MOMB Towards a new consensus, 1987-97

When did Thatcher resign as leader?

1990

Who was elected after Thatcher by the party?

John Major, who defeated Michael Heseltine in the leadership contest

What happened to the economy in the third term?

It stopped growing and went into a recession, prompting fears over inflation

Who was the new Chancellor?

Nigel Lawson

What did Nigel Lawson continue to do?

Cut taxes- Tax cutting budget of 1988 led to renewed inflation (8%) and rising interest rates

Who did the tax cutting budget effects affect?

Homeowners who became trapped in negative equity

Negative equity

Selling your house was not an option if you couldn’t afford the mortgage, as the house was now worth less than before

Why was this bad for Mrs thatcher?

She had relied heavily on homeowners for support during her great years

What effect did Europe have on the party?

It made it increasingly divided- even if the electorate didn’t care about the issue, they did care about a divided party

What had Thatcher become?

Sceptical about the European board’s plan to move towards a single European currency

Who did Thatcher’s hostility to the Delors plan bring her into conflict with?

Nigel Lawson and Geoffrey Howe, two of her closest ministers

How was Labour faring under Neil Kinnock?

It was making gains in the polls as Kinnock fought back against militant

What did Kinnock ditch?

His policies on unilateral disarmament

Proof of Labour revival through by elections

1990 Mid Staffordshire by-election, where Labour won a seat that had been Tory forever

What did Labour no longer have to deal with?

A third party as the Alliance was weak and disintegrating

What was Thatcher’s leadership like?

Increasingly remote and arrogant

After winning 3 elections, how did she feel?

Infallible, which started to alienate members of her cabinet

Who did she alienate due to Westland?

Heseltine

How did she alienate Nigel Lawson?

He supported a single currency, but she ignored him and listened to other economic advisors

What did Lawson do?

Resign as Chancellor in 1989, leading to the first unsuccessful leadership challenge

Delors Plan

3 stage process where each member of the EEC would move towards a single currency

First step of the Delors Plan

Membership of the exchange rate mechanism- biggest conservative dividing factor

Exchange rate mechanism

Exchange rates of countries would be brought closer together

Benefits of the ERM

It would help as an inflation control mechanism

How did the ERM fit into the Delors Plan?

Reducing the ability of currency to fluctuate would make it easier to develop a single currency

Why did Thatcher hate it?

She believed in the Free Market

Stages 2 and 3 of the Delors Plan

Currency alignment and single currency

What else did the Delors plan suggest?

Minimum conditions of education, employment and social security in all member states

Why was thatcher against this?

It would clearly limit Britain’s ability to make its own decisions

Thatcher quote against this

‘We haven’t rolled back the frontiers of the state in Britain only to see them reimposed at European level’

Thatcher saw the socialist USSR dying with satisfaction…

Only to see the development of a socialist superstate in Europe- the DP was her turning point in attitudes towards Europe

Why did Lawson resign in ‘89?

She rejected the ERM on the advice of her unelected, free marketeer economic advisor Sir Alan Walters

The leadership challenge was therefore due to…

Europe AND her style of government

Once Lawson had resigned, what did it trigger?

The first leadership challenge from Sir Antony Meyer, a pro European MP

What was the outcome of the leadership challenge?

33 conservatives voted for him and 27 abstained

What did the outcome suggest?

If that many people were willing to not support Thatcher, a high profile candidate might bring her downfall

What are Meyer’s actions described as?

A stalking horse

Why did the idea of a poll tax have negative implications?

In the 1300s it had caused the peasant’s revolt

How did the government describe it instead?

As the Community Charge

When was the poll tax an issue?

1988-90

How would a poll tax work?

It would replace local rates with a tax on every individual instead

What were local rates based on?

The notional rental value of a house

Why did Thatcher say the old tax was unfair?

It wasnt based on the number of inhabitants

What political benefits would the poll tax have?

It would encourage voters to choose low spending conservative councils

What were higher spending councils generally?

Labour ones in areas that needed high levels of spending

How was this regressive?

It would benefit the rich more than the poor- Lawson understood this and argued against it

How could the gov’s unpopularity increase?

Labour councils would blame the conservatives when people complained to them

Where was the poll tax trialled?

In Scotland in 1989, sparking huge civil disobedience as over 1m refused to pay the tax

Where were there riots in England?

Trafalgar Square, Norwich, Bristol and Colchester

What did Thatcher seem to have lost?

Her ability to understand her people

What had the Duke of Westminster previously paid on his estate?

£10,000, reduced to £417, the same as his housekeeper

What did Thatcher do in October 1990?

She rejected Rome Summit proposals- the EEC was on the way to becoming a stronger political union

What did she then return to the UK to do?

She made her no, no, no speech, alienating Geoffrey Howe and offending other MPs

When did Howe resign?

November, triggering a leadership challenge from Heseltine

Second leadership challenge

Thatcher didn’t bother to campaign as she was confident, but only won 4 votes in the first round

What had Heseltine promised to do in his campaign?

Review the poll tax

Which other Conservatives wanted to be party leaders?

John Major, Chancellor, and Douglas Hurd, Foreign secretary

What eventually led to Thatcher’s resignation?

She spoke to each of her ministers, and 17/19 told her to stand down, alongside Denis

Who was eventually elected leader?

John Major

When was Major’s honeymoon era?

1990-2

What election did Major go on to win?

The ‘92 election with a smaller majority, impressive considering Labour was ahead in the polls

What happened post 1992?

Decline in Major’s popularity

Reasons for Major’s unpopularity: Economy

Black Wednesday economic crisis

Reasons for Major’s unpopularity: Scandal

A series of scandals

Reasons for Major’s unpopularity: Party

Conservatives were becoming increasingly divided

Reasons for Major’s unpopularity: Labour

Strong Labour opposition under Kinnock and Blair

Did Major have much experience politically?

No, he only entered cabinet in 1987

Why was he the clear choice following Thatcher’s resignation?

He was seen as a unifying figure, needed after Thatcher- Heseltine was a marmite politician

What was one of Major’s greatest strengths?

He was an excellent negotiator, shown in the Treaty of Maastricht

Treaty of Maastricht

1992, didn’t commit Britain to the single currency but allowed them to remain in the EU

Who else did Major begin negotiations with?

Sin Fein and the Unionists- Downing Street Declaration paved the way for all party talks

What did Major lead his party to?

Their 4th consecutive victory- only party to do so in the 20th century

What was Major like politically?

A Thatcherite, but with a different leadership style as he listened to his cabinet

1990-1 Gulf War coalition

Major backed the coalition, which successfully removed Suddam Hussain from Kuwait

Significance of Major’s support for the coalition

It strengthened the special relationship, and he met with soldiers who liked him

Why did the right wing hate major?

They felt attached to Thatcher and hated him over Maastricht- he could never heal such divisions

What was the poll tax replaced by?

Council tax, based on the value of the property

Citizen’s charter

1991- Citizens had a right to expect high standards from services, creating accountability for the NHS and DOE.

Irony of Major’s terms

When the economy was stagnating he won, when it was booming his popularity declined

What was the conservative majority of 1992?

21, down from 100

Why didn’t labour win?

The sun warned voters against them, as they weren’t quite trusted with the economy

Major’s ‘soapbox’ campaign

He stood on a box and spoke to street passers with a megaphone, which they liked

What did Major speak of creating?

‘A nation at ease with itself’

Lamont and Heseltine Positions

Lamont as Chancellor, Heseltine as Secretary of State for the Environment

What was the impact of supporting the UN response against Suddam Hussein?

The conservatives benefitted from another ‘Falklands Factor’

Where did deep rooted problems persist?

In the economy, with falling output and unemployment rising to over 2m in 1991

What did middle class homeowners face?

Insecure employment, high interest rates, negative equity

Who benefitted from Tory lost votes?

Lib Dems, as shown by the 1991 Ribble Valley by election where they won the seat on a 25% swing

Norman Lamont’s budget

Poll tax to be replaced in 1993 by a council tax, attacked for rising VAT (15% to 17.5%)

Why was Lamont himself attacked?

He claimed unemployment was a ‘price well worth paying’ and for claiming to detect the ‘green shoots’ of economic recovery during a recession

Majorism vs Thatcherism

Similar, but major had a different style of leadership

Economy Summer/Autumn 1991

Interest rates fell to single figures, inflation to 4%

How did Labour campaign in the 1992 election?

Combined attacks on the social consequences of Thatcherism with emphasis on its own moderation

How did Kinnock present himself?

As a modern day Attlee, and the party as a modern socialist Democratic Party

What did Labour claim in its shadow budget?

That only the ‘rich’ would pay higher taxes- in reality it involved all earning over £21,000 a year

What effects did the sun’s attacks have on Labour morale?

It undermined it, and in the end less than half of the working class voted for Labour

What did the Tory vote rise to?

14m, the highest any party had received since 1945

Who made the decision to join the ERM?

Thatcher in 1990, after having resisted calls from Lawson

Why would the move have been viable in the mid 80s but not in the early 90s?

The economic climate favoured such a move- by 1990 the economy was weaker and pound was overvalued by Major

What was the pound valued at in relation to the German mark and US dollars?

2.95marks, $1.90