2 The extent to which state intervention and the public sector were ‘rolled-back’
Introduction Corporatism
- Debate over the extent to which Thatcher ‘rolled back’ the - Aspect of state intervention rejected by thatcher
public sector that grew throughout the 20 th century - Style of economic management in which the government
- Some historians suggest Thatcher ultimately failed to negotiated with business representatives and unions to
prevent the growth of the state throughout the 1980s due to create a common policy on pay, prices or industrial
the increased cost of welfare and law and order development
- It can also be argued the state intervened less in the - Tebitt argued corporatism was undemocratic and a key
economy and in people’s lives than it had done previously characteristic of fascist governments
and allowed market forces and individual freedom to - Thatcher argued it stifled innovation and economic growth
determine whether industries succeeded or not by giving the government control over crucial sectors of the
economy
1 Thatcherism and state intervention - Effectively abandoned corporatism from 1979
- Committed to strengthen some aspects of the state while - Abandoned prices and income policies once she was elected
‘rolling back others’ – dramatic break with the approach that dominated
- Believed a free market would ensure economic liberty government since the 1960s
o Involved ‘rolling back the state’ in 4 areas, which - Government effectively stopped negotiating with the major
Thatcher believed were essential in the creation of a free unions regarding economic policy
market that would end inefficiency and inflation as well - From 1979, the government increasingly left prices, wages,
as boosting economic growth investment and production to the free market
o End Keynesianism – to end the state intervention and
management of the British economy Keynesianism
o End corporatism - 1945 to late 1970s – government used Keynesian economics
o Cut government spending on welfare to intervene in the economy, cutting taxes and increasing
o Cut direct taxes spending to stimulate the economy during periods of low
- Wanted a strong state to protect political and economic growth
freedom which was threatened by - Rejected by Thatcher as she believed it led to high inflation
o The Soviet Union (communist superpower that wanted to rates, interfering with the natural rhythms of the free market
dominate Britain) – a strong state with a powerful army - Government still intervened with the economy
and nuclear weapons were necessary to protect British o Howe’s budgets cut spending to try reduce inflation
freedom o Lawson cut taxes and manipulated interest rates to
o Powerful unions who wanted to use undemocratic stimulate growth and control inflation
methods to increase wages - Keynesianism did not mean the end of economic
o Terrorists, hooligans and muggers who threatened management, the government intervened in different ways,
violence – a strong state with a large police force and using monetary policy, rather than taxation and spending, to
security service was necessary to protect citizens influence the direction of the economy
, 2 The extent to which state intervention and the public sector were ‘rolled-back’
Union policy
- Government tried to control the unions rather than
negotiating with them Law and order
- Required extensions of state power – the government - Significantly extended police powers
passed laws to control aspects of union activity e.g. The - Introduced ‘sus laws’ in Operation Swamp of 1981 allowing
Trade Union Act of 1984 forced unions to call a secret ballot police to stop and search black people in London – justified
and win a majority of support prior to starting strike action through arguments most muggings were committed by
- Weakened British unions black people, and therefore police had a duty to target the
- Government’s commitment to confronting powerful unions black community
was evident during the miner’s strike of 1984-85 - Police operated a continuous policy of stop and search in
Brixton leading to the Brixton Riots, which led the
Defence government to argue the police needed more powers
- Commitment to defending British interests through - Consequently, they passed a series of laws to enlarge police
strengthening the state’s defence policy and resolve to act powers e.g. The Police and Criminal Evidence Act of 1984
powerfully when challenged by other nations expanded police stop-and-search powers, giving them new
- For example, in 1980, she bought Trident, a new generation rights to search cars and enter properties
of nuclear weapons, from the USA – buying, installing and - Also upgraded police equipment, particularly riot shields,
maintaining Trident cost the government £7.5 billion plastic bullets and CS gas
annually for the first 15 years, but she believed this would - Policing the free market
deter a Soviet invasion or nuclear strike o Some historians argue harsher policing was a necessary
- Defence spending increased by 20% between 1979-86, part of the creation of the free market – Thatcher’s free-
indicating she was not committed to rolling back the state in market policies created mass unemployment, widening
all areas social inequality, leading to more crime
- Began to reduce spending in the mid-1980s as the costs of o The state therefore responded by increasing police
Trident were far greater than initially estimated – 1984-86 powers to control the discontent the new economic
18,000 troops were made redundant policies created
- Defence spending fell by 7% from 1979-89 due to cuts in
conventional forces and continued to fall between 1990 and Secret state and civil liberties
1997 - Commitment to using government power to protect
- Major continued Thatcher’s protective spending on nuclear traditional freedoms
weapons while cutting Britain’s conventional forces meaning - Specifically concerned traditional liberties could be
defence spending fell by 12% between 1990 and 1997 undermined by Russian communist infiltration
- Prepared to limit some freedoms to protect others, as shown
