The term Thatcherism emanated from the belief in a combination of free market policies and upholding family values. With the emergence of Thatcherism, the role of the
Friedrich (2014) presented a convincing argument against the British arguing that they would create an oppressive society where the citizenry would not have freedom by abandoning liberalism and individualism. He further argued that socialism had its roots in exaltation of state above its citizens and central planning of economic policies. For him it was undemocratic to impose the will of a minority upon the majority though central planning. The centralised planning systems would then propagate propaganda to manipulate the people into believing that their interests were represented in the objectives and goals of the state. (Naison 2013, p.7) clearly pointed out that diplomats and politicians have their own interests and identities which are not always shared by those whom they supposedly represent. So when the country had been crippled by industrial strife, Margaret Thatcher sought for an alternative. Borrowing Also from Friedman she introduced a number of policies to revert the decline that was taking place in the industry.
Monetary control policies
This meant the government would control money supply in the economy by charging high interest rates on borrowing. This aimed at reducing the inflation that was escalating at a very alarming rate. Measures were also introduced to cut on public spending and also reduction of government spending on social services like health, housing and education. A Funds Agency was set up to control money spent on opening and closing of schools. She also framed and changed the debate as some people had argued for closing down of private schools.
Taxation
The government introduced policies to reduce taxes they charged especially on high income earners. There was a cut of about 25% from what the previous government had imposed on income tax for low and middle-income earners while for high income earners, the tax was reduced from about 80% to 40%. In addition, focus shifted to indirect tax and as a result value added tax was increased progressively by about 15%. This had the effect of leading to unemployment and short term rise in inflation. Thatcher was critised sharply by her predecessor, Edward Heath and other economists. Despite criticisms and even confrontations asking her to resign, thatcher was firm and proceeded with implementation of the policies. By 1982 however inflation rates dropped and interest rates were also allowed to fall. This was proof of the relationship and influence between money supply and inflation (Middleton 2010, p. 428,).
Privatisation of nationalised industries
This is a move that Thatcher argued was aimed at empowering the people. She encouraged entrepreneurship. State-owned industries in Britain were sold off to private investors. Such industries included British Airways, the national freight company, British telecom, British gas, and water and electricity companies. This process led to improvement of performance in the industries as it enhanced competition among the now privately owned industries. Consumers also benefited from the efficiency and reduced prices since some of the industries had operated as monopolies when they were under government control. Regulatory bodies were however established to compensate for loss of government’s direct control.
Financial deregulation measures were also introduced in 1979 to encourage foreign investment into the British economy. Britain’s exchange controls were also abolished by the chief financial officer, Geoffrey Howe to allow Britain invest in external markets. Furthermore the Big Bang removed restrictions on London’s stock exchange in 1968. These two policies facilitated tremendous growth in the service and finance sections of the economy. This compensated for the loss that was being experienced by the manufacturing sector and therefore encouraged Thatcher to push through with her policies.
Sale of tenant’s council housing
This involved widening the ownership of homes. It was to increase privatisation of public holdings of houses. John Redwood however thought it as populist capitalist strategy as most of the houses were sold to Margaret Thatcher’s supporters. Some members of the public took advantage of shares while some despite the reduced prices were still not able to buy houses.
Curbing trade unions power
The British prime minister accused trade unions of causing unrests through strikes. This she considered an abuse of democracy and impacted negatively on the economy of the state. She therefore sought to reduce their powers through legislation. A number of trade unions held strikes to oppose the move by Thatcher. The biggest opposition was from the miners and thatcher referred to them as enemies from within comparing them with Argentina in the Falklands war. The miners group gave up after striking for one year without any positive responses from the government. In fact they were blamed for the decreasing value of the pound, a significant number of coal mines were closed down by the government and larger number were privatised. This lead to a major loss of employment by those whore employed at the mine (Dorling 2010, p. 87,). Industrial action was also declared constitutionally illegal. Eventually opposition to trade union policy declined. (Siltala 2013, p. 478,) argued that Heaths tenure had been devastated by a series of massive industrial strikes and so Thatcher’s aim was to see to it that the same does not recur in her government. She also imposed postal ballots while abolishing workplace ballots.
Abolishment of local councils
Six metropolitan county councils and the Greater London council were abolished in 1986 as the government implemented its 1983 manifesto. The greater London council was abolished because of increasing its spending for reasons not deemed sufficient enough. It was also argued that giving power to local councils would make them accountable to the people. The six councils had misused public funds by using the already scarce resources for projects that were not considered productive for the state and cost taxpayer’s money. Evans (2013) says the save the GLC campaign was estimated to have cost about £10 million. One of the councils invested in fighting for custody of the children of lesbian mothers. Thatcher upheld Victorian family values and was opposed to homosexuality and deviant behaviour. This had the effect of making such councils vulnerable to Thatcher’s decisions and policies.
The policies introduced by thatcher were not implemented unopposed especially by the members of government she had inherited who were supporters of her predecessor, Heath. She however with support from some members of her government had far reaching influence in the political and social sphere of Britain.
References
Campbell, J., 2011. Margaret Thatcher Volume Two: The Iron Lady. Random House.
Dorling, D., 2010. New Labour and inequality: Thatcherism continued? Local Economy.
Evans, E.J., 2013. Thatcher and Thatcherism. Rout ledge.
Hayek, F.A. and Caldwell, B., 2014. The road to serfdom: Text and documents: The definitive edition. Routledge.
Middleton, R., 2010. British monetary and fiscal policy in the 1930s. Oxford Review of Economic Policy, 26(3), pp.414-441.
Siltala, Juha. "New public management the evidence-based worst practice?" Administration & Society 45.4 (2013): 468-493. Sutcliffe-Braithwaite, F., 2012.
