What conservatives did when in power 87 - 92

http://www.social-policy.org.uk/lincoln/Page.pdf pages 9 - 10

1987-1990: Prime Minister – Third Term

Margaret Thatcher & Gorbachev at RAF Brize Norton, 7 December 1987.

The legislative platform of the third-term Thatcher Government was among the most ambitious ever put forward by a British administration. There were measures to reform the education system (1988), introducing a national curriculum for the first time. There was a new tax system for local government (1989), the Community Charge, or 'poll tax' as it was dubbed by opponents. And there was legislation to separate purchasers and providers within the National Health Service (1990), opening up the service to a measure of competition for the first time and increasing the scope for effective management.

All three measures were deeply controversial. The Community Charge, in particular, became a serious political problem, as local councils took advantage of the introduction of a new system to increase tax rates, blaming the increase on the Thatcher Government.(The system was abandoned by Margaret Thatcher's successor, John Major, in 1991.) By contrast, the education and health reforms proved enduring. Successive governments built on the achievement and in some respects extended their scope.

The economy boomed in 1987-88, but also began to overheat. Interest rates had to be doubled during 1988. A division within the government over management of the currency emerged into the open, Margaret Thatcher strongly opposing the policy urged by her Chancellor of the Exchequer and others, of pegging the pound sterling to the Deutschmark through the European Exchange Rate Mechanism (ERM). In the process, her relations with her Chancellor of the Exchequer, Nigel Lawson, were fatally damaged, and he resigned in October 1989.

Behind this dispute there was profound disagreement within the government over policy towards the European Community itself. The Prime Minister found herself increasingly at odds with her Foreign Secretary, Sir Geoffrey Howe, on all questions touching European integration. Her speech at Bruges in September 1988 began the process by which the Conservative Party — at one time largely 'pro-European' — became predominantly 'Euro-sceptic'.

Paradoxically, all this took place against a backdrop of international events profoundly helpful to the Conservative cause. Margaret Thatcher played her part in the last phase of the Cold War, both in the strengthening of the Western alliance against the Soviets in the early 1980s and in the successful unwinding of the conflict later in the decade.

The Soviets had dubbed her the 'Iron Lady' — a tag she relished — for the tough line she took against them in speeches shortly after becoming Conservative leader in 1975. During the 1980s she offered strong support to the defence policies of the Reagan administration.

But when Mikhail Gorbachev emerged as a potential leader of the Soviet Union, she invited him to Britain in December 1984 and pronounced him a man she could do business with.She did not soften her criticisms of the Soviet system, making use of new opportunities to broadcast to television audiences in the east to put the case against Communism.Nevertheless, she played a constructive part in the diplomacy that smoothed the break-up of the Soviet Empire and of the Soviet Union itself in the years 1989-91.

By late 1990, the Cold War was over and free markets and institutions vindicated. But that event triggered the next stage in European integration, as France revived the project of a single European currency, hoping to check the power of a reunited Germany. As a result, divisions over European policy within the British Government were deepened by the end of the Cold War and now became acute.

On November 1 1990 Sir Geoffrey Howe resigned over Europe and in a bitter resignation speech precipitated a challenge to Margaret Thatcher's leadership of her party by Michael Heseltine. In the ballot that followed, she won a majority of the vote. Yet under party rules the margin was insufficient, and a second ballot was required. Receiving the news at a conference in Paris, she immediately announced her intention to fight on.

But a political earthquake occurred the next day on her return to London, when many colleagues in her cabinet — unsympathetic to her on Europe and doubting that she could win a fourth General Election — abruptly deserted her leadership and left her no choice but to withdraw. She resigned as Prime Minister on November 28 1990. John Major succeeded her and served in the post until the landslide election of Tony Blair's Labour Government in May 1997.

1987-90: Prime Minister – third term

87 Oct 19 Mo:	'Black Monday': Dow Jones fell 23 per cent
88 Feb 08 Mo:	Gorbachev announced Soviet withdrawal from Afghanistan from May
88 Mar 07 Mo:	Sterling 'uncapped' on MT's insistence and rose above 3DM
88 Mar 15 Tu:	Budget: highest rate of income tax cut to 40 per cent
88 May 17 Tu:	Interest rates cut to 7.5 per cent (lowest 1979-90); MT publicly supported Lawson
89 Jan 31 Tu:	NHS White Paper published (Working for Patients)
89 Jun 03 Sa:	China: Tiananmen Square massacre
89 Jun 20 Tu:	MT clash with Howe and Lawson on ERM line at Madrid Council (met again 25 Jun)
89 Jun 26 Mo:	MT set conditions for ERM entry ('Madrid conditions'); rejected Social Charter
89 Oct 26 Th:	Lawson resigned as Chancellor of the Exchequer; Major replaced him
89 Dec 10 Su:	Czechoslovakia: end of Communist rule (Havel President 29 Dec)
89 Dec 22 Fr:	Romania: dictator Ceausescu overthrown (killed 25 Dec)
90 Feb 10 Sa:	Kohl in Moscow: Gorbachev agreed German reunification
90 Mar 11 Su:	Lithuania declared independence of USSR
90 Mar 31 Sa:	Trafalgar Square riot against Community Charge or 'poll tax'
90 Apr 01 Su:	Strangeways prison siege (ended 25 Apr); disturbances in other gaols
90 Jul 14 Sa:	Ridley resigned over comments on Germany
90 Aug 02 Th:	Iraq invaded Kuwait; MT with Bush in Aspen
90 Aug 09 Th:	UK announced commitment of forces to the Gulf
90 Oct 03 We:	German reunification
90 Oct 05 Fr:	Britain joined ERM; interest rates cut by one per cent to 14 per cent
90 Nov 01 Th:	Howe resigned
90 Nov 13 Tu:	HC: Howe's resignation speech bitterly critical of MT
90 Nov 14 We:	Heseltine stood for Conservative leadership
90 Nov 20 Tu:	Conservative leadership election first ballot (MT 204:152 Heseltine)
90 Nov 22 Th:	MT announced decision not to contest second ballot
90 Nov 27 Tu:	Conservative leadership election second ballot; Major became leader
90 Nov 28 We:	MT resigned as Prime Minister; John Major succeeded her