Impact Of Thatchers Economic Policies Flashcards
(14 cards)
What were some of thatchers ideologies?
-halt britains economic decline through the promotion of free market forces.
- believed in limited government interference and bureaucracy. (An organisation where laws are implemented by civil servants or non elected officials)
What is monetarism and who is a leader for it?
Milton Friedman
The idea is that inflation was the greatest economic ill and governments should increase the value of money by reducing supply. The more valuable money was, the more it could buy. This could be achieved by increasing interest rates and reducing public spending.
Statistics for thatchers government in terms of economic.
- thatchers inflation fell by 19% in 1979 to 5% in 1983
- however, unemployment rose by 1 million
What are u turns in economics? How does this relate to thatcher?
Where the government reverses a previously announced policy.
The first year had been characterised bu u turns. Thatchers gov allowed high pay rises for steel workers and miners and financially supported failing nationalised car manufacturer Layland. Inflation risen by a lot too. Many felt the gov would go the same way heath did.
What did many feel about thatchers economic policies?
Felt she was failing,
The cabinet also split it self into ‘wets and dries’ according to level of support - shows clear divide.
What was the 1981 budget?
Chancellor of exchequer Geoffrey introduced monetary budget in 1981 which cut gov expenditure and increases taxes. Many leading economists called for a u turn, many felt the gov would easily be defeated in the next election
What were some policies under supply side economics?
-tax reductions
-deregulation
-the demise of union power
What is supply side economics?
By the mid 80s, monetarism became less significant, but the economy was stimulated by creating greater demand. This was knows as ‘supply side economics’
What is deregulation?
The gov wanted to reduce its own role, as it believed intervention led to economic decline. The decade saw deregulation of transport, and schools and hospitals taking care of their own finances. This was examples of development of the ‘free market’
What happened on 1986?
Chancellor Nigel Lawson deregulated the stock exchange which operated according to old complex customs. With a lack of regulation, it led to making instant transactions by computers possible. London became the centre of world finance.
What is privatisation?
The intention was to collect revenue for government from popular capitalism where ordinary people had their own shares and private companies.
Which companies were sold off?
Steel, telecom, gas, British airways.
How much was the gov able to raise in 1988-89 as a result of privatisation?
7000 million.
But most of their target investors sold off their shares quickly.
How else was the economy advantaged?
Production of North Sea gas and oil with revenue approaching 15% of national income by 1985
