Lecture 5 1979-1997

INTRODUCTION

  • Overview of Thatcherism and its impact from 1979 to 1997.

I. THATCHER ELECTION IN A LANDSLIDE (1979)

  • Context:

    • Factors leading to Thatcher's election.

    • Breakdown of traditional political paradigms in Britain.

A. Factors that led to Thatcher's Election

  1. Winter of Discontent / Inflation

    • Period marked by widespread strikes.

    • Trade unions rejected income policies.

    • Inflation was labeled the ‘disease’ of Britain.

    • Labour Isn't Working

    • Distrust towards the Labour party fueled by media narrative.

    • Public sentiment shifted against Labour’s policies.

II. THATCHERISM

  • Characterization of Thatcher's governance and ideology.

  • Quote:

    • "You turn if you want to. The lady's not for turning."

A. End of Post-War Consensus

  1. Socio-Economic Shift:

    • Transition from Neo-Keynesianism and the welfare state towards Thatcherite principles.

    • Challenges facing the UK economy included rising inflation and competitiveness.

B. The ‘New Right’ Ideology

  1. Philosophical Underpinnings:

    • Economists Friedman and Hayek argued for free markets and criticized post-war economic strategies.

  2. Monetarism:

    • Emphasized the control of money supply to combat inflation.

    • Aim: Stabilize the economy by steering away from Keynesian policies.

  3. Privatization and Deregulation:

    • Transfer of public assets to private ownership; promoting competition.

    • Goals included efficiency, profit maximization, and improved quality of services.

    • Statistics: Adult ownership of shares rose from 4% in 1979 to 25% in 1990.

C. Trade Unions

  • Described as “the enemy within.”

  • Legislative measures taken to weaken union influence.

    • Legacy: Resentment and conflict with unions were hallmarks of Thatcherism.

D. Housing Ownership

  • Policy aimed at spreading ownership and promoting individualism in society.

    • Example: Right to Buy scheme encouraged council house tenants to purchase homes.

    • Impact: The rise of homeownership significantly altered British society.

III. 1990s UNDER JOHN MAJOR

A. Consolidating Thatcher’s Agenda

  1. Election Victory: Major's success ensured the continued influence of Conservative policies amid economic challenges.

  2. Public Service Reforms:

    • Strives for greater responsiveness to market demands.

    • Introduced reforms that echo Thatcher’s ideals.

B. Major's Economic Legacy

  1. European Relations:

    • Britain remained ambivalent towards European integration despite attempts to engage.

    • Black Wednesday (September 16, 1992): Economic fallout from leaving the ERM (Exchange Rate Mechanism).

    • Recovery followed, but Major received little credit.

C. Northern Ireland Commitment

  • Focus on the peace process to resolve longstanding conflicts.

IV. SOCIAL CHANGES

A. Cultural Shifts

  • Evolution from the Swinging Sixties to subsequent protests in the 1970s and 1980s.

  • Notable events: The Windrush scandal, and cultural reflections through media and art.

V. BALANCE SHEET OF THATCHERISM

A. Positive Outcomes

  • Decline in days lost to strikes; increased productivity; enhanced economic competition; improving state revenue from privatization.

B. Negative Outcomes

  • Structural unemployment; societal inequality; rise in poverty levels and economic fragmentation.

  • Evidence: Gini coefficient analysis highlighting growing inequality post-1979.

C. Conclusion on Thatcherism

  • The consolidation of economic reforms versus the associated rise in social issues, including unemployment and poverty, led to critical analysis of Thatcherism's long-term effects on society.