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The Creation of Thatcherism

There were three factors at play in the creation of Thatcherism; A new leader; the development of new ideas and of course Mrs Thatcher herself.

You can also take a look at the Generation Right video below exploring how the UK has changed due to Thatcherism and give your feedback here. It will be used to help future projects.

A New Leader

Mrs Thatcher replaced Heath as leader of the Conservative Party in 1975 and won the 1979 general election.

The Conservative Party had contained groups who wanted a more free market approach than Conservative Governments had been prepared to carry out.

Enoch Powell had been a champion of these in the early 1960s and the Heath Government had started with new ideas but soon abandoned them.

The right in the Conservative Parliamentary Party, reacting against Heath’s failures, wanted a more radical Conservative Government and supported Thatcher for the leadership.

As leader she had to balance the different groups in the Conservative Parliamentary Party and the 1979 election manifesto and her first term in office from 1979 to 1983 were cautious, as she still a number of ministers who had been close to Heath, the ‘Wets’ as the right in the Party called them. Some of the key Thatcherite policies only developed after her 1983 landslide election victory.

New Ideas

From the mid-1970s New Right ideas began to develop:-


  • The works of Friedrich Hayek became popular. As an undergraduate, Margaret Thatcher had read his book The Road to Serfdom, written in 1944, with its central message that socialism, even in its social democratic form always leads to authoritarianism and no compromise must be made with it. She later talked to Conservative audiences about ‘the enemy within’.  Hayek was still alive in the 1970s and was now invited to right wing discussion groups.
  • Milton Friedman challenged Keynesian economics with the idea that inflation is a result of an increase in the money supply.  These monetarist ideas argued that governments caused inflation by overspending and that public spending diverted investment from the private sector where it would have been productive.
  • Variants of public choice theory argued that bureaucracies, often through close links to interest groups, have an interest in increasing their spending as this gives them more power.  The only solution to this is to entirely remove some of the things that the state is doing, rather than simply to reduce public expenditure by a fixed proportion across the board.
  •  There was a neo-Conservative reaction against the social liberalism and movement for individual freedom of the 1960s, for example, in the writing of Roger Scruton and the Salisbury Review
  • The period also saw the creation of right wing think tanks promoting free market ideas.  Keith Joseph, one of the Conservative MPs closest to Mrs Thatcher, set up the Centre for Policy Studies in 1974. The Institute for Economic Affairs researched practical change to policy. The Adam Smith Institute, founded in 1977, promoted privatisation.

Thatcher Herself

There has always been a debate in political science and historical study as to whether individuals make a difference to the course of events – most theorists now see a role for agency as well as underlying structures.

Certainly Margaret Thatcher had unusual feature as a leader.

She saw herself as self-made in contrast to many Conservative politicians, who came from privileged background, and therefore something of an outsider.

It has been said that the British Labour Party owes more to Methodism than Marx and equally, for Mrs Thatcher, her Methodist background gave her a belief in the virtues of thrift, hard work and self-reliance and a traditional social morality.

She saw these as the opposite of socialism and were the values which were to be encouraged in the British people. To this was added a belief in the ability of markets to solve problems and create wealth.

As Prime Minister she had a certainty of conviction and a willingness not to compromise that allowed her to drive new policies through the government machine.

This was helped by her legendary ability to do without much sleep which meant that she was always on top of briefing notes and committee papers for the next day.

Sir Michael Butler, Britain’s Permanent Representative in the EU, remembers being with her, in Stuttgart, the night before a European Council meeting, to agree the line to be taken the next day and then staying up with her while she drank whisky and talked, mostly complaining about her Cabinet colleagues.

Eventually, at about 2am, she decided to go to bed and asked him to put together a briefing paper for the next day.  When he asked what time she needed it, she said for breakfast at 7am!