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Thatcher 1979-90 > Chapter 14- Thatchers economy > Flashcards

Chapter 14- Thatchers economy Flashcards

1
Q

what was monetarism

A

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

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2
Q

what was the inflation rate in 1980

A

15%

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3
Q

what was the unemployment number in 1980

A

above 2 million

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4
Q

what saved Britain from serious balance of payments crisis in 1980

A

North Sea oil and gas

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5
Q

what did the 1981 conservative budget include

A

even further monetarist measures

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6
Q

what did Howe describe the 1981 budget as

A

‘the most unpopular budget in history’

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7
Q

how did income tax change under monetarism

A

top bracket- 83%-40% by 1988

standard rate- 33%-25%

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8
Q

how did VAT change during monetarism

A

went from 8-15% in 1980

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9
Q

who did thatcher see as enemies and why

A

left wing councils

they spent too much and wasted resources

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10
Q

who was Ken Livingston

A

head of the Greater London council who thatcher battled with

face of the loony left

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11
Q

what was the loony left

A

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

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12
Q

what was rate capping

A

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

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13
Q

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

A

sheffield and liverpool

refused to set budgets

stopped as faced by bankrupt

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14
Q

what did the local government act abolish in 1986

A

big metropolitan councils set up under heath

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15
Q

what was the result of there local governments act

A

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

big win against loony left

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16
Q

when was monetarism scrapped

A

1986

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17
Q

what was monetarism replaced by

A

privatisation and deregulation

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18
Q

what industries were privatised under thatcher

A

BP- 1979

British aerospace- 1981

British Gas- 1986

British airways- 1987

role royce- 1987

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19
Q

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

A

went from 3 million-9 million

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20
Q

what was deregulation

A

cutting back on government intervention to encourage entrepreneurship and wealth creation

21
Q

what did the loan guarantee scheme do

A

make it easier for businesses to borrow money

22
Q

what did the enterprise allowance scheme do

A

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

23
Q

what was financial deregulation

A

the loosening of control over banks and financial markets

24
Q

what were the results of financial deregulation

A

led to a massive boom of investment banking and financial speculation

25
Q

what was the ‘Big Bang’ 27th October 1986

A

deregulation of stock exchange

opened way for computer screen trading

foreign banks could now operate as stockbrokers

26
Q

what new breed of dealers appeared with the Big Bang

A

Yuppies

27
Q

what did London become seen as after the Big Bang

A

a place where big risks could be taken and a lot of monety could be made

on par with Wall Street

28
Q

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

A

2.2%

higher than Germany

on par with seventies

29
Q

what was done to control inflation

A

interest rates raised to 17% in 1979

30
Q

what was the problem with increasing interest rates

A

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

31
Q

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

A

went I to recession so they went bankrupt

32
Q

what was inflation in may 1980

A

22%

33
Q

what was inflation by 1986

A

2.5%

34
Q

what was inflation by 1990

A

10.9%

35
Q

what happened to unemployment as a result of reducing inflation

A

increased as industry had to become more competitive

36
Q

what was the impact of monetarism on industry

A

many industry plants closed down

mainly in midlands, Scotland, and South Wales

37
Q

by how much did manufacturing output fall from 1979-81

A

15%

38
Q

what were the effects of monetarism on production

A

fell 25% in West Midlands

steel production cut 30%

39
Q

what was unemployment in 1983

A

over 3 million

40
Q

when did unemployment next drop ti under 3 million

A

1988

41
Q

what was the unemployment rate in Liverpool in the 80%

A

25%

42
Q

what was the youth employment scheme

A

employers received subsidies to take on young workers

43
Q

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

A

2.1 million

44
Q

what was Econo,ic realignment

A

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

45
Q

what effect did economic realignment have on the north and south

A

worse for the north

emphasised north-south divide

46
Q

what did Howe advise Thatcher in 1981

A

cities such as Liverpool could be left in ‘managed decline’

47
Q

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

A

race and poverty

48
Q

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

A

31%

Thatcher 1979-90 (4 decks)

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