Effect Of Thatchers Economic Policies

Question 1

What is Thatcherism?

Answer 1

Thatcherism stands for sound finance, honesty, living within your means, incentives, and wider ownership of property, houses, shares, and savings.

This encapsulates the goals of Thatcher’s economic policies.

Question 2

What did Thatcher aim to achieve with her economic policies?

Answer 2

Thatcher aimed to:
* Smash restrictive practices of trade unions
* Promote individualism
* Overcome inefficiencies of state-owned industry
* Promote growth and investment by reducing red tape
* Lift the tax burden on successful businesses
* Foster public participation through ownership.

These goals reflect her practical approach to economic policy.

Question 3

What was the priority of previous post-war governments compared to Thatcher’s approach?

Answer 3

Previous post-war governments prioritized employment, while Thatcher was willing to risk temporary higher unemployment to tackle inflation.

This marked a significant shift in economic policy focus.

Question 4

What steps did Thatcher take to reduce inflation?

Answer 4

To reduce inflation, Thatcher and her advisers:
* Cut access to money
* Raised interest rates
* Refused to print money to cover inflation.

This approach led to struggles for many companies, especially in manufacturing.

Question 5

What was the inflation rate in 1978 and how did it change by 1980?

Answer 5

In 1978, inflation was 11 percent; by 1980, it had doubled to 22 percent.

This increase was largely due to spiraling pay demands.

Question 6

True or False: Thatcher aimed to reward reckless borrowers by printing money to cover inflation.

Answer 6

False

Thatcher believed printing money punished careful savers.

Question 7

Fill in the blank: Thatcher’s economic views were influenced by a mixture of her moral upbringing and the influence of ______ thinkers.

Answer 7

[new right]

‘New right’ thinkers played a significant role in shaping her economic philosophy.

Question 8

What is the post-Thatcher consensus?

Answer 8

A broad agreement among Conservatives, Labour, and Liberal Democrats on principles of a market economy, low direct taxation, and a smaller role for the state.

This consensus reflects a significant political shift in the UK.

Question 9

How did Thatcher’s approach to economic policy differ from her predecessors?

Answer 9

Thatcher was more practical than theoretical, willing to accept higher unemployment to combat inflation, unlike previous governments that focused on maintaining employment.

This pragmatic approach defined her economic strategy.

Question 10

What is monetarism?

Answer 10

Monetarism is an economic theory that emphasizes the role of governments in controlling the amount of money in circulation.

Question 11

What were the consequences of the 1980 and 1981 budgets in the UK?

Answer 11

The budgets slashed government spending, leading to negative consequences for many people in inner-city areas, including riots and a rise in unemployment.

Question 12

What sparked the riots in several UK cities during the early 1980s?

Answer 12

The riots were partly sparked by racial issues, but poverty in those areas heightened tensions.

Question 13

What was the unemployment rate in the UK by 1982?

Answer 13

Unemployment had risen to over three million, the highest figure at that time.

Question 14

What was a key aspect of Thatcher’s privatisation policy?

Answer 14

Thatcher’s privatisation policy involved the sale of government monopolies to cut government revenue and reduce the number of civil employees.

Question 15

What was the timeline for privatisation under Thatcher?

Answer 15

Privatisation occurred from 1979 to 1987, including British Petroleum and British Aerospace.

Question 16

What was the Right to Buy policy?

Answer 16

The Right to Buy policy allowed tenants to purchase their council houses.

Question 17

What was the impact of privatisation on the British economy?

Answer 17

Privatisation aimed to generate revenue, reduce taxes, and promote wider ownership, creating an incentive to work.

Question 18

What was a significant privatisation event in 1986?

Answer 18

The sale of British Telecom in 1986 was a significant event that popularised the concept of privatisation.

Question 19

What was a key part of Thatcher’s economic strategy?

Answer 19

Privatisation of state-owned companies aimed to cure Britain’s economic stagnation.

Question 20

What were the intended benefits of privatisation under Thatcher?

Answer 20

It aimed to cut government expenditure, promote competition, and create wider ownership of shares.

Question 21

How did the number of shareowners change from 1979 to 1990?

Answer 21

The number of shareowners increased from three million to 11 million.

Question 22

What was the distribution of shares among different worker categories?

Answer 22

Only nine percent of unskilled male workers owned shares, compared to half of all professional males.

Question 23

What was the most successful aspect of ‘popular capitalism’?

Answer 23

The sale of council houses, with over a million sold between 1979 and 1988.

Question 24

How much money was raised by the sale of state assets?

Answer 24

£19 billion was raised, which was used for tax cuts.

Question 25

What was the impact of privatisation on service quality in sectors like water and gas?

Answer 25

There was little appreciable difference in quality, while prices increased faster than inflation.

Question 26

What was the outcome of the privatisation of British Rail?

Answer 26

It led to confusion, with the government subsidising private firms while spending on trains doubled.

Question 27

What initiative was launched under John Major to increase privatisation?

Answer 27

The Private Finance Initiative aimed to inject private funding into state-run services.

Question 28

What is 'contracting out'?

Answer 28

Offering contracts for government-funded work to private companies to reduce costs.

Question 29

What is 'popular capitalism'?

Answer 29

The idea that everyone should have the opportunity to own property and shares in companies.

Question 30

What is a 'public-private partnership'?

Answer 30

A collaboration between a public sector body and a private company to provide a service.

Question 31

What was the tagline used in the advertising campaign for British Gas shares?

Answer 31

'If you see Sid, tell him.'

Question 32

What was the minimum investment for British Gas shares?

Answer 32

No more than £150.

Question 33

What was Thatcher's approach to deregulation?

Answer 33

Thatcher aimed to remove rules and regulations that stifled innovation and competitiveness.

Question 34

What was the significance of the removal of exchange controls in October 1979?

Answer 34

It fueled greater overseas investment and increased consumer spending on foreign goods.

Question 35

What was the 'Big Bang' of October 1986?

Answer 35

It relaxed rules on bank ownership and trading, leading to massive growth in financial services.

Question 36

What was one long-term effect of deregulation?

Answer 36

It enabled unscrupulous individuals to profit in unsustainable and illegal ways, contributing to the 2008 financial crisis.

Question 37

How did deregulation affect private household debt?

Answer 37

Private household debt rose from £16 billion in 1980 to £47 billion in 1989.

Question 38

What happened to mortgage debt from 1980 to 2003?

Answer 38

Mortgage debt rose from £43 billion to £235 billion, and by 2003, personal debt stood at £1.3 trillion.

Question 39

What was Thatcher's view on taxation?

Answer 39

She believed taxation should not be used to subsidize the poor and that tax cuts for the wealthy would promote growth.

Question 40

What were the changes in the top rate of income tax during Thatcher's tenure?

Answer 40

The top rate was cut from 83% to 60% in 1980 and then to 40% in 1988.

Question 41

What was the impact of indirect taxation during Thatcher's government?

Answer 41

The shift to indirect taxes like VAT contributed to a growing gap between the richest and poorest in society.

Question 42

What are regressive taxes?

Answer 42

Regressive taxes take a higher proportion of income from the poor than from the rich.

Question 43

What was Thatcher's stance on trade unions?

Answer 43

She aimed to reduce their influence and viewed them as bullying individual workers.

Question 44

What were the Employment Acts of 1980 and 1982?

Answer 44

The 1980 Act limited unions' power, and the 1982 Act restricted strike action.

Question 45

What was the miners' strike and its significance?

Answer 45

The miners' strike was a key conflict that highlighted the power struggle between trade unions and the government.

Question 46

What was the impact of Thatcher's governments on trade unions?

Answer 46

Thatcher's governments gradually undermined the power of trade unions through a series of Employment Acts and legislation that restricted union activities.

Question 47

What did the 1980 Employment Act entail?

Answer 47

The 1980 Act meant workers did not have to join a union when employed.

Question 48

What was the significance of the 1984 Trade Union Act?

Answer 48

The 1984 Trade Union Act required that a strike had to be approved by a majority of union members in a secret ballot before it was legal.

Question 49

What was the outcome of the miners' strike that began on March 6, 1984?

Answer 49

The miners' strike was defeated on March 3, 1985, almost a year later, leading to a significant decline in union membership and power.

Question 50

How did the miners' strike affect union membership?

Answer 50

Trade union membership fell from 13.5 million in 1979 to under 10 million in 1990, indicating a significant decline in union power.

Question 51

What tactical errors did Arthur Scargill make during the miners' strike?

Answer 51

Scargill did not ballot NUM members about strike action and launched the strike with 'flying pickets', causing divisions among miners.

Question 52

What was the public perception of Scargill during the strike?

Answer 52

Scargill lost public sympathy due to provocative methods, with his disapproval rating remaining high throughout the strike.

Question 53

What were the consequences of the Employment Acts passed in 1988, 1989, and 1990?

Answer 53

These Acts further weakened trade unions, contributing to a decline in union influence and membership.

Question 54

What was the effect of Thatcher's policies on the coal industry?

Answer 54

The coal industry became increasingly uncompetitive, leading to large-scale redundancies and a significant decline in the number of miners.

Question 55

What was the impact of the miners' strike on local communities?

Answer 55

Many local communities were greatly affected by the end of major local industries, leading to economic decline and social issues.

Question 56

How did the number of miners change from 1974 to 1991?

Answer 56

The number of miners fell from 200,000 to 10,000 during this period, reflecting the decline of the coal industry.