Primarily because she and her Government took on the power of the mighty unions and broke them and thus transformed the way industries were run in Britain. As you can guess this was heresy to the union leaders and their left wing supporters.
During WW2 the unions grew in strength and started dictating to the government (there were around thirty separate strikes in the aircraft industry in the year 1944 alone). By the 1960's they were very powerful and had imposed terms and conditions that gave them more power than the management, for example -
The closed shop - every single employee of an organisation had to become a union member, anyone who refused would be instantly fired.
Job continuation - any employee who left the organisation had to be replaced.
Job restriction - employees could only carry out functions outlined in their job description, anything outside it and they had to call in another employee to do that part.
Pre 1979 successive governments had either meekly given in to the demands of the unions or those that had tried to oppose them had either been humiliatingly defeated or had backtracked when the going got tough. During the 1970's services were constantly disrupted by strikes - no mail delivered for weeks, TV services closed down for weeks, no rail service during holiday time, power cuts at the height of winter etc causing much misery for the ordinary man and woman and for their children.
As to your question asking how these industries were expected to compete in markets, the unions weren't interested and didn't care about that. Those organisations were there to provide jobs for their members and NOT to make profits which were considered immoral and un-socialist. Many of the organisations blighted by strikes were nationalise industries and any losses they made were compensated by the government, money obtained from high taxation from the public. For example when the Thatcher government were elected the nationalised British Steel Corporation was making an annual net loss of 2 billion pounds. They decided that this could not go on and announced job cuts which led to strikes.
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