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Transcript of Thatcherism
Policies Timeline: Margaret Thatcher (background) Thatcherism In 1980-1981, manufacturing production fell by 14 percent, and gross national product fell by 3.2 percent
By 1987, inflation fell to around 4% and economic growth was rising at between 4% and 5%
Government debt had fallen to 27.7% of GDP by 1990 with the government running a budget surplus of around £6 billion
1983-1986, the GDP grew by 8 percent, productivity per worker by 13% and exports by 21%
Drastically improved Britain's productivity under Thatcher leadership; 1970's (Pre-Thatcher) Britain had the lowest rate of productivity growth (0.6%) out of all in the G7. 1980's, Britain had the third highest productivity growth among the G7
Unemployment met its highest point (since the Depression) under her leadership, rising to a high of 11.8%
The average real income of British families rose 37% from 1979 to 1992. The income of the richest tenth rose by 61%, but the income of the poorest tenth decreased by 18%. In 1979, the richest tenth's share of the national income was 20.6%, and that of the poorest tenth was 4.3%. In 1991, the richest tenth's share was 26.1% and that of the poorest tenth was 2.9% By: Stephen, Kaitlyn, Marlee, Daniel and Karin Pre-Thatcherism 1980 1984 1981 Employment Act: Goal was to limit union power
now required 80% approval of the workers to establish a workplace union
Restricted many types of strikes
Protest were limited to place of employment Increased taxes at lowest point of the recession; 1981 budget included raises in the income tax and the National Insurance contributions. A wide variety of new consumption taxes were introduced Trade Union Act: Cut the power of union leaders
Did this by forcing a re-election every 5 years
Required postal ballots for all union offices and provided subsidies for holding them Born Margaret Roberts in Grantham, Lincolnshire, October 13, 1925
2 years after graduating (with a chem degree), she ran as the conservative candidate for a Dartford parliamentary seat in the 1950 and 1951 elections. she lost both times, but received national publicity as the youngest female candidate in the country.
In 1959, Thatcher was elected as Member of Parliament
During this time the Conservative government had to find substantial cuts to meet election pledges on tax. She decided to remove free school milk for children over seven. This became the most notorious saving introduced, and earned her the nickname Thatcher Milk Snatcher, which stuck with her throughout her political career.
The economic difficulties experienced by the United Kingdom under the Labour government caused extensive trade union strikes, which were over pay demands in the winter of 1978–1979. This swung public opinion back to the favor of the Conservatives. In the General Election of May 1979, Margaret Thatcher became Prime Minister of the United Kingdom Goals Neo-Conservatism in Action! Pro Con Part of her strategy was to pursue policies that were unpopular immediately to decrease inflation
Ban trade unions
Privatize major industries
Raise interest rates-to cool down the economy
Planned to reduce consumer spending (which would increase demand for goods and therefore prices)
Reduce budget deficit
Increase efficiency of economy
Reduce power of trades union
Reduce Government Intervention to encourage economic freedom and entrepreneurship Practiced Demand-Side (Keynesian Economics)
During the 1970s Britain suffered a long running period of relative economic disorder, determined by severe inflation, strikes and union power abuse and control. With the Labour government unable to halt the country's economic decline, unemployment exceeded 1,000,000 by 1972 and had risen even higher by the end of the decade 1987 Privatized British Telecom in November 20 Placed restraints on the trade union movement. Thatcher unleashed the full force of the state on a coal miner’s strike; 700 workers were injured and around 966 workers were fired. 1985 Privatized: Thatcher established an economic system of monetarism. This placed a priority on controlling money supply in order to control inflation and economic growth. It created a trickle-down economic structure, in which the government would intervene only to create a free market by lowering taxes. Privatized: British Airways
Rolls Royce 1988 Margaret Thatcher believed that direct taxes, especially progressive direct taxes like the income tax, reduced the incentive to work. One of her key objectives as the prime minister was to cut direct taxes, especially the income tax May 17:
Cut personal (direct) taxes by 7.5% Raised interest rates to stop the economic boom fueling inflation. The Poll tax introduced 1989 1990 October 5:
Further cut personal (direct) taxes by 14% 1983 Part of the British Aerospace (1981)
Cable and Wireless (1981)
British Rail Hotels (1981)
British Sugar Company (1981)
British Oil (1982)
Associated British Ports (1983). Causes and Effects on Britain (1967-1979) Energy crises arose in Britain caused by the Middle East; Arab Oil producers imposed a ban on trade with other countries due to their anger caused by the West's support of Israel in the Yom Kippur War. This also increased the price of crude to rise from $3 to $12 per barrel
Trade unions submitted claims for higher wages to keep up with rising prices leading to confrontation with miners and the fall of the Conservative party in the next election
The introduction of a three day working week forced the citizens to live without electricity for the remaining four days, making living conditions inefficient and unpleasant
Breton Woods Agreement: as world currencies were allowed to float freely on world markets, a period of inflation ensued
OPEC: Imposed a 5 month oil embargo on the U.S and Netherlands and reduced production of oil.
Welfare State: Costs to maintain the programs of a welfare state was rising due to inflation, and the economic slowdown meant that government collected less tax revenue http://news.bbc.co.uk/2/hi/in_depth/4447082.stm THE