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Conservative aims once in power: Union power
Limit union power to curb wildcat strikes
Conservative aims once in power: Post war consensus
Breaking the consensus to prioritise a free market over state ownership
Conservative aims once in power: Taxes
Lower income tax as people were being taxed to prop up industries
Conservative aims once in power: Inflation
Lowering inflation was their top priority, at the expense of unemployment
How did Thatcher divide her ministers?
Into the camps of ‘one of us’ and ‘wets/wimps’
‘One of us’
Thatcherites
‘Wets/wimps’
Heathites and consensus politicians
Thatcherites in her cabinet
Keith Joseph
Heathites in her cabinet
Willie Whitelaw, Jim Prior, Peter Walker, Sir Ian Gilmore
Why did Thatcher need Heathites in her cabinet?
To maintain party unity- as the first female PM, she was not yet strong enough to choose her own cabinet
Michael Heseltine
In charge of housing
Lord Carrington
Had been in gov since the 1950s, foreign minister
1979-81 Economics- Spending
Cutbacks on public spending
1979-81 Economics- Monetarism
Introduced monetarism- tighter control of money supply
1979-81 Economics- Interest rates
Increased interest rates to limit borrowing
What did increased interest rates lead to?
A severe recession between 1979-18
1979-81 Economic recession- Closure
Mines and factories closed
1979-81 Economic recession- Unemployment
Unemployment went over 2 million
1979-81 Economic recession- Inflation
Inflation didn’t go down and the economy shrank by 2.5% over this period (European average growth 5%)
1979-81 Economic recession- manufacturing
Manufacturing extremely hard hit, affecting old industrial areas of Britain
Which divide began in this period?
North-south
What did inflation rise to in this period?
20%- it had been 8% last under Callaghan
Why wasn’t inflation really Thatcher’s fault?
Her gov had to accept high pay rises for public sector workers negotiated under Heath to prevent more strikes
Why did prices rise in this period?
Reducing income tax meant they needed money from elsewhere
Why did Thatcher like VAT?
People have a choice in which products they buy- with taxes they don’t
What products were taxes put on?
Fuel, alcohol and tobacco
What was a consequence of rising unemployment?
More money had to be spent on welfare benefits
Famous quote from 1980 conference
‘You turn if you want to. The lady’s not for turning’
Although heath had often u turned…
Thatcher was determined not to
However, how much of Britain’s manufacturing capacity was lost between 1979-81?
1/5
Why did the unions not react strongly to the loss of manufacturing capacity?
They were much less militant in this period as the threat of unemployment was too great
Howe’s 1981 ‘monetarist’ budget
Raised a range of taxes to reduce gov spending, despite it being a recession- opposite of Keynesian economics
What did many economists argue about the budget?
It was regressive taxation, as the lower classes were hit hard by duties on goods
How did some economists and MPs respond to the budget?
364 signed a letter to the times in protest of this budget, but no MPs resigned as they felt thatcher wouldn’t last long
What did thatcher do as she grew in political confidence?
She removed leading ‘wets’ from her cabinet
What happened to Jim Prior?
He was replaced by Norman Tebbit as Employment Secretary
Who were sacked from Thatcher’s cabinet?
Sir Ian Gilmour and chairman Lord Thorneycroft
Which effective ‘wet’ was retained?
Peter Walker
When did recession end?
1982, inflation began to fall too
Where did small growth begin to occur?
Newer industries
However, what was happening with unemployment?
It continued to rise and reached 3 million for the first time since the 1930s, peaking at 13%
How did thatcher’s gov begin to be perceived?
As successful in its determination to lower inflation and avoid heath style u turns
Over who did Thatcher’s popularity begin to grow?
Michael Foot, the new labour leader
What did some people point out about the Thatcher gov?
Their heartlessness in being prepared to pay such a high price in the levels of unemployment
Where were there thus major riots?
Liverpool, London and Bristol in 1980 and 1981
Reasons for unemployment: Global problems
At the start of the 1980s, there was a world regression
Reasons for unemployment: Manufacturing
Decline of traditional British manufacturing, e.g. steel and ship building
Reasons for unemployment: Wages
Wage increases not matched by greater productivity
Reasons for unemployment: Exports
Uncompetitive exports- sterling’s value was exacerbated by high interest rates and North Sea oil
Reasons for unemployment: Smaller state
Reduced industrial subsidies
Reasons for unemployment: Attitudes to unemployment
Unemployment was no longer the top priority but ‘collateral damage’ in the war on inflation
When did Callaghan resign?
1980
What did the battle for Labour leadership become?
A battle between the right and left wings
Which candidates were on the right/left?
Healey on the right, who lost to Foot on the left
What was Foot’s job as new leader?
To reignite support for Labour, but he was a weak leader and unable to control the warring factions
What happened to the Labour left in this period?
It grew stronger
What did the left wing want?
More socialist policies, condemning Wilson’s governments of the 60s and 70s
What did other beliefs did the left hold?
The working class wanted more socialism, and the need to reduce the power of MPs at party conferences
Who did the left wing want to hand more power to?
Local constituencies representing ordinary members
What did the left wing begin to do when an MP died?
Attempt to deselect right-wing candidates and ensure left wingers, essentially taking over local constituencies
Who was the left wing’s parliamentary champion?
Tony Benn
Militant
The extreme left wing faction, a Trotskyist group, who rose in this period (especially in London and Liverpool)
What did working class Britons actually want?
Policies that would improve their living standards and increase their opportunities
What proved their new desires?
The 1979 election
Who would Benn’s group thus not appeal to?
The C2s, as working class Britons wanted to be more individualistic.
Divisive party conferences of 1981: Wembley
Labour voted to give more power to unions in deciding the outcomes of leadership elections
Why were some MPs angry about the vote?
They would have less power in deciding policies and leadership
Who thus resigned?
Roy Jenkins, Bill Rodgers, Shirley Williams and Dr David Owen to form the SDP
SDP
A new social Democratic Party
Divisive party conferences of 1981: Brighton
Healey was chosen as deputy leader over Tony Benn after another bitter fight between the right and left
What would Foot do in the HOC?
Ramble and debate in true intellectual style- he wasn’t good at putting things plainly like Mrs Thatcher could
Entryism
Infiltration by the radical left
What was the state of the economy like by the 1983 election?
The government was meeting their priority goals, e.g. inflation and growth
How was Mrs thatcher’s political authority?
It was increasing, shown by her cabinet reshuffle
Impact of the weaker opposition
The left wing, socialist labour was likely to struggle to win back votes lost to thatcher in 1979
What was a factor determining whether the Conservatives would keep their votes?
Union power
Did the Conservatives limit union power?
Yes, as some legislation stopped secondary picketing which massively affected the economy
Who did the SDP go into an alliance with?
The liberals, forming The Alliance
How did the Alliance capture the centre ground?
They won a series of by elections 1981-3
Where did Roy Jenkins capture a safe labour seat?
1981, Hill Head in Glasgow
Bermondsey
A deprived, working class area
1983 Bermondsey by-election
Labour’s extreme left candidate Peter Tatchell lost to the Alliance candidate Simon Hughes
What was the Bermondsey campaign like?
Very dirty on both sides, but the deprived voters chose the liberal candidate who retained this post for decades
What was the political situation in 1982?
Despite having a heavily two party based system, the Alliance was ahead in the polls, making an election risky
What were the Falkland Islands?
A British dependency, still regarded as British territory
What was recommended in the 1970s?
To withdraw HMS Endurance from the Falklands as part of military cutbacks, but Callaghan refused due to the argentine risk
When had the British seized the islands?
1833, but Argentina saw them as their own due to their proximity
What did Argentina call the Falklands?
Las Malvinas
What did Thatcher want to do when she came to power?
Reverse the cutbacks of the 60s and 70s
Why did thatcher want to remilitarise?
The threat of the USSR
Who withdrew HMS Endurance?
Lord Carrington, to be able to focus on British interests elsewhere.
When did Argentine forces land to recapture the islands?
March 1982
Apart from HMS Endurance, why did Argentina invade?
The dictator General Galtieri wanted a patriotic military victory to boost his declining popularity.
Despite many in government opposing it, what did the Admiral of the Fleet tell Mrs Thatcher?
That the island should and could be taken back
Reasons why the British public felt strongly patriotic: Fascism
The enemy was a fascist dictator, so even Michael Foot spoke about the need to support the gov at this time
Reasons why the British public felt strongly patriotic: Imperialism
It was a chance to reverse in a small way Britains long term imperial decline
Reasons why the British public felt strongly patriotic: Sovereignty
Falklands residents were British and wanted to remain so
Who out of the public was against the Falklands war?
Churchmen and activists
What did the churchmen and activists argue?
It was a form of imperialism to reclaim the islands
Why else were people against the war?
Because they were anti Thatcher and didn’t want her to use it to boost her personal popularity