Premiership of Margaret Thatcher

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Margaret Thatcher
Thatcher in 1983
Premiership of Margaret Thatcher
4 May 1979 – 28 November 1990
MonarchElizabeth II
Cabinet
PartyConservative
Election
James Callaghan
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Coat of arms of HM Government
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Margaret Thatcher's term as the Prime Minister of the United Kingdom began on 4 May 1979 when she accepted an invitation of Queen Elizabeth II to form a government, and ended on 28 November 1990 upon her resignation. She was elected to the position in 1979, having led the Conservative Party since 1975, and won landslide re-elections in 1983 and 1987. She gained intense media attention as Britain's first female prime minister, and was the longest-serving British prime minister of the 20th century.[1] Her premiership ended when she withdrew from the 1990 Conservative leadership election. While serving as prime minister, Thatcher also served as the First Lord of the Treasury, the Minister for the Civil Service and the Leader of the Conservative Party.

In domestic policy, Thatcher implemented sweeping reforms concerning the affairs of the economy, eventually including the privatisation of most nationalised industries,[2] and the weakening of trade unions.[3] She emphasised reducing the government's role and letting the marketplace decide in terms of the neoliberal ideas pioneered by Milton Friedman and Friedrich Hayek, promoted by her mentor Keith Joseph, and promulgated by the media as Thatcherism.[4] In foreign policy, Thatcher decisively defeated Argentina in the Falklands War in 1982. In longer-range terms she worked with Ronald Reagan to wage a war against communism during the Cold War. However, she also promoted collaboration with Soviet leader Mikhail Gorbachev in ending the Cold War.[5]

In her first years she had a deeply divided cabinet. As the leader of the "dry" faction she purged most of the One Nation "wet" Conservatives and took full control.[6]: 34  By the late 1980s, however, she had alienated several senior members of her Cabinet with her opposition to greater economic integration into the European Economic Community, which she argued would lead to a federalist Europe and surrender Britain's ability to self govern. She also alienated many Conservative voters and parliamentarians with the imposition of a local poll tax. As her support ebbed away, she was challenged for her leadership and persuaded by Cabinet to withdraw from the second round of voting – ending her eleven-year premiership. She was succeeded by John Major, her Chancellor of the Exchequer.

First term (1979–1983)

Composition of the House of Commons after the election

Thatcher was Britain and Europe's first female prime minister.[a] She appointed few women to high office and did not make women's issues a priority,[1] but her pioneering election was widely hailed as an achievement for women in general.[7]

Royalty tensions

Thatcher, having to share the media spotlight with

Queen Elizabeth II and Diana, Princess of Wales,[b] increasingly assumed regal poses, such as taking the salute at the victory parade after the Falklands War, and becoming the centre of attraction on foreign visits.[9]: 464–467  Tensions between the two were kept hidden until 1986, when the Sunday Times reported on the Queen's alleged criticism of Thatcher's policies, especially regarding the people of the Commonwealth, as "uncaring, confrontational and socially divisive." Thatcher often ridiculed the Commonwealth, which the Queen held in very high esteem.[10]
: 575–577, 584 

Economic affairs

Annual UK GDP growth with the economic turnaround in the 1980s highlighted in light green

Biographer John Campbell reports that in July 1978, before Thatcher became prime minister, when asked by a Labour MP in the Commons what she meant by socialism:

[S]he was at a loss to reply. What in fact she meant was Government support for inefficient industries, punitive taxation, regulation of the labour market, price controls – everything that interfered with the functioning of the free economy.[11]: 95 

Deflationary strategy

Under Margaret Thatcher's government, the taming of inflation displaced high employment as the primary policy objective.[12]: 630 

As a

real exchange rate.[12]: 630  These moves hit businesses—especially the manufacturing sector—and unemployment exceeded 2 million by the autumn of 1980, up from 1.5 million at the time of Thatcher's election
just over a year earlier.

Political commentators harked back to the Edward Heath government's "U-turn" and speculated that Thatcher would follow suit, but she repudiated this approach at the 1980 Conservative Party conference, telling the party: "To those waiting with bated breath for that favourite media catchphrase, the U-turn, I have only one thing to say: You turn if you want to. The lady's not for turning".[14] That she meant what she said was confirmed in the 1981 budget, when, despite concerns expressed in an open letter from 364 leading economists,[15] taxes were increased in the middle of a recession, leading to newspaper headlines the following morning of "Howe it Hurts", a reference to the Chancellor Geoffrey Howe.

Unemployment

In 1981, as unemployment soared (exceeding 2.5 million by the summer and heading towards 3 million before Christmas) and the Government's popularity plunged, the party chairman,

wets.[17]
: 85 

Following the Brixton riot in West London in April 1981, employment secretary Norman Tebbit, responding to a suggestion that rioting was caused by unemployment, observed that the unemployment of the 1930s was far worse than that of the 1980s—and that his father's generation never reacted by rioting. "I grew up in the 1930s with an unemployed father", Tebbit said. "He did not riot. He got on his bike and looked for work, and he went on looking until he found it."[18]

Over two million manufacturing jobs were ultimately lost in the recession of 1979–81.[12]: 630  This labour-shedding helped firms deal with long-standing X-inefficiency from over-manning,[12]: 630  enabling the British economy to catch up to the productivity levels of other advanced capitalist countries.[12]: 630 

The link between the money supply and inflation was proven accurate, and by January 1982, the inflation rate had dropped back to 8.6% from earlier highs of 18%.[12]: 630  Interest rates were then allowed to fall. Unemployment continued to rise, passing 3 million by January 1982 and remaining this high until early 1987. However, Tebbit later suggested that, due to the high number of people claiming unemployment benefit while working, unemployment never reached three million.

By 1983, manufacturing output had dropped by 30% from 1978, although economic growth had been re-established the previous year. The productivity turnaround from labour-shedding proved to be a one-off and was not matched by growth in output.[12]: 628  The industrial base was so reduced that thereafter the balance of payments in manufactured goods was in deficit.[12]: 630  Chancellor Nigel Lawson told the Lords' Select Committee on Overseas Trade: "There is no adamantine law that says we have to produce as much in the way of manufactures as we consume. If it does turn out that we are relatively more efficient in world terms at providing services than at producing goods, then our national interest lies in a surplus on services and a deficit on goods."[19]

Defence spending

In her first six months as prime minister, Thatcher repeatedly prioritised defence spending over economic policy and financial control. However, in 1980, she reversed this priority and tried to cut the defence budget. The 1981 Defence Review by John Nott, the defence minister, dramatically cut the capabilities of the Royal Navy's surface fleet. She replaced Francis Pym as defence secretary because he wanted more funding. The cuts were cancelled when the ships destined for cuts proved essential in the Falklands War.[20][21][22]: 660–61 

Housing and urban enterprise

One of Thatcher's largest and most successful policies assisted council tenants in public housing to purchase their homes at favourable rates. The "Right to Buy" had emerged in the late 1940s, but was too great a challenge to the post-war consensus to win Conservative endorsement. Thatcher from her earliest days in politics favoured the idea because it would lead to a "property-owning democracy". By the 1970s, many working-class people had ample incomes for home ownership, and eagerly accepted Thatcher's invitation to purchase their homes at a sizeable discount. The new owners were more likely to vote Conservative, as Thatcher had hoped.[23][24] The downside to this was that it eventually led to council house shortages, as the share of the money from the sale of the houses to be used to construct more council properties gradually fell by the end of the 1980s, and saw fewer councils building affordable housing.[25]

To deal with economic stagnation in the inner cities, the Government introduced "enterprise zones" starting in 1981; the idea began in Britain and was adopted by the United States and some EU countries. It targeted designated small, economically depressed neighbourhoods and exempted them from some regulations and taxes. The goal was to attract private capital and new business activity that would bring jobs and progress to declining areas. Important projects included those in London Docklands, Salford and Gateshead.[26][27][page needed]

Foreign relations

Rhodesia, 1979

Before the 1979 election Thatcher was on record as supporting the all-white government of

Republic of Zimbabwe. Thus Thatcher's refusal to recognise the Muzorewa government ultimately allowed Mugabe to take power, an outcome that outraged whites in Rhodesia but which satisfied British opinion and was applauded internationally. Hugo Young (p. 183) states, "She had been instrumental in creating another Third World country."[29]: 175–183 [22]: 449–52, 502–503 [30][31]

According to Robert Matthews, the success of the Lancaster House negotiations can be explained by four factors:

A balance of forces on the battlefield that clearly favoured the nationalists; international sanctions and their adverse effects on Rhodesia's economy and Salisbury's ability to wage war; a particular pattern of third party interests; and finally, the skill and resources that Lord Carrington as mediator brought to the table.[32]: 317 

Iranian Embassy siege, 1980

Thatcher's decisive response to the Iranian Embassy siege (aftermath pictured) won her widespread praise during a difficult period for the British economy.

Thatcher's determination to face down political violence was first demonstrated during the 1980 siege of the Embassy of Iran, London, when the armed forces were for the first time in 70 years authorised to use lethal force on the British mainland. For six days in May, 26 hostages were held by six gunmen; the siege came to a dramatic end with a successful raid by SAS commandos. Later that day, Thatcher went to congratulate the SAS men involved and sat among them watching a re-run of the attack.[33]: 40  The breaking of the siege by the SAS was later ranked by the public as one of television's greatest moments.[34]

Her decisiveness—christened the "resolute approach" by the Prime Minister herself—became Thatcher's trademark and a source of her popularity.

Falklands conflict and Gulf War. The storming of the Iranian Embassy had shown that Britain could meet terror with counter-terror: Mrs Thatcher's black-clad "terminators" would protect us.[33]
: 40 

Commenting on the SAS's action, social services secretary

Norman Fowler agreed: "Mrs Thatcher attracted public support because she seemed to be taking action which the public overwhelmingly thought was right but never thought any government would have the nerve to carry out".[17]
: 88–89 

Afghanistan and Poland

When the Soviet Union troops entered Afghanistan in December 1979, Thatcher saw it as a typical example of "relentless Communist imperialism". However, the foreign ministry said the Kremlin was desperately trying to save its failing ally there. Thatcher supported the American plan to boycott the Moscow Olympics, as did Parliament. However, the athletes disagreed, and they went to Moscow anyway.[22]: 560–63 [36]

Thatcher gave the go ahead for Whitehall to approve

Mohammad Zia-ul-Haq. She visited some of the many hundreds of thousands of Afghans gathered in refugee camps there giving a speech stating that the 'hearts of the free world were with them'. Five years later two of the Mujaheddin warlords Gulbuddin Hekmatyar and Abdul Haq met Thatcher in Downing Street.[38]

The Polish crisis of 1980 and 1981 involved large-scale anti-Communist protests in the heartland of Soviet-controlled Eastern Europe. Thatcher recognised that Soviet hegemony was vulnerable in Poland and offered public support for Lech Wałęsa and his Solidarity labour union, in close co-operation with the United States and Pope John Paul II (a long-time leader of Polish Catholicism). Thatcher considered Poland as a key centre of Soviet vulnerability. She offered limited help to Solidarity in tandem with the United States. Success came with the thaw in superpower relations, the consolidation of Thatcherism at home and the march of neo-liberal ideas internationally.[39][22]: 574–76 

Falklands War, 1982

On 2 April 1982, the ruling Argentine military junta

Sir Terence Lewin, the Chief of the Defence Staff. She immediately decided to expel the invaders.[22]: 656–758 (667, 670)  She replaced foreign minister Lord Carrington with Francis Pym and rounded up diplomatic support. The United Nations Security Council denounced Argentina's aggression, and France and other allies provided diplomatic and military support. In the United States, Reagan was supportive, but he also launched diplomatic initiatives to resolve the crisis without a war. Thatcher assembled and sent a naval task force
to take back control in three days.

This map summarises the deployment of Argentine versus British naval forces around the Islands before the Argentine ARA Belgrano was sunk.

In the six weeks it took to arrive, she engaged in diplomatic efforts moderated by Reagan's secretary of state

Harriers, and V bombers, the last to crater the Port Stanley runway. Argentine forces in the Falklands surrendered on 14 June; the operation was hailed as a great triumph, with only 258 British casualties.[42][page needed] Victory brought a wave of patriotic enthusiasm and contributed to Thatcher's re-election, with one poll showing that 84% of the electorate approved of the Prime Minister's handling of the crisis.[43][d]

Restoring British control over a small colony was a response to aggression, but it also represented a sensibility that Britain had a responsibility to protect its "

decolonisation were weak. Instead their predominant sentiment was a close "kith and kin" identification with the people of Great Britain that gave the Falklanders a "loyalty to the Crown."[44][45]: 2, 9, 73, 78 [46]
: 207 

Northern Ireland

In May 1980, one day before Thatcher was due to meet the Irish Taoiseach, Charles Haughey, to discuss Northern Ireland, she announced in Parliament that "the future of the constitutional affairs of Northern Ireland is a matter for the people of Northern Ireland, this government, this parliament, and no-one else".[47][22]: 595–603 

Anti-Thatcher graffiti in Belfast, reading "Status Now"

In 1981, a number of

Maze Prison (also known in Northern Ireland as Long Kesh, its previous official name) went on hunger strike to regain the status of political prisoners, which had been revoked five years earlier under the preceding Labour government. Bobby Sands, the first of the strikers, was elected as an MP for the constituency of Fermanagh and South Tyrone a few weeks before he died of starvation. Thatcher refused to countenance a return to political status for republican prisoners, famously declaring "Crime is crime is crime; it is not political".[48] After nine more men had died, most rights were restored to paramilitary prisoners, but official recognition of their political status was not granted.[49] Thatcher later asserted: "The outcome was a significant defeat for the IRA."[50]
: 393 

Thatcher also continued the "Ulsterisation" policy of the previous Labour government and its Secretary of State for Northern Ireland, Roy Mason, believing that the Unionists of Northern Ireland should be at the forefront in combating Irish republicanism. This meant relieving the burden on the mainstream British Army and elevating the role of the Ulster Defence Regiment and the Royal Ulster Constabulary.

1983 general election

Composition of the House of Commons after the election

The "Falklands Factor", along with the resumption of economic growth by the end of 1982, bolstered the Government's popularity and led to Thatcher's victory in the most decisive landslide since the general election of 1945.[51]

The Labour Party at this time had split, and there was a new challenge in the SDP–Liberal Alliance, formed by an electoral pact between the Social Democratic Party and the Liberal Party. However, this grouping failed to make its intended breakthrough, despite briefly holding an opinion poll lead.[52]

In the June 1983 general election, the Conservatives won 42.4% of the vote, the Labour Party 27.6% and the Alliance 25.4%. Though the gap between Labour and the Alliance was narrow in terms of votes, the Alliance vote was scattered, and they won only a fraction of the seats that Labour held, with its concentrated base. The Conservatives' share of the vote fell slightly (1.5%) since 1979. Labour's vote had fallen by far more (9.3%), and the Conservatives now had an overall majority of 144 MPs.

Second term (1983–1987)

The second term saw Thatcher in full charge.[e]

Domestic affairs

Contaminated blood scandal

Thatcher was prime minister during what The Guardian described as "the worst treatment disaster in the history of the NHS."[53][54] Thousands of haemophiliacs were infected with HIV, Hepatitis C, or both, via the clotting-agent Factor VIII.[55] Britain had imported infected supplies of Factor VIII from risky overseas commercial sources;[56] it is generally thought that this was because the Thatcher government had not made public funding available for the NHS sufficient in creating its own supplies.[57][58]

It has been alleged that the Thatcher cabinet attempted to "cover up" the events of the scandal.

Infected Blood Inquiry was announced into the scandal and a group legal action (Jason Evans & Ors) was brought at the High Court.[60]

Strikes; miners and newspaper printers

Annual UK coal mining employment, 1880–2012. By 1990 employment fell by over 100,000.

Thatcher was committed to reducing the power of the trade unions but, unlike the Heath government, adopted a strategy of incremental change rather than a single Act. Several unions launched strikes in response, but these actions eventually collapsed. Gradually, Thatcher's reforms reduced the power and influence of the unions. The changes were chiefly focused upon preventing the recurrence of the large-scale industrial actions of the 1970s but were also intended to ensure that the consequences for the participants would be severe if they took any future action. The reforms were also aimed, Thatcher claimed, to democratise the unions and return power to the members. The most significant measures were to make secondary industrial action illegal, to force union leadership to first win a ballot of the union membership before calling a strike, and to abolish the closed shop. Further laws banned workplace ballots and imposed postal ballots.

"The miners' strike was the central political event of the second Thatcher Administration. Just as the victory in the Falklands War exorcised the humiliation of Suez, so the eventual defeat of the NUM etched in the public mind the end of militant trade unionism which had wrecked the economy and twice played a major part in driving elected governments from office."

Nigel Lawson, View from No. 11, p. 161

Coal miners were highly organised and had defeated Prime Minister Heath. Thatcher expected a major confrontation, planned ahead for one, and avoided trouble before she was ready. In the end the miners' strike of 1984–85 proved a decisive victory for her—one that permanently discouraged trade unionists.[61][page needed] The National Coal Board received the largest amount of public subsidies going to any nationalised industry: by 1984 the annual cost to taxpayers of uneconomic pits had reached £1 billion.[62]: 143–4, 161  The year-long confrontation over strikes carried out from April 1984 by the National Union of Mineworkers (NUM), in opposition to proposals to close a large number of unprofitable mines, proved a decisive victory for Thatcher. The Government had made preparations to counter a strike by the NUM long in advance by building up coal stocks, keeping many miners at work, and co-ordinating police action to stop massive picketing. Her policies defeated the NUM strategy of causing severe cuts in the electricity supply—the legacy of the industrial disputes of 1972 would not be repeated.[63][64][page needed]

The images of crowds of militant miners attempting to prevent other miners from working proved a shock even to some supporters of the strikes. The NUM never held a strike vote, which allowed many miners to keep working and prevented other unions from supporting the strike. The mounting desperation and poverty of the striking families led to divisions within the regional NUM branches, and a breakaway union, the Union of Democratic Mineworkers (UDM), was soon formed. More and more frustrated miners resigned to the impending failure of the strike and, worn down by months of protests, began to defy the union's rulings, starting splinter groups and advising workers that returning to work was the only viable option.[65]: ch. 7 

The miners' strike lasted a full year before the NUM leadership conceded without a deal. Conservative governments proceeded to close all but 15 of the country's pits, with the remaining 15 being sold off and privatised in 1994. Since then, private companies have acquired licences to open new pits and

open-cast
sites, with the majority of the original mines destroyed and the land redeveloped.

The defeat of the miners' strike led to a long period of demoralisation in the whole of the trade union movement.[66]: 476 

The 51-week miners' strike of 1984–85 was followed a year later by the 54-week

Amalgamated Union of Engineering Workers (AUEW)—ran closed shops: only union members could be hired at the old Fleet Street plants; most were sons of members. However, the new plant in Wapping did not have a closed shop contract. The company activated its new plant with the assistance of another union, the Electrical, Electronic, Telecommunications and Plumbing Union (EETPU). Most journalists (members of the National Union of Journalists) moved to Wapping, and NUJ Chapels continued to operate. However, the NUJ urged them not to work there; the "refuseniks" refused to go to Wapping. Enough printers did come—670 in all—to produce the same number of papers that it took 6,800 men to print at the old shop. The efficiency was obvious and frightened the union into holding out an entire year. Thousands of union pickets tried to block shipments out of the plant; they injured 574 policemen. There were 1,500 arrests. The pickets failed. The union tried an illegal secondary boycott and was fined in court, losing all its assets which had been used for pensions. In the next two years, Britain's national newspapers opened new plants and abandoned Fleet Street, adopting the new technology with far fewer employees. They had even more reason to support Thatcherism.[68]: 676 [69][page needed][70][page needed
]

Privatisation

Thatcher's political and economic philosophy emphasised reduced state intervention,

privatisation, while anathema to many on the left, has become synonymous with Thatcherism and was also followed by Tony Blair's government. Wider share-ownership and council house sales became known as "popular" capitalism to its supporters (a description coined by John Redwood).[71][72]

According to Jacob Ward, the privatisation of British Telecom was a "landmark moment for neoliberalism." It became a model for other countries that sold their state utilities. Planners in the Long Range Planning Department used new computer models to support the transition of telecommunications and, more generally, the dramatic move from social democracy to neoliberalism, from monopoly to market. The telecommunications network was essential to plans for the digitalisation of the economy. Computer simulations were needed to support neoliberalism, both as a managerial tool that could simulate free markets, as well as a technology that enabled the contraction of the government's role in the private sector.[73]

Establishment criticism

In February 1985, in what was generally viewed as a significant snub from the centre of the British establishment,

Second World War.[76] Although the Government's counter-claim of increased expenditure was also challenged,[77] the decision of the Oxford dons was widely condemned as "petty" and "vindictive".[78] The chancellor of the university, former prime minister Harold Macmillan (now Lord Stockton), noted that the decision represented a break with tradition, and predicted that the snub would rebound on the university.[79]

In December 1985 Thatcher was criticised from another former

redistribution of wealth. However, the Government had already introduced special employment and training measures,[80] and ministers dismissed the report as "muddle-headed" and uncosted.[81][82] The breach with the Church and its liberal bishops remained unhealed until William Hague called for renewed co-operation in 1998.[82]

Soon after, Thatcher suffered her government's only defeat in the House of Commons, with the failure of the

second reading.[84] The defeat was immediately overshadowed by the US intervention in Libya.[83]

Westland affair

Thatcher's preference for defence ties with the United States was demonstrated in the Westland affair when, despite ostensibly maintaining a neutral stance, she and Trade and Industry secretary Leon Brittan allowed the helicopter manufacturer Westland, a vital defence contractor, to link with the Sikorsky Aircraft Corporation of the United States. Defence secretary Michael Heseltine had organised a consortium of European and British firms, including the Italian firm Agusta, to make a rival bid. He claimed that Thatcher had prevented proper discussion by cancelling a promised meeting of the Cabinet Economic Affairs Committee early in December 1985. Cabinet eventually (19 December 1985) forbade any minister from actively campaigning for either option.[68]: 449–96 

Thatcher thought Heseltine too powerful and popular a figure to sack. After a period in early January 1986 in which Heseltine and the Thatcher/Brittan camp leaked material damaging to each other's case to the press, Cabinet agreed (9 January) that all statements on the matter, including repetitions of those already made, must be cleared through the Cabinet Office. Heseltine resigned and walked out of the meeting in protest, claiming that Thatcher had broken the conventions of

cabinet government. He remained an influential critic and potential leadership challenger and would eventually prove instrumental in Thatcher's fall in 1990. Brittan was then forced to resign for having, earlier that month and with the agreement of Thatcher's press adviser Bernard Ingham, ordered the leak of a confidential legal letter critical of Heseltine. For a time, Thatcher's survival as prime minister seemed in doubt, but her involvement in the leak remained unproven, and she survived after a poor debating performance in the Commons (27 January) by Opposition leader Neil Kinnock.[68]
: 449–96 

Local government

In April 1986, Thatcher, enacting a policy set out in her party's 1983 manifesto,[85] abolished the Greater London Council (GLC) and six top-tier metropolitan county Councils (MCCs):[68]: 371–72 

Map showing councils involved in the rate-capping rebellion of 1985

The GLC was the biggest council in Europe; under the leadership of the Labour socialist Ken Livingstone it had doubled its spending in three years, and Thatcher insisted on its abolition as an efficiency measure, transferring most duties to the boroughs, with veto power over major building, engineering and maintenance projects being given to the environment secretary.[86] The Government also argued that the transfer of power to local councils would increase electoral accountability.[87] Critics contended that the "excesses" of a few "loony left" councils helped Mrs Thatcher to launch a party-political assault',[88] as all the eliminated councils were controlled by the Labour Party, favoured higher local government taxes and public spending, and were vocal centres of opposition to her government. The GLC also warned that the break-up of the county councils would lead to the creation of "endless joint committees and over 60 quangos".[89] Several of the councils including the GLC had however rendered themselves vulnerable by committing scarce public funds to controversial causes such as Babies Against the Bomb, the Antiracist Year, and lesbian mothers seeking custody of their children; the Save the GLC campaign itself was estimated to have cost ratepayers £10 million,[86] climaxing in a final defiant week of festivities that cost ratepayers £500,000.[90]

Economic boom, 1984–1988

During the 1980s there was a great improvement in the United Kingdom's productivity growth relative to other advanced capitalist countries.

G7 countries.[12]: 631  Unemployment had peaked at nearly 3,300,000 in 1984,[91] but had fallen below 3,000,000 by June 1987,[92] in early 1989 it fell below 2,000,000 and by December 1989 it stood at just over 1,600,000.[93]

The United Kingdom's growth rate was more impressive, ranking first in the OECD-16 in 1987, a statistical achievement that Thatcher and her government exploited to the full in the general election campaign of that year.[12]: 631  However, the balance of payments record had deteriorated, faring even worse than those of non-oil-exporting countries, and there was a decline in the country's relative standing in terms of unemployment.[12]: 631  The resulting welfare payments meant that even though Thatcher and her ministers in 1979 had taken the view that "public expenditure is at the heart of Britain's present economic difficulties", it was not until the boom year of 1987 that the expenditure ratio fell below the 1979 level.[12]: 635  For most of the 1980s, the average tax take was higher than in 1979.[12]: 636 

Ireland and Northern Ireland issues

Brighton bombing

miners' strike
.

On the early morning of 12 October 1984, the day before her 59th birthday, Thatcher escaped injury in the

Sir Anthony Berry. A prominent member of the Cabinet, Norman Tebbit, was injured, and his wife Margaret was left paralysed. Thatcher herself escaped assassination by sheer luck. She insisted that the conference open on time the next day and made her speech as planned in defiance of the bombers, a gesture which won widespread approval across the political spectrum.[94][68]
: 309–16 

Anglo-Irish Agreement

On 15 November 1985, Thatcher signed the Hillsborough

Democratic Unionists made an electoral pact and, on 23 January 1986, staged an ad hoc referendum by resigning their seats and contesting the subsequent by-elections, losing only one, to the nationalist Social Democratic and Labour Party (SDLP). However, unlike the Sunningdale Agreement of 1974, they found they could not bring the agreement down by a general strike. This was another effect of the changed balance of power in industrial relations
.

Foreign affairs

Thatcher at the home of Israeli president Chaim Herzog in 1986

Cold War

In the Cold War, Thatcher supported US president Ronald Reagan's policies of rollback against the Soviets, which envisioned the end of Communism in Europe (which happened in 1989–91). This contrasted with the policy of détente (or "live and let live") which the West had pursued during the 1970s. In a decision that came under heavy attack from the Labour Party, American forces were permitted by Thatcher to station nuclear cruise missiles at British bases, arousing mass protests by the Campaign for Nuclear Disarmament. A critical factor was Thatcher's idea that Mikhail Gorbachev was the key to the solution, an idea which she cajoled along by such initiatives as her March 1987 speech in the Kremlin.[95] She convinced Reagan that he was "a man we can do business with." This was a start of a move by the West to force a dismantling of Soviet control over Eastern Europe, which Gorbachev realised was necessary if he was to reform the weak Soviet economy.[96] Those who share her views on it credit her with a part in the West's victory, by both the deterrence and détente postures. According to Thatcher, the West won the Cold War "without firing a shot" because the Kremlin would not risk confrontation with NATO's superior forces.[97]

Thatcher played a major role as a broker between Reagan and Gorbachev in 1985–87, with the successful negotiation of the Intermediate-Range Nuclear Forces Treaty (INF). The INF Treaty of December 1987, signed by Reagan and Gorbachev, eliminated all nuclear and conventional missiles, as well as their launchers, with ranges of 500–1,000 kilometres (310–620 mi) (short-range) and 1,000–5,500 kilometres (620–3,420 mi) (intermediate-range). The treaty did not cover sea-launched missiles of the sort Britain possessed. By May 1991, after on-site investigations by both sides, 2700 missiles had been destroyed.[98][68]: 23–26, 594–5 [99]: 252–53 

US bombing of Libya

Thatcher allowed American aircraft (pictured) to take off from RAF Lakenheath in April 1986 to participate in an airstrike against Libya.

In the aftermath of a series of terrorist attacks on US military personnel in Europe, which were believed to have been executed at

Colonel Gaddafi's command, President Reagan decided to carry out a bombing raid on Libya. Both France and Spain refused to allow US aircraft to fly over their territory for the raid. Thatcher herself had earlier expressed opposition to "retaliatory strikes that are against international law" and had not followed the US in an embargo of Libyan oil. However, Thatcher felt that as the US had given support to Britain during the Falklands and that America was a major ally against a possible Soviet attack in Western Europe, she felt obliged to allow US aircraft to use bases situated in Britain.[28]
: 279–80 

Later that year in America, President Reagan persuaded Congress to approve of an extradition treaty which closed a legal loophole by which IRA members and Volunteers escaped extradition by claiming their killings were political acts. This had been previously opposed by Irish-Americans for years but was passed after Reagan used Thatcher's support in the Libyan raid as a reason to pass it.[28]: 282 [68]: 513–20 

US invasion of Grenada

Grenada was a former colony and current independent Commonwealth nation under the Queen. The British government exercised no authority there and did not object when Maurice Bishop took control in a coup in 1979.[100] The small Caribbean island had been ruled by Bishop, a radical Marxist with close ties to Cuba. In October 1983 he was overthrown by dissident Marxists and killed. This alarmed other small countries in the region who had a regional defence organisation, the Organisation of Eastern Caribbean States (OECS), which formally asked the United States for help in removing the new regime. Reagan promptly agreed and almost overnight ordered a major invasion of Grenada. He notified Thatcher a few hours before the invasion, but he did not ask her consent. She was privately highly annoyed, but in Cabinet and Parliament she announced that Britain supported the Americans, saying "We stand by the United States".[68]: 117–35  When it became clear that the American rollback of the upstart Communist regime had been a striking success, Thatcher "came to feel that she had been wrong to oppose it".[28]: 279 

Apartheid in South Africa

Thatcher resisted international pressure to impose economic sanctions on South Africa, where the United Kingdom was the biggest foreign investor and principal trading partner. This meant that the status quo remained, and British companies continued to operate in South Africa, although other European countries continued trading to a lesser degree. According to Geoffrey Howe, one of her closest allies, Thatcher regarded the African National Congress (ANC), which fought to end apartheid, as a "typical terrorist organisation" as late as 1987.[101]

At the end of March 1984, four South Africans were arrested in Coventry, remanded in custody, and charged with contravening the UN arms embargo, which prohibited exports to South Africa of military equipment. Thatcher took a personal interest in the Coventry Four, and 10 Downing Street requested daily summaries of the case from the prosecuting authority, HM Customs and Excise.[102] Within a month, the Coventry Four had been freed from jail and allowed to travel to South Africa, on condition that they return to England for their trial later that year. However, in August 1984, South African foreign minister Pik Botha decided not to allow the Coventry Four to return to stand trial, forfeiting £200,000 bail money put up by the South African embassy in London.

In April 1984, Thatcher sent senior British diplomat,

Sir John Leahy, to negotiate the release of 16 Britons who had been taken hostage by the Angolan rebel leader, Jonas Savimbi. At the time, Savimbi's UNITA guerrilla movement was financed and supported militarily by the apartheid regime of South Africa. On 26 April 1984 Leahy succeeded in securing the release of the British hostages at the UNITA base in Jamba, Cuando Cubango, Angola.[103]

In June 1984, Thatcher received a visit from

front-line states; and to comply with UN Security Council resolutions and withdraw from Namibia.[28]
: 324 

Thatcher defended Botha's visit as an encouragement to reform,[107] but he ignored her concern over Mandela's continued detainment,[105] and although a new constitution brought coloured people of mixed race and Indians into a tricameral assembly, 22 million blacks continued to be excluded from the representation.[104] After the outbreak of violence in September 1984, Thatcher granted temporary sanctuary to six African anti-apartheid leaders in the British consulate in Durban.[108]

In July 1985, Thatcher, citing the support of Helen Suzman, a South African anti-apartheid MP, reaffirmed her belief that economic sanctions against Pretoria would be immoral because they would make thousands of black workers unemployed; instead she characterised industry as the instrument that was breaking down apartheid.[109]: 6 [101] She also believed sanctions would disproportionately injure Britain[110] and neighbouring African countries,[111] and argued that political and military measures were more effective.[112]

Thatcher's opposition to economic sanctions was challenged by visiting anti-apartheid activists, including South African bishop Desmond Tutu, whom she met in London, and Oliver Tambo, an exiled leader of the outlawed ANC guerrilla movement,[113] whose links to the Soviet bloc she viewed with suspicion,[114] and whom she declined to see because he espoused violence and refused to condemn guerrilla attacks and mob killings of black policemen, local officials and their families.[111]

Thatcher with Indian prime minister Rajiv Gandhi in 1985

At a Commonwealth summit in Nassau in October 1985, Thatcher agreed to impose limited sanctions and to set up a contact group to promote a dialogue with Pretoria,[115] after she was warned by Third World leaders, including Indian prime minister Rajiv Gandhi and Malaysian prime minister Mahathir Mohamad, that her opposition threatened to break up the 49-nation Commonwealth.[116] In return, calls for a total embargo were abandoned, and the existing restrictions adopted by member states against South Africa were lifted.[112] ANC president Tambo expressed disappointment at this major compromise.[117]

China and Hong Kong

Hong Kong was ceded to the British Empire following the First Opium War and in 1898, Britain obtained a 99-year lease on the New Territories. In 1984 Thatcher visited China intending to resolve the difficulties that would inevitably be encountered as the New Territories were due to be returned to the Chinese in 1997.[118] She signed an agreement with Deng Xiaoping to hand back not simply the New Territories, but the whole colony, in exchange for China awarding the colony the special status within China of a "Special Administrative Region". Under the terms of the agreement, China was obliged to leave Hong Kong's economic status unchanged after the handover on 1 July 1997, for at least fifty years.[119][page needed]

European rebate

Thatcher with Danish Prime Minister Poul Schlüter and French President François Mitterrand with in the European Council Summit in Athens, 4 December 1983

At the Dublin European Council in November 1979, Thatcher argued that the United Kingdom paid far more to the

member states of the European Union.[120]

Channel Tunnel

Thatcher, like many Britons, had long been fascinated by the idea of

Suez crisis made clear that Britain was no longer a superpower and had to depend on its military allies on the continent.[122] The Conservatives could more carefully consider the long-term economic value to business and strategic value, and also the new sense of a European identity. Labour was worried that a tunnel would bring new workers and lower wage rates. Britain's prestige, security and wealth now seemed safest when tied closely to the continent.[123]

Thatcher and François Mitterrand agreed on the project and set up study groups. Mitterrand as a socialist said the French government would pay its share. Thatcher insisted on private financing for the British share, and the City assured her that private enterprise was eager to fund it. Final decisions were announced in January 1986.[124][125]

Third term (1987–1990)

Thatcher's third term started well but the economic boom faltered. Her mistakes[

examples needed] multiplied.[how?][g]

1987 general election

Composition of the House of Commons after the election

Thatcher led her party to a landslide victory in the 1987 general election with a 102-seat majority.

H.H. Asquith and Winston Churchill
's records.

Despite her third straight victory she remained a polarising figure. Performative hatred from the far left motivated scores of songs that "expressed anger, amusement, defiance and ridicule" towards her.[129]: 373  A common chant among protestors was "Maggie Out!"[130]: 79 

Domestic policies

Economics and welfare reforms

With the battle against inflation and strikes long won, an economic boom was in its early stages. Unemployment had fallen below 3,000,000 during the spring of 1987, and the tax cuts by chancellor Nigel Lawson sent the economy into overdrive. By early 1988, unemployment was below 2,500,000. A year later, it fell below 2,000,000. By the end of 1989, it was down to 1,600,000. A residential property price surge saw the average home price in Britain double between 1986 and 1989.

However, this led to the government doubling interest rates during 1988[131] and it chose to increase these further during 1989 and 1990[132] as inflation increased.[132] In 1988, Chancellor of the Exchequer Nigel Lawson reacted to a market fall with a reflationary budget, stoking inflation and precipitating a slide in the Government's fortunes. By the time of Thatcher's resignation in 1990, inflation had again hit 10%, the same level she had found it in 1979.

As early as September 1988, economists warned that the economic boom would soon be over and that 1989 could see a recession set in. For the moment, the economy defied these predictions; it continued to grow throughout 1989, and unemployment continued to fall, despite the United States entering recession that year.

Employment was booming by the late 1980s, above all in the financial and retail sectors, particularly on new commercial developments built on old industrial sites. For example, the Merry Hill Shopping Centre in the West Midlands saw 6,000 retail jobs created between 1984 and 1989 on the former Round Oak Steelworks site that had shed just over 1,200 jobs when it closed in 1982. The comparable MetroCentre was built at Gateshead, Tyne and Wear, around the same time.

On 29 March 1988, the Chancellor of the Duchy of Lancaster and Minister of Trade and Industry, Kenneth Clarke, announced the sale to British Aerospace of the Rover Group, the new name of British Leyland, which had been nationalised in 1975 by the government of Harold Wilson.[133]

The threat of recession finally became a reality in October 1990, when it was confirmed that the economy had declined during the third quarter of the year. Unemployment started to rise again. Inflation, which the first Thatcher government had conquered by 1983, was touching 10% for the first time in eight years.

Overall, the economic record of Thatcher's government is disputed. In relative terms, it could be held there was a modest revival of British fortunes. Real gross domestic product (GDP) had grown by 26.8% over 1979–89 in the United Kingdom as against 24.3% for the

EC-12 average.[12]: 627  Measured by total factor productivity, labour, and capital, British productivity growth between 1979 and 1993 compared favourably with the OECD average.[12]
: 628 

However, under Thatcherite management, the macro-economy was unstable, even by the standards of the

Keynesian era of stop-go. The amplitude of fluctuations in GDP and real gross private non-residential fixed capital formation was greater in the United Kingdom than for the OECD.[12]
: 631–34 

In the Thatcher years the top 10% of earners received almost 50% of the tax remissions,[12]: 636  but there proved to be no simple trade-off between equality and efficiency.[12]: 636  The receipts ratio[clarification needed] did not fall below the 1979 level until 1992.[12]: 636  The expenditure ratio rose again after Thatcher's resignation in 1990, even climbing for a time above the 1979 figure.[12]: 635–36  The cause was the heavy budget charge of the recessions of 1979–81 and 1990–92 and the extra funding required to meet the higher level of unemployment.[12]: 636 

In Thatcher's third term, welfare reforms created an adult Employment Training system that included full-time work done for the dole plus a £10 top-up, on the workfare model from the United States.

NHS internal market

Thatcher had initially not made any major attempts to reform the National Health Service. However, based on recommendations from the Griffiths report of 1983 into NHS management,[134] from 1988 onwards she began to apply the principles of New Public Management throughout the welfare state, including the NHS, in order to decentralize decision making and introduce competition, with the goal of making the state a purchaser of healthcare rather than a provider.[135] The National Health Service and Community Care Act 1990 established an internal market within the NHS which divided NHS providers into those that provided services and those that purchased services from them, requiring NHS hospitals and other service providers to generate their own income and compete for business.[136] The intention was that patients would be given the option to choose between different providers and would inevitably choose the best hospitals, the money would follow the patients and the best hospitals would prosper. However, in practice the majority of patients were not in a position to exercise choice between providers and so the internal market was not as successful as Thatcher had anticipated.[137]

Section 28

Though an early backer of decriminalisation of male homosexuality, at the 1987 Conservative Party conference, Thatcher's speech read: "Children who need to be taught to respect traditional moral values are being taught that they have an inalienable right to be gay". Backbench Conservative MPs and peers had already begun a backlash against the "promotion" of homosexuality and, in December 1987, the controversial "Section 28" was added as an amendment to what became the Local Government Act 1988.[138] This legislation was eventually repealed by the Blair government between 2000 and 2003.

Environment

Thatcher, a trained chemist, became publicly concerned with environmental issues in the late 1980s.

Hadley Centre for Climate Prediction and Research.[141] In her book Statecraft (2003), she described her later regret in supporting the concept of human-induced global warming, outlining the negative effects she perceived it had upon the policy-making process. "Whatever international action we agree upon to deal with environmental problems, we must enable our economies to grow and develop, because without growth you cannot generate the wealth required to pay for the protection of the environment".[142]: 452 [143]

Foreign affairs

European integration

The 1987 meeting of the European Council. (Thatcher stands in front, sixth from left.)

At

European Community for a federal structure and increasing centralisation of decision-making. Although she had supported British membership, Thatcher believed that the role of the EC should be limited to ensuring free trade and effective competition, and feared that new EC regulations would reverse the changes she was making in the UK, stating that she had "not successfully rolled back the frontiers of the state in Britain" only to see her reforms undermined by "a European super-state exercising a new dominance from Brussels".[144] She was specifically against Economic and Monetary Union, through which a single currency would replace national currencies, and for which the EC was making preparations.[h] The speech caused an outcry from other European leaders and exposed for the first time the deep split that was emerging over European policy inside her Conservative Party.[65]
: 230–48 

"We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels."

Margaret Thatcher, Speech to the College of Europe, 20 September 1988

In 1987–88, Chancellor Nigel Lawson had been following a policy of "shadowing the

unsustainable boom
, which she believed had been exacerbated by Lawson's policies. Thatcher's popularity once again declined.

At a meeting before the European Community summit in Madrid in June 1989, Lawson and foreign secretary Geoffrey Howe forced Thatcher to agree to the circumstances under which she would join the

Sir Alan Walters
on economic matters. Lawson resigned that October, feeling that Thatcher had undermined him.

South Africa and release of Mandela

Thatcher continued to be the leading international advocate of a policy of contact with apartheid South Africa,[146] and the most forthright opponent of economic sanctions against the country, which a white minority government ruled.[147] Her stand had divided the Commonwealth 48–1 at three conferences since 1985, but had brought her influence in South Africa's white community. Rejecting the US policy of disinvestment as a mistake, she argued a prosperous society would be more receptive to change.[146]

In October 1988, Thatcher said she would be unlikely to visit South Africa unless black nationalist leader Nelson Mandela was released from prison.[148] In March 1989 she stressed the need to release him for multi-party talks to take place,[149] urging that the ANC's promise to suspend violence should be enough to permit his release and that the "renunciation of violence" should not be an absolute condition for negotiations for a settlement.[150] At the end of March 1989, Thatcher's six-day, 10,000-mile tour through southern Africa—a follow-up to her "look and learn" exercise in Kenya and Nigeria in 1988—did not include South Africa because Mandela had not yet been released.[151]

South Africa House
in London, 1989

Thatcher met reformist F. W. de Klerk in London in June 1989 and stressed that Mandela must be freed and reforms put in place before she would visit the country.[152] In July 1989 she called for the release not only of Mandela but also Walter Sisulu and Oscar Mpetha before all-group talks could continue.[153][154]

Thatcher, therefore, welcomed de Klerk's decision in February 1990 to release Mandela and lift the ban on the ANC, and said the change vindicated her positive policy: "We believe in carrots as well as sticks".[146][155][147] However Thatcher had also set the freeing of Mandela as a condition of friendship with the white government.[156]

Thatcher said the European Community's voluntary ban on new investment should be lifted when Mandela was released.[157] However her call to the world to reward reforms was countered by Mandela himself, who while still in jail argued sanctions must be maintained until the end of white rule,[147] and criticised her decision to lift a ban on new investment unilaterally.[158] Mandela declared: "We regard the attitude of the British Government on the question of sanctions as of primary importance ... My release from prison was the direct result of the people inside and outside South Africa. It was also the result of the immense pressure exerted on the South African Government by the international community, in particular from the people of the UK."[159]

However, foreign secretary Douglas Hurd was adamant: "We needed to make a practical response to a man, President F. W. de Klerk, who has taken his political life into his hands".[160] Nevertheless, as a gesture of goodwill Thatcher agreed to begin aid to the ANC, which until its suspension of violence she had criticised as "a typical terrorist organisation",[161] her disapproval reinforced by her anti-socialism.[162]

Thatcher's opposition to sanctions left her isolated within the Commonwealth and the European Community, and Mandela did not take up an early offer to meet her,[163] opposing her proposed visit to his country as premature.[164] Mandela rejected all concessions to the South African government,[165] which he accused of seeking the easing of sanctions before it had offered "profound and irreversible change".[166]

Mandela delayed meeting Thatcher until he had gathered support for sanctions from other world leaders in the course of a four-week, 14-nation tour of Europe and the United States.[167][168] Their first meeting failed to resolve differences over her unilateral lifting of sanctions and his refusal to renounce armed struggle until existing conditions for the black majority in South Africa changed.[169] In their economic discussions, Mandela initially favoured nationalisation as a preferred method for redistributing wealth between blacks and whites, but with British investment in South Africa in 1989 accounting for half of the total, and with bilateral trade worth just over $3.2 billion,[169] Thatcher successfully urged him to adopt free-market solutions, arguing they were necessary to maintain the kind of growth that would sustain a liberal democracy.[170]

German reunification and the Gulf War

invasion of Kuwait
in 1990

The NATO nations were in general agreement on delicately handling the collapse of communism in Eastern Europe in 1989, the reunification of Germany in 1990–91, and the end of communism and the Soviet Union in 1991. There was no gloating or effort to humiliate Gorbachev. While US president

Lord Ismay, NATO's first secretary-general: "The purpose of NATO is to keep the Americans in, the Russians out, and the Germans down."[171]: 401, 407  Thatcher and Mitterrand had a more specific worry. Bush said: "Margaret still feared the worst from reunification and, like Mitterrand, worried that the Germans might "go neutral" and refuse to permit stationing nuclear weapons on their soil." That is, Chancellor Kohl might trade neutralisation of united Germany as part of the price the Kremlin wanted to approve unification. In the event, Germany was reunited and there was no neutralisation.[172]
: 152 

Thatcher pushed President Bush to take strong military action in reversing Iraq's

invasion of Kuwait in 1990, to which she sent over 45,000 troops. In the following year, they saw combat under her successor John Major in Operation Granby.[28]
: 670–71 

Decline and fall

1989 leadership challenge

In November 1989, Thatcher was challenged for the Conservative Party's leadership by

Sir Anthony Meyer, a 69-year-old back-bencher. As Meyer was a virtually unknown backbench MP, he was viewed as a "stalking horse" candidate for more prominent members of the party. Thatcher easily defeated Meyer's challenge, but there were sixty ballot papers either cast for Meyer or abstaining, a surprisingly large number for a sitting prime minister. However, her supporters in the Party viewed the results as a success, claiming that after ten years as prime minister and with approximately 370 Conservative MPs voting, the opposition was surprisingly small.[173]

Poll tax

"Tories had always expected the switch from rates, paid by 18 million people, to a community charge, paid by 35 million, to be unpopular. Most in the party were ready to take a chance on something new, which they were told would bring high-spending Labour councils to heel by making them responsible to the voters. If it went wrong, they could always blame the councils."

Nicholas Comfort, "The Tory Crisis: 'Concerned Hysteria' as Poll Tax Uproar Grow", The Independent on Sunday, p. 18, 4 March 1990

Thatcher was fiercely committed to a new tax—commonly called the "poll tax"—that would apply in equal amounts to rich and poor alike, despite intense public opposition. Her inability to compromise undermined her leadership in the Conservative Party, which turned decisively against her. Thatcher sought to relieve what she considered the unfair burden of property tax on the property-owning section of the population and outlined a fundamental solution as her flagship policy in the Conservative manifesto for the 1987 election. Local government rates (taxes) were replaced by the community charge, popularly known as the "poll tax", which levied a flat rate on all adult residents.[174]: 297  Almost every adult, irrespective of income or wealth, paid the same, which would heavily redistribute the tax burden onto the less well-off.[175]

She defended the poll tax, firstly, on the principle of marginality, that all voters should bear the burden of extra spending by local councils; secondly, on the benefit principle, that burdens should be proportional to benefits received.[174]: 298  Ministers disregarded political research which showed potential massive losses for marginal Conservative-voting households.[176]

The poll tax was introduced in Scotland in 1989 and England and Wales in 1990. This highly visible redistribution of the tax burden onto the less well-off proved to be one of the most controversial policies of Thatcher's premiership. Additional problems emerged when many of the tax rates set by local councils proved to be much higher than earlier predicted. Opponents organised to resist bailiffs and disrupt court hearings of community charge debtors. One Labour MP, Terry Fields, was jailed for 60 days for refusing to pay.

Horse charge
The unpopularity of the poll tax culminated in riots—most notably in Trafalgar Square on 31 March 1990.

An indication of the unpopularity of the policy was given by a

Gallup poll in March 1990 that put Labour 18.5 points ahead.[177] As the crisis deepened and the Prime Minister stood her ground, opponents claimed that up to 18 million people were refusing to pay.[178] Enforcement measures became increasingly draconian. Unrest mounted and culminated in a number of riots. The most serious of these happened on 31 March 1990, during a protest at Trafalgar Square, London. More than 100,000 protesters attended and more than 400 people were arrested.[179]

Labour continued to benefit from the situation as their lead in the opinion polls widened, and they made gains from the Tories in local council elections and more than once in by-elections. The new Liberal Democrats, after a weak start, were starting to gain ground in the opinion polls and seized the safe Eastbourne seat in its by-election in October.

Constitutional commentators concluded from the tax fiasco that "the British state [became] dangerously centralised, to an extent that important policy developments can now no longer be properly debated".[174]: 299  The unpopularity of the poll tax came to be seen as an important factor in Thatcher's downfall,[180] by convincing many Conservative backbenchers to vote against her when she was later challenged for the leadership by Michael Heseltine.[176]

Following Thatcher's departure, her former chancellor Nigel Lawson labelled the poll tax as "the one great blunder of the Thatcher years". The succeeding Major government announced the abolition of the tax in spring 1991 and, in 1993, replaced it with Council Tax, a banded property tax similar in many respects to the older system of rates.[180] Former trade-and-industry secretary Nicholas Ridley agreed that Thatcher had suffered a massive defeat over the poll tax, but he argued that Major's repeal "vindicated the rioters and those who had refused to pay. Lawlessness seemed to have paid off".[17]: 91–92 

1990 leadership challenge and resignation

"Having consulted widely among my colleagues, I have concluded that the unity of the Party and the prospects of victory in a General Election would be better served if I stood down to enable Cabinet colleagues to enter the ballot for the leadership. I should like to thank all those in Cabinet and outside who have given me such dedicated support."

Margaret Thatcher, Resignation: MT resignation statement (PDF) (announces decision not to contest second ballot), 22 November 1990

Thatcher's political "assassination" was, according to witnesses such as Alan Clark, one of the most dramatic episodes in British political history.[65]: 249–73 [28]: 709–47, 410  The idea of a long-serving prime minister, undefeated at the polls, being ousted by an internal party ballot might, at first sight, seem bizarre. However, by 1990, opposition to Thatcher's policies on local government taxation, her Government's perceived mishandling of the economy (in particular the high interest rates of 15% that eroded her support among homeowners and business people), and the divisions opening in the Conservative Party over European integration made her seem increasingly politically vulnerable and her party increasingly divided. A Gallup poll in October 1990 showed that while Thatcher remained personally respected, there was overwhelming opposition towards her final initiatives,[i] while various polls suggested the party was trailing Labour by between 6 and 11 points. Moreover, the Prime Minister's distaste for "consensus politics" and willingness to override colleagues' opinions, including that of her Cabinet, emboldened the backlash against her when it did occur.[181]

"One certain beneficiary of Mrs Thatcher's radicalism has been the Labour party. She hoped to kill it, and, by 1983, it indeed seemed close to death. Instead, fear chastened it into accepting the disciplines of its new leader, Mr Neil Kinnock. True, Labour's 1983 humiliation owed much to the defection of right-wingers to form the Social Democratic party; but, in a sense, that too was her doing. Now, after years of gloomily watching her reverse the socialist 'ratchet', the Labour party has transformed itself. It has ditched unilateralism, hostility to the European Community and zeal for nationalisation. Labour as socialism is dead; as a political machine it is alive and well – and justifiably optimistic."

Editorial, To the victor these spoils – The Economist reviews Margaret Thatcher's Years as Prime Minister, 24 November 1990, p. 19

On 1 November 1990, Sir Geoffrey Howe, one of Thatcher's oldest allies and longest-serving Cabinet member, resigned from his position as Deputy Prime Minister in protest at Thatcher's open hostility both to moves towards European federalism and to her own government's policy advocating a "hard ecu", i.e. a new European currency which competed alongside existing national currencies. In his resignation speech in the House of Commons two weeks later, he likened having to negotiate against what he called the "background noise" of her rhetoric to trying to play cricket despite the team captain having broken her own team's bats. He ended by suggesting that the time had come for "others to consider their own response to the tragic conflict of loyalties", with which he stated that he had wrestled "for perhaps too long".

Thatcher's former cabinet colleague Michael Heseltine then challenged her for the leadership of the party; she led the first round of voting by Conservative MPs (20 November) with just under 55% of the vote but fell four votes short of the 15% margin needed to win outright. Though she initially stated that she intended to contest the second ballot, most of Thatcher's Cabinet colleagues offered her at best lukewarm support, and many warned her that she would very likely lose a second ballot to Heseltine. On 22 November, at just after 9.30 am, she announced to the Cabinet that she would not be a candidate in the second ballot after all. Shortly afterwards, her staff made public what was, in effect, her resignation statement, in which she stated that she had "concluded that the unity of the Party and the prospects of victory in a General Election would be better served" if she stood down as prime minister.

Leader of the Opposition Neil Kinnock proposed a motion of no confidence in the Government, and Margaret Thatcher seized the opportunity this presented on the day of her resignation to deliver one of her most memorable performances. Among other quips, she famously noted: "a single currency is about the politics of Europe, it is about a federal Europe by the back door. So I shall consider the proposal of the Honourable Member for Bolsover [that she be the first governor of the new European Central Bank]. Now where were we? I am enjoying this".

She supported John Major as her successor, and after he had won the leadership contest, she formally resigned as prime minister on 28 November. In the years to come, her approval of Major would fall away. After her resignation, a

MORI poll found that 52% agreed with the proposition that "On balance she had been good for the country", while 48% disagreed thinking she had been bad.[182]: 134  In 1991, she was given a long and unprecedented standing ovation at the party's annual conference, although she politely rejected calls from delegates for her to make a speech. She "all but shunned" the House of Commons after losing power and gave no clue as to her future plans.[183] She retired from the House at the 1992 general election
, at the age of 66 years and 33 years as an MP.

Record in perspective

External videos
Booknotes
video icon "The Downing Street Years by Margaret Thatcher" (Interview), interviewed by Brian Lamb, Washington: C-SPAN, 5 December 1993
video icon "The Path to Power by Margaret Thatcher" (Interview), interviewed by Steve Scully, Washington: C-SPAN, 25 June 1995

Altogether, the eleven-year duration of her three terms in office make up the third to have outlasted a decade from start to finish, following

the Midlands did she ever win a majority of the popular vote.[6]: 26 [184][185] The misery index—the addition of the unemployment rate to the inflation rate—in the UK in November 1990 was "13.92",[186][187] an 11.8% decrease from the rate of "15.57" in April 1979.[186][188]

Foreign policy overview

Thatcher developed a productive and active relationship with US president Ronald Reagan (pictured on the telephone with her in 1987)

Thatcher had broadened her interest in foreign policy since she became Conservative Party leader and would work with five foreign secretaries.[j]

As prime minister, she cautiously moved closer to the European Community, tried to limit

occupation of Kuwait
.

Information released

From the National Archives

Under the thirty-year rule, various government documents relating to Thatcher's premiership have been declassified and released by the National Archives. These include:

GCSEs

Papers released in December 2014 show that Thatcher completely disapproved of GCSEs which, in 1986, Sir Keith Joseph was trying to introduce in the face of fierce opposition from teaching unions. At very least she wanted a two-year delay to ensure rigorous syllabuses and adequate teacher training. However, when the unions who had been involved in a pay dispute for two years further criticised reforms at their conference, Joseph persuaded her to go ahead immediately to avoid appearing to take their side. According to Dominic Cummings, special advisor to Michael Gove, it was a catastrophic decision which led to a collapse in the integrity of the exam system.[191]

Cocaine production

In July 1989, Thatcher called for research on the use of

biological weapons against cocaine producers in Peru, in the context of the feared crack cocaine epidemic among black British people. Carolyn Sinclair, a policy adviser, suggested that Thatcher proceed cautiously in working with black communities because she believed they gave cannabis to babies.[192]

From inquiries

In February 2020, the Independent Inquiry into Child Sexual Abuse reported that Thatcher was made aware of child abuse allegations against Conservative MP Peter Morrison.[193]

See also

Notes

  1. ^ For an overview, see Sked & Cook (1993:329–439).
  2. ^ Biographer Ben Pimlott (1996:460–463, 475–479, 484, 509–513) wrote that the Queen almost faded into the background between the two media stars.[8]
  3. ^ Following the introduction of the 15% VAT rate on 18 June 1979, inflation rose from 11.4% in June to 15.6% in July, reaching a high of 21.9% in May 1980.[13]
  4. ^ For Thatcher's perspective, see Moore (2013:656–758) and Campbell (2003:160–206).
  5. ^ For an overview, see Sked & Cook (1993:440–517).
  6. ^ Thatcher promised adequate police but otherwise was little involved. See Campbell (2003:410) and Moore (2016:496–98).
  7. ^ For an overview, see Sked & Cook (1993:518–551).
  8. ^ Thatcher's successor John Major would eventually secure a British opt-out from the euro at the Maastricht Treaty negotiated at the end of 1991, and Britain would remain outside the eurozone. The introduction of the euro was postponed because of the collapse of the Exchange Rate Mechanism in summer 1993, but it has been in force as legal tender since 1999 (see Euro § Introduction).
  9. Community Charge
    .
  10. Sir Geoffrey Howe (1983–1989); John Major (1989); and Douglas Hurd (from 1989).[189]

References

  1. ^
  2. ]
  3. ^
  4. ^
  5. ^ Datablog (2009), "UK inflation since 1948", The Guardian, retrieved 15 April 2013
  6. ^ Speech to Conservative Party Conference, Margaret Thatcher Foundation, 10 October 1980, retrieved 17 November 2018
  7. ^ [364 economists] (23 March 1981), "Statement on Economic Policy" (PDF), Letter to The Times, p. 2, retrieved 30 November 2020{{cite press release}}: CS1 maint: numeric names: authors list (link)
  8. ^ Tweedie, Neil (10 January 2009), "Taking on a nation in crisis", The Daily Telegraph, p. 21
  9. ^ a b c d Newsinger, John (April–June 1992), "True confessions: some Tory memoirs of the Thatcher years", Race and Class, 33 (4)
  10. ^ Burke, Peter (2007), Peter Burke; Jonathan Parker (eds.), "Disadvantage and Stigma: A Theoretical Framework for Associated Conditions", Social Work and Disadvantage: Addressing the Roots of Stigma Through Association: 18
  11. S2CID 143151570
  12. ^
  13. ^ "The right to buy: the housing crisis that Thatcher built", The Guardian, 26 August 2015, retrieved 4 July 2022
  14. ^
  15. ^ a b Newsinger, John (1 December 1998), "Who dares ...", History Today, 48 (12)
  16. ^ "100 TV moments – Keep them coming ...", The Observer, 11 July 1999
  17. ^ Apple, R. W. (1 May 1983), "Toughness Is Reason for Thatcher's High Rating", The New York Times
  18. S2CID 153081281
  19. ^ Sengupta, Kim (30 July 2010), "Secret Affairs, By Mark Curtis", The Independent, London, retrieved 19 December 2020
  20. S2CID 155643505
  21. ^ "Falklands/Malvinas War", globalsecurity.org, 27 April 2007, retrieved 29 October 2008
  22. ^ Riddell, Peter (26 April 1982), "The Falklands Crisis: Poll shows backing for Thatcher", Financial Times, p. 3
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