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  • The UK economy
    • Causes of economic change
      • The UK is experiencing a period of economic change. This is happening as a result of several factors, including globalisation, government policies and deindustrialisation.
    • Globalisation:
      • Globalisation describes the way in which the world has become more interconnected. Globalisation has led to an increase in world trade, foreign investment, communication between different countries and the sharing of ideas.
    • in the past, the UK economy was based on activities that took place within the country and within Commonwealth countries. The growth of globalisation has meant that the UK economy is now more dependent on other countries.
      • An example of this is the manufacturing industry. In the 1900s, 55% of the UK population worked in secondary jobs. The 2011 census showed that this figure had dropped to just 9%. Globalisation has allowed people to connect with other countries - it is possible to send orders abroad, locate factories abroad and get products shipped in to UK ports.
    • Government policies
      • The government manages the UK economy through the Treasury. Each year a budget is produced, which sets out things such as the minimum wage, spending on public services and levels of tax.
        • The UK economy continued to grow into the 1990s. The government had decided to keep taxes low so people had more money and could afford to buy more things.
      • During the 1980s the UK was performing better than most other European countries. Several things helped this growth:
        • Many state-owned businesses in the UK were privatised, eg British Telecom and British Gas. They had been owned by the government, but they were sold to individuals or other companies. This made a lot of money for the government.
        • Markets were deregulated. This means that the government became less involved in running things and some companies had to find better ways to make a profit
        • Lots of factories and coal pits were closed. The government said that they could no longer compete with foreign countries where wages are lower. This is when UK jobs first began to go overseas.
    • Deindustrialis-ation
      • The UK has experienced deindustrialisation. There has been a decrease in the amount of manufacturing taking place in the country and a growth in the tertiary and quaternary sectors. Traditional industries, such as ship building and textiles, have declined. This has happened for two main reasons:
        • A global shift in manufacturing to new emerging economies (NEEs), where wages are lower, working hours are longer and trade unions are sometimes banned.
        • An increase in the number of machines used to carry out work. This is called mechanisation.

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