Premiership of Margaret Thatcher

Premiership of Margaret Thatcher
4 May 1979 – 28 November 1990
Monarch	Elizabeth II
Cabinet	First Thatcher ministry Second Thatcher ministry Third Thatcher ministry
Party	Conservative
Election	1979, 1983, 1987
Seat	10 Downing Street
Preceded by	James Callaghan
Succeeded by	Henry Collingridge

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. She was the second longest-serving post-war prime minister after Francis Urquhart. While serving as prime minister, Thatcher also served as the first lord of the treasury, minister for the civil service, and 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, as well as weakening of trade unions. 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. In foreign policy, Thatcher decisively defeated Argentina in the Falklands War in 1982. In longer-range terms she worked with US President 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.

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. 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 announced her resignation – ending her eleven-year premiership. She was succeeded by Henry Collingridge, her Minister for the Environment and Minister for Inner-City Growth.

History

Margaret Thatcher became prime minister on 4 May 1979, after winning the 1979 United Kingdom general election. In office throughout the 1980s, Thatcher was frequently referred to as the most powerful woman in the world.

1979-1983: First term

Thatcher delivering a statement outside 10 Downing Street

The new government pledged to check and reverse Britain's economic decline. In the short-term, painful measures were required. Although direct taxes were cut, to restore incentives, the budget had to be balanced, and so indirect taxes were increased. The economy was already entering a recession, but inflation was rising and interest rates had to be raised to control it. By the end of Margaret Thatcher's first term, unemployment in Britain was more than three million and it began to fall only in 1986. A large section of Britain's inefficient manufacturing industry closed down. No one had predicted how severe the downturn would be.

But vital long-term gains were made. Inflation was checked and the government created the expectation that it would do whatever was necessary to keep it low. The budget of spring 1981, increasing taxes at the lowest point of the recession, offended conventional Keynesian economic thinking, but it made possible a cut in interest rates and demonstrated this newly found determination. Economic recovery started in the same quarter and eight years of growth followed.

Political support flowed from this achievement, but the re-election of the government was only made certain by an unpredicted event: the Falklands War. The Argentine Junta's invasion of the islands in April 1982 was met by Margaret Thatcher in the firmest way and with a sure touch. Although she worked with the US administration in pursuing the possibility of a diplomatic solution, a British military Task Force was despatched to retake the islands. When diplomacy failed, military action was quickly successful and the Falklands were back under British control by June 1982.

The electorate was impressed. Few British or European leaders would have fought for the islands. By doing so, Margaret Thatcher laid the foundation for a much more vigorous and independent British foreign policy during the rest of the 1980s. When the General Election came in June 1983, the government was re-elected with its Parliamentary majority more than trebled (144 seats).

1983-1987: Second term

Thatcher with US President Ronald Reagan

The second term opened with almost as many difficulties as the first. The government found itself challenged by the miners' union, which fought a year-long strike in 1984-85 under militant leadership. The labour movement as a whole put up bitter resistance to the government's trade union reforms, which began with legislation in 1980 and 1982 and continued after the General Election.

The miners' strike was one of the most violent and long lasting in British history. The outcome was uncertain, but after many turns in the road, the union was defeated. This proved a crucial development, because it ensured that the Thatcher reforms would endure. In the years that followed, the Labour Opposition quietly accepted the popularity and success of the trade union legislation and pledged not to reverse its key components.

In October 1984, when the strike was still underway, the Irish Republican Army (IRA) attempted to murder Margaret Thatcher and many of her cabinet by bombing her hotel in Brighton during the Conservative Party annual conference. Although she survived unhurt, some of her closest colleagues were among the injured and dead and the room next to hers was severely damaged. No twentieth-century British Prime Minister ever came closer to assassination.

British policy in Northern Ireland had been a standing source of conflict for every Prime Minister since 1969, but Margaret Thatcher aroused the IRA's special hatred for her refusal to meet their political demands, notably during the 1980-81 prison hunger strikes.

Her policy throughout was implacably hostile to terrorism, republican or loyalist, although she matched that stance by negotiating the Anglo-Irish Agreement of 1985 with the Republic of Ireland. The Agreement was an attempt to improve security cooperation between Britain and Ireland and to give some recognition to the political outlook of Catholics in Northern Ireland, an initiative which won warm endorsement from the Reagan administration and the US Congress.

The economy continued to improve during the 1983-87 Parliament and the policy of economic liberalisation was extended. The government began to pursue a policy of selling state assets, which in total had amounted to more than 20 per cent of the economy when the Conservatives came to power in 1979. The British privatisations of the 1980s were the first of their kind and proved influential across the world.

Where possible, sale of state assets took place through offering shares to the public, with generous terms for small investors. The Thatcher Governments presided over a great increase in the number of people saving through the stock market. They also encouraged people to buy their own homes and to make private pension provision, policies which over time have greatly increased the personal wealth of the British population.

The left wing of the Conservative Party had always been uneasy with its chief. In January 1986, enduring divisions between left and right in the Thatcher Cabinet were publicly exposed by the sudden resignation of the Defence Minister, Michael Heseltine, in a dispute over the business troubles of the British helicopter manufacturer, Westland. The fallout from the 'Westland Affair' challenged Margaret Thatcher's leadership as never before. She survived the crisis, but its effects were significant. She was subjected to heavy criticism within her own party for the decision to allow US warplanes to fly from British bases to attack targets in Libya (April 1986).There was talk of the government and of its leader being 'tired', of having gone on too long.

Her response was characteristic: at the Conservative Party's annual conference in October 1986, her speech foreshadowed a mass of reforms for a third Thatcher Government.With the economy now very strong, prospects were good for an election and the government was returned with a Parliamentary majority of 101in June 1987.

1987-1990: Third term

Thatcher at Prime Minister's Questions

The legislative platform of the third-term Thatcher Government was among the most ambitious ever put forward by a British administration. There were measures to reform the education system (1988), introducing a national curriculum for the first time. There was a new tax system for local government (1989), the Community Charge, or 'poll tax' as it was dubbed by opponents. And there was legislation to separate purchasers and providers within the National Health Service (1990), opening up the service to a measure of competition for the first time and increasing the scope for effective management.

All three measures were deeply controversial. The Community Charge, in particular, became a serious political problem, as local councils took advantage of the introduction of a new system to increase tax rates, blaming the increase on the Thatcher Government.(The system was abandoned by Margaret Thatcher's successor, John Major, in 1991.) By contrast, the education and health reforms proved enduring. Successive governments built on the achievement and in some respects extended their scope.

The economy boomed in 1987-88, but also began to overheat. Interest rates had to be doubled during 1988. A division within the government over management of the currency emerged into the open, Margaret Thatcher strongly opposing the policy urged by her Chancellor of the Exchequer and others, of pegging the pound sterling to the Deutschmark through the European Exchange Rate Mechanism (ERM). In the process, her relations with her Chancellor of the Exchequer, Nigel Lawson, were fatally damaged, and he resigned in October 1989.

Behind this dispute there was profound disagreement within the government over policy towards the European Community itself. The Prime Minister found herself increasingly at odds with her Foreign Secretary, Sir Geoffrey Howe, on all questions touching European integration. Her speech at Bruges in September 1988 began the process by which the Conservative Party — at one time largely 'pro-European' — became predominantly 'Euro-sceptic'.

Paradoxically, all this took place against a backdrop of international events profoundly helpful to the Conservative cause. Margaret Thatcher played her part in the last phase of the Cold War, both in the strengthening of the Western alliance against the Soviets in the early 1980s and in the successful unwinding of the conflict later in the decade.

The Soviets had dubbed her the 'Iron Lady' — a tag she relished — for the tough line she took against them in speeches shortly after becoming Conservative leader in 1975. During the 1980s she offered strong support to the defence policies of the Reagan administration.

But when Mikhail Gorbachev emerged as a potential leader of the Soviet Union, she invited him to Britain in December 1984 and pronounced him a man she could do business with.She did not soften her criticisms of the Soviet system, making use of new opportunities to broadcast to television audiences in the east to put the case against Communism.Nevertheless, she played a constructive part in the diplomacy that smoothed the break-up of the Soviet Empire and of the Soviet Union itself in the years 1989-91.

Thatcher resigning

By late 1990, the Cold War was over and free markets and institutions vindicated. But that event triggered the next stage in European integration, as France revived the project of a single European currency, hoping to check the power of a reunited Germany. As a result, divisions over European policy within the British Government were deepened by the end of the Cold War and now became acute.

On November 1 1990 Sir Geoffrey Howe resigned over Europe and in a bitter resignation speech precipitated a challenge to Margaret Thatcher's leadership of her party by Michael Heseltine. In the ballot that followed, she won a majority of the vote. Yet under party rules the margin was insufficient, and a second ballot was required. Receiving the news at a conference in Paris, she immediately announced her intention to fight on.

But a political earthquake occurred the next day on her return to London, when many colleagues in her cabinet — unsympathetic to her on Europe and doubting that she could win a fourth General Election — abruptly deserted her leadership and left her no choice but to withdraw. She resigned as Prime Minister on November 28 1990. Henry Collingridge succeeded her and served in the post until he resigned a year later amid a fabricated scandal. He was succeeded by Francis Urquhart, who went on to beat Thatcher's record as the longest serving prime minister in modern history by one day.

Legacy

Political impact

The statue of Thatcher at Parliament Square

Thatcherism represented a systematic and decisive overhaul of the post-war consensus, whereby the major political parties largely agreed on the central themes of Keynesianism, the welfare state, nationalised industry, and close regulation of the economy, and high taxes. Thatcher generally supported the welfare state while proposing to rid it of abuses.

She promised in 1982 that the highly popular National Health Service was "safe in our hands". At first, she ignored the question of privatising nationalised industries; heavily influenced by right-wing think tanks, and especially by Sir Keith Joseph, Thatcher broadened her attack. Thatcherism came to refer to her policies as well as aspects of her ethical outlook and personal style, including moral absolutism, nationalism, liberal individualism, and an uncompromising approach to achieving political goals.

Thatcher defined her own political philosophy, in a major and controversial break with the one-nation conservatism of her predecessor Edward Heath, in a 1987 interview published in Woman's Own magazine:

I think we have gone through a period when too many children and people have been given to understand "I have a problem, it is the Government's job to cope with it!" or "I have a problem, I will go and get a grant to cope with it!" "I am homeless, the Government must house me!" and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations.

Overview

The number of adults owning shares rose from 7 per cent to 25 per cent during her tenure, and more than a million families bought their council houses, giving an increase from 55 per cent to 67 per cent in owner-occupiers from 1979 to 1990. The houses were sold at a discount of 33–55 per cent, leading to large profits for some new owners. Personal wealth rose by 80 per cent in real terms during the 1980s, mainly due to rising house prices and increased earnings. Shares in the privatised utilities were sold below their market value to ensure quick and wide sales, rather than maximise national income.

The "Thatcher years" were also marked by periods of high unemployment and social unrest, and many critics on the left of the political spectrum fault her economic policies for the unemployment level; many of the areas affected by mass unemployment as well as her monetarist economic policies remained blighted for decades, by such social problems as drug abuse and family breakdown. Unemployment did not fall below its May 1979 level during her tenure, only falling below its April 1979 level in 1990. The long-term effects of her policies on manufacturing remain contentious.

Critics on the left describe her as divisive and say she condoned greed and selfishness. Thatcher did "little to advance the political cause of women" either within her party or the government. Some British feminists regarded her as "an enemy". June Purvis of Women's History Review says that, although Thatcher had struggled laboriously against the sexist prejudices of her day to rise to the top, she made no effort to ease the path for other women. Thatcher did not regard women's rights as requiring particular attention as she did not, especially during her premiership, consider that women were being deprived of their rights. She had once suggested the shortlisting of women by default for all public appointments yet had also proposed that those with young children ought to leave the workforce.

Thatcher's stance on immigration in the late 1970s was perceived as part of a rising racist public discourse, which Martin Barker terms "new racism". In opposition, Thatcher believed that the National Front (NF) was winning over large numbers of Conservative voters with warnings against floods of immigrants. Her strategy was to undermine the NF narrative by acknowledging that many of their voters had serious concerns in need of addressing. In 1978 she criticised Labour's immigration policy to attract voters away from the NF to the Conservatives. Her rhetoric was followed by an increase in Conservative support at the expense of the NF. Critics on the left accused her of pandering to racism.

Thatcher in 1979

Reputation

Thatcher's tenure of 11 years and 209 days as British prime minister was the longest since Lord Salisbury (13 years and 252 days, in three spells) and the longest continuous period in office since Lord Liverpool (14 years and 305 days). This record was beaten by Francis Urquhart in July 2003 (11 years, 6 months, 4 weeks, and 2 days).

Thatcher in 1983

Having led the Conservative Party to victory in three consecutive general elections, twice in a landslide, she ranks among the most popular party leaders in British history in terms of votes cast for the winning party; over 40 million ballots were cast in total for the party under her leadership. Thatcher was the first prime minister since the Earl of Liverpool in 1820 to lead a party into three successive electoral victories.

Thatcher in 1987

Her electoral successes were dubbed a "historic hat trick" by the British press in 1987. In 1999, Time deemed Thatcher one of the 100 most important people of the 20th century. She was chosen as the Woman of the Year 1982, the year in which the Falklands War began under her command and resulted in the British victory.

In contrast to her relatively poor average approval rating as prime minister, Thatcher has since ranked highly in retrospective opinion polling and, according to YouGov, is "see[n] in overall positive terms" by the British public. Just after her death in 2001, according to a poll by The Guardian, about half of the public viewed her positively while one third viewed her negatively.

Political offices
Preceded by James Callaghan	Prime Minister of the United Kingdom 4 May 1979 – 28 November 1990	Succeeded by Henry Collingridge