Cracks were showing in the post-war consensus in the late 1970s but people still stuck with it. However, it did come under increasing criticism, especially from the right wing of the Conservative Party. There were, at this time, splits in the Conservative Party as to which direction it should take. Some ‘One Nation Tories’ thought that there should be a continuation of the post-war consensus. The ‘New Right’ wanted to abolish the post-war consensus. They grew in strength in the 1970s. Mrs Thatcher was a leading light within the new right and became its leader.

The new right gained inspiration from a number of sources. Milton Friedman and Frederick Hayek thought that the free market was very important. They believed that market forces were the best way of distributing resources, and that inflation was the key social evil. This was adopted by the new right as a main element of their reasoning. The new right adopted many of the ideas produced by government think tanks such as ‘The Adam Smith Institute,’ ‘The Institute for Economic Affairs’ and ‘The Centre for Policy Studies.’ These ideas all opposed the continuation of the post-war consensus.

A lot of the members of the new right were not considered to be very Conservative. It is sometimes considered controversial that they should be named the new right. Barry said in 1987 that the new right should instead be called the ‘new liberals.’ His reason for saying this is that the new right adopted a liberal, free market, approach to managing the economy.

The post war consensus was not just a British phenomenon. All across there were a number of Social Democratic regimes. In America Keynesian methods of economics had been accepted and the American ‘Great Society’ was very Keynesian. The new right set out to destroy the post-war consensus all over the western world. It was unified by its attack of Keynesianism, the welfare state and the post-war consensus. Camble said of the new right that they represented “the free market and the strong state.” This statement may seem like a contradiction, but it is very accurate. The new right was very authoritarian. Members of the new right believed that the state needed to intervene in matters of law and order and defence, but that the state should not intervene in the economy.

The new right would have remained insignificant if Mrs Thatcher had not become leader of the Conservative Party in 1975. Mrs Thatcher was very lucky to have won the leadership election in 1975. Her becoming leader can be attributed to a number of factors.

Ted Heath made the mistake of not resigning, despite the fact that he had lost three elections, in 1966, February 1974, and in October 1974. If he had resigned, Mrs Thatcher would not have stood against him.

The leader of the new right was Keith Joseph, not Thatcher. Joseph challenged Heath for the leadership of the Conservative Party. Unfortunately for Joseph, he had to withdraw from the election because he had accidentally remarked that “the working class should not be allowed to breed.” When Joseph withdrew, Thatcher took his place as the candidate representing the new right.

Heath did not allow any of his close allies to stand in the leadership election. Those who opposed Heath naturally voted for Thatcher because there was no other choice.

Thatcher beat Heath in the first ballot. Heath withdrew from the second ballot and new candidates were allowed to oppose Thatcher, but by this time she had a bandwagon rolling, and had rallied her support.

This goes to show that Thatcher was not elected as leader of the Conservative Party because its members agreed with what she thought. She was elected because she was not Ted Heath. Voters in the leadership election had little other choice. Also, because Thatcher was a woman, her cabinet thought that they would be able to control her, but they could not. The ideas of Thatcher and the new right were not accepted outright. The shadow cabinet was still dominated by One Nation Tories and there was still discussion about the future direction of the Conservative Party.

Thatcher was undoubtedly a huge break from the past. Her policies were an attempt to set up a new ideological framework. They contained liberal, authoritarian and new right ideas. However, Thatcherism had no clearly set out blueprint. It evolved as it wet on.

Thatcher believed that the state should play a greater role in social events, but should intervene less in the economy. She was a conviction politician rather than a consensus politician, and was very dominant within her Cabinet. She always believed herself to be right.

Monetarism was a new way of managing the economy. The concepts of monetarism turned Keynesianism on its head. Instead of fighting unemployment, the key goal of monetarism was to tackle inflation, even if this resulted in a high level of unemployment. Norman Lamont said that “unemployment is a price worth paying.” Monetarism also includes free market economics. The belief is that the government should control the money supply to control inflation. By adopting monetarism, the Thatcher government, it is claimed, made a great break with consensus politics.

Monetarist policies were implemented during the period 1979-82. The Chancellor lowered the rate of income tax, doubled the level of VAT and high interest rates to limit the growth of the money supply. However, Denis Healy had refused to increase spending in his 1975 budget, instead initiating a new emphasis on the control of inflation as a new government aim rather than the maintenance of a high and stable level of employment. Dennis Kavanagh called this policy shift “a historic breach with one of the main planks of the post-war consensus.”

During the sterling crisis of 1976, the government adopted formal targets for the growth of the money supply as a way of reducing inflation. Labour also began using cash limits methods after 1976, to keep spending programmes within their budget. These monetarist policies were a radical shift from post-war consensus Keynesian methods of managing the economy, which had lost their credibility, but monetarism is a policy usually attributed to the Conservative Party. Most people wrongly think that Margaret Thatcher was responsible for the introduction of monetarist policies to control the British economy. However, although Healy had tried to tackle inflation, it was only intended as a short term measure to bring inflation down. Thatcher aimed for long term stability of inflation and did not seem concerned with the consequences.

Between 1961 and 1982 inflation, on average, was higher than foreign competitors such as Germany, Japan and France. Between 1970 and 1982 inflation averaged about 13.7%. In the same period, other industrial countries averaged inflation rates of about 9%. The adoption of monetarist policies by Thatcher managed to bring inflation down to 2.5% by 1986. However, unemployment rose quickly compared with other countries. Unemployment grew rapidly throughout the 1980s. It grew from 1.5m in 1979, to 3m in 1983, to reach 3.2m by 1985. This growth still occurred despite the fact that the government changed the measurement of unemployment figures twenty times. Unemployment only dropped slightly during a boom period.

Monetarists argue that one cause of inflation is borrowing. The PSBR is the difference between what the government raises in tax and what it spends. Thatcher set out to reduce borrowing. She compared the management of the economy with the management of a housewife's budget.

The Thatcher Government believed that public expenditure was ‘at the heart of Britain’s present difficulties,’ and came to power promising substantial cuts in all areas except the NHS, defence, and law and order, to which Thatcher gave an increased commitment. Trident was purchased from the Americans at great expense to replace Polaris. The defence budget had increased by one-fifth by the end of the 1980s, partly due to the Falklands War in 1982, which cost the nation billions of pounds. Mrs Thatcher has always thought of the Falklands War of 1982 as her greatest achievement. She became increasingly popular as a result of patriotism. She felt that Britain had regained some of its pride, and removed the shame of Suez. The result of the war enabled the Prime Minister to claim that ‘Great Britain is great again,’ although increased spending on defence prevented Thatcher’s promised reduction in borrowing.

Thatcher also increased spending on law and order. The Conservatives had always been perceived as being the party of law and order, and way ahead of Labour in terms of crime, until Tony Blair became the Shadow Home Secretary in 1994. There had always been a strong conscious link between the Conservatives and law and order up until this time. Thatcher was keen to foster this belief and to tackle crime. Unfortunately, crime doubled under Thatcher’s government, but the Conservatives denied that it was as a result of increasing unemployment, or indeed that there was even a link between unemployment and crime.

Mrs Thatcher made the extension of the police one of her priorities. Whereas other public servants had pay freezes, the wages of the police were increased. Many thousands of new officers were recruited, and the police force also received a great deal of political support for all that they did. Some critics of Thatcher say that she anticipated the civil unrest that resulted from the policies that she introduced.

One way that Thatcher attempted to reduce borrowing was through privatisation. Privatised industries were no longer a burden on the tax payer, and the assets that were sold off also raised income. The efficiency of these industries was also increased. Some said that privatisation was like ‘selling off the family silver’ but it still proved popular. By 1990 privatisation had accounted for £32.9b of revenue.

Mrs Thatcher was in favour of the concept of ‘popular capitalism.’ She thought that everyone should be able to buy their own house and to be able to own their own shares in a privatised company. Initially privatisation was very slow, but after BT and British Gas had been sold off, privatisation increased its pace, and became popular. The 1980 Housing Act which introduced the ‘Right to Buy’ was also popular.

Again, many people attribute the introduction of a policy of privatisation to Margaret Thatcher, and this is not strictly true. Churchill’s Government of 1951 privatised steel and road haulage. However, he did leave other industries which had been nationalised by the previous Attlee Government in the public sector. No other Prime Minister privatised industry on the scale, or with the speed and enthusiasm, that Mrs Thatcher did.

Thatcher’s government aimed to curb public expenditure in order to prevent inflation. Thatcher despised the fostering of what she called a ‘dependency culture.’ She saw the welfare state as a burden on the tax payer. Because there was little she could do to decrease spending by the welfare state due to unemployment,

Mrs Thatcher thought that the strength of the welfare state was encouraging a ‘dependency culture’ in British society. People became dependent on benefits and had little incentive to find employment. Mrs Thatcher tried to ‘roll back the welfare state.’ However, as a result of her economic policy to fight inflation rather than achieve a high and stable level of employment, more people were claiming benefits as they became unemployed. This sparked a contradiction.

Thatcher tried to reform the National Health Service. However, during her period of office, spending on the NHS actually increased by a third in real terms.

Some people tried to accuse the Conservatives of trying to privatise the NHS. In the 1992 election campaign, Labour used an election campaign called ‘Jennifer’s Ear’ to try to show that the standard of care on the NHS was deteriorating.

Thatcher pointed at the fact that real spending on the NHS had increased to show that she was not trying to scrimp on the care provided by the Health Service. However, it is said that the extra money that was being sent on the Health Service budget was soaked up by new and expensive medicines, equipment and techniques. No more patients were being treated and the quality of care provided was not increased.

The Conservatives tried to introduce an internal market into the NHS. Market forces, and new managers were intended to make the Health Service more efficient.

Because Britain has an ageing population, we were spending more and more money on pensions. Thatcher was caught in a trap as there was very little that she could do to control benefit’s spending.

Thatcher focused her attention on other areas of benefit. She cut student grants in real terms and froze the level of child benefit. Students were also stopped from claiming housing and unemployment benefits during the holidays.

Thatcher also aimed to reduce taxes. However, public expenditure increased making the introduction of tax cuts difficult. Dennis Healy had, however, made previous similar attempts to reduce taxes before Thatcher.

Despite Thatcher's aspirations, some people were taxed more, in order to pay for the increasing budget for benefits. Thatcher desperately wanted to cut taxes, but she could not because of rising public expenditure. Instead of putting up direct tax on incomes, she increased indirect taxes, such as VAT.

Thatcher changed from progressive taxes to regressive taxes. The idea was that you paid as you spent, not as you earned. There was a growing gap between the rich and the poor in the 1980s, partly due to the tax system that Thatcher adopted.

Thatcher also fought a vigorous and largely successful campaign against the other eight member countries of the EEC to reduce Britain’s payments, which in 1980 exceeded its receipts by over £1 billion, and to get ‘our money’ back. She eventually got two thirds of it.

Having already signed the Single European Act in 1986, Thatcher fiercely resisted ‘Euro-federalism’ and significantly delayed Britain’s entry into the ERM until October 1990.

The relationship between the UK and Europe was very unstable. Whilst in 1979 the Tories had been considered very pro-European, Mrs Thatcher became increasingly anti-European. Thatcher considered Europe to be over-bureaucratic and financially wasteful. She wanted to reform Europe and make it more efficient. She became very hostile towards Jaques De Lors, who wanted to increase political and economic integration. Thatcher opposed this because she thought that it would erode British sovereignty.

In 1988 Mrs Thatcher laid into Europe in a speech she made in Bruges, Belgium, which later became known familiarly as the ‘Bruges Speech.’

Thatcher felt that she was closer to the US than to Europe, and this revived the ‘special relationship,’ which had been in decline from the late 1960s.

During the post-war consensus corporatism was favoured. The new right was hostile to the Trade Unions. Unions were capable of bringing down the government. Heath’s government and Callaghan’s government had been destroyed by the miners strike. Thatcher was afraid that the unions were challenging to the authority of government.

The Trade Unions negotiated pay rises even though workers were becoming no more productive. The criticism was that workers were under productive and that Britain was not competitive.

Thatcher claimed that incomes policies, that were negotiated by the government and the trade unions through corporatism, led to inflation, and that inflation could only be controlled through the management of the money supply. The government said that it should not co-operate with the unions.

Thatcher tried to curb the unions, but she was careful. She had learnt from the mistakes of previous attempts and made the change gradual. She bought in three separate pieces of legislation controlling the union in 1980, 1984 and in 1988.

She took several measures to curb the power of the trade unions. She illegalised secondary picketing, illegalised flying pickets, abolished secondary action so that sympathy strikes were not possible and made secret ballots compulsory. If any union attempted to break any of these rules their funds could be seized.

Thatcher was most afraid of the National Union of Miners. She knew that there would be backlash so she prepared for confrontation by building up a stockpile of coal, recruiting more officers to the police forces and by illegalising secondary picketing. Her legislation culminated in the 1984-5 miners’ strike. In this dispute the National Union of Miners, which had ruined Heath’s government, was eliminated.

Mrs Thatcher wanted to lower public spending, but local councils had the freedom to spend a large amount of money. She wanted to restrict this spending. ‘Capping’ was the process by which central government restricted spending by local governments. She also set out to centralise power. She saw the GLC as a threat and set out to destroy it. She also destroyed the other metropolitan councils, which she considered as a challenge to the authority of central government. This contradicted her belief that the state should not surpress the power of the individual. She did it to take away power from anyone that could oppose her.

Part of the reforms also included the replacement of the domestic rates by the community charge, or ‘Poll Tax,’ which was intended to make the entire local electorate more cost conscious. It was thought that when the whole electorate, not just ratepayers, were responsible for providing local government revenue, they would vote for the council who promised value for money rather than the high spenders.

Thatcher was an authoritarian figure. She thought that the state should intervene more in aspects of law and order and defence. People had become disillusioned with government because it had not been authoritarian and were pleased with this change.

Mrs Thatcher had a confrontational and decisive personality. She was forceful and dictatorial. She was very much an activist in the cabinet and always thought that she was right. She was an excellent parliamentarian, and a very good speaker at the despatch box. Her personality was regarded as very uncaring and cold. She was rated very low in terms of compassion. People thought of her as more of a decisive figure.

A series of ‘State of the Nation’ polls carried out by ICM for the Guardian provides valuable data on the state of public opinion on a range of social and economic issues. These polls broadly confirm Ivor Crewe’s conclusion in 1989 that ‘there has been no Thatcherite transformation of attitudes or behaviour among the British public.’

There is widespread support for the principle of state funded education and health services, and considerable doubt about the trustworthiness of Conservative governments to run them.

A NOP survey during the 1992 election campaign revealed the dissatisfaction with the government’s internal market health and education reforms. A large majority favoured the scrapping of recent changes in the way that the NHS is run, whilst more respondents disproved than approved, of the policy of helping more schools to opt out of local authority control.

The polls suggest a steady movement of public opinion during the 1980s against tax cutting and in favour of more spending on education and the NHS.

In 1985, only 32 per cent agreed and 57 per cent disagreed, that it was more important for the government to control inflation than to reduce unemployment. In 1990 this had changed, whilst by 1993, opinion was in favour of reducing unemployment again.

Public opinion on privatisation has also fluctuated over time. Between 1964 and 1983, support for privatisation increased, but it seems to have declined steadily from the mid-1980s. Thatcher’s policies in this area then have become increasingly unpopular.

Arguably, Thatcherism has had a greater impact on the Labour Party than on public opinion. The ‘new’ Labour Party has broadly accepted the policies of previous Thatcher governments. or instance, Labour has decided that it will not adjust the rates of tax that it inherited from the previous Conservative government, and the majority of Thatcher’s trade union reforms, with one exception, have been sustained.

Margaret Thatcher rejected the post-war consensus, and is responsible for many changes in the management of the nation. She introduced a set of new policies, and her strength of character, and dominant nature, will always be remembered. Although she sometimes acted against the public opinion she did secure office for many years, winning three general elections. She is also responsible for changing the way the public thinks about various issues, such as tax and inflation, although whether she changed public opinion in favour of the policies she was pursuing, or against, is sometimes disputed. Many of the policies that are considered to be included in Thatcherism had in fact been pursued by earlier politicians, such as Denis Healy but because Thatcherism was such a huge break from the past in many ways they are remembered in association with her rule.