First Thatcher ministry

Margaret Thatcher was Prime Minister of the United Kingdom from 4 May 1979 to 28 November 1990, during which time she led a Conservative majority government. She was the first woman to hold that office. During her premiership, Thatcher moved to liberalise the British economy through deregulation, privatisation, and the promotion of entrepreneurialism.

This article details the first Thatcher ministry which she led at the invitation of Queen Elizabeth II from 1979 to 1983.

Following the vote of no confidence against the Labour government and prime minister James Callaghan on 28 March 1979, a general election was called for 3 May 1979. The Winter of Discontent had seen the Labour government's popularity slump during the previous four months, and the opinion polls all pointed towards a Conservative victory.

The Conservatives won the election with a majority of 43 seats and their leader Margaret Thatcher became the United Kingdom's first female prime minister.

Thatcher inherited some of the worst economic statistics of postwar Britain. The nation was still feeling the effects of the numerous strikes during the recent Winter of Discontent. Inflation had recently topped twenty per cent, and unemployment was in excess of 1.5 million for the first time since the 1930s.

Thatcher's monetarist and deflationary economic policies saw a cut in the inflation rate from a high of 22 per cent in May 1980 to just over 13 per cent by January 1981, and by June 1983 it had fallen to a 15-year low of 4.9 per cent.

Decreasing the public sector borrowing requirement as a share of GDP was a part of the medium term financial strategy at the beginning of the first Thatcher ministry. It was brought down from around five per cent during the 1978–1979 period to around half of this figure during the 1982–1983 period.

Public expenditure as a share of GDP increased at around 1.5 per cent per year during the 1979–1983 period, despite the target being a reduction of one per cent, per year. This increase in spending was mostly driven by larger expenditures in social security programs such as unemployment benefits, industrial support, and increased lending to nationalized industries; defense spending did not go up considerably during the Falklands War.