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- indirect taxes raised from 8% to 15%
- But cut the 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%
- later reached 17% in Nov,
- rewarding those with large savings
- hurting people with debts.
- Major relaxation of exchange controls
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- 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
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1980 Partly due to Govt. unwillingness to prop up manufacturing production fell by 11%
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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.
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falling orders for manufactured goods saw the start of a recession + GNP fell by 3.2%.
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Unemployment rose to 2.7million in 1981, the highest since the depression of the 1930s
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1981 Budget 25p lower rate of tax introduced by Labour in 1978 was abolished
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Consequences of economic recession wave of riots across inner-city London, Liverpool, Manchester, Leeds + Bristol in summer 1981
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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)
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Opinion polls showed the Prime Minister’s personal popularity + that of her govt. had declined significantly.
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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
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economy was not a success - very bad
politically not was not popular
but she stuck to her principles