On the Community Charge
As part of the 1987 manifest, Thatcher implemented a tremendous unpopular tax on the people of Britain. It was known as the poll tax. It provided a single flat rate of tax on every working adult set by the local authority. It was abolished a few years later. This marked a turning point in Thatcher’s popularity and subsequent attacks from within her party.
On European Union Relations: 1983-1987
Thatcher believed that a free-market Europe was predominant even if there were signs of hidden protectionism. Thatcher wanted her country’s budget contribution sorted out quickly. There were underlying forced of federalism and bureaucracy gaining with the coalition of Socialist and Christian Democrat government in France, Spain, Italy and Germany. Britain wanted to negotiate the budget contribution per country GDP 1.3% but there were competing opinions on this matter. Thatcher believes that Franco-German deals were always being made behind Thatcher’s back. The EU is a complicated system. Each country tries to exempt its dairy or agricultural industries from free trade…Self-interest gets the better of all the members involved. There was a coordinated attack on Thatcher to ransom her 1983 budgetary rebate by offering a weaker deal with Britain on annual permanent budgetary arrangements. The EU then blocked payment of the 1983 refund when Britain refused a deal on budgetary contributions. A successful summit was needed by Kohl; the domestic situation in France and Germany influenced their efforts in the EU. Britain was not being treated fairly by France or Germany. Germany wanted special subsidies for farmers.
The enlargement of the community strengthens its value. Security for Thatcher while in Ireland was intense. The idea of bringing in Spain and Portugal would strengthen the union substantially. The costs would be high. Greece called for financial assistance and vetoed the enlargement until it received its fair dues. This was absolute nonsense. The Greeks had held the EU hostage while they had entered under similar circumstances before. The Greek government’s poor handling of their finances irritated Thatcher. Greece had to be paid in order to allow entrance. The Greek government got their bonanza. It wasn’t fair but it happened anyway.
The Falklands War highlighted the importance of EU cooperation as a military entity. Britain wanted to ride the EU tariffs. A single-market was salient in the views of Thatcher as well as the military aspect. Mitterrand and Kohl had little income compared to Schmidt and Giscard d’Estaing. Kohl was willing to subordinate German interest for French guidance since the assuaged the other smaller neighbours. Thatcher had the subtle-tariffs that existed between EU members. Open markets were her goal. Thatcher wanted national sovereignty on identity cards and policing. M Delors the president of the European Commission attacked Britain for reducing the financial leavers of the community. Thatcher doesn’t believe in Brussels federalism of social and economic policy for other countries. She was open market nothing else really. Thatcher is highly sceptical of the Franco-German bloc during this period.
On Public Expenditure in 1981: “You turn [u-turn] if you want to; the Lady’s not for turning” is her most famous line from the early 1980s. Thatcher did not believe that increased government spending would prevent further economic recession. Some of her cabinet colleges (the wets) revolted and she had a few of them sacked over this philosophical dispute between entrenched statism and her limited government vision. The party faithful were taking the heat for the continued poor performance of the economy until the budget speech where she spoke of the road she was taking. But there were relapses later that year.
The recession was blamed on oil prices. The unemployment was also caused by high wages and low production. However, the wets agitated again in late 1981 to make a u-turn similar to Mitterrand of France. This was a difficult time for Thatcher’s monetarist policies because it failed to improve the economic situation in the 1981-82 period. The Conservative Party stress blew up repeatedly and a full cabinet re-shuffle was necessary to weaken the ‘wets’ within the party. Thatcher could not tolerate dissent and the unfaithful. Thatcher’s economic policy guided other western countries in subsequent years.
On Ronald Reagan: Early Talks
Reagan’s election was a watershed for the US and the World. He shared many of the same ideas as Thatcher. However, she disagreed with him on deficit reduction, which Reagan was not taking seriously. Reagan stood for a renaissance against the increased threat of communism. He spoke eloquently about the horrors of communism. Thatcher also hatedthe USSR and she wanted to end what she called the repression of the Russian people. Reagan was the leader of world freedom. He was also amiable and charming.
Thatcher met Reagan as the first head of government to do so. She knew not to pressure him on issues that he could not resolve. The “one principle of diplomacy which diplomats oath to recognize more often: there is no point in engaging in conflict with a friend when you are not going to win and the cost of losing may be the end of the friendship.” Thatcher shared Reagan’s concern over El Salvador’s communist movement. The Washington press core noted Thatcher’s failure in government and pointed to the neoconservative vantage as a fraudulent one. The economic problems in America could not be solved using the Thatcher experiment. However, Thatcher’s rebuttal was that entrench nationalization was much worse in Britain. Socialism in Britain was not present in the US, so there is a fallacy of composition in their critique of her policies.
On the Origin’s of Her Philosophy:
Her father was a grocery store owner. She was a scientist who had a keen eye for the small business owner’s capacity to deal with the tides of demand and supply. Individuals should be free to maximize their own ingenuity. The free market is pure, effective and should be the dominant force in any society. The private sector is the most appropriate source of economic prosperity. Economics is Thatcher’s chief concern during the early stages of her leadership.
On British Statism:
Since World War II, Britain has entrenched socialist programs too extensively. The Labour Party had developed a democratic socialist philosophy, which stood for the Third Way between European collectivism and American Capitalism. It was not working in 1979 and never really did. Socialism had weakened the UK systematically. Britain’s economic world dominance has declined through out the post-war. Britain has been the economic loser: sick man of Europe during this period. Jobs, industries have moved overseas. Reversing this trend would be Thatcher’s goal in office. Scotland should not undertake any form of devolution. Any relinquished power from London will inevitably lead down the path to political secession and economic upheaval.
On Civil Service:
Thatcher believed in massive civil service reform. The civil service was 780,000, bloated with Labour Party patronage and needing to be reduced. First, she implemented a stop order on new hiring. She had some problems with permanent secretaries whom she felt were attempting to resist change.
On the European Community:
The European Union should be handled with suspicion. France and Germany have a close relationship. They stand to gain the most from British financial contributions. Germany stands to make enormous returns in international respectability. France stands to protect itself from German aggression. Thatcher fears that the EU will standardize European communities and decrease cultural diversity. The EC/EU should maximize individual rights not diminish them.
Thatcher upon taking office, called for drastic reductions in British budgetary contributions to the EC. The major issue with the EC and German President Schmidt was the British budge issue. The Agricultural subsidies in France were unfair to the British farmer, for example. Britain has unreasonably high tariffs but still has to pay higher levels of budgetary contributions. Thatcher did not see the economic benefits of the EU during the Labour Party era. Thatcher puts Britain’s interests ahead of the EU, every single time. She stands to prevent the EU from moving forward. Thatcher did not commit sterling to the Exchange Rate Mechanism. Rhodesian legal independence was achieved under Thatcher’s leadership.