Premiership of Margaret Thatcher

The premiership of Margaret Thatcher spanned Britain from May 1979 to November 1990. She became Prime Minister after having served as the Leader of the Conservative Party since 1975. Domestically, she is best known for her sweeping policies concerning the affairs of the economy, including the privatisation of most nationalised industries. In foreign policy, she fought a war against Argentina and played a key role with US President Ronald Reagan and Soviet leader Mikhail Gorbachev in ending the Cold War. She alienated her party leadership in 1990 primarily on the issue of greater economic integration into the European Community. She also alienated many Conservative voters with a demand for a local poll tax. As her support fell away, senior Conservatives challenged and defeated her as Party leader, forcing her resignation as Prime Minister.

A polarising figure for Britons, Thatcher nonetheless ranks highly among historians, and generally fares well in contemporary opinion polls.

Under Margaret Thatcher's government, the taming of inflation displaced high employment as the primary policy objective.

As a monetarist, Thatcher started out in her economic policy by increasing interest rates to slow the growth of the money supply and thus lower inflation. She had a preference for indirect taxation over taxes on income, and value-added tax (VAT) was raised sharply to 15%, with a resultant actual short-term rise in inflation. The fiscal and monetary squeeze, combined with the North Sea oil effect, appreciated the real exchange rate. These moves hit businesses—especially the manufacturing sector—and unemployment exceeded 2 million by the autumn of 1980, up from 1.5 million at the time of Thatcher's election just over a year earlier.

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