Thatchers Economic Policies 1979-83

Thatcher agreed to recommendations

Apr 25, 1979

in 1979 Thatcher agreed to recommendations for increased public sector pay awards

Pensions

Jun 1, 1979

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

Incomes policy

Jun 1, 1979

June 1979 Government Incomes policy was dropped

taxes

Jul 1, 1979

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

Employment Act

Jan 1, 1980

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.

fall of manufacturing production

Jan 1, 1980

Manufacturing production which was already declining, fell by 14% 1980-81, partly caused by this govt. policy unwillingness to intervene

Inflation

Jan 2, 1980

inflationof 22% in spring 1980 up from Labour figure in 1979

manufacturing production

Jan 4, 1980

1980 Partly due to Govt. unwillingness to prop up manufacturing production fell by 11%

falling orders for manufactured goods

Jan 5, 1980

1980-81 falling orders for manufactured goods saw the start of a recession + GNP fell by 3.2%.

pay awards

Apr 25, 1980

1980 Budget large pay awards for police + army

wave of riots across

Jan 1, 1981

Consequences of economic recession wave of riots across inner-city London, Liverpool, Manchester, Leeds + Bristol in summer 1981

Unemployment rose

Jan 25, 1981

Unemployment rose to 2.7million in 1981, the highest since the depression of the 1930s

lower rate of tax

Apr 25, 1981

1981 Budget 25p lower rate of tax introduced by Labour in 1978 was abolished

productivity

Apr 25, 1981

1981 Productivity increased amongst those still in work

inflation

Apr 25, 1982

Inflation down to 10% 1982 – partly due to high unemployment

Public expenditure

Apr 25, 1982

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

direct taxes

Apr 25, 1982

Although direct taxes fell, the overall tax burden increased from 34% of GDP in 1978-79 to 40% of GDP in 1982/3

popularity

Apr 25, 1982

1982 Thatcher’s continuation in office threatened. Opinion polls showed the Prime Minister’s personal popularity + that of her govt. had declined significantly

unemployment

Apr 25, 1982

1982 unemployment > 3 million

inflation

Apr 25, 1983

Inflation 5% in 1983

conclusion

Apr 30, 1983

i think that in 193 she would not have been re-elcted as there was a long stuggle to bring down inflation and unemployment levels although she did stick from her policies that she began with , she could have avoided such high levels of unemployment