Economic Policy: Deregulation

Question 1

What famous speech did Thatcher make on how she aimed to change the British culture ?

Answer 1

February 1984, aimed to change Britian from a ‘give it to me’ attitude aiming instead to create an ‘enterprise culture’
- ‘from a dependent to a self reliant society’

Question 2

What is financial deregulation ?

Answer 2

Loosening controls the Bank of England had in banks and financial markets known as ‘cutting red tape’
- removes binding and reactions of free movement for businesses
- led to a massive boom in investment banking and financial speculation

Question 3

In what ways did the govenrment encourage business ?

Answer 3

Thatcher uralized deregulation to encourage growth and entrepreneurship
- loan guarantee scheme 1982 and enable over 13k small businesses to borrow around £440 million
- enterprise allowance scheme encouraged unemployed to start a business giving them £40(modern 142) a week for the first 12 months. This did require £1000 of their own money prior to receiving the allowance

Question 4

What was the biggest impact of financial deregulation ?

Answer 4

27 October 1986 ‘big bang’
- trading now conducted by computer screens meaning transactions were faster
- no longer on the stock exchange floor
- shifted the market from an ‘old boys’ style network to a far more open and accessible market

Question 5

What did the Big Bang do to London ?

Answer 5

Foreign banks could now operate in London as stock rockets turning it into a financial centre of trading and a world city much like New York City

Question 6

What is meant by a yuppie ?

Answer 6

A young urban professional who were the new breed of dealers and speculators

speculation: act of conducting a financial transaction that has risk of losing value but could also hold significant gain or other major value

Question 7

Did deregulation cause growth ?

Answer 7

The average growth rate of 2.2% in the 80s was not fare above that seen in the 70s