisis over the campaign for ‘special category’ status by IRA prisoners held in the Maze prison in Belfast. Hunger strikers, led by Bobby Sands, began in 1980. The hunger strikers gained a great deal of attention and support. Then a sudden by-election in Fermanagh presented Sinn Fein, the political wing of the IRA, with an opportunity. Still on hunger strike, Sands was nominated for the seat and won. A few weeks later he died. His funeral drew crowds of 100,000. Nine more hunger strikers died before the protest was called off in October 1981.

• Thatcher claimed that the hunger strikes were a defeat for the IRA because their main aim, special category status, was not granted but the hunger strikes changed the political landscape. Bobby Sands and the other strikers became nationalist heroes. Sinn Fein saw the advantages of using the ‘ballot box and the gun’ as a twin-track strategy. In the 1983 general election, the Sinn Fein president, Gerry Adams, won the parliamentary seat of West Belfast and set out on the long road that led ultimately to the Good Friday Agreement of 1998.

• Despite Thatcher’s public stance of never negotiating with terrorists, there were secret contacts through go-betweens. The London and Dublin governments also discussed proposals for a constitutional settlement in Northern Ireland. Then, in October 1984, the IRA exploded a huge bomb in the Grand Hotel in Brighton during the Conservative party conference. The main target of the Brighton bomb, Thatcher, was unhurt, but five people were killed. There was national outrage in Britain. Despite the Brighton bomb, however, contacts with Irish government continued; the British authorities knew the IRA could not be beaten without Dublin’s help on cross-border security.

• In November 1985, the Anglo-Irish Agreement, setting up permanent intergovernmental cooperation, was signed at Hillsborough. There was a furious unionist and loyalist backlash. 200,000 attended a protest rally in Belfast. In November 1989, the new Northern Ireland secretary, Peter Brooke, stated that the IRA could not be defeated by force and that the government would ‘respond imaginatively’ if the IRA offered a ceasefire. Brooke’s approach provided the basis for the later ‘peace process of the 1990s.

### The British economy, 1979-90

• The key aim of Thatcher’s economic policy was denationalisation, ‘rolling back the frontiers of the state by the privatisation of state-controlled enterprises. In the first term, BP was privatised in 1979 and British Aerospace in 1980, but the drive for privatisation gained real momentum with the successful sale of British Telecom in 1984. The British Airports Authority and the National Bus Company were also sold off, followed by British Gas and British Airways in 1986, Rolls Royce in 1987 and British Steel in 1988. The sale of British Gas, in particular, was accompanied by a high-profile advertising campaign seeking to maximise the purchase of shares by ordinary people.

• Privatisation was driven by anti-socialist ideology. It was a core belief of Thatcherism that the private sector was more dynamic and efficient than the public sector. Most privatised enterprises were sold off cheaply in order to ensure all shares were taken up. Conversely, privatisation also brought in huge amounts of money to the government. Radical Thatcherites wanted to push ahead with further privatisations, including the coal industry and the railways, and drew up plans to privatise parts of the NHS.

• These plans were not pursued until the 1990s but, even so, the privatisation of state concerns during the Thatcher years marked a significant shift in the British economy. Perhaps more than any other factor, the drive for privatisation signalled the end of the post-war consensus about economic management.

• Another aspect of the ‘private good; public bad’ theme was the sale of council houses. Thatcher was enthusiastic about the idea of turning Britain into a ‘property-owning democracy’, through the widest possible private ownership of homes as well as shares. The Housing Act of 1980 gave the ‘Right to Buy’ to council-house tenants. In one sense, these policies were very successful. Council house sales rose from 1,342 in 1980 to a high of 202,558 in 1982. On the other hand, shares in the privatised industries were mostly bought up by big commercial concerns, not by the ‘little people’ as government advertising had predicted.

• Alongside privatisation, there was also financial deregulation, freeing up the City of London and the financial markets from the tight controls regulated by the Bank of England. In October 1986, the ‘Big Bang’ blew away old traditions and internationalised the stock market. The City became a place where bigger risks were taken and bigger fortunes were made, faster.

• The Thatcherite agenda naturally included lower taxes and more incentives for people to generate wealth. In Nigel Lawson’s budget in March 1987, the basic rate of income tax was cut from 29 % to 27 % (a year later it was cut again, to 25 %) and personal pensions were launched, encouraging people to save for themselves rather than rely on state or company pensions.

### The downfall of Thatcher

• The decline of Thatcher can be traced back to 1987, the year of her third election triumph. One problem was economic. 1987 was the year of the great stock market crash that followed the ‘Big Bang’, the deregulation of the City in 1986. The policies of Thatcher’s new chancellor, Nigel Lawson, especially his 1988 budget, led to the rapid expansion of the economy in the ‘Lawson boom; but the result was a balance of payments problem. By 1990, inflation had risen to 10.9 %, higher than it had been in 1980. Fear of inflation was one of the main reasons why Britain entered the Exchange Rate Mechanism (ERM).

• The second problem was political. From the time Michael Heseltine resigned over the Westland affair in 1986, he became a magnet for disaffected MPs. Thatcher was beginning to become isolated as many of the most loyal members of her government were pushed to the sidelines. In 1989, Thatcher’s use of Professor Alan Walters as an economic advisor infuriated the Chancellor, Nigel Lawson. Lawson resigned. Thatcher alienated Geoffrey Howe by moving him from the foreign office to a lesser post. In 1990, Nicholas Ridley had to resign after making embarrassing anti-German comments in an interview in the Spectator.

• The turbulence in the government was shown by the fact that the relatively young and inexperienced John Major filled the three great cabinet posts of home secretary, foreign secretary and chancellor in the space of 18 months. In 1990, the tensions in the government came to a head when Mrs Thatcher provoked the long-suffering Sir Geoffrey Howe into finally resigning from the government.

• The third problem was self-inflicting. Thatcher wanted to replace the system of financial local government through homeowners paying rates with the idea of individuals paying a new community charge. The proposed poll tax proved bitterly unpopular with public opinion and the press. Thatcher was strongly advised to drop the scheme. She ignored the advise and pressed on. Anti-poll tax demonstrations in central London, attended by about 200,000 people, led to very serious rioting, with hundreds of rioters and policemen injured and millions of pounds worth of damage. The government’s popularity in the opinion polls fell sharply. The chant of the anti-poll tax protesters, ‘Maggie, Maggie, Maggie, Out, Out, Out!’ displays how this policy was decreasing support to that extent that people sought her resignation.

• By 1990, the Labour party recovery under Neil Kinnock and John Smith was evident. Many Conservative MPs now genuinely feared defeat at the next election. The loss of the ultra-safe seat of Eastbourne to the Liberals in a by-election was especially alarming: if the Conservatives could lose Eastbourne, they could lose anywhere. This was a key factor in Thatcher’s downfall. Without the fears for their own survival among Conservative MPs, there would not have been a challenge to her leadership in the first place.

• The final blows to Thatcher came from within her own cabinet. In the first ballot, held while Thatcher was in Paris for a European summit, she won 204 votes against Michael Heseltine’s 152. The margin of victory was not sufficient to rule out a second ballot. At first, Thatcher intended to fight on but when she called in her ministers, one at a time for consultation, she found most of them advising her to quit which she did.

• One view on the decline and fall of Thatcher was that she was running out of enemies. Her whole premiership had been marked by battles against opponents who were first demonised and then defeated: General Galtieri, Michael Foot, Arthur Scargill, Ken Livingstone. After 1987, Thatcher’s main target was ‘Europe’ but this was not an easy battlefield to fight on, because of the risk of damaging party unity.

• By 1990, Thatcher had lost almost all the key players in her years of triumph. Her loyal party chairman, Cecil Parkinson, had to resign because of a scandal in his private life in 1983. Willie Whitelaw went to the House of Lords. From 1987, Thatcher had sacked or alienated, Norman Tebbit, Nigel Lawson and Geoffrey Howe. When Thatcher loyalists bitterly accused her cabinet of failing to support her during the leadership election, it was difficult to ignore the fact that she had thrown away a great deal of loyalty by her own autocratic actions beforehand.

### The Thatcher legacy

• Thatcher’s policies often seemed more divisive than they actually were. There were many continuities in the Thatcher years: welfare spending kept going up, and the government held back from privatising the public services. It was often Margaret Thatcher’s political style that had such a polarising effect, rather than the actual policies. In 1990, she promised John Major that she would be ‘a good back-seat driver’.

For

• She was Britain’s first woman prime minister.

• She enabled the Conservatives to have 18 years in power.

• She broke the excessive power of the unions.

• She played a key role in winning the Cold War.

• She restored national pride.

• She rescued Britain from economic decline and transformed the economy.

• She made Britain a property-owning democracy.

Against

• She alienated women voters so that the Conservatives no longer gained the majority of the female vote.

• She enabled the Labour party to have eleven years in power.

• She politicised the police and polarised society.

• She alienated Britain’s partners in Europe.

• She caused unnecessary damage to Britain’s industrial base.

• She encouraged private greed at the expense of the public good.