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Y113: Britain 1930–1997

Thatcher and the end of consensus 1979–1997: election victories, monetarism, privatisation and the Right to Buy

  • 3 things to know
  • Unit group 1

Overview

Recall questions on the Conservative victories of 1979, 1983 and 1987, wets and dries, monetarism and its effects, supply-side measures, privatisation, the Right to Buy and trade union legislation.

What you need to know

Answer each one before you reveal it.

Your recallNot started
Numbers

What was the difference between the wets and the dries in Thatcher's Cabinet?

Numbers

Explain monetarism as the government applied it after 1979.

Evaluation

Why did the Conservatives win in 1979?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    Why did the Conservatives win in 1979?

    Model answer

    The Winter of Discontent destroyed Labour's claim to manage the unions, rising unemployment and prices undermined its record, and Conservative advertising pressed the message that Labour was not working while offering tax cuts, council house sales and firm law on strikes.

  2. 2

    Account for the scale of the Conservative victories of 1983 and 1987.

    Model answer

    Victory in the Falklands and falling inflation restored the government's standing despite mass unemployment, and the opposition vote split between a left-wing Labour Party and the new Alliance, producing majorities of about 144 and just over 100 on well under half the popular vote.

  3. 3

    What was the difference between the wets and the dries in Thatcher's Cabinet?

    Model answer

    The dries, such as Howe, Joseph and later Lawson and Tebbit, backed monetarist discipline whatever the cost in unemployment, while the wets, such as Prior, Gilmour and Pym, wanted a return to reflation and consensus; by the 1981 reshuffle the wets had largely been removed.

  4. 4

    Explain monetarism as the government applied it after 1979.

    Model answer

    Inflation was treated as a monetary phenomenon, so the Medium Term Financial Strategy set falling targets for money supply growth and borrowing, enforced by high interest rates and tight budgets; the 1981 budget raised taxes in the middle of a recession and 364 economists publicly protested, but the government did not change course.

  5. 5

    What were the economic effects of the early Thatcher years?

    Model answer

    Inflation fell from over twenty per cent in 1980 to under five per cent by 1983, but manufacturing output fell by roughly a fifth, and unemployment passed three million in 1982 and stayed above that level for years, concentrated in the industrial north, Scotland and Wales.

  6. 6

    Give the main supply-side measures of the Thatcher governments.

    Model answer

    Income tax was cut, with the top rate reduced from 83 to 60 per cent in 1979 and to 40 per cent in 1988 while indirect taxation rose, exchange controls were abolished, the City was deregulated in the Big Bang of 1986, and union power and some welfare entitlements were curtailed to make markets work more freely.

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