The Thatcher Years.
|Margaret Thatcher faced serious problems when she came to power in 1979. Britain still had a reputation for frequent strikes. Inflation was high. Traditional heavy industries such as coal, steel, and shipbuilding were declining, and as a result, many cities in the north and west of Britain, which had been rich since the industrial revolution, now faced high levels of unemployment.|
There were a number of major political debates during this period. The Conservatives cut taxes and claimed they were giving power back to the people. They also returned a large number of state-owned industries to the private sector. The Labour Opposition saw these policies as encouraging selfishness: they described the new “enterprise economy” as widening the gap between the rich and the poor. In their view lower taxes helped those who were already wealthy. They strongly criticised the sale of industries, which they considered to belong to the nation.
The state continued to provide education, health and social services largely free of charge. In all these areas, the Conservative philosophy was to increase efficiency and individual choice, but the Labour party members were concerned by what they interpreted as a decline in standards. The Government and Opposition were bitterly divided in their view of how Britain was changing. On the one hand, the Conservatives saw a richer, freer country, while Labour saw a decline in essential services for those who could not afford to pay for them.
Margaret Thatcher and her ideas dominated British policies until she resigned in 1990. She brought an entirely new tone to government. “I am not a consensus politician…” Margaret Thatcher announced in one of her most famous remarks, “I am a conviction politician”. In fact she had become convinced since she took over the party leadership in 1975, that the Conservatives as well as Labour had implemented basically socialist-type policies since 1945. She was determined to destroy the position of socialism in Britain, which she blamed for the country’s ills. Her targets were the labour strongholds: council estates (homes rented by local government to people on low incomes); the trade unions; the local authorities; and the nationalised industries.
Margaret Thatcher’s philosophy, put simply, was to create a stable economic climate by low rates of inflation and taxation. This, she believed, would allow a market economy to recover. The government role in economic revival would be minimal beyond securing these stable conditions, and cutting public expenditure.
Mrs. Thatcher pressed on where her predecessors had retreated. Indeed, she said at the time, “I have no time for arguments” - even with her colleagues. She arranged for the coal and steel industries to be “slimmed down” in order to improve efficiency and meet demand but no more.
High interest rates and her refusal to assist struggling industries led to dramatic changes. By its second anniversary in 1981 the Thatcher government had presided over the greatest decline in total output in one year since the Depression of 1931, and the biggest collapse in industrial production in one year since 1921. Britain’s balance of payments began to deteriorate. Its share of world trade fell by 15 per cent between 1979 and 1986, a larger fall than in any other industrialised country during that period. In1983 the import of manufactured goods exceeded exports for the first time in 200 years. There were social consequences, too. In May 1979 there had been 1.2 million unemployed. By May 1983 this figure had risen to 3 million, over 13 per cent of the work force.
Furthermore, the stress created by Mrs. Thatcher’s policies began to divide the nation into areas, which responded to them and ones which could not. Growth in the south of the country was three times as fast as in the rest of the country during most of the decade. The divide was not purely geographical. Mrs. Thatcher’s policies also led to a growing gulf between the richest and poorest all over the country.
But Mrs. Thatcher was determined to break with the past and did not look back. She began to sell into private hands many publicly owned production and service companies, for example British Telecommunication, British Gas, British Airways, Jaguar Cars, Rolls Royce, even British Regional Water Authorities. She had two basic interests: to free these areas from government control and also to persuade ordinary individuals to buy a stake in these enterprises.
In both she was largely successful. Government largely gave up its traditional intervention in the economy and began to turn Britain into a “share-owning democracy”. Between 1979 and 1992 the proportion of the population owning shares increased from 7 to 24 per cent, powerfully emphasizing that the accepted philosophy of the 1980s was personal wealth rather than public ownership. Such was the attraction of this philosophy that even the Labour Party, traditionally the party of public ownership, felt compelled to accept the new realities.
In local government she had greater success, but the struggle was more bitter because much of the local government was controlled by the Labour Party. Her government abolished the metropolitan authorities – created to coordinate the affairs of London and six other large conurbations – all of which had been Labour-controlled. She also undermined local authorities (or councils) by limiting their ability to raise money, by forcing them to allow occupants of council-owned rented accomodation to purchase their homes at attractive prices, by reducing their authority in areas like education, and by breaking up local authority bus services.
While she freed the economy from previous restraints, she also brought other areas of national life under closer central control, by stricter laws on national security of “sensitive” material in the press and on television and the introduction of a national curriculum for all state schools. Some people disliked the more authoritarian style of government.
Fundamentally, Mrs. Thatcher faced the same dilemma her predecessors had all faced since the war. The commitment to reduce government spending conflicted with the need for investment in education, training, research and development, in order to produce long-term improvements in the economy. Some felt that Britain’s weakness stemmed from the failure of successive governments to plan enough, and that the real challenge was to create a powerful central planning body including both managers and trade unionists, which could evolve and implement a coordinated strategy.
Overseas, Britain went to war with Argentina in 1982 over the future of the Falkland Islands in the South Atlantic. Mrs. Thatcher’s close relationship with president Reagan brought American support in that war, a favour which was returned in 1986, when the United States raided Libya with bombers based in Britain. Nearer home, there still seemed to be no acceptable solution to the problems of Nothern Ireland. Mrs. Thatcher and her cabinet narrowly escaped death in 1984, when an IRA (Irish Republican Party) bomb exploded in their hotel during the Conservative Party conference in Bridgeton.
Margaret Thatcher resigned as Prime Minister in November 1990, when she lost the confidence of over one third of her party colleagues in Parliament.