Thathers economy

Thatchers ideology

• return to principle of individual accountability and end of state intervention

• critical of Heath/socialism

“looney left”

• name used by right wing press to left that promoted liberal and politically correct policies

• included promotion of multiculutralism, promotion of gay and lesbian rights and nuclear free zones, commuism in cuba

• fabricated such as hackney council banning baa baa black sheep because it was racist

economic revolution

• 1979:thatchers first budget reduced spending (monetarism)

• 1980:recession hit

• north sea oil prevented balance of payments crisis

• 1981:government borrowing went down

• 1981:grants to local cuts

• 1981:benefits frozen

• shift away from direct taxation to VAT

1980 recession

• inflation at 15%

• unemployment above 2 million

• stagflation returned

shift to VAT

1979:VAT increased the price of petrol, alcohol and cigarettes

supporters: allowed workers to keep what they want

critics: hit those on lower incomes and poor could never get rich

income tax

1988: highest rate of income tax dropped from 83% to 40%

VAT increased from 8% to 15%

rate capping

• due to labour councils trying to over spend their budgets (Ken Livingston in greater london council)

• Thatcher introduced rate capping- limited the amount of money that the council was allowed to raise through local taxation

liverpool rebellion

Northern councils such as liverpool rebelled and refused to set a budget but stood down after

local government act (1986)

abolished big metropoliton councils