A Significant Feature of the Thatcher Record - Essay Example

Critical Evaluation of the Effect That Thatcherism Has Had On the British Welfare After the 1979 general election, Margaret Hilda Thatcher became the Prime Minister of Britain (the first woman to become Prime Minister in Britain) under the Conservative Party. The policies she advocated for are today referred to as Thatcherism. She had to resign from her premiership position in 1990 because of the splits over the Europe issue and cabinet discordance, her dictatorial style as the Prime Minister, and the London Poll Tax Riots. After she left the office in the late 1980s, Great Britain was relieved of her economic boom and had to go through high unemployment and a severe economic recession (Karabiber 2009, p15). The welfare state was central target for the radical right. This is because it supposedly generated higher tax levels, discentives to work and save, budget deficits and a distended class of unproductive workers. The welfare state also encouraged soft attitudes towards immigrants, the feckless, the sexually aberrant, strikers, the idle, and crime. The restructuring process of the welfare state was situated within the political structure of the radical right (Gough 1980, p8). The objectives of the Thatcher government were three; (a) restoration of the Conservative Party political fortunes, (b) the revival of the market liberalism as the main public philosophy, and (c) the creation of optimal conditions for a free economy through limitation of the state scope while reinstating its authority (Morris 2005, p1). Hills (1998, p1) asserts that four themes stood out as the core policies towards the welfare state during the period of Thatcherism: (a) attempts to manage public spending, (b) privatisation, (c) targeting, and (d) rising inequality. Thatcher believed in the socialistic grouping of the British economic policy. Thatcher’s monetarist program had the following characteristics (Karabiber 2009, p15): Financial stability by decreasing inflation Positioning of the free markets at the heart of the economy Reduction of the state’s economic power through the privatisation of the public enterprises Curtailment of the trade union activities The Thatcher government initiated administration of the welfare and restructuring of the civil service to introduce more efficiency. The initialization had three main components and they include: The administration was divided into agencies in order to facilitate easy assessment of the efficiency of each section of the administration. Examples include the Social Security administrative agencies and the National Health Service (NHS) trusts. Management introduction and this is concerned with running the agencies in a business-like fashion. Quasi markets through separating purchase and the provision of services. It also entailed the introduction of competition and the public service was forced to imitate economic markets (Karabiber 2009, p16). Most of the welfare policies that occurred in the 1980s were aimed at restricting and cutting public spending in order to reduce income taxes. The approach suggested a reduction in welfare spending to assist the citizens to become self-reliable. It is important to note that empirical data does support the above statement. Karabiber (2009, p16) states that “spending altered between 1973 and 1997 from housing and education towards health and social security services but stayed nearly at the same level of about 25% of national income.” Public spending reduced from 50 percent in 1975 to around 40 percent in 1990 and the welfare spending achieved a raising share of the public expenditure (Karabiber 2009, p16). Housing proved to be a vulnerable area of the welfare state. The overall social-policy record of Thatcher suggests more continuity rather than change; the government was able to implement considerable retrenchment in the housing programs (Pierson 1995, p77). Two Conservative reforms significantly reduced the people’s prospective future rights under the welfare system. The generosity of the welfare system was cut through: (a) a sharp reduction in the subsidies to social housing in the early 1980s and 1990s and thus, higher rents were charged to social tenants, (b) a number of rule changes, which decreased entitlements to social insurance benefits for those unemployed, and the (c) Cash limit that was put on the cost of home care for the elderly and residential; this happened when the responsibilities were shifted to the local authorities from the social security budget in 1993. The reason that the cuts did not succeed in decreasing welfare spending in relation to the GPD lies on the constraints that the Conservatives faced. First, the demand for the welfare services increased significantly – during the first years of Thatcher government, unemployment increased at a rapid rate. Male unemployment rate also increased after the boom fall in the late 1980s (Hills 1998, p4). The other constraint is the increase in aspirations because of the rise in standards; the standards rose with the economic growth in other people’s lives (Hills 1998, p7). It would be not wise to state that the Thatcher governments did not bring any change to Britain. Radical privatisation policy and legislation on the industrial legislations have created an almost permanent shift in the relationship between the industry and the state. The change was popular with voters and it was in tune with long-term developments in Britain and abroad. However, it became clear that the degree of change was small compared to Thatcher’s ambitions. Thatcher’s legislations and objectives were radical but in most cases, they were unsuccessful in implementing the policies, which made possible the achievement of these objectives. Although Thatcher’s populist rhetoric was seen as an anti-establishment, the effect on the British institutions was very limited. It is evident that there were core institutional reorganizations that emphasized self-management in hospitals and schools. “However, the old Tory network of the military, public schools, law, the City and landed interest was left much stronger by these apparently radical Conservative governments” (Morris 2005, p12). Strong support of the welfare state by the public especially by the middle class people of the NHS, maintenance grants for the students, and tax relief on the mortgage interest prevented any major reforms in the welfare state. At the end of 1989, spending and taxation were not considerably lower than the 1979 levels. Social security increased in real terms, absolute terms and as the proportion of GNP (for a considerable length of the Thatcher period). This was as a direct result of the most visible changes in the Thatcher years, the most notable one being the unintentional rise in the levels of unemployment. What the Thatcher governments achieved and what they intended to achieve was largely self-inflicted. The inconsistency of the Thatcherite ideology and their belief in a top-down approach to government made sure that according to their own principles of success, the Thatcher governments were at all times destined to fail; this is so especially, where they were faced with popular opposition (Morris 2005, p12). A significant feature of the Thatcher record is the outcome across the programs (the outcome of the programs was uneven). Major retrenchment was possible in a few cases, while in others, stiff opposition made the Thatcher government retreat (Pierson 2009, p34). In conclusion, Thatcher governments brought a number of changes to the welfare state despite the fact that it had failed in a number of instances. For instance, among her successes include radical privatisation policy and legislation on the industrial legislations. This has created an almost permanent shift in the relationship between the industry and the state. Increase in unemployment rates in the late 1980s was a major setback for the Thatcher government. Coupled with issues facing the Cabinet and increase in riots, Thatcher was forced to resign from her premiership. References Gough, I. (1980) Thatcherism and the welfare state. Marxism Today, pp7-12. Hills, J. (1998) Thatcherism, new labour and the welfare state, London, UK: London School of Economics. Karabiber, T. (2009) Thatcherism and the welfare state, Norderstedt, Germany: GRIN Verlag. Morris, S. (2005) Did the Thatcher governments change Britain? The Social Structure of Modern Britain, 14, pp1-13. Pierson, P. (1995) Dismantling the welfare state? Reagan, Thatcher, and the politics of retrenchment, Cambridge, UK: Cambridge University Press. Pierson, P. (2009) Taking the jewel from labour’s crown? Mrs. Thatcher’s assault on the British welfare state. Available from [accessed on 26 Oct. 2011]. Read More