BPG FINALS 2020 – Thatcherism
, Conservative Governments 1970-74 and 1979-97
Questions:
1. What best explains Thatcherism? To what extent was it a repudiation of Heath’s government
1970-74? To what extent was it a coherent ideology?
2. Was Thatcherism more ‘new’ or ‘old’ Conservatism? Which ideological label best
characterises the governments 1979-97? Or were they pragmatic rather than ideological?
Was there a tension between Thatcher’s short-term tactics and her overall strategy?
3. Were Conservative governments powerful in the 1980s but weak in the 1990s? If so, why?
4. How innovative were Conservative governments 1979-97?
5. How much did the Conservative Party / its policies change 1970-97, and for what reasons?
Elections / Leaders:
• Conservative leaders post-WW2:
o Sir Winston Churchill 1940-55 (resigned just before the 1955 election).
o Sir Anthony Eden 1955-57 (resigned due to ill health and due to embarrassment
caused by military action over the 1956 Suez Crisis).
o Harold Macmillan 1957-63 (resigned following his controversial 1962 Cabinet
shuffle – the ‘Night of the Long Knives’ in which 1/3 of the Cabinet was dismissed
▪ and due to his credibility being affected by the 1963 Profumo Affair).
o Sir Alec Douglas-Home 1963-65 (resigned a year after losing the 1964 election, but
ensured his successor would be the first to be elected by secret ballot).
o Edward Heath 1965-75 (lost in a 1975 leadership election called by Thatcher).
o Margaret Thatcher 1975-90 (challenged for the leadership by Michael Heseltine
following Geoffrey Howe’s resignation over Europe and the poll tax – despite
winning the first ballot, she was encouraged by her Cabinet to resign).
o Sir John Major 1990-97 (resigned following landslide defeat in the 1997 election).
• For the 1970, February 1974, and October 1974 elections, see notes above.
• 1979 election:
o Called after Callaghan’s government lost a vote of confidence by 1 vote (following
the Winter of Discontent and defeat of the Scottish devolution referendum).
o Thatcher’s Conservatives ousted Callaghan’s Labour to win a majority of 44 seats.
This was the first of 4 consecutive election wins for the Conservatives, and Thatcher
became Europe’s first elected female head of government.
o Led to the Labour Party shifting even further to the left in the 1980s (believing their
defeat had been due to a lack of ideological commitment), leading to the 1981 SDP
break-off and enabling the Conservatives to move further to the right.
• 1983 election (following the Falklands War 1982):
o Incumbent Conservatives increased their majority to 144 seats (the most decisive
election victory since Attlee’s Labour in 1945).
o Returned 61% of MPs on 42.4% of the vote
o Share of vote fell slightly from 1979 (from 44 per cent to 42.4 per cent), they won
an overall majority of 144 seats (Lab narrowly held on to second – 27.6 vs Alliance
25.4)
• 1987 election:
o Incumbent Conservatives lost 21 seats but retained a large majority.
• 1992 election:
o Surprise 4th consecutive win for the Conservatives (now under Major) – a narrow
majority whilst receiving the largest number of votes in British electoral history.
, • 1997 election:
o Blair’s Labour won a landslide 418 seats (Conservatives won 165), the most seats
the Party has ever held.
o Huge Conservative-Labour swing of 10.2% on a national turnout of 71% (the last
national vote where turnout exceeded 70% until the 2016 EU Referendum).
Heath’s Government 1970-74:
Overview:
• PM from 1970-1974
• Harrison: Heath exemplified the philosophy of modernization
• Heath’s early policies were right-wing (some have said proto-Thatcherite):
o Cut income tax in his first budget.
o Lifted £2bn of corporation tax in his second budget.
o Successfully restricted the Post Office strike of 1971.
o Passed the Industrial Relations Act 1971 without consulting the trade unions
▪ required state registration of unions, made collective agreements legally
enforceable, and limited ‘wildcat’ (unofficial) strikes.
• He is most remembered for a number of U-turns, having come into office on a platform of a
largely self-regulating, free enterprise economy:
1. Special Budget of July 1971:
▪ Abolished financial targets for nationalised industries, and provided a fiscal
stimulus to the economy through a £100m public works programme.
▪ 1972-74 actually ended up being the peak of Keynesianism, despite the 1970
‘A Better Tomorrow’ manifesto promising lower taxes and spending.
▪ It seems that Heath was a pragmatist conservative, not a neoliberal
ideologue, so was unwilling to implement neoliberal policies at the cost of
unemployment, discontent, and unpopularity.
2. Nationalisations:
▪ Nationalised the aero-engine division of Rolls Royce in 1971 when it went
bankrupt (because its production was necessary for the armed forces).
▪ Bailed out Upper Clyde shipbuilders in 1972 after a Communist-led sit-in.
3. Industry Act 1972:
▪ The government promised to promote and subsidise industry, which was a
precursor to Heath’s “dash for growth”.
▪ Resulted from the announcement that unemployment had broken 1m in
January 1972, and the humiliation of the miners’ strike in February 1972.
4. Introduced a statutory incomes policy in 1972:
▪ This was despite the Conservatives having campaigned in opposition to
abolish Labour 1966 incomes policy, and bringing back free collective
bargaining without government intervention in 1970.
▪ Introduced against the backdrop of an international oil crisis which
quadrupled energy prices, but was unsuccessful in controlling inflation – it
peaked at 26.9% in the 12 months to August 1975.
▪ Led to repeated strikes throughout 1974.
• Heath was persuaded to call the “Who governs Britain?” election of February 1974 as a
result of the ongoing industrial crises (in particular the miners’ strike) and the three-day
week – Labour emerged as the largest Party despite the Conservatives winning the most
votes and, when the Conservative coalition talks failed (the Liberals could not uphold a
defeated government), Wilson formed a minority Labour government.
, • He then fought the October 1974 election on a consensus platform, having lost faith in his
own government to govern, and was replaced by Thatcher as Conservative Leader in 1975.
Despite the U-turns, there were some achievements:
• Long-lasting achievement – Britain’s entry into the EEC in 1973 (it was the Conservatives
who were the pro-EEC/EC/EU Party compared to Labour in the 1970s), achieving 3 goals:
avoiding war in Europe, economic stimulus, and a world role for the UK post-empire.
• Short-lived achievements:
o Power-sharing in Northern Ireland (shattered shortly after February 1974 election).
o Reorganisations of health and local government.
o Industrial Relations Act 1971 (until repealed by Wilson in 1974).
• And we must remember the external constraints on Heath’s government:
o His Chancellor (Macleod) had a heart attack and died within a month.
o Rise of militant unionism and the student movement – law and order was declining,
and Heath had to impose five states of emergency.
o Three major shocks to the world economy:
▪ Nixon ended the Bretton Woods Agreement (which had fixed world
currencies against the Dollar) in August 1971, creating instability.
▪ Huge rise in commodity prices when Heath was seeking to curb inflation.
▪ OPEC oil crisis in 1973, which quadrupled energy prices.
Thatcher’s criticism of Heath:
• Despite his 1970 ‘A Better Tomorrow’ manifesto promising lower taxes and spending,
Heath was ‘wet’ and U-turned on this (e.g. promising a £100m public works programme in
the July 1971 Special Budget), and 1972-74 ended up being the peak of Keynesianism.
• Harrison: Thatcher had no time for the mid-1970s defensive constitutional reform package
– devolution along with PR – which some Conservatives hoped would restrain socialist govs
• Defence of Heath:
o The country was not yet ready for this right-wing assault – it needed to experience
the failures of the Heath government and stagflation under Labour 1974-79. Had
Heath been more right-wing, the Conservatives would probably have performed
even worse in the two 1974 elections.
o He set the tone for Thatcherism, promising what she actually delivered:
▪ His first Conference speech as PM promised a “quiet revolution”,
challenging the post-war consensus.
▪ The abandonment of the 1970 manifesto (based on free-market economic
policies) led to the creation of the ‘Selsdon Group’ in 1973, whose policies
influenced the Thatcher and Major governments.
Thatcher’s ascendancy:
• In the 1975 leadership election, she won 130 votes vs. 119 for Heath, due to:
o Her ‘conviction politician’ personality – the fact she was not Heath.
o The fact she was willing to challenge Heath when others would not (she was the
only candidate in the first round – Whitelaw entered too late in the second round).
o The skill of her campaign manager (Neave) – he deliberately underplayed her
strength ahead of the first ballot, thus encouraging MPs to vote for her who would
otherwise have abstained. This momentum carried her through the second ballot.
• She did not appear radically right-wing at this point:
o She was the daughter of a grocer from Grantham.
