(11) Thatcherism good or bad?

(11) Thatcherism good or bad?

1. Thatcherism was a good thing

   • De-regulation
     • Council tenants had the right to buy their own houses. (1 million sold by 1987 raising £18 billion). Owner-occupation increased from 55-75% of the market between 1980-90. Meant more skilled workers could own their own homes.
     • De-regulation of the banks and building societies enabled more people to take out mortgages and to borrow more to do so.
     • Creation of competition within public services (e.g. internal market in the NHS) increased efficiency and productivity
   • Privatisation
     • Provided treasury with large additional funds (e.g. £7000 million 1988-9) E.g. sale of BP raised £6 billion, British Gas £7 billion Gave more ordinary people chance to be shareholders – increased from 3 – 9 million 1979-90. Fuelled a growth in GDP
   • North Sea Oil
     • Brought in large amounts of revenue (billions)
   • Taxation
     • Significant reduction in income tax rates (e.g. rates for a single person declined from 25.0 to 20.3 % of gross income between 1979-90)
   • Employment
     • Number of self-employed increased to 1.5 million – from 8-15% of employed people. Increase in real wages.

2. Thatcherism was a bad thing

   • De-regulation
     • Councils lost their housing stock, causing a lack of supply of affordable housing for future tenants.
     • Increased mortgage lending fuelled a housing and consumer spending bubble that crashed in the early 1990s.
   • Privatisation
     • Funds raised were one-offs. Privatisations failed to create competition because the companies were often so big they were simply private monopolies.
   • North Sea Oil
     • Government sold long-term asset for short term gain. Revenues disguised lack of economic growth.
   • Taxation
     • Overall tax bill not greatly altered because of rises in indirect taxes (NI, VAT, local rates) e.g. VAT increased from 6.5 to 8.0 % of gross income 1979-90.
   • Employment
     • Employment in manufacturing fell by 2m during the 1980s creating unemployment hotspots, particularly in the industrial north.

3. For

   • Made GB face economic reality
   • Encouraged initiative and entrepreneurship
   • Created conditions for growth
   • Created new jobs
   • Advanced popular capitalism
   • Developed notion of accountability

4. Against

   • Encouraged individualism and greed
   • Ignored the needs of the more vulnerable in society
   • Caused unemployment
   • Led to a recession

5. How far was 1983-87 a political success?

   • Successes
     • Second government was more Thatcherite – leading ‘Wets’ were either removed (Pym) or demoted (Walker) and replaced with loyal Thatcherites e.g. Lawson (Chancellor), Howe (Foreign Secretary)
     • Gained support from skilled workers – largely due to sale of council houses. Tories had a 7% lead over Labour among skilled workers in the 1987 election.
     • ‘special relationship’ with Reagan – inflated her international standing
     • ‘Iron lady’ reputation secured – particularly after she continued the Tory Party conference after an IRA bomb in 1984.
   • Failures
     • Westland Affair – exposed lack of unity within the government, made a powerful enemy (Michael Heseltine), made Thatcher vulnerable to being accused of bullying and of being subservient to the US.
     • Loss of support from middle class liberals – 1987 only 1/3 of university-educated voters supported the Tories.