Privatisation Flashcards
why did Thatcher believe privatisation was necessary?
nationalised industries were inefficient, over-manned and privatising them would raise revenue to fund tax cuts/ boost investment.
How did privatisation proceed slowly, and what did it provide the government with?
Aerospace and petroleum sold off first.
From 1984, BT, British Gas, British Airways, Rolls Royce, British Steel & Water Utilities amongst many.
Provided the government with revenue to decrease taxes.
What did competition produce?
Competition did produce innovation and better customer service in some industries.
Who was privatisation very popular with?
How many shareholders were there comparing 1979 and 1990, what did she hope it would do?
Those who bought shares in new companies, e,g. British Telecom.
In 1979, there were 3 million shareholders, but in 1990, 11 million.
Thatcher hoped it would reward the hardworking with a modest share in future of capitalism.
How did Thatcher make privatising industry more attractive to prospective investors?
Thatcher introduced legislation to reduce the power of trade unions- two Employment Acts of 1980 and 1982 ,
and Trade Union Act of 1984 which required unions to hold a secret ballot before trade union action
What did weaker unions mean?
Increased job insecurity, lower pay & conditions.
How did Thatcher target the coal industry?
She created circumstances for the year long coal strike and forced the miners to realise that most of the industry was unsustainable.
She made sure there was no security net for these coal/ steel communities, apart from the dole (benefits).
Despite being more competitive, where did it fail to improve customer service?
Water and gas industries
What was the consequence of the government undervaluing the assets of privatised industries?
The value rose steeply, encouraging shareholders to sell for a quick profit and selling to big financial operations, rather than fellow small shareholders.
Another successful privatisation was council houses, how many were sold between 1979 and 1988.
Over 1 million.
What was the council house policy popular with, and how much did it raise?
Popular policy with aspiring middle class, raised £19 billion to pay for tax cuts.
How was privatisation a problem for housing and class system?
It began the chronic housing shortage of good quality homes,
It widened the gap between the rich and the poor further.
How was Thatcher’s economic ‘miracle’ faltering by 1989?
Due to very high interest rates on mortgages, the people Thatcher admired (the hard working) were paying heavily for the houses they had been encouraged to buy.
