-
Pensions
June 1979 Pensions would be based not on the ‘movement in prices + earnings, whichever is greater’ but solely on prices – Pensioners set to get poorer relative to those in work -
Government incomes policy
June 1979 Government Incomes policy was dropped -
inflation
Inflation of 22% in spring 1980 up from Labour figure in 1979 -
indirect taxes
June 1979 Budget raised indirect taxes (most importantly Value Added Tax VAT) from 8% to 15% but he cut the top rate of income tax from 83% to 60% + the standard rate from 33% - 30% - shift from direct to indirect tax designed to boost incentives by allowing the successful high earners to keep of their income. Interest rates were raised by 14% + these later reached 17% in Nov, rewarding those with large savings, but hurting people with debts. Major relaxation of exchange controls -
manufactured goods
1980-81 falling orders for manufactured goods saw the start of a recession + GNP fell by 3.2%. -
production
Manufacturing production which was already declining, fell by 14% 1980-81, partly caused by this govt. policy unwillingness to intervene -
Pay awards for police + army
1980 Budget large pay awards for police + army -
production
1980 Partly due to Govt. unwillingness to prop up manufacturing production fell by 11% -
riots
Consequences of economic recession wave of riots across inner-city London, Liverpool, Manchester, Leeds + Bristol in summer 1981 -
tax
1981 Budget 25p lower rate of tax introduced by Labour in 1978 was abolished -
rise in unemployment
Unemployment rose to 2.7million in 1981, the highest since the depression of the 1930s -
Employment Act
Employment Act 1982 provided compensation from public funds to people dismissed from closed shops. It also made ‘union labour only’ requirements in contracts illegal. Trade unions became liable for damages if they were the cause of unlawful industrial actions. It gave employers legal redress against industrial action where the action was not wholly or mainly about employment matters (i.e. strikes which could be considered political) -
public expenditure
Public expenditure continued to rise, reaching 44.5% of the gross domestic product (GDP) in 1982, largely as a result of the huge increases in the number of those receiving unemployment benefit -
Unemployment
1982 unemployment > 3 million -
decline in popularity
1982 Thatcher’s continuation in office threatened. Opinion polls showed the Prime Minister’s personal popularity + that of her govt. had declined significantly. -
Tax
Although direct taxes fell, the overall tax burden increased from 34% of GDP in 1978-79 to 40% of GDP in 1982/3 -
inflation
Inflation down to 10% 1982 – partly due to high unemployment -
inflation
Inflation 5% in 1983 -
Productivity
1981 Productivity increased amongst those still in work -
Employment Act
1980 Employment Act made secondary picketing illegal but didn’t make ballots compulsory or ban sympathetic strikes. All new closed shops (i.e. union only Labour in an industry) had to be approved by a 4/5 of those affected + public funds were made available to encouraged unions to hold postal ballots. -
Increased public sector pay awards
1979 Thatcher agreed to recommendations for increased public sector pay awards -
Conclusion
Margaret Thatcher overall had a succesful 1st ministry and kept to her word and made no U turns. Although near the beginning the economy was poor, towards the end inflation was down to 5%. However it was unlikely she would be elected again.
