Chapter 14- Thatchers economy

Question 1

what was monetarism

Answer 1

economic theory whereby controlling money supply and government spending and borrowing inflation would be reduced

Question 2

what was the inflation rate in 1980

Answer 2

15%

Question 3

what was the unemployment number in 1980

Answer 3

above 2 million

Question 4

what saved Britain from serious balance of payments crisis in 1980

Answer 4

North Sea oil and gas

Question 5

what did the 1981 conservative budget include

Answer 5

even further monetarist measures

Question 6

what did Howe describe the 1981 budget as

Answer 6

‘the most unpopular budget in history’

Question 7

how did income tax change under monetarism

Answer 7

top bracket- 83%-40% by 1988

standard rate- 33%-25%

Question 8

how did VAT change during monetarism

Answer 8

went from 8-15% in 1980

Question 9

who did thatcher see as enemies and why

Answer 9

left wing councils

they spent too much and wasted resources

Question 10

who was Ken Livingston

Answer 10

head of the Greater London council who thatcher battled with

face of the loony left

Question 11

what was the loony left

Answer 11

name given by rich wing media about left wing local councils that promoted liberalisation and political correctness

Question 12

what was rate capping

Answer 12

introduced in 1995 to cap how much local councils copied raise in taxation

Question 13

which councils tried to rebel against rate capping and what happened to them

Answer 13

sheffield and liverpool

refused to set budgets

stopped as faced by bankrupt

Question 14

what did the local government act abolish in 1986

Answer 14

big metropolitan councils set up under heath

Question 15

what was the result of there local governments act

Answer 15

central government gained a lot of power it took away from local governments

big win against loony left

Question 16

when was monetarism scrapped

Answer 16

1986

Question 17

what was monetarism replaced by

Answer 17

privatisation and deregulation

Question 18

what industries were privatised under thatcher

Answer 18

BP- 1979

British aerospace- 1981

British Gas- 1986

British airways- 1987

role royce- 1987

Question 19

how did the number of individuals owning stocks change from 1979-1990

Answer 19

went from 3 million-9 million

Question 20

what was deregulation

Answer 20

cutting back on government intervention to encourage entrepreneurship and wealth creation

Question 21

what did the loan guarantee scheme do

Answer 21

make it easier for businesses to borrow money

Question 22

what did the enterprise allowance scheme do

Answer 22

gave starting businesses £40 a week for a year to start up

Question 23

what was financial deregulation

Answer 23

the loosening of control over banks and financial markets

Question 24

what were the results of financial deregulation

Answer 24

led to a massive boom of investment banking and financial speculation

Question 25

what was the 'Big Bang' 27th October 1986

Answer 25

deregulation of stock exchange opened way for computer screen trading foreign banks could now operate as stockbrokers

Question 26

what new breed of dealers appeared with the Big Bang

Answer 26

Yuppies

Question 27

what did London become seen as after the Big Bang

Answer 27

a place where big risks could be taken and a lot of monety could be made on par with Wall Street

Question 28

what was the growtn rate (GDP) of Britain look like from 1980-88

Answer 28

2.2% higher than Germany on par with seventies

Question 29

what was done to control inflation

Answer 29

interest rates raised to 17% in 1979

Question 30

what was the problem with increasing interest rates

Answer 30

harder for businesses to borrow and value of pound to increase making businesses output decrease.

Question 31

what happened to the economy in 1980 and what did this mean for businesses

Answer 31

went I to recession so they went bankrupt

Question 32

what was inflation in may 1980

Answer 32

22%

Question 33

what was inflation by 1986

Answer 33

2.5%

Question 34

what was inflation by 1990

Answer 34

10.9%

Question 35

what happened to unemployment as a result of reducing inflation

Answer 35

increased as industry had to become more competitive

Question 36

what was the impact of monetarism on industry

Answer 36

many industry plants closed down mainly in midlands, Scotland, and South Wales

Question 37

by how much did manufacturing output fall from 1979-81

Answer 37

15%

Question 38

what were the effects of monetarism on production

Answer 38

fell 25% in West Midlands steel production cut 30%

Question 39

what was unemployment in 1983

Answer 39

over 3 million

Question 40

when did unemployment next drop ti under 3 million

Answer 40

1988

Question 41

what was the unemployment rate in Liverpool in the 80%

Answer 41

25%

Question 42

what was the youth employment scheme

Answer 42

employers received subsidies to take on young workers

Question 43

how many less people were employed in manufacturing in 1990 compared to 1979

Answer 43

2.1 million

Question 44

what was Econo,ic realignment

Answer 44

moving British economy away from heavy industry and manufacturing and towards services

Question 45

what effect did economic realignment have on the north and south

Answer 45

worse for the north emphasised north-south divide

Question 46

what did Howe advise Thatcher in 1981

Answer 46

cities such as Liverpool could be left in 'managed decline'

Question 47

what were the riots in brixton, Liverpool and Birmingham said to be due to by the Scarman report

Answer 47

race and poverty

Question 48

how much less effective were British workers compared to those in Europe in 1984

Answer 48

31%