Thatcher's Economy

example of direct taxation

income tax

example of indirect tax

VAT

Why was there a shift from direct to indirect taxation?

incentivise wealth creation

What was a downside to the shift from direct taxation to indirect taxation?

impacted poorer people harder

What was a political consequence of cuts in public spending?

conflict between Conservative government and Labour-controlled councils

Who was the leader of the Greater London Council who was demonised as a face of the ‘Loony Left’?

Ken Livingstone

What did rate capping limit?

the amount of money a council was allowed to raise in taxation

When was the Local Government Act?

1986

What did the Local Government Act abolish?

big metropolitan local authorities set up by Heath’s government

How did rate capping affect the balance between central and local government?

powers of central government increased at the cost of the local governments

Why was Thatcher ultimately unable to cut public spending?

high levels of unemployment

Why was monetarism ended in 1986?

Nigel Lawson (Chancellor) abandoned spending targets

When was BP denationalised?

1979

When was British Telecom denationalised?

1984

When was British Gas denationalised?

1986

What was a socioeconomic byproduct of Thatcher’s mass privatisation?

increase in individuals owning stock

What was a benefit of privatisation?

brought in money for the government

What was a downside of privatisation?

people lost jobs as company owners of newly-privatised enterprises cut back on staff

What was deregulation?

limiting government interference in economy

What was made easier from deregulation?

businesses to trade and grow

What did deregulation encourage?

entrepreneurship and wealth creation

When was the Enterprise Allowance Scheme?

1981

How much money was given to unemployed people who set up their own business under the Enterprise Allowance Scheme?

£40 per week

When was the ‘Big Bang’?

1986

What was deregulated which triggered the ‘Big Bang’?

London Stock Exchange

What group of young people was created as a result of financial deregulation?

yuppies

What was the average annual GDP growth for Britain in 1980-1988?

2.2%

What was the average annual GDP growth for the U.S. in 1980-1988?

2.8%

What was the average annual GDP growth for France in 1980-1988?

1.9%

What was the interest rate in 1979?

17%

When did interest rates peak during Thatcher’s premiership?

1980 — 22%

When were interest rates at their lowest in Thatcher’s premiership?

1986 — 2.5%

What was the interest rate by 1990 (end of Thatcher’s premiership)?

11%

What organisation did Britain join in 1990?

European Exchange Rate Mechanism (ERM)

When did unemployment reach over 3,000,000?

1983

When did unemployment fall back to under 3,000,000?

1987

What percentage of the workforce were unemployed (at 3,000,000)?

13.5%

What policies did the government implement to try aid unemployment?

• National Insurance rates reduced for lower-paid jobs

• Youth Employment Schemes to encourage companies to hire young people

What were old British industries challenged by?

• foreign competition

• technological innovation

When were there riots in major cities?

1981, further in 1985

2 examples of cities that had riots

• London

• Liverpool

What was the name of the report that concluded the riots were caused by race and poverty?

Scarman report

Which law exacerbated race issues as police targeted BAME individuals for stop and searches?

sus law

Who spearheaded redevelopment projects in London and Liverpool docklands?

Michael Heseltine