Callaghan to Thatcher 1975 - 1990 HIS3M


Labour 75-79

Wilson was Prime Minister until 1976, when he stepped down and James Callaghan succeeded.

1- Leadership. Wilson was very liked following previous time in office, Callaghan was a 'safe pair of hands' as a successor with experience and good trade union links.
2- 1976 IMF crisis - handled well and economic recovery after.
3- 1977 LibLab pact strengthened government. (12 Lib Mps vote for gov. in facour of callaghan pursuing devolution to wales and scotland)
4- North sea oil - economic improvements
5- Personality of Thatcher in opposition - not well liked.

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Labour 75-79

Wilson was Prime Minister until 1976, when he stepped down and James Callaghan succeeded.


1- Labour disunity. Left wingers (such as Tony Benn and Michael Foot) didn't want to put pressure on the unions. 1975 - Steep tax rises.

3- Surge of inglation due to rush of wage rises, government in a weak position to stand up to unions (emphasising disunity within Labour)

2- Economic issues, return of stagflation. IMF crisis, emergency loan to Britain of 3 billion with huge spending cuts - although handled well was seen as a humiliation reinforcing the image of Britain in economic decline.

3- No decisive outcome of devolution - opposing opinion to Thatcher and conservatives (emphasising the end of consensus)

4- Election timing, had Callaghan called an election in 1978 it is debated that he may have won, however he did not.

5- The Winter of Discontent - Industrial unrest. Lorry and Train drivers went on strike, porters, dustmen and grave diggers caused public unrest with images of rubbish and postponed funerals sweeping the media. Strikes in 79 showed loss of control by the unions. Workers switching loyalty from Labour.

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The Triumph of Thatcher

Key factors to Thatchers success as a Prime Minister:

1- Force of Personality, drive and confidence in a pessimistic Britain. Political presentation, Saatchi and Saatchi (public relations firm) helped her to polish her image

2- Willie Whitelaw, deputy leader. His loyalty was neccesary to win over Heathites within the party keeping unity.

3- Economic Policy, against big government and consensus politics. Monetarism.

4- Keeping her options open, no specific policy, an advantage as she could not be critisised as Heath had been for his U-Turn

"The country feels in its bones when it is time for a change. It was just such a mood that determined the result of the 1979 election" John Cole, 1995 BBC political editor

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The First Thatcher Government 1979-83


 1- The Economy, Monetarism. Chancellor Geoffrey Howe intended to reduce government spending, cut taxes and reduce inflation. Increased unemployment and sharp contraction of industrial production. 1980 Serious recession, inflation at 15% and unemployment over 2 million. Methods intended to reduce inflation by government control on the money supply short term made the recession worse. Steel production dropped, many plants closed down.

2- Fear of social tensions. Major rioting in inner cities, London, Liverpool, Manchester. Not a positive attitude

3- Party Divisions, wider with several 'wets' (wets, willing for consensus and against monetarism, drys, for monetarism and against consensus) being forced to resign or sacked

4- Lack of popularity, government was hugely unpopular, 1981 opinion poll at just 27%

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The First Thatcher Government 1979-83


 1- The Economy, North sea oil flow helped to ease balance of payments crisis. Inflation was reduced. (but at the expense of recession and unemployment)

2- Weaknesses in Opposition, Labour Divisions, reduced opposition. Revival of the Liberals meant Labour was not the only alternative option. Coverage in media was hostile. Key personalities broke away within the SDP in 81. Labour in decline. (SDP = allied with the Liberals, by 4 leading Labour oppositions Michael Foot lead, won key seats, a possible opposition until the Falklands)

3- Foreign Policy, the Falklands Factor. Beginning of 1982, Thatcher was hugely unpopular, unemployment nearing 3 million, support for the SDP was fastly growing. Military regime in Argentina invaded the Falkland Islands, against appeasement Thatcher responded with full scale military effort to recover the island. A gamble, that was successful. Wave of patriotism through the country expressed positively in the media.

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Thatchers Second Government, 1983-87


1- Privatised industry meant more money for government. 1986 Local Government Act abolishing most local authorities set up by Heath, increasing powers of central government.

2- Miners Strike, union powers curbed. Stocks of coal and oil built up (to avoid energy crisis like 1973) Miners strike to object pit closures. Arthur Scargill hadn't gained full support (didn't hold a strike ballott) and miners who disapproved of his radical tactics drifted back to work. Police were more experienced after 1981 disturbances and so had better equipment and tactics to stop a strike. Scargill hadn't won over moderates and hadn't got full support of Labour Leadership, and so Thatcher won.

3- Mastery of the press, thanks to press secretary Bernard Ingham.

4- Northern Ireland, battle against republicanism. IRA prisoners in belfast wanted 'Special Category' status, so went on hunger strike. 10 Died. Strike was called off. 1984 Brighton Bomb, failed to injure Thatcher but killed 5 and caused outrage in Britain. 1985 Anglo-Irish agreement, with a permanent intergovernmental cooperation signed.

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Thatchers Second Government 1983-87


1- Increase in central government and private sector meant damage to local public sectors.

2- Miners strike, lead to Anti-Thatcher radicallism.

3- Labour began to reunify. New leader Neil Kinnock restored party dicipline and prioritised party modernisation. SDP-Liberal alliance lost momentum. SDP shrank as labour rebuilt.

4- Economic - 'Big Bang' of 1986 lead to a stock market crash in 87.

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Thatchers Third Government 1987-1990


1- 'Lawson Boom' Thatchers policies lead to a rapid expansion of the economy.

Weaknesses/Thatchers Downfall:

1- 'Lawson Boom' lead to a balance of payments crisis. Increased inflation, higher than it had been in 1980.

2- Thatcher was becomming politically isolated. Her use of Alan Waters as her econmic adviser angered Nigel Lawson who resigned. Geoffrey Howe alienated by her moving him freom foreign office to a lesser post, later resigned. Young and inexperienced John Major filled 3 cabinet posts in 18 months, unstable.

3- Poll Tax. Thatcher wanted to replace financing loval government through homeowners paying rates, idea of individuals paying a community charge. Bitterly unpopular with public opinion and press. Anti-poll tax riots, millions worth of damage.

4- Labour recovery evident. Thatcher hadn't won enough on ballots, resigned after advised by each of her ministers.

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Thatchers Legacy


1- Enabled 18 years of conservative dominance.
2- Broke the excessive union powers
3- Played a key role in winning the Cold War
4- Restored national pride and prestive
5- Made Britain a property-owning democracy
6- Restored relationship with US


1- Enabled Labour to next have 11 years in power
2- Politicised the police and polarised society
3- Alienated Britain's partners in Europe
4- Caused unneccesary damage to Britain's industrial base
5- Encouraged private greed at the expense of public good.

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