Inflation, unemployment and realignment

• Inflation was the biggest problem - not unemployment alike Keynesianism which they blamed
• Control of inflation :

  • interest rates raised to 17% in 79 - led to decline in output and demand as exports expensive and borrowing too
  • economy goes to recession which led to mass unemployment
  • inflation peaks at 22% in May 1980 - reaches 2.5 in 86 - by 90 reaches double figures
• Unemployment at beginning

  • worst hit areas - midlands and north
  • Deindustrialisation - manufacturing output fell by 15% in 2 years
  • 1983 - unemployment rose to over 3 million - highest since post war - 13% of total workforce
  • Youth employment schemes and lower national insurance to combat but only falls under 3 million in 87
• Unemployment

  • liverpool - employment hit 25%
  • Labourers and traditional workers rendered useless with mechanisation and privatisation
  • Realignment hit men so women became Breadwinners
• Economic realignment :

  • thatcher embraces shift to service economy
  • north south divide emerges with dereliction in old mining and ships and steelworks
  • increase in drug use, depression as kids don’t follow parents to work
  • howe 81 - Liverpool can be left to decline
• Economic realignment :

  • Riots - 1981 x Brixton, Birmingham and Liverpool
  • Scarman report identified cause as poverty and race
  • Occurred in migrant areas and high unemployment
  • SUS laws - black and Asians discriminated
• Productivity did not increase