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Government Incomes Policy
June 1979 Government Incomes policy was dropped -
Pay Awards
1979 Thatcher agreed to recommendations for increased public sector pay awards. -
Inflation
Inflation of 22% in spring 1980 up from Labour figure in 1979 -
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 -
1979 Budget
June 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 -
1980 Employment 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
1980 Budget large pay awards for police + army. -
Manufacting Production
1980 Partly due to Govt. unwillingness to prop up manufacturing production fell by 11%. -
Manufacturing Decline
Manufacturing production which was already declining, fell by 14% 1980-81, partly caused by this govt. policy unwillingness to intervene -
Waves of Riots
Consequences of economic recession wave of riots across inner-city London, Liverpool, Manchester, Leeds + Bristol in summer 1981 -
Increased Productivity
Productivity increased amongst those still in work. -
25p Budget Abolished
Budget 25p lower rate of tax introduced by Labour in 1978 was abolished. -
Unemployment Rose
Unemployment rose to 2.7million in 1981, the highest since the depression of the 1930s. -
Recession and GDP Falling
1980-81 falling orders for manufactured goods saw the start of a recession + GNP fell by 3.2%. -
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). -
Unemployment
Above 3 million. -
Continuation in Office Threatened
Opinion polls showed the Prime Minister's personal popularity and that of her government had declined significantly. -
Public Expenditure Rising
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. -
Inflation
Inflation down to 10% in 1982, partly due to high unemployment. -
Conclusion
To conclude, Thatcher did stick to her principles. However, the economy did not fair too well during her time in office until the end when inflation decreased. Thus it would seem unlikely for her to be elected again at the next General Election. -
Inflation
5% in 1983 - decreasing. -
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.
