Margaret Thatcher entered Downing Street in May 1979 representing the Conservative party. It has been stated by many, including Lee (1996), that ‘she was committed to a policy of economic and social transformation’, and that for the next eleven years, ‘she dominated British politics more than any other prime minister of the twentieth century’ (pg. 229). In 1990, Mrs Thatcher resigned, being replaced as party leader by John Major. Although Mrs Thatcher implemented a wide range of policies towards the welfare state, it is not generally accepted that she transformed it. However, before the changes made on the welfare state are examined, the issue of definition must be addressed.

As Jessop et al. (1988) have previously stated, the term ‘Thatcherism’ has “acquired almost as many meanings as there are people who mention it” (pg. 5). Such definitions include “classic liberalism laced with misogyny and proto-feminism” as put forward by Campbell (1987 pg. 17), and “an instinct, a sense to moral values and an approach to leadership” as viewed by Young and Sloman (1986 pg. 138). However, for the sake of this essay, the term ‘Thatherism’ will take on the definition given by Gamble (1988): the distinctive ideology, political style and programme of policies with which the British Conservative Party has been identified by during and since the leadership of Margaret Thatcher.

The fundamental aims of the Thatcherite social policy include the increase of privatization, the reduction of the power of the local governments, the promotion of inequality and the reduction of public expenditure in the welfare sphere. Social commentators such as Marsland (1989) and Murray (1984) had established in Mrs Thatcher a detestation of the ‘culture of dependency’, where individual and family autonomy had been withered by creeping welfare statism. The project was thus to replace dependency with not just an enterprise, but also a ‘self-help’ culture. In the post-war period, before Margaret Thatcher was elected, the welfare state was mainly influenced by the works of Beveridge and Keynes. This old welfare state was accused by many including Boyson (1971) as being irresponsible and encouraging dependence, as well as promoting constraint and lacking in incentive.

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Some areas did see lasting change, especially with the encouragement for people to opt out of the welfare state. In 1980 enacting an idea suggested in and rejected by the Labour Government after 1974, council house tenants were given the right to buy their own house by the 1980 Housing Bill (cited in Lee 1996, pg. 237). By the end of Thatcher’s reign, over one million families or individuals became homeowners. The ‘assisted places scheme’ introduced in 1980 allowed able children from less well off backgrounds to secure means tested places at the country’s independent schools. In 1990, those over the age of the age of 60 were given tax relief on private health insurance, in an attempt to reduce the burden on the NHS and to expand the private sector.

Another theme was targeting help on the most deserving, which had been enthusiastically proposed by right-wing thinkers such as the Institute of Economic Affairs (IEA) for many years. Successive reforms of the social security system, commencing with the Social Security Act 1980 (cited in Johnson 1990, pg. 37), progressively tightened the eligibility rules for unemployment benefit, as well as the abolition of earnings-related supplements to unemployment and the taxation of unemployment benefits. Johnson (1990) points out that means testing was extended, as illustrated by the family credit scheme that replaced family income supplement and the changes made to the housing benefit system. Payouts from insurance-based benefits were also restricted, such as the cold weather payments, and the level of popular universal benefit paid to parents (child benefits) was frequently frozen year on year.

There was a further investigation to increasing efficiency and applying market disciplines to the education system and the NHS. The Griffiths Report of 1983 had led to the introduction of two hundred non-medical managers (Collings and Seldon, 2000, pg.45). Hospitals were also required to put contracts for services such as laundry, cleaning and catering out for competitive tendering. This allowed firms from the public or private sector to put in an offer to provide the service for a certain price, and the firm that offered to provide the service the most efficiently would be awarded with the contract. The NHS internal market gave GPs budgets and lead to hospitals competing for patients. Similarly, social service departments were to become purchasers of care for their elderly and disabled residents. With the 1988 Housing Act (cited in Alcock 1996, pgs. 35-36), alternative landlords could take over individual council properties or whole estates with the agreement of the tenants.

The provision for schools to ‘opt out’ of local authority control, which was provided by the 1988 Education Act (cited in Haralambos & Holborn 1995, pg. 796), enhanced parental control over their children’s education and devolved budgetary responsibility to the schools themselves, so “important decisions would be taken at a level closest to parents and teachers” (Thatcher 1993, pg. 592).

City Technology Colleges (CTCs) were created to teach technical skills and together with Grant Maintained schools, were designed to give parents a greater variety of choice. The drive to introduce greater efficiency and competition extended to higher education. The Education Act 1988 abolished academic tenure, the system by which university academics were appointed for life, as the government believed that this provided little incentive to maintain high standards. The University Grants Commission was replaced by a University Funding Council, to remove the prohibitive cost of expanding the number of students in higher education.

First the NHS, and then local governments, were also forced to withdraw some services. ‘Efficiency audits’ became everyday practice with many, including hospital consultants and university professors, having to account for their spending of public money. Although these reforms achieved some decentralization, state control was also enhanced through policies such as the introduction of a National Curriculum, the abolition of the Inner London Education Authority, which to the Education Secretary Kenneth Baker (1993):

“had become a byword for swollen bureaucracy, high costs, low political standards and political extremism” (pg. 226).

There was also the increase in central government control over university funding. The National Curriculum was formed from the 1988 Education Act and consisted of ten foundation subjects, with agreed ‘attainment targets’ at the end of the various key stages: seven, eleven, fourteen and sixteen.

Although Glennerster states that “taken together, this legislation was the biggest break with social policy tradition since 1945” (cited in Kavanagh and Seldon, 1994, pg. 322), Collings and Seldon (2000) state that “social policy is an area in which the Thatcher government lacked its radical edge” (pg. 72). Collings and Seldon (2000) state this for reasons including the failure of Thatcher to pursue any “whole-hog…radical options” (pg. 72). They argue that policies such as the privatization of the whole NHS, a refusal to give benefits to the unemployed unless they retrained or took alternative work, and education ‘vouchers’, where parents would have an entirely free hand in the choice of their child’s school should have been implemented. They state that these were all ideas that the government considered but subsequently dropped.

Whereas the long standing rate of state increase on welfare spending slowed, there was still a real rise in public spending by a fifth, with health and social security spending a third higher in real terms in 1990 than in 1979 (Collings and Seldon, 2000, pg.72). They also point out that the fundamental changes implemented by Mrs Thatcher didn’t come until her third administration, even though all the all the prescriptions had been available to her since 1979. In most cases, they claim, the reforms were often enacted too quickly and sometimes hand to be rapidly altered, for example, the 1988 Housing Act being replace d by the 1989 Act. Some measures also had unfortunate consequences: while the ‘right to buy’ policy increased owner-occupation to two-thirds of all households (Collings and Seldon, 2000, pg.72), the failure to address distortions in the housing market, coupled with an overheated economy, produced the huge disparity in house prices country-wide which handicapped labour mobility.

By the end of the Conservatives terms in Government it was evident that the changes made did lead to an increase in centralization, privatization and in most cases, a reduction in public expenditure in the welfare sphere, even if they didn’t extend as far as Margaret Thatcher would have initially liked them to. Many of the changes Mrs Thatcher made such as the establishment of the National Curriculum and enterprise in the NHS are sill in place and being developed today. However, it should also be noted that not all the changes made to the welfare state were beneficiary to ordinary people, as illustrated with the example of the consequences of the ‘right to buy’ policy.


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