This seminar class is designed to help students tackle Assessed Essay No. 4: ‘The fall from power of Margaret Thatcher in 1990 saw the demise of Thatcherism.’ Did it?
Background of Margaret Thatcher
Margaret Hilda Thatcher was elected as the leader of Conservative party also known as Tory party in 1975. It was in 1979 when the conservative party won under her leadership making her the first woman prime minister of Britain. Nigel Lawson who not only served in her cabinet from 1981 to 1989 but also was the financial secretary to the treasury after her election as prime minister defined Thatcherism as Free markets, Tax cuts, Financial discipline, firm control over public expenditure, Victorian values, nationalism, privatization and a dash of populism. Thatcherism can also be defined as the political, economic, social style of Margaret Thatcher working with conviction (Anon., 2013). Thatcherism is said to be a decisive rejection and reversal of the post war consensus. It has also been used to describe the principles of British government under thatcher as a prime minister from 1979 to 1990 and beyond to the governments of John Major, Tony Blair and David Cameron. The origin of the word Thatcherism is disputed but is mostly attributed to either The Tribune newspaper’s education correspondent Tony Heath or The Cultural Theorist Stuart Hall. Britain which once was known as the world’s most capitalist nation became the most state-owned nation outside of the communist world due to the unprecedented pace of nationalization by Thatcher’s predecessors. Britain before the implementation of the post war consensus was once known as “The workshop of world” but due to inefficiency of nationalization policy and unproductivity it earned a bad name and came to be known as “The sick man of Europe”.
By 1970s the state-owned Britain had become over populous, costly and was making huge losses which had brought Britain down to its Knees. As per Richard Hefferan, New Labor party was only a continuation of Thatcherism. Margaret Thatcher herself regarded that she had changed the labor party for good and it was to be her greatest achievement. British Social Attitude annual report of December 2011 found the country more inclined to the right wing on welfare and immigration than before Margaret Thatcher being elected as the prime minister. The conservative party had agreed with the Labor Socialist party that the economy was to be directly controlled by the state in what was to be known as the post war consensus hence nationalized the ships and the ports, Trains and the railways, canals and the ferries, telecommunications, computer industries, airports and the airlines, cars, buses, truck, airplane manufacturers, oil, gas, iron, steel, coal, water, electricity et cetera. Margaret Thatcher was always skeptical about the government’s ability to deliver progress (Cannadine, 2017). In 1974 there was an agreement between Margaret Thatcher and a small group of radical Tory members in common belief that Britain was headed for a ruin and needs new thinking and direction. Margaret Thatcher joined the institute of economic affairs which was newly established and run by Ralph Harris and Arthur Sheldon who belonged to a very humble background. They were to grow very close working relationship together and were inspired by the former Austrian socialist Frederick Von Hayek who had himself turned against his own past socialist beliefs. It was decided in the year 1975 that Margaret Thatcher was to stand for the leadership of The Conservative Party. Edward Heath at that time was the leader of The Conservative Party and that of the opposition. He had the support of the upper-class Tory establishment whom Mrs. Thatcher called the “wet tory” while she found herself mostly appealing to the middle class and rank in file Tory members. Margaret Thatcher (Aitken, 2013) later described as the result of the party leadership battle and her win as “The shattering blow to the Tory Establishment”. As per Cecil Parkinson who was the member of Mrs. Thatcher’s cabinet, a leader like Margaret from an unheard background as of her would fight, win and lead The Conservative party and he called it “a peasant’s revolt”. Another British Conservative member of parliament, David Davis thought that a leader like Mrs. Thatcher would have never been selected by in what he called “the magic circle” of party. He considered her to not being in line with the agendas of the establishment inside the party. Mrs. Thatcher Chief Press Secretary Bernrad Ingham said that an old-fashioned Tory party thought of her as a woman gone rogue waging a guerilla warfare against the establishment’s best of beliefs inside the party. To their great shock and disappointment Margaret not only won the party leadership battle but also the 1979 elections and was to be the first female prime minister in Britain’s history breaking the societal norms who gave less importance to a woman in politics that too of a conservative party. After her leadership win of the party in 1975 the Tory party establishment were dismayed but the labor party seemed delighted. James Callaghan a labor party leader had reportedly said that they had already won the country’s next general election because he never believed that a Conservative party led by a woman would ever manage to beat him. In 1979 thatcher again directed her campaigning just like she’d done in her inside party election towards the working class and the middle class and not towards the traditional upper-class tory party voters (Thatcher, 2011). She believed conservative party consisted of people from all walks of life and this policy is for those people only
Neil Kinnock a Labor leader said that her time as a prime minister where She was stood like a true leader and she would make up her mind. She was very determined and deliberate that one always knew where they were with her and even though they disagreed with her, that remained the order of the day. Kenneth Baker member of Mrs. Thatcher’s cabinet said that she was very blunt. One always knew exactly what she thought and she was very straight with the British people. In one of her televised interviews once she said that she like to be straight, she like to be clear and honest. Mrs. Thatcher was very determined to disrupt the state control of Economy (Stepney, 2014). Many in the nationalized loss-making industry lost their jobs. Polly Toynbee a columnist at The Guardian said that the devastation that happened to those communities under Margaret Thatcher was remarkable because during very short period of time something was done that’d never been done before to very large communities of people. Mining, steel, chip building was devastated overnight with no chance for any alternative to be introduced, no chance for shifting those communities towards something else. Industries like ship building were shrunk to the fraction of its size before. Labor Left heavily criticized the Thatcher government for cutting the subsidy to the state’s loss-making industries and termed it unforgivable. Mrs. Thatcher thought of it as a first step to recovery. Charles Powell Mrs. Thatcher’s private secretary had a thought in her mind what had to be done. She knew it was going to be tough particularly at the beginning in 1979. David Cameron (Hill & Heppell, 2009), Prime minister of England from 2010 to 2016 once said that when Margaret took over in 1979 people were beginning to think that perhaps Britain was in an irreversible state of economic decline and it was she who turned that around. As per him, she was immensely courageous. Mrs. Thatcher’s struggle with the labor left had been the struggle of two different visions for the working class. According to the labor left the working class had been oppressed due to economic freedom. The labor left wanted the working class to stay in the state housing, travel in state transport and work for state-controlled industries. The Labor left fought to preserve the traditional jobs. Kelvin McKenzie editor of The Sun said of the post war Britain before Margaret Thatcher being elected they were basically a North Korea but without a hope. Mrs. Thatcher used to be very much offended by the socialist vision of the working class. Mrs. Thatcher in her first queen’s speech announced that people in the state housings would be allowed to buy their own homes and it became very popular along with the selling of the council houses (Moore, 2015). Though Mrs. Thatcher had gained support from the new working-class Tories but her free market radical implementation had brought her into direct conflict with the upper-class Tory establishment who were known as “Tory wets” still dominated the party. The struggle was epic with the “Tory wets” and she had to fire a few of them in her cabinet and bring in who were loyal to her. She believed privatizing state industry would revive their fortunes and help spread wealth and ownership. John Redwood head of Mrs. Thatcher’s policy unit said that the idea was a nation of owners where every man and every woman would be an owner as part of the journey. He also believed it was quite wrong that wealth being concentrated in limited number of hands rather it should be shared equally among the men and women who deserved it. The tory upper-class establishments had repeatedly publicly condemned privatization acts of Thatcher’s government. The trade unions had been fierce opponent of privatization drive. State monopoly had given the union leaders enormous power which they did not want to lose (Burton, 2013). Mrs. Thatcher was of belief that the state union leaders instead of helping workers was instead taking the industries to the ruin. She thought that the interests and views of union leaders don’t match with that of the workers whom the leaders claimed to represent. She began to work on a plan to give ordinary union members more power. David Davis said that the Thatcher’s solution to the problem created by the union leaders as she did not try to break the unions rather she tried to make them more democratic. Mrs. Thatcher (Blundell, 2008) gave the ordinary union members right to elect their leaders, to consult in secret ballots whether to strike or not, and to leave the union according to their preference without a threat to their job. This further strengthened Mrs. Thatcher’s political support along with the victory in the Falkland Island war. Though there had been unease, instability, protests due to her economic reforms her victory in the 1983 elections would go down in the history books as the most decisive since the second world war (Guise, 2014). This would also mean the worst performance by the labor party in the elections since the party was founded in the 1900. People were encouraged to buy shares in the privatized industries. Small investors were preferred and workers were encouraged to buy shares in their own industries. Margaret Thatcher had created a new Britain which was rash and very assertive in a revolutionary way. The ordinary people began to see socialism as very high taxation and enormous public spending. Margaret Thatcher believed in Enterprise, opportunities, meritocratic society in which people wouldn't be held back by the class of birth. She believed in government should create condition for growth coupled with economic stability and economic efficiency i.e. low tax, low interest rates, low inflation and low welfare payments with privatization of state assets. She believed in “a rising tide lifts all boats” meaning that if growth is happening economically then everyone must be doing well. She said to the “relative poverty” criticisms of her policy as being the “politics of Envy”. Mrs. Thatcher in one of her speech mentioned that the opposition have got an eye even on the pension scheme and life insurance. She also mentioned that if we put the savings into the bank and they will nationalize it too. The British society was fundamentally reshaped by her policies. Very few were employed in traditional low skilled jobs in manufacturing and industry. The ownership of capital was vastly expanded also in terms of shares and houses. The middle class had expanded in bulk as a result of her policies and became hostile to socialism. Before Thatcher there was large group of people who were employed in low skilled working-class jobs who lived in council houses. Middle Class was very narrow with white collared jobs and there was a significant upper class who were capital owning gentry. Due to the policies of thatcher the capable capital owning gentry who were doing nothing moved into the middle class with their transfer of assets, Capable people working in lower class too moved into the middle class and became entrepreneurs (Slocock, 2018). The upper class had always been voting for the conservatives, Initially the larger middle class were Margaret thatcher’s creation and they too began to vote for the conservatives. The low skilled worker class had benefitted from thatcher’s policies and with their aspirations moved them into middle class. The low skilled worker class always tended to vote for the Labor Party. This made the labor party isolated and too focused on the unskilled working class whose vote share had shrunk as a result the labor party lost the elections of 1983,1987 and 1992 continuously. Margaret Thatcher had a very combative personality and she used to override the opinions of the collegiate. This had begun to increase the discontent within the tory party and the wet tory establishment had never gone too far away. Thatcher removed Geoffrey Howe after he and Lawson forced her to join the European Exchange Rate Mechanism (ERM) which Britain entered in October 1990. She said that she hasn’t change Britain so that Europe can put socialism back to Britain from outside. Her cabinet convinced her to not fight the second ballot because of the challenge to her leadership by Michael Heseltine. She regarded these developments as betrayal and resigned in November 1990.
Post-War Consensus and Nationalization
Peter Mandelson a close associate of Tony Blair and Labor party had declared very famously in 2002 that they are all Thatcherites now. Labor Party Initiated its rightward shift to match with the economic policies of the Thatcher government at some level (Bale, 2016). Tony Blair and Gordon Brown were accused of mimicking most of the economic policies of the Thatcher’s government and were termed as a "neo-Thatcherite" by the disgruntled Labor supporters and leaders alike. The trade union legislation, privatizations and free market approach of Thatcher’s government are accepted by all the parties in Britain. No major political party is committed to reverse the reforms of economy made by thatcher (Clark, 2012).
From the above paper, it is evident that Margaret Thatcher went against all the odds to became the first Prime minister of Britain. The macroeconomic performance of the Great Britain has improved comparatively to that of before the implementation of Thatcherite economic policies. Thatcher resigned as Prime Minister in 1990. The growth of economy by then had been on average higher than other large economies of Europe which consisted of Germany, France and Italy. The United Kingdom had a very low unemployment compared with other big economies since early 2000. "Britain needed the industrial and economic reforms of the Thatcher period. The efforts of thatcher were ideological, sometimes unnecessarily so, much of what she wanted to do in the 1980s was inevitable, a consequence not of ideology but of social and economic change as mentioned by Tony Blair. Hence, from the above discussion it can be concluded that the demise of Margaret Thatcher was not the demise of Thatcherism.
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