79-87 Economy

Question 1

north sea oil discovery

Answer 1

-offshore oil made britain into an energy powerhouse
-rescued britain from a balance of payments crisis
-however it sent the value of british pound up, rose unemployment in manufacturing sector

Question 2

Monetarism

Answer 2

-milton friedmans economic theory
-control inflation by restricting gov spending and borrowing
-strict curbs on money supply and currency in circulation

Question 3

Impact of monetarism

Answer 3

-inflation above 15% and unemployment above 15m 1980
-stagflation returned

Question 4

1981 budget

Answer 4

-implemented more monetarist policies
-gov borrowing decreased, grants to local councils cut and benefits frozen
-howe called it ‘the most unpopular budget in history’

Question 5

Shift from indirect taxation

Answer 5

-top rate of income tax fell 83% to 40% by 1988
-standard rate fell 33% to 25%
-vat went up 8% to 15% in 1979
-taxes on petrol, cigarettes, alcohol increased

Question 6

Rate capping

Answer 6

-used to control labour local authorities spending
-limited money council could raise in local taxation
-1985 sheffield and liverpool rebelled against the cap
-had to back down threatened with bankruptcy
-1986 local gov app abolished big local authorities

Question 7

Privatisation

Answer 7

-BT sold 1984, momentum for privatisation
-British gas sold 1986, biggest share offer in history
-1979-90 individuals owning stocks and shares 3m-9m
-

Question 8

Benefits of privatisation

Answer 8

-belief that private sector more effective than public
-brought in alot of revenue for the government
-businesses competed which encouraged improvements

Question 9

Problems with privatisation

Answer 9

-critics argued sold off cheaply to ensure sale of shares
-some people lost jobs as enterprises cut back on staff
-some had no long term job security or reliable pension
-radical thatcherites wanted to privatise coal, rail, nhs

Question 10

Deregulation

Answer 10

-government interfered as little as possible
-made it easier for businesses to trade and grow
-encouraged entrepreneurship and wealth creation

Question 11

Government schemes

Answer 11

-loan guarantee scheme, easier for small businesses to borrow money
-enterprise allowance scheme, encouraged unemployed to start their own businesses by giving them £40 a week

Question 12

Big Bang

Answer 12

-27 october 1986 deregulated london stock exchange
-restored londons position as a world financial centre
-introduction of yuppies
-2.2% growth in GDP during 1980s no better than 1970s

Question 13

Inflation

Answer 13

-interest rates used to control inflation, 17% in 1979
-led to a decline in both output and demand, economy in recession many businesses bankrupt
-inflation peaked at 22% in may 1980
-reached a low of 2.5% in 1986

Question 14

Monetarisms effect on industry

Answer 14

-many industrial plants shut down permanently
-midlands, north, scotland, wales hit badly
-output fell 15% in 2 years
-production in west midlands fell by 1/4
-steel production cut 30% to 14 millon tons

Question 15

Unemployment

Answer 15

-unemployment over 3 million by 1983
-13.5% of total workforce, highest post ww2
-didnt fall below 3 million until 1987
-25% in liverpool

Question 16

Government policies to help unemployment

Answer 16

-youth employment scheme, employers paid to take on young people
-national insurance rates reduced for lower paid jobs
-government focused more on inflation than unemployment

Question 17

Economic realignment

Answer 17

-old industries facing competition from abroad
-britains economy becoming more focused on services
-foundations of working class communities crumbled
-increased north south divide

Question 18

Sale of council houses

Answer 18

-1980 housing act, tenants right to buy council houses
-received a 33%-50% discount based on time lived there
-2 million homeowners had used scheme by 1988

Question 19

Negatives of sale of council houses

Answer 19

-predominantly in better off areas, not worse estates
-councils made to use profits to reduce debts not build new council houses
-number and quality of homes for renting reduced, many people housed in emergency B&Bs

Question 20

Print union strikes

Answer 20

-newpaper proprietors tried to reduce print unions power
-confrontation at murdochs wapping plant 1986
-failed to prevent newspaper publication, strike collapsed 13 months in

Question 21

Start of pit closures

Answer 21

-1981 NCB warned of need to close 23 pits
-tories had been worried about a rerun of 1973/74 events
-1984 government felt confident due to stores of coal built up, north sea oil, NCB announced need to close 20

Question 22

Scargills reaction to pit closure

Answer 22

-claimed he had seen a secret plan to close 70 pits
-ian mcgregor rejected this but leaked cabinet papers showed plan to close 75 pits over next 3 years

Question 23

Divisions of miners

Answer 23

-scargill didnt gain total support for a national strike
-nottinghamshire miners broke away and formed UDM
-scargillites called UDM scabs and traitors

Question 24

Police battles

Answer 24

-new equipment, tactics, more experience of riot control
-thatcher blamed for the politicisation of the police
-most famous battle of orgreave june 1984

Question 25

Failure of preventing pit closures

Answer 25

-by 1979 coal industry employed 200,000
-by 1990 down to 60,000 and falling

Question 26

Union loss of power

Answer 26

-total union membership 2/3 of 1979 levels
-british steel and airways reorganised, job losses
-could no longer intimidate governments

Question 27

Poll tax

Answer 27

-aimed to make local councils more accountable to their electors by ensuring everyone contributed
-difficult to justify why pensioners and millionaires paid the same local tax

Question 28

Poll tax in scotland

Answer 28

-introduced 1989 unpopular from the beginning
-further damaged tories relationship with scotland after deindustrialisation and recession

Question 29

Protests against poll tax

Answer 29

-anti poll tax unions set up across the country
-30% of people in some areas are non payers
-mar 1990 200k people demonstration in trafalgar square
-5000 injured, 300 arrests made