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1979 Margaret Thatcher became Britain's first woman prime minister.


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Margaret Thatcher.org

 

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1979-1983: Prime Minister – First Term

The new government pledged to check and reverse Britain's economic decline. In the short-term, painful measures were required. Although direct taxes were cut, to restore incentives, the budget had to be balanced, and so indirect taxes were increased. The economy was already entering a recession, but inflation was rising and interest rates had to be raised to control it. By the end of Margaret Thatcher's first term, unemployment in Britain was more than three million and it began to fall only in 1986. A large section of Britain's inefficient manufacturing industry closed down. No one had predicted how severe the downturn would be.

But vital long-term gains were made. Inflation was checked and the government created the expectation that it would do whatever was necessary to keep it low. The budget of spring 1981, increasing taxes at the lowest point of the recession, offended conventional Keynesian economic thinking, but it made possible a cut in interest rates and demonstrated this newly found determination. Economic recovery started in the same quarter and eight years of growth followed.

Political support flowed from this achievement, but the re-election of the government was only made certain by an unpredicted event: the Falklands War. The Argentine Junta's invasion of the islands in April 1982 was met by Margaret Thatcher in the firmest way and with a sure touch. Although she worked with the US administration in pursuing the possibility of a diplomatic solution, a British military Task Force was despatched to retake the islands. When diplomacy failed, military action was quickly successful and the Falklands were back under British control by June 1982.

The electorate was impressed. Few British or European leaders would have fought for the islands. By doing so, Margaret Thatcher laid the foundation for a much more vigorous and independent British foreign policy during the rest of the 1980s.When the General Election came in June 1983, the government was re-elected with its Parliamentary majority more than trebled (144 seats).

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