Thatchers Principles

  • pensions

    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
  • Tax

    Tax

    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
  • incomes policy

    incomes policy

    June 1979 Government Incomes policy was dropped
  • public sector pay awards

    public sector pay awards

    1979 Thatcher agreed to recommendations for increased public sector pay awards
  • recession

    recession

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

    Employement 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.
  • pay awards

    pay awards

    1980 Budget large pay awards for police + army
  • manufactoring production

    manufactoring production

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

    inflation

    Inflation of 22% in spring 1980 up from Labour figure in 1979
  • productivity

    productivity

    1981 Productivity increased amongst those still in work
  • Tax

    Tax

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

    unemployment

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

    maufactoring

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

    consequences of recession

    Consequences of economic recession wave of riots across inner-city London, Liverpool, Manchester, Leeds + Bristol in summer 1981
  • Unemployment rose 3 million

    Unemployment rose 3 million

    Economy going down hill
  • Thatchers position is threatened

    Thatchers position is threatened

    1982 Thatcher’s continuation in office threatened. Opinion polls showed the Prime Minister’s personal popularity + that of her govt. had declined significantly= political and social consequences
  • Tax burden

    Tax burden

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

    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 = economy doing badly
  • inflation

    inflation

    Inflation down to 10% 1982 – partly due to high unemployment
  • Employment act

    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)
  • Inflation

    Inflation

    Inflation 5% in 1983 = Economy doing bad
  • Summary paragraph

    did thatcher stick to her principles? yes, despite various successes there is a high amount of failures, however does decrease towards the end. Overall interms of handling economy she was a sucess, however is still unlikely to get re-ellected at this stage.