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The text on this page follows the development of Great Britain since the end of the Second World War and provides an historical background to the development of its party system. After considering Great Britain's post-war consensus and its mixed economy, we will move on to address Thatcherism and Tony Blair's 'third way' in order to help us understand the developments in British history. Other texts in this section deal with the following subjects:
Overview: Charles Dickens (1812-1870) wrote about 19th century Victorian England and documented the way in which the country saw itself and the social conflicts in a nation of imperial size and international standing. This picture of England portrayed by Dickens still fills the minds of foreign visitors. But since the beginning of the 20th century this apparently calm and contented country has been shaken up. The increasing importance of the workforce and trade unions as a political force, the beginning of the women's liberation movement (women's right to vote 1918), the emerging discussion around social problems and the questioning of the British Empire during two world wars all conspired to change fundamentally the way in which British domestic and foreign policy was seen. The war effort had resulted in a loss of two-thirds of British foreign-trade volumes and a threefold increase in the national debt by 1945. Great Britain was dependent on American financial aid the pound was losing value. A return to its previous role of world power was not an option for both political and economic reasons. Many British colonies were demanding their independence. Moreover, many previously socially deprived sections of British society were now demanding their rights. Their confidence had grown during a war which had managed to mobilize the population in way previously unknown, integrate women into the production process and establish full employment. As far as domestic policy was concerned, post-war governments initially concentrated on providing for the population, moving on later to improving living standards and on re-establishing international economic competitiveness. Despite the fact that the nation's two largest political parties, the Labour Party to the left drawing its support form the working classes and the Conservative Party to the political right, did not follow consensus-based strategies to achieve this goal, it is still fair to talk about a post-war consensus existing in British politics. The foundations of this consensus were based upon a theory by the British economist John Maynard Keynes (1883-1946) which advocated expanding the welfare state. In concrete terms this meant the development of a state-financed system of social security accessible to all citizens and state responsibility for the economy. According to this theory, the state should be more active in introducing regulations and controls aimed at influencing prices and wages, rather than just implementing economic policy in an attempt to prevent recession. The Labour Party nationalized many key areas of the economy including public utilities, airlines, public transport and the steel industry. Up until the mid eighties, the British economy was a mixed economy, that is, it was based on interplay between nationalized and private industry. By the beginning of the 70s, the British population were enjoying a marked improvement in living standards. Successive governments, however, had failed to strengthen the British economy in the face of international competition. This lack of competitiveness had led to a situation in which even key British exports to fading colonies were in decline. During the 70s Great Britain was known as the "sick man of Europe" and was suffering from the British disease". The symptoms of this "disease" included high inflation, a permanent trade deficit, wage levels that were too high (set against economic productivity), regular strikes caused by all-powerful trade unions and a general hostility toward social and economic change. The Labour governments of the 70s made several unsuccessful attempts at limiting the number of strikes and increasing the efficiency of state price and wages policy by involving the trade unions in the economic decision-making process. Back to top of page]
During her first period in office, she put her faith in monetary policy and its controlling effect on the national economy (monetarism) and later in the fight against inflation to ensure the best possible results from the market economy. In doing so she took up the international change in economic thinking based on the theories of the American economist Milton Friedman. Margaret Thatcher confronted the trade unions head on and introduced legislation that would drastically limit their power. The defeat of the miners following a bitter strike in 1984/85 represented a coming to a head and a key moment in the politically motivated protest against the Conservative government, a protest spearheaded by the miners. This defeat, then, provided the symbolic end of trade union power (...). Margaret Thatcher set about completely re-organizing the former mixed economy into a private market-based economy through a comprehensive program of privatization. The new benchmark for social policy was not whether services were required, but whether they could be financed. From now on unemployment was to be regarded as the fate of the individual rather than the responsibility of the state. Those affected were to bear the main responsibility for finding new work. The social safety for catching and treating equally both those unwilling and those searching for work was abolished. Wherever possible, the state withdrew itself out of social policy and made room for individual imitative, that is, the private economy. An orientation towards the needs of the market would modernize the economy and society. The aim of this policy was to rid Britain of uncompetitive structures, to encourage entrepreneurial spirit and to break a mentality among some sections of society that they exist as the passive receivers of state handouts. The problems caused by these changes including growing homelessness, the widening gap between rich and poor and widespread dissatisfaction in regions largely untouched by the economic boom of the late eighties were largely dismissed by the Conservatives as being unavoidable. Reductions in social security payments, according to the government, were not intended to affect those in need, but only those profiting from the generosity of the welfare state. The Conservatives believed that social problems should be seen more as a problem of society and less a problem of the state. Thatcher’s government justified this policy of austerity by emphasizing the need to balance the national budget and fight inflation, which, according to the government, were closely connected to the national debt. The economic aims of the Thatcher government had largely been achieved by the middle of the eighties. While unemployment figures were still recording numbers in excess of 10 percent in 1987, inflation had been brought down to around four percent for the first time since the 60s. And because of extra income from the privatization program and north sea oil revenue, by the end of the eighties the national budget had been more than balanced. A budget surplus had been achieved, which was used to pay off the relatively large national debt by European standards. The tax system was reformed and made simpler in 1988 and the top-rate of income tax was reduced to a level unparalleled outside of the US. This made Great Britain an attractive place for the booming foreign investment during Thatcher's term in office. (...). The policies followed by Thatcher were so characteristic of the eighties that the term "Thatcherism" became synonymous for a kind of politics that rigorously sought to achieve market economics with little or no state interference. Numerous surveys carried out both during Thatcher's term in office and her successor's, John Major, however, repeatedly indicated a lack of support from the population for some of the Conservative's central political policies such as privatization, the reform of the National Health Service and the introduction of the Poll Tax (council tax). Despite the fact that the populace shared a growing belief that the state should play less of a role in the community and that individuals should take on more responsibility for their own lives, this new shift in social policy was never very popular. Indeed, the vast majority of the British people were not prepared to accept the negative social consequences of Thatcherism. The election successes of the Conservative Party had also coincided with other circumstances (such as the Falkland War in 1982), powerful leadership, tax and financial policies and a weak opposition. Back to top of page]
Tony Blair's 'third way' was conceived as a pragmatic strategy aiming to bridge the gap between the rather roughly presented extremes of "cold-hearted capitalism" on the one side and a welfare policy whose reach into society was too great on the other. The aim of this new strategy is to create an efficient education system and a situation in which every one, regardless of background, has an equal chance in society, and to ensure that all who are willing to work are allowed to share in the nation's success. In contrast to the welfare state, the 'third way' does not guarantee comprehensive social security unless individuals are prepared to work and take responsibility for their lives. Unlike the Conservatives, the Labour government does not want to exclude those willing to work because of their "family background" or where they were brought up. Social problems will not be tolerated, but dealt with. Yet the government does not expect to find the solutions for these problems alone. The new goal of state initiatives is to help society, that is, affected individuals, families, social groups, communities and interest groups to reach a position in which they are able to help themselves. From the point of view of the 'third way', just what the state can do to unite society and encourage the competitiveness of the economy cannot be taken from economic or philosophical textbooks. The challenge for the state is to identify those strategies which offer citizens the most opportunity and work without carrying any ideological baggage. In order to create this opportunity, the government of Tony Blair believes that reform of the nation's constitution and political institutions is necessary. As an example the government wants to strengthen basic civil rights and introduce democratically elected parliaments into Scotland and Wales. This is considered as being the right way forward and encouraging participation from citizens in the political process. It is also hoped that these changes will promote "competitiveness" of the British model of democracy. [Taken and translated from: Roland Sturm: Entwicklung Großbritanniens seit 1945; in: Informationen zur Politischen Bildung 262, "Großbritannien", Bonn BpB 1999]
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Subjects: Human
Rights I Democracy I Parties
I Examples I
Europe
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Globalisation
I United Nations
I Sustainability
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