Major Problems and Black Wednesday, 1992-97

Main

1992 Election - Conservative victory

1992

Surprise Conservative victory. Used old fashioned 'soap box' politics. Labour too over the top and arrogant.

Black Wednesday

16 September 1992

By Sept 1992, the pound (with several other currencies) was coming under pressure from foreign exchange speculators - trading at low level, close to min. allowable rate 2.77 marks.
Day started with wave of speculative selling. Gov. determined not to devalue and stay in ERM.
Chancellor, Lamont, increases interest rates - 10% -> 12% ->15% - hoped to persuade investors to buy pound again. B of E spent huge amounts buying pounds.
Pound continued to sink. Emergency meeting. Decide to withdraw - announced
Major disaster for party (pun not intended) - lost rep. for economic competence. Strengthened Eurosceptics and Labour opposition. Lost press support. Party divisions.
Although recovered well - less damaging than thought, maybe even beneficial.

N. Ireland - Downing Street Declaration

1993

Launched 'Back to Basics' campaign

1993

N. Ireland - the Hume-Adams Plan

1993

Economic recovery

1993 - 1997

Economic recovery accelerated. Reduced gov. borrowing and inflation. Unemployment down, productivity up (a little). Consumer spending, car ownership, house prices up. Business supportive of gov. policies.
Kenneth Clarke replaced Lamont as chancellor - confident, good communicator.
Took over when American economy coming out of recession.
British economy doing well - deregulation and flexible working practices - Germany doing badly.
Privatisation - coal in 1994, railways in 1996 (controversial) - were going to privatise Post Office - more shares in privatised industries - stock market up.

Major's 'bastards' off tape leak

1993

'Just think it through from my perspective. You are the prime minister, with a majority of 18... where do you think most of the poison is coming from? From the dispossessed and the never-possessed. Do we want three more of the bastards out there?'

Maastricht blocked by rebel MPs

July 1993

Gets it through with vote of confidence in the end.

Scott enquiry

1994

Set up by Major to investigate illegal arms dealing. Proved gov. ministers had broken rules and been 'economical with the truth'.

N. Ireland - IRA ceasefire

1994

Major reshuffles cabinet

1994

Cash for questions scandal begins

October 1994

Neil Hamilton and other Tory MPs were accused of accepting money in return for lobbying on behalf of the controversial owner of Harrods, Mohammed Fayed.

N. Ireland - Bomb attack on Downing Street

1995

Major calls leadership election

June 1995

Sign of weakness or desperation? Satire from the media. Possible challenges from Portillo and Redwood. Portillo decided against. Redwood stood for Eurosceptics and Thatcherites. Major had meeting with Heseltine - deputy PM - made sure everyone knew he voted for Major.
Major wins decisively - did not strengthen party.

N. Ireland - renewal of IRA ceasefire

1996