It seems that Brits were just as much or even more nostalgic for the 1950's/60's and even early 70's in the 80's:


Dave Stewart & Barbara Gaskin brought Lesley Gore's "It's My Party" to the 80's. While very 80's-sounding her styling in the video and the ending look/sound nostalgic and retro.
Tracey Ullman's "They Don't Know" from 1983 (I wonder if Queen used her as inspiration for the "woman" character with the vacuum cleaner?)
Speaking of which, the whole Queen's "I Want to Break Free" video is a homage/parody of 50's-70's Britain and Coronation Street.
Alison Moyet famously covered "That Ole Devil Called Love"
Mary Wilson's "Just What I've Always Wanted"
Madness' "Our House" - old-timey houses and house interiors in the video plus nostalgic lyrics ("Our house was our castle and our keep/Our house in the middle of our street/Our house that was where we used to sleep")
Shaking Stevens built a career on sounding like the 50's Rockers.
Dexy's "Come On Eileen" and Danny Wilson's "Mary's Prayer" videos both use old footage from the 60's.
Bananarama's covers of 60's songs like "Na Na Hey Hey Kiss Him Goodbye", Diana Ross-influences in "I Want You Back" and later covered "Help!".
Kim Wilde covered "You Keep Me Hanging On" by The Supremes
The Pretender's "Don't Get Me Wrong" music is a tribute to the British 1960's TV spy series The Avengers.
Soft Cell's "Tainted Love" cover
ELO's "So Serious" and other songs had 60's influences and inspired music videos.
A few 50s/60s songs were revived in the 80's either in ads or animations like "Reet Petite" and "My Baby Just Cares For Me".
Kylie Minogue's music videos from the 1980's and early 1990's also had some 50's and 60's (and even 1940's!) influences - check "Locomotion", "Je Ne Sais Pas Pourquoi", "Got To Be Certain", "Hand On Your Heart", "Step Back In Time"and "Tears on My Pillow".

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My question is does anyone know the reason why Brits looked so fondly to the 50's, 60's and even the 70's back then (distaste with Thatcher?). I know about the 20 year rule, but apparently Brits were starting to miss something else (feeling like Britain is turning too multicultural and hence losing its Britishness?)

The entire "new wave" era of the 80s was a specific return to the 50s. Much to my own dismay, I might add. After the staggering creativity of the 60s and beautifully meandering spirituality of the 70s, the pendulum swung drastically back. Back to the jackets with thin lapels, skinny ties, pointy glasses. The short concise songs that, behind their layers of synths, often had very 1950s-like chord progressions and melodies. And all search for "deeper meaning" or "higher consciousness", hallmarks of the 60s and 70s, ceased and everything became very shallow and materialistic.  And for the 60s influences you point out, the majority of it was EARLY 60s. Pre-"mind expanding consciousness" you might say. The bouffant hair, the girl-group style. Perfectly exemplified by the Tracy Ullman illustration you posted. So, in a way, that perceived "embrace" of the 60s was actually a rejection of a big part of it. As if the "heaviness" of the 60s and 70s had never happened.

By the way, kudos to you for knowing "Tainted Love" was originally a UK hit for Gloria Jones in 1965 and was not original to Soft Cell.

^Happy holidays! :)

I think in Britain the nostalgia maybe had to do with Thatcher who became a prime minister in 1979 and by 1981-1983 it was evident she was detrimental to didn't quite handle the North (Scotland and Northern Ireland) well. Not that those after her have done much better mind you.

Of course Thatcher despite her failures was more of a scapegoat for the frustration of Britain losing its position of an empire, the globalization, exporting formerly British jobs abroad, more and more immigrants going to the UK, etc. Honestly though, Brits themselves haven't done much to improve things -- I don't think British tourists until the 80's had that stereotyped association they have attached now as rowdy, binge-drinking hooligans. In fact they were thought of smart, polite, sophisticated, posh and even a bit snobbish. Nowadays people associate Brits only with the snobbish part as less and less Brits act polite.

As for the "Made in Britain" vs "Made in China" sentiments I bet most of us, liberals and conservatives wish we had more things produced locally. Alas, not quite possible anymore. I bet modern-day Swan Teasmades (a typical British invention) would read "Made in China". And what's worse is that's often child/slave labor. Corporations only care about cheap production costs.

So Brits decided to "Rip It Up" and start again, ooh ooh with Brexit, we'll see how that will be down the line.

The 80s seemed like a pretty bad time for Britain. The old industries were dying and the country was starting to lose its cultural identity. As someone mentioned too, the loss of empire had an effect I would think.

I think the OP is over thinking somewhat. There were more than a few 50s throwbacks in the mid-late 70s be it in the US (the success of Grease and also Happy Days being huge and probably a few more examples) and in the UK bands like Showaddywaddy and Darts harked back to 50s American doo-wop as well as there being a bit of an unintentional rockabilly revival around 78/79/80 with groups like Matchbox and also from New York there were the Stray Cats. Perhaps all that may have been on the coattails of Grease being so huge in 1978?

If anything it is more like the twenty year or so nostalgia cycle and any cover versions are irreevant when they have a more contemporary 80s sound and feel and likewise any usage of old clips in videos.

Brits have famously been obsessed with American soul music since the days of the British invasion and Northern Soul, and about half of your examples & many famous ones you didn't mention by Culture Club, Phil Collins, ABC etc. are homages to soul music. Stock Aitken & Waterman openly compared their production style to Motown (they produced Kylie's and many of Bananarama's hits); Dexy's was explicitly a soul revival band; Tracey Ullman's first single was a soul cover, as were 2 of Soft Cells' hits.

fwiw the soul revival wasn't exclusively British, as Hall & Oates and Huey Lewis were almost very successful