Thatcher's economic policies 1979 - 1983

Government Incomes policy was dropped

Apr 25, 1979

unwillingness to prop up manufacturing production fell by 11%

Apr 25, 1979

Partly due to Govt

Thatcher agreed to recommendations for increased public sector pay awards

Apr 25, 1979

Pensions would be based not on the ‘movement in prices + earnings

Apr 25, 1979

but solely on prices – Pensioners set to get poorer relative to those in work

Budget raised indirect taxes

Jun 25, 1979

(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

Apr 25, 1980

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.

Budget

Apr 25, 1980

large pay awards for police + army

Inflation of 22%

Apr 25, 1980

up from Labour figure in 1979

falling orders for manufactured goods

Apr 25, 1980

Productivity increased.

Feb 25, 1981

Amongst those still in work.

Unemployment rose to 2.7million

Feb 25, 1981

the highest since the depression of the 1930s

Manufacturing production was declining

Apr 25, 1981

fell by 14% 1980-81, partly caused by this govt. policy unwillingness to intervene

economic recession

Apr 25, 1981

wave of riots across inner-city London, Liverpool, Manchester, Leeds + Bristol

Budget

May 25, 1981

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

Public expenditure continued to rise.

Mar 5, 1982

Reachrf4.5% of the gross domestic product (GDP) in 1982, largely as a result of the huge increases in the number of those receiving unemployment benefit

Thatcher’s continuation in office threatened.

Apr 25, 1982

Opinion polls showed the Prime Minister’s personal popularity + that of her govt. had declined significantly

Employment Act

Apr 25, 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)

Unemployment > 3 million

Jul 25, 1982

Inflation down to 10%

Aug 28, 1982

Partly due to high umemployment.

Although direct taxes fell, the overall tax burden increased.

Oct 25, 1982

34% of GDP in 1978-79 to 40% of GDP in 1982/3

Inflation at 5%

Apr 25, 1983

Conclusion

Apr 25, 2014

She achived her aim of not U turning and sticking to her policies throughout her first term. She was successful in her first term but the economy didn't begin to improve until 1983. based on this she wouldn't have been reelcted in the 1983 election.