The essay has been divided by 3 parts, equally with the 3 periods of time that Mrs Thatcher campaigning to be in power. Each part I’d state the key events and policies circulated by Mrs Prime Minister and the Conservatives Party and also the opposition party’s activites, together to conclude the factors that contributed to Mrs Thatcher’s 3 consecutive General Election victory and her 11 years in power.
Why did Tories/ Margaret Thatcher win the 1979 General Election?
The period of time from 1974 to 1979 is when the two dominant British political parties were under controlled by their two leaders: Jim Callaghan for Labour and Margaret Thatcher for Conservatives. The February 1974 General Election saw a hung parliament as a result and Labour was the largest party (Owen and Howe, 2011). The leader of the Labour party was Harold Wilson. In April 1976, he was succeeded by Jim Callaghan, who was the first and remain the only Prime Minister to hold the role in all ‘three offices of state’, which are Home Secretary of State and Chancellor of the Exchequer (1964 – 70), Foreign Secretary of State from 1974 before holding office at number 10 Downing Street (BBC News, 2001). Meanwhile, Margaret Thatcher successfully challenged Edward Heath for leadership of the Conservatives party to be the first woman to lead a major political party and the Tories had got its very first woman leader. The economy at such this point wasn’t an alliance with the Labour government to leave them in a well-controlled position. After the quadrupling of oil prices in 1973-74 of the O.P.E.C’s oil prices crisis, inflation rose sharply to over 24% and the sterling pound (£) reached an alert point in the international currency market. During 1971 and 1974, inflation had been arrived at a rate of 9.3%, but had a peak of 27% in 1975. Between 1974 and 1978 the average of inflation was 17.3% and later on fell down to 9.3% in 1979 (Visitor6 Website, 2012). To keep up and to survive with costly goods in such an inflationary era, it’s inevitable for all the workers to claim for higher wages to live with the situation. Greater paid amount for workers was campaigned by the unions, in fact, they would favour a rise in wages up to 22% for fireman, 14% for bakers, despite the limit of 5% of the government policy (ibid, 2012). In consequence, the strikes began. Strikes carried on by truck drivers and oil tanker drivers, garbage collection services stopped in Liverpool, resulting in rubbish all over and pile up on the streets. Even worse, the grave-diggers went on strike, dead bodied were not buried, making this the most depressed chaos ever and making the government looks like it couldn’t cope with the situation (ibid, 2012). This, was so-called, the ‘Winter of Discontent’, which was a significant factor contributing to the victory of the Conservative in the 1979 General Election, as the Labour government was seen with nothing to rely on. Another thing to note is that, by April 1976, after two days Callaghan holding the Prime Minister Office, the Labour party has lost its majority to be a minority government of 1, as a result of the resignation of the formal Cabinet Minister John Stonehouse, and the 2 backbenchers left to establish a new ‘Scottish Labour Party’ (BBC On This Day Website, 2005). This was also a miscalculation of Callaghan, when he had the right to call an election by October 1978, but he didn’t as the economic performance started to get a little bit better, and then the ‘Winter of Discontent’ (WoD) appeared. Meanwhile, the Conservatives were getting every single opportunity out of their excellent media campaign. Mrs Thatcher was more than welcome for the attraction of the media and to provide journalists lots of ‘photo-opportunities’. The Tories also managed to get an efficient use of TV broadcast, and also the influence of their poster ‘Labour isn’t working’ delivered by advertising agency Saatchi and Saatchi, imitating a queue of jobless people (Bunn, 2010a). The Conservative manifesto advanced greatly away from the Keynesian economic policies which had been adopted since 1945 by all government. Instead of applying demand management like previously, Mrs Thatcher adopted the idea of monetarism policies, which stated by the Chicago economist Milton Friedman that money supply is the main reason rising the rate of inflation, hence for the government to be able to control inflation, public expenditure shall be cut down and the amount of money circulated in the business flow should be well under controlled, although all of this would lead to further unemployment rate (Owen and Howe, 2011). To be focused on lowering the rate of inflation, the Tories reckon that small inflation would create greater developing environment for firms and businesses, therefore providing greater demand for jobs because of the non-fluctuation condition in the market (Visitor6 Website, 2012). Other policies including leaving the market opened and free movement of the economy, breaking down the excessive power of the Trade Unions and tax cuts. The Conservatives party now seen as ‘the party of Law and Order’, giving Britain a new begin to escape from the so long chaos (Owen and Howe, 2011). The 1979 General Election results putting the Conservative back into power after with the total win of 339 seats, winning a solid majority of 44, marking the first of the 4 consecutive Genereal Election victories in the following years of the Tories, and Margaret Thatcher became the first woman to be the Prime Minister and serving on number 10 Downing Street (Bunn, 2010a).
Thatcher’s first term in power: 1979 – 1983
The first two years of the Thatcher Government were a remarkably difficult time in British politics. As stated above, Thatcher was massively inspired by the idea of monetarism, which believe the biggest demon of government is inflation, and to be in a good hand of controlling inflation rate, government need to control the flow of money supply (EconomicHelp Website, 2007). Indirect taxes were increased, government expenditure was lowered down and higher interest rate as government was fighting inflation (ibid, 2007). In the first Budget introduced in 1979, income tax rates were cut by 3%, from 33% to 30% but VAT was increased to a single rate of 15%. Interest rates were kept high, even raised up to 14%. The result was an economic recession (1979 – 81) in which manufacturing productivity fell by nearly 20% (BBC Budget Website, 1997). The subsequent rise in unemployment made it difficult to reduce government spending, which, as percentage of GDP, increased until 1983, although thereafter it fell noticeably. On the other hand, as a result of the recession, inflation fell significantly. By 1982, it was at 5% which was the average of the OECD and then reached its bottom for almost 20 years at 2.6% in 1986 (Owen and Howe, 2011).
The turning point for the Conservatives Party during this tough period before the 1983 General Election was the Falkland War. Four months before the Falkland conflict, Mrs. Thatcher was the most unpopular Prime Minister on record according to the early 1980s opinion polls (Owen and Howe, 2011). After the island attack, her popular ratings increased from 41% in April and to 56% in May 1982 and when the invasion was finally over in June, her approval ratings was favourably reached 59% (IPSOS Website, 2007). Nevertheless, even before the Falkland factor happened, the economic was slightly recovered from the recession, backing up Thatcher’s image, and also there was obviously public support behind the government’s decision of fighting and getting back the island. The Economist conducted a survey showed that 83% seen the decision of sending the naval task force to Falkland was right, followed by 85% in a later week and 85% in early May (ibid, 2007). Hence, the Prime Minster was doing what the people also desired to do and expected to do so, and with the successful achievement of the invasion’s outcomes, Mrs Thatcher was seen as a ‘strong and patriotic leader’. Adulations were honoured to Mrs Prime Minister by the tabloid press across the nation (Owen and Howe, 2011). There was clearly the ‘Falkland factors’ behind the Conservative win on the 1983 General Election, but there’s others factor supported Thatcher too, such as what was happening on the side of the opposition party. The Labour was divided, and appeared to middle-class voters as extremely left-wing and too close to the Unions. Their Manifesto for the 1983 election, later describes as “the longest suicide note in history” by Sir Gerald Kaufman, was the most left-wing manifesto ever as believed (Rayner, 2013). The party wished to exit the EEC by the end of the next term and non-business with all nuclear weapons. It would not let the market to be left freely and pledged to more state intervention in the economy with the association of the Trade Unions in paying and other decisions. It also wanted to nationalised again all the assets to the state, including the bank of England. Finally, the party was saying to end one of the most popular policies of the Tories, “The Right to Buy” council tenant houses (Bunn, 2010b).
Adding all of the elements stated above, the result was a second victory for Margaret Thatcher and a landline winning for the Conservative Party with 397 seats and an overall majority of 144 (Bunn, 2010b). With that massive amount of majority, Thatcher would be able to perform even more ‘radical reforms’ in her next following term in power (Rayner, 2013).
The second term in power: 1983 – 1987
Not long after the 1983 election, Thatcher in 1984 attended a summit of European Union leaders at Fontainebleau, France. She has been ‘wrangling’ many years to claim for the rebate that Britain should have earned as contributing a massive amount to the budget of the EEC, for example Britain was the most imported agriculture-products country and paid heavily for the Common Agriculture Policy (CAP)’s financial statement (Zijlstra, 2005). “I want my money back” – with this legendary saying at the summit, Mrs Thatcher put British Euroscepticism into words clearer than anyone else before. The event was seemed to be successful for the Iron Lady, but on the other hands, distanced herself with other EU leaders in the area (Owen and Howe, 2011).
The key event associated with Mrs Thatcher’s second term in office is undoubtedly the Miners Strike Defeat (1984 – 85). Since 1974, Mrs Prime Minister believed a strike could be expected, as when the miners had heavily tackled down the Heath’s government. In addition, in the 1983 general election, the Labour party again was unable to be in power with Michael Foot being its leader, she said a strike would naturally arise (Craig, 2013). The National Coal Board was planning the strike by shutting down many of the ‘uneconomic pits and stem financial losses running into billions’ (ibid, 2013). Ian MacGragor was appointed as the board’s chairman by Mrs Thatcher, foreseeing the strike and stocking a massive amount of coal at power stations with orders and support from Nigel Lawson and later Peter Walker, the Energy Secretaries of State (ibid, 2013). The miners’ leader, Arthur Scargill, was negotiating with the Colonel Gaddafi of Libya and Mikhail Gorbachev for sufficient fund for the prolonging strike. He was said to have got £150,000 from Lybia, but by forecasting the strike long ahead, Mr Gorbachev agreed not to support the miners after Thatcher’s successful persuasion (ibid, 2013). By the end of 1984, the miners and their families facing financial shortage and poverty, returned to work and the strike was seen as admitting its defeat. This Miners’ Strike event was a direct hit on the Trade Unions, weakening its power, and as Thatcher wrote in her memoirs, “What the strike’s defeat meant was that Britain could not be made ungovernable by the Fascist Left” (ibid, 2013).
The 1980s also can be clearly seen as the era of privatisation. The nationalised assets had gradually been selling to private buyers and investors: British Telephone (1984), British Gas (1986), British Airways (1987), British Steel (1988). Electricity privatisation begun in the 90s, British Rail was privatised by Major later on. The Thatcherite support for privatisation was that it created more options and competitions in the market, hence provide the best service and offer best prices to customers, and also contribute extra funds to the Treasury (Owen and Howe, 2011). Approximately £440m was raised by the privatising progress by 1987, which is the perfect condition for government to allow further direct tax cuts. Despite the increase in inflation rate, these were seen as the ‘economic feel-good factors’, putting the Conservatives Party on another term in power, but turn out to be Thatcher’s last election victory (ibid, 2011).
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