Thatcher became prime minister on 4 May 1979. Arriving at
Downing Street she said, paraphrasing the
Prayer of Saint Francis: In office throughout the 1980s, Thatcher was frequently referred to as the most powerful woman in the world.
Domestic affairs Minorities Thatcher was the Opposition leader and prime minister at a time of increased racial tension in Britain. During the
1977 local elections,
The Economist commented: "The Tory tide swamped the smaller partiesspecifically the
National Front, which suffered a clear decline from last year." Her standing in the polls had risen by 11% after a 1978 interview for
World in Action in which she said "the British character has done so much for democracy, for law and done so much throughout the world that if there is any fear that it might be swamped people are going to react and be rather hostile to those coming in", as well as "in many ways add to the richness and variety of this country. The moment the minority threatens to become a big one, people get frightened". In the 1979 general election, the Conservatives had attracted votes from the NF, whose support almost collapsed. In a July 1979 meeting with Foreign Secretary
Lord Carrington and Home Secretary William Whitelaw, Thatcher objected to the number of Asian immigrants, in the context of limiting the total of
Vietnamese boat people allowed to settle in the UK to fewer than 10,000 over two years.
The Queen As prime minister, Thatcher met
Queen Elizabeth II weekly to discuss government business, and their relationship came under scrutiny. states:
Michael Shea, the Queen's press secretary, in 1986 leaked stories of a deep rift to
The Sunday Times. He said that she felt Thatcher's policies were "uncaring, confrontational and socially divisive". Thatcher later wrote: "I always found the Queen's attitude towards the work of the Government absolutely correct [...] stories of clashes between 'two powerful women' were just too good not to make up."
Economy and taxation Thatcher's economic policy was influenced by
monetarist thinking and economists such as
Milton Friedman and
Alan Walters. Together with her first
chancellor,
Geoffrey Howe, she lowered direct taxes on income and increased indirect taxes. She increased interest rates to slow the growth of the money supply, and thereby lower inflation; introduced cash limits on public spending and reduced expenditure on social services such as education and housing. Cuts to higher education led to Thatcher being the first
Oxonian post-war prime minister without an honorary doctorate from Oxford University after a 738–319 vote of the governing assembly and a student petition. Some Heathite Conservatives in the Cabinet, the so-called "
wets", expressed doubt over Thatcher's policies. The
1981 England riots resulted in the British media discussing the need for a
policy U-turn. At the 1980 Conservative Party conference, Thatcher addressed the issue directly with a speech written by the playwright
Ronald Millar, that notably included the following lines: Thatcher's job approval rating fell to 23% by December 1980, lower than recorded for any previous prime minister. As the
recession of the early 1980s deepened, she increased taxes, despite concerns expressed in a March 1981 statement signed by 364 leading economists, which argued there was "no basis in economic theory [...] for the Government's belief that by deflating demand they will bring inflation permanently under control", adding that "present policies will deepen the depression, erode the industrial base of our economy and threaten its social and political stability". in 1982 By 1982 the UK began to experience signs of economic recovery; inflation was down to 8.6% from a high of 18%, but unemployment was over 3 million for the first time since the 1930s. By 1983 overall economic growth was stronger, and inflation and mortgage rates had fallen to their lowest levels in 13 years, although manufacturing employment as a share of total employment fell to just over 30%, with total unemployment remaining high, peaking at 3.3 million in 1984. During the 1982 Conservative Party Conference, Thatcher said: "We have done more to roll back the frontiers of socialism than any previous Conservative Government." She said at the Party Conference the following year that the British people had completely rejected
state socialism and understood "the state has no source of money other than money which people earn themselves [...] There is no such thing as public money; there is only taxpayers' money." By 1987 unemployment was falling, the economy was stable and strong, and inflation was low. Opinion polls showed a comfortable Conservative lead, and
local council election results had also been successful, prompting Thatcher to call a general election for 11 June that year, despite the deadline for an election still being 12 months away. The
election saw Thatcher re-elected for a third successive term. Thatcher had been firmly opposed to British membership of the
Exchange Rate Mechanism (ERM, a precursor to
European Economic and Monetary Union), believing that it would constrain the British economy, despite the urging of both Chancellor of the Exchequer
Nigel Lawson and Foreign Secretary Geoffrey Howe; in October 1990 she was persuaded by
John Major, Lawson's successor as chancellor, to join the ERM at what proved to be too high a rate. Thatcher reformed local government taxes by replacing
domestic rates (a tax based on the nominal rental value of a home) with the
Community Charge (or poll tax) in which the same amount was charged to each adult resident. The new tax was introduced in Scotland in 1989 and in England and Wales the following year, and proved to be among the most unpopular policies of her premiership. Public disquiet culminated in a 70,000 to 200,000-strong demonstration in London in March 1990; the demonstration around
Trafalgar Square deteriorated into
riots, leaving 113 people injured and 340 under arrest. The Community Charge was abolished in 1991 by her successor, John Major. It has since transpired that Thatcher herself had failed to register for the tax and was threatened with financial penalties if she did not return her form.
Industrial relations Thatcher believed that the
trade unions were harmful to both ordinary trade unionists and the public. She was committed to reducing the power of the unions, whose leadership she accused of undermining parliamentary democracy and economic performance through strike action. Several unions launched strikes in response to legislation introduced to limit their power, but resistance eventually collapsed. Only 39% of union members voted Labour in the 1983 general election. According to the BBC's political correspondent in 2004, Thatcher "managed to destroy the power of the trade unions for almost a generation". The
miners' strike of 1984–85 was the biggest and most devastating confrontation between the unions and the Thatcher government. In March 1984 the
National Coal Board (NCB) proposed to close 20 of the 174 state-owned mines and cut 20,000 jobs out of 187,000. Two-thirds of the country's miners, led by the
National Union of Mineworkers (NUM) under
Arthur Scargill, went on strike in protest. However, Scargill refused to hold a ballot on the strike, having previously lost three ballots on a national strike (in January and October 1982, and March 1983). This led to the strike being declared illegal by the
High Court of Justice. Thatcher refused to meet the union's demands and compared the miners' dispute to the
Falklands War, declaring in a speech in 1984: "We had to fight the enemy without in the Falklands. We always have to be aware of the enemy within, which is much more difficult to fight and more dangerous to liberty." Thatcher's opponents characterised her words as indicating contempt for the working class and have been employed in criticism of her ever since. After a year out on strike in March 1985, the NUM leadership conceded without a deal. The cost to the economy was estimated to be at least £1.5 billion, and the strike was blamed for much of the
pound's fall against the US dollar. Thatcher reflected on the end of the strike in her statement that "if anyone has won", it was "the miners who stayed at work" and all those "that have kept Britain going". The government closed 25 unprofitable coal mines in 1985, and by 1992 a total of 97 mines had been closed; those that remained were privatised in 1994. The resulting closure of 150 coal mines, some of which were not losing money, resulted in the loss of tens of thousands of jobs and had the effect of devastating entire communities. Strikes had helped bring down Heath's government, and Thatcher was determined to succeed where he had failed. Her strategy of preparing fuel stocks, appointing hardliner
Ian MacGregor as NCB leader and ensuring that police were adequately trained and equipped with riot gear contributed to her triumph over the striking miners. The number of stoppages across the UK peaked at 4,583 in 1979, when more than 29 million working days had been lost. In 1984, the year of the miners' strike, there were 1,221, resulting in the loss of more than 27 million working days. Stoppages then fell steadily throughout the rest of Thatcher's premiership; in 1990, there were 630 and fewer than 2 million working days lost, and they continued to fall thereafter. Thatcher's tenure also witnessed a sharp decline in trade union density, with the percentage of workers belonging to a trade union falling from 57.3% in 1979 to 49.5% in 1985. In 1979 up until Thatcher's final year in office, trade union membership also fell, from 13.5 million in 1979 to fewer than 10 million.
Privatisation The policy of
privatisation has been called "a crucial ingredient of Thatcherism". After the 1983 election, the sale of state utilities accelerated; more than £29 billion was raised from the sale of nationalised industries, and another £18 billion from the sale of council houses. The process of privatisation, especially the preparation of nationalised industries for privatisation, was associated with marked improvements in performance, particularly in terms of
labour productivity. Some of the privatised industries, including gas,
water and electricity, were
natural monopolies for which privatisation involved little increase in competition. The privatised industries that demonstrated improvement sometimes did so while still under state ownership.
British Steel Corporation had made great gains in profitability while still a nationalised industry under the government-appointed MacGregor chairmanship, which faced down trade-union opposition to close plants and halve the workforce. Regulation was also significantly expanded to compensate for the loss of direct government control, with the foundation of regulatory bodies such as
Oftel (
1984),
Ofgas (
1986), and the
National Rivers Authority (
1989). There was no clear pattern to the degree of competition, regulation, and performance among the privatised industries. In most cases, privatisation benefited consumers in terms of lower prices and improved efficiency but results overall have been mixed. Not all privatised companies have had successful share price trajectories in the longer term. A 2010 review by the free-market think tank the Institute of Economic Affairs states: "[I]t does seem to be the case that once competition and/or effective regulation was introduced, performance improved markedly [...] But I hasten to emphasise again that the literature is not unanimous." Thatcher always resisted
privatising British Rail and was said to have told Transport Secretary
Nicholas Ridley: "Railway privatisation will be the
Waterloo of this government. Please never mention the railways to me again." Shortly before her resignation in 1990, she accepted the arguments for privatisation, which her successor John Major implemented in 1994. The privatisation of public assets was combined with
financial deregulation to fuel economic growth. Chancellor Geoffrey Howe abolished the UK's exchange controls in 1979, which allowed more capital to be invested in foreign markets, and the
Big Bang of 1986 removed many restrictions on the
London Stock Exchange.
Northern Ireland In 1980 and 1981,
Provisional Irish Republican Army (PIRA) and
Irish National Liberation Army (INLA) prisoners in Northern Ireland's
Maze Prison carried out
hunger strikes to regain the status of political prisoners that had been removed in 1976 by the preceding Labour government.
Bobby Sands began the 1981 strike, saying that he would fast until death unless prison inmates won concessions over their living conditions. Thatcher refused to countenance a return to political status for the prisoners, having declared "Crime is crime is crime; it is not political". Nevertheless, the British government privately contacted republican leaders in a bid to bring the hunger strikes to an end. After the deaths of Sands and nine others, the strike ended. Some rights were restored to paramilitary prisoners, but not official recognition of political status. Violence in Northern Ireland escalated significantly during the hunger strikes. Thatcher narrowly escaped injury in an IRA
assassination attempt at a Brighton hotel early in the morning on 12 October 1984. Five people were killed, including the wife of minister
John Wakeham. Thatcher was staying at the hotel to prepare for the Conservative Party conference, which she insisted should open as scheduled the following day. She delivered her speech as planned, though rewritten from her original draft, in a move that was supported across the political spectrum and enhanced her popularity with the public. On 6 November 1981, Thatcher and
Taoiseach (Irish prime minister)
Garret FitzGerald had established the Anglo-Irish Inter-Governmental Council, a forum for meetings between the two governments. On 15 November 1985, Thatcher and FitzGerald signed the Hillsborough
Anglo-Irish Agreement, which marked the first time a British government had given the Republic of Ireland an advisory role in the governance of Northern Ireland. In protest, the
Ulster Says No movement led by
Ian Paisley attracted 100,000 to a rally in Belfast,
Ian Gow, later assassinated by the PIRA, resigned as
Minister of State in
HM Treasury, and all 15 Unionist MPs resigned their parliamentary seats; only one was not returned in the subsequent
by-elections on 23 January 1986.
Environment Thatcher supported an active
climate protection policy; she was instrumental in the passing of the
Environmental Protection Act 1990, the founding of the
Hadley Centre for Climate Research and Prediction, the establishment of the
Intergovernmental Panel on Climate Change, and the ratification of the
Montreal Protocol on preserving the
ozone. Thatcher helped to put
climate change,
acid rain and general pollution in the British mainstream in the late 1980s, calling for a global treaty on climate change in 1989. Her speeches included one to the
Royal Society in 1988, followed by another to the
UN General Assembly in 1989. However, by the 2003 release of her book
Statecraft, she had revised her opinion on climate change.
Foreign affairs Thatcher appointed Lord Carrington, an ennobled member of the party and former
Secretary of State for Defence, to run the
Foreign Office in 1979. Although considered a "wet", he avoided domestic affairs and got along well with Thatcher. One issue was what to do with
Rhodesia, where the white minority had determined to rule the prosperous, black-majority breakaway colony in the face of overwhelming international criticism. With the 1975
Portuguese collapse in the continent, South Africa (which had been Rhodesia's chief supporter) realised that their ally was a liability; black rule was inevitable, and the Thatcher government brokered a peaceful solution to end the
Rhodesian Bush War in December 1979 via the
Lancaster House Agreement. The conference at Lancaster House was attended by Rhodesian prime minister
Ian Smith, as well as by the key black leaders:
Muzorewa,
Mugabe,
Nkomo and
Tongogara. The result was the new Zimbabwean nation under black rule in 1980.
Cold War Thatcher's first foreign-policy crisis came with the 1979
Soviet invasion of Afghanistan. She condemned the invasion, said it showed the bankruptcy of a
détente policy and helped convince some British athletes to boycott the
1980 Moscow Olympics. She gave weak support to US president Jimmy Carter who tried to punish the USSR with economic sanctions. Britain's economic situation was precarious, and most of NATO was reluctant to cut trade ties. Thatcher nevertheless gave the go-ahead for
Whitehall to approve
MI6 (along with the SAS) to undertake
"disruptive action" in Afghanistan. As well as working with the CIA in
Operation Cyclone, they also supplied weapons, training and intelligence to the
mujaheddin. The
Financial Times reported in 2011 that her government had secretly supplied
Iraq under Saddam Hussein with
"non-lethal" military equipment since 1981. Having withdrawn formal recognition from the
Pol Pot regime in 1979, the Thatcher government backed the
Khmer Rouge keeping their UN seat after they were ousted from power in Cambodia by the
Cambodian–Vietnamese War. Although Thatcher denied it at the time, it was revealed in 1991 that, while not directly training any Khmer Rouge, from 1983 the
Special Air Service (SAS) was sent to secretly train "the armed forces of the
Cambodian non-communist resistance" that remained loyal to Prince
Norodom Sihanouk and his former prime minister
Son Sann in the fight against the
Vietnamese-backed puppet regime. Thatcher was one of the first Western leaders to respond warmly to the reformist Soviet leader
Mikhail Gorbachev. Following Reagan–Gorbachev summit meetings and reforms enacted by Gorbachev in the USSR, she declared in November 1988 that "[w]e're not in a Cold War now" but rather in a "new relationship much wider than the Cold War ever was". She went on a state visit to the Soviet Union in 1984 and met Gorbachev and Council of Ministers chairman
Nikolai Ryzhkov.
Ties with the US with ministers in the
White House Cabinet Room, 1981 Despite opposite personalities, Thatcher bonded quickly with US president
Ronald Reagan. She gave strong support to the
Reagan administration's
Cold War policies based on their shared
distrust of communism. A sharp disagreement came in 1983 when Reagan did not consult with her on the
invasion of Grenada. During her first year as prime minister, she supported
NATO's decision to deploy US nuclear
cruise and
Pershing II missiles in Western Europe, permitting the US to station more than 160 cruise missiles at
RAF Greenham Common, starting in November 1983 and triggering mass protests by the
Campaign for Nuclear Disarmament. She bought the
Trident nuclear missile submarine system from the US to replace Polaris, tripling the UK's nuclear forces at an eventual cost of more than £12 billion (at 1996–97 prices). Thatcher's preference for defence ties with the US was demonstrated in the
Westland affair of 1985–86 when she acted with colleagues to allow the struggling helicopter manufacturer
Westland to refuse a takeover offer from the Italian firm
Agusta in favour of the management's preferred option, a link with
Sikorsky Aircraft. Defence Secretary
Michael Heseltine, who had supported the Agusta deal, resigned from the government in protest. In April 1986 she permitted US
F-111s to use
Royal Air Force bases for the
bombing of Libya in retaliation for the
Libyan bombing of a Berlin discothèque, citing the right of self-defence under
Article 51 of the UN Charter. Polls suggested that fewer than one in three British citizens approved of her decision. Thatcher was in the US on a state visit when Iraqi leader Saddam Hussein
invaded Kuwait in August 1990. During her talks with President
George H. W. Bush, who succeeded Reagan in 1989, she recommended intervention, and put pressure on Bush to deploy troops in the Middle East to drive the
Iraqi Army out of Kuwait. Bush was apprehensive about the plan, prompting Thatcher to remark to him during a telephone conversation: "This was no time to go wobbly!" Thatcher's government supplied military forces to the international coalition in the build-up to the
Gulf War, but she had resigned by the time hostilities began on 17 January 1991. She applauded the coalition victory on the backbenches, while warning that "the victories of peace will take longer than the battles of war". It was disclosed in 2017 that Thatcher had suggested threatening Saddam with
chemical weapons after the invasion of Kuwait.
Crisis in the South Atlantic On 2 April 1982, the
military junta in Argentina ordered the invasion of the
Crown colony of the
Falkland Islands and its dependency of
South Georgia,
beginning the Falklands War. The subsequent crisis was "a defining moment of premiership". At the suggestion of Harold Macmillan and
Robert Armstrong, she set up and chaired a small
War Cabinet to oversee the conduct of the war, which by 5–6 April had authorised and dispatched
a naval task force to retake the islands.
Argentina surrendered on 14 June and
Operation Corporate was hailed a success, notwithstanding the deaths of 255 British servicemen and three Falkland Islanders. Argentine fatalities totalled 649, half of them aboard that was torpedoed and sunk by on 2 May. Thatcher was criticised for the neglect of the Falklands' defence that led to the war, and especially by Labour MP
Tam Dalyell in Parliament for the decision to torpedo the
General Belgrano, but overall, she was considered a competent and committed war leader. The "
Falklands factor", an economic recovery beginning early in 1982, and a bitterly divided opposition, all contributed to Thatcher's second election victory in
1983. Thatcher often referred after the war to the "Falklands spirit".
Negotiating Hong Kong In September 1982, she visited China to discuss with
Deng Xiaoping the
sovereignty of Hong Kong after 1997. China was the first communist state Thatcher had visited as prime minister, and she was the first British prime minister to visit China. Throughout their meeting, she sought the PRC's agreement to a continued British presence in the territory. Deng insisted that the PRC's sovereignty over Hong Kong was non-negotiable but stated his willingness to settle the sovereignty issue with the British government through formal negotiations. Both governments promised to maintain Hong Kong's stability and prosperity. After the two-year negotiations, Thatcher conceded to the PRC government and signed the
Sino-British Joint Declaration in Beijing in 1984, agreeing to hand over Hong Kong's sovereignty in 1997.
Apartheid in South Africa Despite saying that she was in favour of "peaceful negotiations" to end
apartheid, Thatcher opposed
sanctions imposed on South Africa by the Commonwealth and the
European Economic Community (EEC). She attempted to preserve trade with South Africa while persuading its government to abandon apartheid. This included "[c]asting herself as
President Botha's candid friend" and inviting him to visit the UK in 1984, despite the "inevitable demonstrations" against his government. Alan Merrydew of the Canadian broadcaster
BCTV News asked Thatcher what her response was "to a reported ANC statement that they will target British firms in South Africa?" to which she later replied: "[...] when the ANC says that they will target British companies [...] This shows what a typical terrorist organisation it is. I fought terrorism all my life and if more people fought it, and we were all more successful, we should not have it and I hope that everyone in this hall will think it is right to go on fighting terrorism." During his visit to Britain five months after his release from prison,
Nelson Mandela praised Thatcher: "She is an enemy of apartheid [...] We have much to thank her for."
Europe Thatcher and her party supported British membership of the EEC in the
1975 national referendum and the
Single European Act of 1986, and obtained the
UK rebate on contributions, but she believed that the role of the organisation should be limited to ensuring free trade and effective competition, and feared that the EEC approach was at odds with her views on smaller government and deregulation. Believing that the single market would result in political integration, Thatcher's opposition to further
European integration became more pronounced during her premiership and particularly after her third government in 1987. In her Bruges speech in 1988, Thatcher outlined her opposition to proposals from the EEC, forerunner of the
European Union, for a federal structure and increased centralisation of decision-making: Sharing the concerns of French president
François Mitterrand, Thatcher was initially opposed to
German reunification, telling Gorbachev that it "would lead to a change to postwar borders, and we cannot allow that because such a development would undermine the stability of the whole international situation and could endanger our security". She expressed concern that a united Germany would align itself more closely with the Soviet Union and move away from NATO. In March 1990, Thatcher held a Chequers seminar on the subject of German reunification that was attended by members of her cabinet and historians such as
Norman Stone,
George Urban,
Timothy Garton Ash and
Gordon A. Craig. During the seminar, Thatcher described "what Urban called 'saloon bar
clichés' about the German character, including '
angst, aggressiveness,
assertiveness, bullying,
egotism,
inferiority complex sentimentality. Those present were shocked to hear Thatcher's utterances and "appalled" at how she was "apparently unaware" about the post-war
German collective guilt and Germans' attempts to
work through their past. The words of the meeting were leaked by her foreign-policy advisor
Charles Powell and, subsequently, her comments met fierce backlash and controversy. During the same month, German chancellor
Helmut Kohl reassured Thatcher that he would keep her "informed of all his intentions about unification", and that he was prepared to disclose "matters which even his cabinet would not know".
Challenges to leadership and resignation in 1990 During her premiership, Thatcher had the second-lowest average approval rating (40%) of any post-war prime minister. Since Nigel Lawson's resignation as chancellor in October 1989, polls consistently showed that she was less popular than her party. A self-described conviction politician, Thatcher always insisted that she did not care about her poll ratings and pointed instead to her unbeaten election record. In December 1989, Thatcher was challenged for the leadership of the Conservative Party by the little-known backbench MP
Sir Anthony Meyer. Of the 374 Conservative MPs eligible to vote, 314 voted for Thatcher and 33 for Meyer. Her supporters in the party viewed the result as a success and rejected suggestions that there was discontent within the party. Opinion polls in September 1990 reported that Labour had established a 14% lead over the Conservatives, and by November, the Conservatives had been trailing Labour for 18 months. These ratings, together with Thatcher's combative personality and tendency to override collegiate opinion, contributed to further discontent within her party. In July 1989, Thatcher removed Geoffrey Howe as
foreign secretary after he and Lawson had forced her to agree to a plan for Britain to join the
European Exchange Rate Mechanism (ERM). Britain joined the ERM in October 1990. On 1 November 1990, Howe, by then the last remaining member of Thatcher's original 1979 cabinet, resigned as
deputy prime minister, ostensibly over her open hostility to moves towards
European monetary union. In his resignation speech on 13 November, which was instrumental in Thatcher's downfall, Howe attacked Thatcher's openly dismissive attitude to the government's proposal for a new European currency competing against existing currencies (a "
hard ECU"): On 14 November, Michael Heseltine mounted a challenge for the leadership of the Conservative Party. Opinion polls had indicated that he would give the Conservatives a national lead over Labour. Although Thatcher led on the first ballot with the votes of 204 Conservative MPs (54.8%) to 152 votes (40.9%) for Heseltine, with 16 abstentions, she was four votes short of the required 15% majority. A second ballot was therefore necessary. Thatcher initially declared her intention to "fight on and fight to win" the second ballot, but consultation with her cabinet persuaded her to withdraw. After holding an audience with the Queen, calling other world leaders, and making one final Commons speech, on 28 November she left Downing Street in tears. She reportedly regarded her ousting as a betrayal. Her resignation was a shock to many outside Britain, with such foreign observers as
Henry Kissinger and Gorbachev expressing private consternation. Chancellor John Major replaced Thatcher as head of government and party leader, whose lead over Heseltine in the second ballot was sufficient for Heseltine to drop out. Major oversaw an upturn in Conservative support in the 17 months leading to the
1992 general election and led the party to a fourth successive victory on 9 April 1992. Thatcher had lobbied for Major in the leadership contest against Heseltine, but her support for him waned in later years. ==Later life==