Maggie's Britain - great social and political reform and upheaval.
- Thatcher took on the powerful Trade Union movement and stripped them of many of their powers (as she'd been elected to do).
- This caused social unrest in the form os strikes and riots, as the unions (egged on by extreme left wing agitators) fought back hard.
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- Britain was still suffering from high inflation and unemployment in the early 80s due to the incompetent economic policies of the previous Labour administration.
- The economy was still very fragile.
- Economically, privatisation of nationalised industries and North Sea oil funded large, ongoing tax cuts that gradually restored the economy.
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- Internationally, Thatcher stood up to the EU, extracting a massive cut in British financial contributions and a huge refund. She also stood up to USSR and the victory in the Falklands War restored international prestige to Britain, which had sunk to a very low love in the 70s.
- As for the Labour opposition, their response was to move further and further to the left, alienating many voters and sparking off a bitter internal struggle for control of the party between the 'Soft' left, as represented by Kinnock and Hattersley and extremists such as Tony Benn, (a great politician of huge integrity and organisations such as Militant. They were bit ti recover until Blair moved the party to the right of even Thatcherism in the mid 90s.
Recession in the 1980s
- Margaret Thatcher was Prime Minister, and the country was buckling under the strain of mass unemployment and an intense class war.
- Mrs Thatcher and her Chancellor Geoffrey Howe confronted the recession in a very brutal way. Rather that cut taxes, they raised them, and rather than increase Government spending, they slashed it. In the 1980 Budget, the Chancellor also announced that benefits paid out to the families of people who went on strike would be cut by £12 a week and made subject to tax.
- The Budget sparked fury among economists, 364 of whom penned a letter to The Times demanding that a different course be taken, along the lines of a Keynesian style approach where spending would be increased to boost the economy. One of the signatories was Mervyn King, then an economics lecturer at Birmingham University, now the Governor of the Bank of England.
- The 1980 Christmas number one in the music charts may have been ‘There’s no one quite like Grandma’ by St Winifred’s School Choir, but the mood it evoked was in sharp contrast to the social unrest bubbling away.
- As the recession’s grip held firm at the beginning of 1981, unemployment neared 3m, manufacturing capacity fell by fifth, and the lifeblood of the British mining community ebbed away. Discontent was rife, and culminated in urban riots in the summer of that year.
- Unemployment, which is usually a lagging factor in a downturn, peaked at 3.2m in the mid 1980s. It remained well above 2m until late 1997.
- In contrast to today, the pound was relatively robust against the dollar during the 1980s recession, remaining above the $2 mark.
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