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In 1965, Edward Heath became the first leader chosen through election. Heath led a Conservative government from 1970 to 1974 that faced the problems of a stagnant economy and a declining international political position. In response, the party moved to curb the power of trade unions and encouraged more economic self-reliance. In foreign affairs, it continued the policy of restricting Great Britain's Commonwealth and international roles while expanding ties with Western Europe, as demonstrated by Britain's entry (1973) into the European Community (now the European Union [EU]).
In 1974, the Conservatives lost two elections and Heath was replaced as party leader by Margaret Thatcher, the first woman to lead the party. Thatcher was prime minister from 1979 to 1990, the longest uninterrupted government of the 20th cent. Her government dismantled much of Britain's postwar welfare state, and the party became identified with free-market economic policies. In 1990, Thatcher's leadership was challenged by members of the party; in the ensuing elections, she was succeeded by John Major. Under his leadership, the Conservatives won the 1992 general election. The party received a resounding defeat in the 1997 elections, and Major was replaced as party leader by William Hague. In 2001 the party, which had come to be seen as anti–European Union, was again trounced at the polls by Labour, leading Hague to resign. Iain Duncan Smith, who has strongly opposed further British integration with the EU, was chosen to succeed Hague.
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