1979 - 1990 Flashcards
THATCHER: STYLE AND IDEOLOGY
What was Thatcher a striking example of?
A conviction politician
THATCHER: STYLE AND IDEOLOGY
What did Thatcher have a strong aversion to?
Consensus politics, her 11 years in power ended consensus
THATCHER: STYLE AND IDEOLOGY
Why was Thatcher angry at Heath?
Abandoning new right policies and going back to Keynesianism
THATCHER: STYLE AND IDEOLOGY
What did Thatcher hate?
State spending, inefficiency and low growth
THATCHER: STYLE AND IDEOLOGY
What was Thatcher’s large majority after the general election, and what did this mean?
43, meaning she could easily implement drastic reform
THATCHER: STYLE AND IDEOLOGY
What did Thatcher believe Heath did?
Pushed Britain further towards socialism then the Labour governments
THATCHER: STYLE AND IDEOLOGY
Describe Thatchers early life
- Born the daughter of a grocer 1925
- Chemistry and law at Oxford
- First female party leader and PM
- An ardent anticommunist
MONETARISM
Define monetarism
The theory or practice of controlling the supply of money as the chief method of stabilizing the economy
MONETARISM
What is monetarist view on unemployment?
Not worry about rising unemployment so long as inflation was kept low, because some unemployment is generally healthy for the economy
MONETARISM
Who was Thatcher’s 1st chancellor of the exchequer?
Howe
MONETARISM
What did Howe reduce the standard rate of income tax to?
33% - 30%
MONETARISM
What did Howe reduce the marginal rate for higher earners to?
83% - 60%
MONETARISM
What did tax on unearned incomes fall to?
98% - 75%
MONETARISM
To make up for the impact tax cuts had on government income, what did Howe do?
Increase VAT by 4%
MONETARISM
What were the results of Howe’s tax cuts?
The rich paid less tax, the poor paid more, and the cost of living went up
MONETARISM
What was Howe’s calculation
Cost of living going up caused inflation, but once this was fought off everybody would be better off
MONETARISM
What was Howe forced to do when inflation rose?
Raise interests to 14% June 1979 and 17% in December
MONETARISM
What happened to public spending under Howe?
It went in the wrong direction and people, aswell as businesses, were impacted
MONETARISM
Did inflation eventually come down?
Yes, and the 2nd chancellor of the exchequer Nigel Lawson remained true to tax cuts. However, the cuts in direct taxes were balanced by an increase in other general taxes
SUPPLY SIDE ECONOMICS
By mid 1980s what was largely abandoned?
Monetarism, in favour for supply side economics
SUPPLY SIDE ECONOMICS
Define supply side economics
Supply-side economics holds that increasing the supply of goods translates to economic growth for a country.
SUPPLY SIDE ECONOMICS
Give examples of supply side economic policies
- Reducing taxation to give greater incentive
- Encourage competition to lower prices
- Limit power of trade unions so they couldn’t block productivity or hinder modernisation
- Cutting wasteful welfare payments as a way of saving public money and reducing dependancy
DEREGULATION
Define deregulation
A concerted effort to remove financial and legal restrictions thatcher believed prevented efficiency and profitability in many areas of socio economic activity
DEREGULATION
Give examples of areas in the deregulation programme
- Finance
- Transport
- Education
- Health