Key words:

Monetarism Thatcherism City

Sunday, April 26, 2020

How did Thatcher attempt to change the economy in Britain?

To understand what monetarism is To explain how Thatcher’s policies affected Britain

Who were the key individuals 1979 83?

Geoffrey Howe, Chancellor of the Exchequer Keith Joseph, Department of Trade and Industry William Whitelaw, Home Secretary 1979 83 Milton Friedman

Thatcher 1979 1983

• Complete the gap filling exercise to make sure you understand monetarism

Inflation

Inflation doubled by the end of 1980 to 21.9%. Cuts were imposed on government spending and attempts made to reduce subsidies to nationalised industries http://www.youtube.com/ watch?v=Qx7AOKqvC4E

Wets v Drys

In 1980 Norman St John Stevas , refers to the PM as the ‘immaculate misconception.’ One ‘wet’, Julian Critchley, denounced Thatcher in a letter to the Observer

Define “Wet” and “Dry” Blair – P89 Norman St John Stevas Julian Critchely

Howe’s Second Budget

Geoffrey Howe‘s second Budget in March 1980 took £900 million out of public spending. Cuts were made to higher education; social security payments were reduced.

Retreat?

April 1980: British Steel Workers were given a 16% pay increase but accepted plant closures. Super ‘dry’ Keith Joseph was forced to retreat from government spending.

October 1980: Thatcher makes her ‘You turn if you want to the Lady’s not for turning’ speech http://www.youtube

.com/watch?v=T2Rt 0W-Jsd4

De-Industrialisation

By the end of 1980 unemployment reached 2.8 million. Whole areas of the country were being de-industrialised as companies went bankrupt.

Unemployment

1982: unemployment reaches 3 million for the first time since 1932

Inflation Falls

Inflation fell to 4.5% in 1983.

From April to July 1981 riots broke out in London, Liverpool, Manchester and Bristol. Thatcher was reckoned to be the most unpopular PM since polling began. Her approval rating dropped as low as 18% http://www.youtube.com/ watch?v=iSX2IeBEWYQ

The Falklands Factor

The 1982 victory in the Falklands transformed Thatcher’s appeal with the so called ‘Falklands Factor’. In the 1983 election Thatcher romps home with just under 43% of the popular vote.

http://www.youtube.co

m/watch?v=bmlzDKev4 ec

• • • Read P89-91 (Blair) and P117-121 & skim P122 (Thatcher) to create a storyboard on the economy 1979-83 Alternatively make notes You could create a mind map

Key words:

Supply side economics City

Sunday, April 26, 2020

How successful was supply side economics?

To understand how Conservative economic policy changed To make a judgement about the success of supply side economics

• • • • •

Thatcher victorious, happy and glorious?

Labour vote severely down in 1983 Huge Tory majority of 144 seats, swept through on the “Falklands factor” Although Thatcher was popular with many, it wasn’t purely her actions that led to Conservative success – Labour were extremely weak Anti-Cons vote = 16million, but the Cons vote = 13million. FPTP system helped Maggie to a huge majority Thatcher was “not for turning” – or was she?

Deregulation

• • • • In 1986 the Conservative government under Maggie Thatcher introduced a package of new rules relaxing the regulation on the London Stock Exchange.

The new legislation: Scrapped fixed commission rates, arguable making the exchange more competitive globally Abolished rules barring foreign companies from buying City firms – leading to 65% of the City’s workforce having non-British employers in 2011.

And created a modernised and more efficient market by swapping exchange floor trading for screen-based computer trading.

http://www.youtube.com/watch?v=Dtc58sTsT pE&safe=active

Privatisation

• • Privatisation is the selling of government owned companies Began in 1979 with Cable and Wireless and British Aerospace (Not to be confused with BA!) Kicked off after 1983, with the selling off of all or most of a number of nationalised industries, such as British Gas http://www.youtube.com/watch?v=nedVpG GjkE&safe=active

How did Conservative economic policy change?

• Define and explain the key features of: – – Supply side economics Deregulation – Privatisation (benefits and problems) • What was the argument over how Thatcher used North Sea Oil?

Taxation

• Direct taxation was reduced from 33p to 30p in the £.

• To fund lower taxes on incomes, up went tax on most things shoppers bought. VAT, or value added tax, jumped from 8% to 15%.

http://www.youtube.com/watch?v=QghMqvQi 6kc&safe=active

How far did Conservative economic policy effect society?

• • • • Taxation (P134/5 Thatcher) Local government http://www.youtube.com/watch?v=r_BFdjh7eeE&saf e=active Education

How successful was Thatcherite economic policy?

Success Failure Read AQA P103/4 – note take on economic importance Write a paragraph to explain the importance of economic factors contributing to the strength of support of the Conservative government in 1987.

‘Margaret Thatcher’s achievements as prime minister in the years 1979 to 1990 were limited.’ Assess the validity of this view. (45 marks)