economy

• was montarism succesful?

  no, more spent on unemployment benefits etc due to high levels of unemployment and poverty
• what was inflation in 1980?


  15%
• what was unemployment in 1980?

  2m
• by how much did income tax fall?

  top rate fell from 83% to 40% by 1988
• by how much did VAT rise?

  from 8% to 15% between 1979 and 1987
• what was an example of a 'looney left' council?

  Ken Livingstone, Greater London council
• what did gov introduce to control 'loony left' councils and what was the outcome?

  rate capping, limiting amount councils could raise through tax, Sheffield and Liverpool refused to set a cap but had to due to threat of bankruptcy
• what did privatisation result in?

  more share-holders than trade union mebers
• what was privatised in 1979?

  British Petroleum
• what was privatised in 1987?

  Rolls Royce
• What was privatised in 1988 ?

  British steel
• what schemes helped deregulation?

  The Loan Guarantee Scheme (easier for small businesses to borrow money) and Enterprise Allowance Scheme (£40 for unemployed to get off the ground)
• how succesful was deregulation?

  economy grew but productivity did not, and 2.2% increase in GDP = same as 1970s
• how much was unemployment by 1983?

  3m, 13.5% of workforce
• how much did manufacturing output fall by?

  15% in 2 years
• what were interest rates in 1979?

  17%
• what signified the end of monetarism and when was it?

  1986 lawson abandoned spending targets
• how much did the standard rate of tax fall?

  fell from 33% in 1979 to 25% by 1988
• what is monetarism?


  Economic theory that the best way to control inflation was by government restraint from spending and borrowing and imposing strict curbs on the money supply
• what were the indicators of stagflation by 1980?

  inflation was 15% and unemployment was over 2m
• what made the 1981 budget more monetarist?

  grants to local councils were cut and benefits were frozen
• what was the 1986 local Government Act?

  abolished the big metropolitan local authorities set up by Heath's government
• what was the long term result of the 1986 Local Government Act?

  damaged local accountability
• what made privatisation gain momentum?

  sale of British telecom in 1984
• what was the significance of the sale of British gas in 1986?


  Biggest share offer in history, was accompanied by an advertising campaign to maximise shares
• how much did the individuals owning stocks and shares increase by?

  3m to 9m between 1979 - 1990
• what was criticised about privatisation?

  privatised industries were sold off cheaply to ensure all shares were taken up
• what was the impact of privatisation for employees?

  jobs threatened as privatised enterprises cut back on staff, couldn't rely on long-term job security or reliable pensions provisions
• what was the impact of deregulation?

  made it easier for businesses to trade and grow, encouraging entrepreneurship and wealth creation
• how did the government encourage start up companies?

  loan guarantee scheme made it easier for small businesses to borrow money and the Enterprise Allowance Scheme gave the unemployed £40 per week to start businesses
• what was financial deregulation?

  loosening of controls on banks and financial markets which led to a boom in investment banking and financial speculation
• when was the Big Bang?

  27th October 1986
• what did the Big Bang do?

  deregulated London stock exchange, making London one of the financial capitals of the world
• how did Thatcher attempt to control inflation and what was the result of this?

  interest rates - raised to 17% 1979, but made it more expensive for businesses to borrow and increased the value of the pound which made it difficult for businesses to export, leading to a decline in output and demand causing a recession by the early 1980s
• when was the inflation peak?

  22% in May 1980
• what was the lowest inflation?

  2.5% in 1986
• what had happened to inflation by 1990?

  reached double figures again
• how much did manufacturing output fall?

  15% in 2 years
• how much did production fall in the West Midlands?

  1/4
• by how much was steel production cut?

  30%