Made by:

Juan Pablo García Godoy

THATCHERISM

Consensus

Economic Decline

Thatcherism

Thatcher´s Mandate

Labour Conversion

Legacy

A New Consensus?

THATCHERISM

Britain by the end of the WWII was economically bad.

It was one of the top three superpowers, behind the UnitedStates and the Soviet Union.

The 1945 Labour government was largely responsible for whatis called the 'post-war consensus‘ were Britain would emergedas a model social democracy, combining planning andcollectivism with civil liberties.

CONSENSUS

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The major features of domestic politics included:

Governments accepted a commitment to maintain fullemployment. Ministers would use their levers, such as cuttingtaxes and boosting state spending, to increase the level ofeconomic activity.

Acceptance and some encouragement of the role of the tradeunions. Governments recognised and consulted them regularlyon workplace relations and economic policy.

The mixed economy, with a large role for state ownership ofthe utilities (such as gas, electricity, coal, rail, etc) andintervention and planning in the economy.

CONSENSUS

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The welfare state. The object of the national insurance systemand the National Health Service was to provide an adequateincome and free health when a family’s income was hit by, forexample, sickness, old age, unemployment or death of themain breadwinner. The services were provided out of generaltaxation, or insurance, and represented social citizenship.

There was a belief that government could play a positive rolein promoting greater equality through social engineering, forexample, by progressive taxation, redistributive welfarespending, comprehensive schooling and regional policies.

CONSENSUS

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The parties agreed on:

The transition of the empire to the British Commonwealth.

British membership of the North Atlantic Treaty Organisation(Nato).

Nuclear weapons, (regarded as a mark of being a majorpower).

That Britain should join the European Community.

CONSENSUS

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During the 1960s and 1970s, the main parties competed toreverse Britain’s relative economic decline.Virtually all European countries, except for Britain, had so-called 'economic miracles‘, primarily because their economywas aid by the United States with their policy of the MarshallPlan. Britain was often described as the 'sick man of Europe'.The targets for blame included:Failure to invest in new plant and machineryRestrictive working practices and outdated attitudes on theshop floor ('us and them').Amateurish management.Loss of markets.Rise of competition.

ECONOMIC DECLINE

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Governments of both parties turned to incomes policies as ananswer to inflation. They tried to agree a 'norm' for annualwage rises with the unions, but it became a dramatic failure.

There was an extra importations of the products, rising theinflation.

International Monetary Fund's 'rescue' in 1976.

ECONOMIC DECLINE

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The 'Winter of Discontent' in 1979 demonstrate that thegovernment was unable to control and maintain stability to thecountry and its people, as well as their unions.There were two responses to this failure. From the right, the newideas of economists Friedrich Hayek and Milton Friedman -advocating monetarism, a greater scope for markets and limitedgovernment - won out over the ideas of the left for more stateownership and protection of industry following a withdrawal fromthe European Community.

ECONOMIC DECLINE

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Thatcherism actually evolved as circumstances allowed, andwas helped by the failures of the opposition.

Because of Labour’s divisions and its left-wing policies.

THATCHERISM

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The fate in the 1980s of the five features of the post-war consensus:

Trade unions now operated in a tighter legal framework, including: therequirement for pre-strike ballots; the end of the 'closed shop' (unionmembership as a precondition of employment in a specific industry);and making unions liable for damages incurred in i l legal strikes. Theywere hardly consulted by the government and their influence waned inpart because of the abandonment of income policies and risingunemployment.The spread of privatisation of the major uti l i t ies altered the balance ofthe mixed economy. Gas, electricity, telephony, Brit ish Airways andlater Brit ish Rail were all privatised. There was also a huge sale totenants of council housing.The government abandoned its commitment to full employment, statingthis was the responsibil ity of employers and employees, and accordedpriority instead to keeping inflation low.Welfare state benefits were increasingly subject to means-testing.Government insisted that it could no longer be a universal provider.More should be left to the market, the voluntary sector and self-help.

THATCHERISM

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The election of 1979 was more of a rejection of Labour thanan endorsement of Thatcherism.

The recapture of the Falkland Islands from Argentina in 1982help to Thatcher´s government as it made her be seen as astronger leader to claims in domestic politics, improve thepublic standing of the government and stand up for thenation.

THATCHER´S MANDATE

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Thatcher was respected but not liked by the British public.

Surveys showed limited support for many of Thatcher’s values.Professor Ivor Crewe’s 'The Crusade that Failed' noted thelack of support for Thatcher’s policies on 'tax-and-spend' andreplacing the dependency culture with an enterprise culture.And there was greater approval for a more equal society andfor social and collective provision of welfare as againstThatcher's vision of people looking after themselves.

THATCHER´S MANDATE

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Successive heavy general election defeats graduallyconvinced Labour to accept much of the new settlement, withsuccessive tranches of Thatcher's policies.

Some of these policies, including sales of cheap shares inprivatising utilities, cutting direct taxes, and trade unionreforms, were widely popular.

Globalisation ask for national governments to pursue‘prudent’ economic policies. Labour gradually accepted theneed to prioritise economic stability, low inflation andborrowing, and encourage private enterprise.

The decline of the working class and the increasingly middleclass electorate was crucial for electoral victory as Britainunderwent demographic and economic change.

LABOUR CONVERSION

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Britain's relationship with the US remains dominant, as itbecame important for the issue of going to war.

Thatcher made a strong premiership. Since then, it can beseen that Blair and his successor Gordon Brown have tointervene more directly in the departments of government.

England is becoming more centralised.

LEGACY

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Local government has continued its post-1945 decline. In theprovision of public services, there are even more constraints onlocal autonomy via targets and reviews.For this reason, the journalist Simon Jenkins claims John Major,Tony Blair and Gordon Brown are ‘Sons of Thatcher’.But the Thatcher era also meant a massive under-investment ininfrastructure, particularly railways, roads, schools anduniversities.Inequality increased. The winners included much of the corporatesector and the City, and the losers, much of the public sector andmanufacturing.

LEGACY

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But the convergence of many policies between the parties hasoccurred in two stages. Firstly Labour accepted the Thatchersettlement. This encompassed:Making the control of inflation a priority, but not havingincome policies.Giving a greater role to markets, including privatisation.Flexible labour markets, but with a place for the minimumwage and the 'social chapter' (part of the 1991 MaastrichtTreaty on European Union relating to workers' rights and othersocial issues).Lower direct rates of tax.Means-testing for some welfare benefits.Restoring the up-rating of old age pensions and wage rises.

A NEW CONSENSUS?

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Secondly the Conservatives accepted the Blair settlement. Thishas involved:Accepting the government’s planned public spending totals,notably for health and education.Bank of England independence.

Many of Labour's constitutional reforms.In effect, the two main parties have accepted a neo-liberalmodel of policy as a means of coping with the constraints andopportunities of globalisation. Both also accept the need forreform of public services and for greater value for money.

A NEW CONSENSUS?

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Some of the major social changes over the past 50 years includethe loss of empire and of world power status, a weaker sense ofcollective British identity, an increase in immigration, first fromthe newer Commonwealth countries and now from new EU states,and the growth of multiculturalism and changes in the balance ofthe population ( the decline of manual work, the increase in thenumber of women in the workforce and rising numbers of theelderly).Society has become more individualistic.

CONCLUSION

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London has gained greatly from the globalising economy,while the north remains heavily dependent on public spendingfor jobs and economic activity.

And despite rising living standards and greater opportunity formany, society has become more 'broken' and an 'underclass'has emerged. Indicators of these trends are divorce, whichhas increased twentyfold, the prison population, which hasincreased sevenfold, and the fact that Britain has more birthsoutside marriage and teenage mothers than any otherEuropean country.

CONCLUSION

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