Thatcher's Economic Policies

Question 1

What were Thatcher’s aims for the economy?

Answer 1

• Reduce inflation (monetarism etc.)
• Reduce government debt (privatisation etc.)
• Increase efficiency of economy (supply side economics etc.)
• Reduce power of Trade Unions

Question 2

How was Maggie doing with Trade Unions?

Answer 2

+ Unions became far more willing to work with the government after the strike defeat
+ No. of members fell dramatically over Thatcher’s time
+ Government support for failing industries was removed
- Days lost to strikes was at its highest
- Unemployment was very high - miners lost pits
- Crime rate doubled during 80s

Question 3

What was Maggie doing with tax? (Successes and Failures)

Answer 3

+ Decreased income tax significantly (money seems more as your own)
+ Decline in tax avoidance
+ City of London grew rapidly - became one of the major financial centers of the world
- Increase in other taxes like VAT - increased wealth inequality
- Poll tax brought down Thatcher
- Due to London’s growth, riskier financial schemes took place to make huge sums of money
- 1989 Poll Tax - Fixed tax per adult resident (Hated)

Question 4

What was monetarism?

Answer 4

• Introduced a new economic priority, requiring new economic policies
• Controlling inflation - believed this was by reducing excessive state spending
• Overall was to drain excess money from the economy

Question 5

How successful was privatisation from Thatcher?

Answer 5

+ Saved £20 billion total
+ No. of shareholders tripled
+ Companies overall became more efficient
+ Privatisation of companies like BT found their customers were more satisfied with their service
- Privatisation led to prices increasing faster than inflation
- Privatisation led to job losses
- British Rail was not improved by privatisation

Question 6

What was supply side economics?

Answer 6

• Economic policy shifted at the end of 1982
• Ministers admitted it was impossible to measure the money supply, thus monetarism was largely abandoned
• Designed to stimulate production in the private sector, including tax cuts and privatisation - mass increase in production and efficiency

Question 7

What was ‘Breaking-Even’?

Answer 7

• Wanted to break even by 1985
• Needed to stop losing money
• Thatcher wanted nationalised industries to become more efficient
• Led to large scale job losses
• Complete failure