-
Thatcher agreed to recommendations for increased public sector pay awards
-
Government Incomes policy was dropped
-
Budget raised Indirect Taxes (VAT)
- 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
-
Pensions
- 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
-
manafacturing production
1980 Partly due to Govt. unwillingness to prop up manufacturing production fell by 11% -
1980 Budget large pay awards for police + army
-
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. -
1980-81 start of recession
falling orders for manufactured goods saw the start of a recession + GNP fell by 3.2%. -
Unemployment rose to 2.7million
Unemployment rose to 2.7million in 1981, the highest since the depression of the 1930s -
lower rate of tax abolished
1981 Budget 25p lower rate of tax introduced by Labour in 1978 was abolished -
1981 Productivity increased amongst those still in work
-
riots in major cities
Consequences of economic recession wave of riots across inner-city London, Liverpool, Manchester, Leeds + Bristol in summer 1981 -
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) -
Although direct taxes fell, the overall tax burden increased from 34% of GDP in 1978-79 to 40% of GDP in 1982/3
-
1982 Thatcher’s continuation in office threatened.
Opinion polls showed the Prime Minister’s personal popularity + that of her govt. had declined significantly. -
1982 unemployment > 3 million
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Inflation down to 10% 1982 – partly due to high unemployment
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Public expenditure continued to rise
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 -
Inflation 5% in 1983
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Conclusion of thatcher
economy was not a success - very bad
politically not was not popular
but she stuck to her principles
