Margaret Thatcher: Policies of the Thatcher Premiership

Margaret Thatcher led a government that set out to take a sledgehammer to the post-war consensus and therefore drove through a large number of radical policy proposals, helped by healthy parliamentary majorities. Here are some of the most high profile policies during the Thatcher premiership.

Economic Policy - Monetarism & Dealing with a Recession

Based on the monetarist theories of Milton Friedman, the base interest rate was raised to 30% in 1979, in order to try and bring down inflation. Despite this, inflation peaked at 20% in 1980. (Contemporary comparisons: interest rate 0.5% and inflation 2.6% as of summer 2018).

In 1981, Chancellor Geoffrey Howe acted against the received wisdom of Keynesian economic by raising taxes and cutting spending during a recession. Unemployment increased but the policy was successful on its own terms as it did bring down inflation, which the government viewed as more important.

Home Ownership

The Housing Act, 1980, allowed council tenants to purchase council homes at a significantly discounted price. This was a manifesto pledge in 1979 to establish the UK as a “property-owning democracy”.

By 1987 more than 1 million homes had been sold to their tenants under the scheme which proved very popular with those tenants who taken a step onto the housing ladder. The policy had been opposed by Labour, on the grounds that it was depleting council housing stock, but this assisted a shift in voting behaviour among the “aspirational” working class towards voting Conservative.

Privatisation and Deregulation

Thatcher's government privatised a number of state-run companies, including key public utilities. In 1984 they privatised British Telecom with over 2 million people buying shares in the company. Further companies followed such as British Gas in 1986. Note that the most controversial privatisation of all – British Rail – was actually privatised under Thatcher’s successor, John Major.

In 1986, the government introduced a massive deregulation of banks, financial services and the City of London. This proved successful in establishing London as a global centre for financial services, although is blamed by some for the malpractice in banking that would ultimately result in the banking crisis of 2008.

Trade Union Legislation

The 1980 Employment Act outlawed “secondary action” by trade unions. “Secondary action” or sympathy strikes was the idea of one set of workers coming out on strike to support another, rather than because they had a specific industrial dispute of their own. This act also greatly restricted the number of people who could legally be on a picket line (although this law was often broken during strikes in the 1980s, such as the Miners’ Strike in 84/85 and the Wapping print workers’ strike in 1985 as a picket line of six individuals was deemed entirely ineffective in such workplaces.

The 1982 Employment Act further limited the powers of trade unions, banning “political strikes” and limiting the grounds upon which workers could go on strike. The law also made unions liable for damages arising from industrial action, allowing the government to seize funds of up to 250,000 pounds

Defence

In 1982, the government purchased new nuclear weapons, establishing the Trident nuclear submarine programme. (At the time, the Labour Party was in favour of unilateral nuclear disarmament, providing a very clear difference between the two main parties).

Ireland

In 1985, Margaret Thatcher signed the Anglo-Irish Agreement with the Irish government, seeking to take a joint role in ending the conflict in Northern Ireland, although the agreement lacked support in both communities in Northern Ireland.

Education

The 1988 Education Reform Act was a major piece of legislation that introduced marketisation principles into state education. Among its many provisions were the introduction of SATs tests, league tables and the national curriculum.

Taxation and Local Government

In 1986, the government abolished the Greater London Council (GLC). The council had a left-wing administration, led by Ken Livingstone, and abolishing it further reduced the influence of left-wing socialists on British public life.

In 1989, Margaret Thatcher introduced the “poll tax” in Scotland before rolling it out to the rest of the country. Really called the “community charge”, this tax replaced local rates and was replaced by council tax. It was based on the idea of all individuals paying the same amount, rather than households paying based on the value of their property. People living alone saw their local taxes reduce, but larger households saw sometimes very significant increases in their tax bill. The charge was deeply unpopular. Scotland being seen as a “guinea pig” for the controversial popular further reduced support for the Conservative Party in Scotland and increased support for independence.