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
