Thatcher's economic policies and their impact

what was included in thatcher’s budget in 1979?

Thatchers government set out to reduce government spending according to monetarist principles; controlling the money supply which would it was believed would educe inflation and lead to economic growth

what happened to the economy by 1980?

• the economy had plunged into a serious recession hit by inflation above 15 percent and sharply rising unemployment

• stagflation was back

what saved the UK economy?

• north sea oil

what did most people expect for the 1981 budget to do?

• the government to stop it’s monetarist measures

what actually happened to the 1981 budget?

• the budget applied even further monetarist measures

• government borrowing went down

• local council grats were cut and benefits were frozen

what di howe describe the budget as?

The most unpopular budget in history

what was another reason Thatcherites wanted to cut public spending?

• they believed that individuals spent their money better than governments did

what was there a shift away from?

Direct taxation

what became popular?

Indirect taxation

what are some examples of indirect taxation?

• VAT

how much did income tax rates drop by 1988?

83 percent to 40 percent

how much did standard rate fall to by 1988?

33 percent to 25 percent

how much did VAT go up to?

8 percent to 15 percent in 1979

what goods were taxed in almost every budget between 1979 and 1987?

• petrol

• cigarettes

• alcohol

what di supports argue reducing taxation would do?

• would create an incentive in wealth creation by allowing people to keep more of what they earned

what did critics argue reducing direct taxation do?

• it was transferring the burden onto the indirect taxation system was less progressive and hit poorer people harder

what did cut to public spending lead to between conservative governments and the labour controlled local councils?

Clashes

what did Thatcher government think about Labour-controlled councils?

They saw left-wing local councils as enemies, both in ideology and because they blamed them for wasting resources.

what was one of the fiercest battles?

Greater london Council led by left-winger Ken Livingstone

what did Thatcher treat GLC policies?

she treated them as provocations

what was the loony left?

give to liberal and politically correct policies

ranged from the promotion of multicultural initiatives and LGBT rights