Thatchers Economic Policies Flashcards
What economic ideology did Thatcher adhere to and what were its tenetss
Monetarism; the belief that a tight control of the money supply and less govt restrictions will result in non-inflationary economic growth
What was the inflation and unemployment numbers in 1980
15% and 2 million
What was the only thing likely preventing Britain from a complete run on the pound and balance of payment crisis
The flow of north sea oil
What did the 1981 budget do which suprised most people
doubled down on monetarist policies, limiting spending by cutting grants to local councils and freezing benefits. Described as the biggest fiscal squeeze in peacetime
What did Geoffrey Howe say about the ‘81 budget
Most unpopular budget in history
Why did Thatcherites believe so strongly in cutting public spending
They thought, contrary to keynes, that the public were more allocatively efficent in spending money compared to the govt
How did Thatcher change the top rate of income tax, for literally no reason and to pretty bad ramifications
From 83% to 40% by 1988
How did Thatcher change VAT upon her ascension to power
Increased from 8% to 15%
Why did Thatcher place more emphasis on regressive, rather than progressive tax policies such as raising VAT and cutting high levels of income tax
She hates poor people and was a bootlicker for corporations
where and when was the UKs first gender-neutral bathroom established
Royal Chelsea Hospital on 28th September 2013
What goods, disproportionately purchased by the working class, and even if they werent a flat price increase affects them much more than Thatchers well off party benefactors, were increasingly indirectly taxed in almost every one of Thatchers budgets
Cigarettes Alcohol and Petrol
Who did the conservatives fight with over drastic cuts to public spending and the wastefulness of spending
left wing and labour Local Councils.
Where did the greatest resistance from a local council take place
The Greater London Council, with Thatcher treating many of the GLCs policies as provocations. Ken Livingstone, head of the council, was demonised as the head of the loony left
What was the Loony Left
name given by right wing press to left wing policies that promoted liberal and politically correct policies e.g. mulitcultral zones, lgbt rights, to support for irish republicanism. Many myths, including that baa baa black sheep was banned for being racist by Hackney council
Why did the Conservative goverment introduce rate capping and what was it
It was a limit to how much the local council could raise in taxation, in order to control overspending by Labour Councils
Name some local authorities that rebelled against rate capping in 1985 and were they successful
Sheffield and Liverpool, no
What did Thatcher abolish in 1986 that Heath had previously set up
the Local Goverment Act-it set up the big metropolitan authorities. Abolishing it heavily centralized the UK to short term benefit but overall lead to much less local accountability
Despite her best efforts, why was Thatcher never able to cut public spending in real terms
The amount spent on social security, especially unemployment, heavily increased, ironically due to Thatchers own cost saving policies(cutting jobs destroying unions etc)
When did Thatchers experiment with monetarism end and why
essentially over by her second term-1986. Final nail was when Lawson abandoned spending targets. Ended because she managed to break the philips curve and have both high unemployment and high inflation, the two of which are supposed to be mutually exclusive
After 1986, what did Thatchers economics ethos look like
Although monetarism had been abandoned, Thathcer placed great emphasis on supply side, rather than the post war demand side, economics, with a huge focus on privatisation and deregulationG
Give some examples of supply side and demand side policies
Supply Side- Subsidizing production, reduxing corporation tax, reducing labour rights e.g. trade unions, ensuring a flexible labour supply and encouraging competition
Demand side- Supporting full employment by manipulating all elements of AD-consumption, investment, govt expenditure and exports-imports through both fiscal and monetary policy- tax rates and interest rates
Name some organizations privatized during Thatchers reign of terror
British Petroleum-79
British Aerospace-81
Britoil-82
Jaguar-84
British Telecommunications-84
British Gas-86
British Airways-87
Rolls Royce-87
British Steel-88
Water-89
Electricity-90
What was the Biggest Share offer in history, held b the Thatcher goverment
Sale of British Gas in ‘86
Between ‘79 and ‘90, how did the number of people holding stocks change
tripled from 3 to 9 million
What privatisation truly kick-started the drive for it in 1984
BT
Why did Thatcher favour privatisation
Anti-socialist-they believed that Private companies were more dynamically and overall more efficient at providing a service, and competition would improve and encourage innovation, as opposed to a govt controlled monopoly
It also generated huge revenue for the government
Why was privatisation criticised
Allegedly shares were sold off cheaply to ensure all shares were taken up
Employees of privatised firms lost job security, with some being laid off, and others found no job security and had lost their government pensions.
What did industries did Radical Thatcherites wish to privatise and were they successful
Coal, Railways and parts of the NHS were slated for privatisation but this was only pursued in the 90s and Thatcher was ousted before it could happen
What did Privatisation truly symbolise
The final demise of the post-war economic consensus between labour and the conservatives
Why did the Thatcher goverments pursue deregulation
They believed companies would be more efficient with less ‘red-tape’ and so encourage innovation and wealth creation
What schemes did Thatcher introduce to encourage small buisnesses and entrepeneurship
Loan Guarantee Scheme-easier for small buisnesses to borrow money
Enterprise Allowance Scheme-Unemployed could set up their own buisnesses and were given £40 a week for it
What was the ‘Big Bang’ and when did it take place
27th OCT 1986-London and the financial markets wewre freed from the tight controls of the Bank of England, freeing the LSE and replacing the old boys network with meritocratic competition, computer screen trading and turning central london into one of the most profitable places on earth
What could foreign banks now do after the big bang
They could now operate as stockbrokers
What were Yuppies
Young Urban Professionals-a relatively new class, prevalent in areas like london with large amounts of disposable income
What was the average gdp growth per year in the 80s and how did it change from the 70s
2.2%-unchanged from the 80s. The high growth of ~5% in the middle of the decade was offset by extrmeley low or negative growth at the beginning and end
What did thatcher blame for the inflation that racked the british economy in the 70s
Keynsian economic policies
What were interest rates raised to in 1979 and why
17%-dampen borrowing, incentivize saving and overall reduce inflation
When and to what did inflation peak to in the Thatcher years
22% in early 1980
When the the UK join the EU exchange rate mechanism
1990
What areas were worst hit with unemployment due to Thatchers policies
Scotland, North, Midlands and Wales
How did industrial production in the West Midlands change
Fell by a quarter, with steel production alone being cut by 30%
What was unemployment in 1983
3 Million, 13.5% of the workforce
What did Youth Unemployment Scheme provide
Subsidy for employers who took on young people to combat the unemplyoment wrecking britain
What did Thatcher prioritise controlling inflation of unemployment
Inflation
When did the Unemployment number fall below 3 million
1987
How did the number employed in manufacturing change from 1979 to 1990
7.1 million to 5 million
To what industries did Britain begin to specialise in under Thatcher and what did they abolish
Fintech and other parts of the service industry
Moved away from traditional industrial and manufacturing buinsesses due to competition from abroad and comparative disadvantages
Why was it difficult for many laid off from the manufacturing industry
Their traditional skills were no longer in demand for the new serice industry orientated british economy so faced structural unemployment
What phrase did Howe use for how derelict cities such as Liverpool, whom were pagued with crime, alcoholism and deprivation after the destruction of their traditional industries could be treated
‘managed decline’
What occured in 1981, notably in Toxteth, Liverpool, and Brixton, London
a series of riots
Why was the scarman report commisioned and what did it conclude
to find the reasons for 1981 riots. It concluded race and poverty were major factors, as well aas high levels of unemployment and deprivation
What was the ‘sus law’
Police had permission to stop and search those they believed might commit a crime. It was used to racially discriminate. Shortly before the brixton riots, 1000 people were stopped in 6 days
What happened in 1985, despite the abolishment of the sus law, the scarman report and further policing reform
more riots
Who was essentially the last of the one nation conservatives, still advocating for money to be spent to improve peoples lives
Michael Heseltine, who spearheaded movements to improve the docklands of both Liverpool and London, with canary wharf becoming the second most important financial district in the country after the city of london, emblematic of the shift to service industries
Why is this 55 cards long
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