Successes and Failures of Thatcher's Economic Policies

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  • Created by: eloise
  • Created on: 04-05-22 15:07

Successes and Failures of Thatcher's Economic Policies

Advantages

  • Led to a modernised economy -> proportion of the workforce employed in manufacturing fell from 40% in 1960 to 22% in 1990
  • Britain achieved an average economic growth of 4% each year
  • Government finances were in surplus, and not debt
  • Inflation was cut from 14% in 1979 to single figures in 1982 and didn't rise above 9% for the remainder of the 1980s
  • Productivity increased from 50% of US productivity in 1979 to 77% in 1997
  • There was a 300% rise in investment to financial services

Disadvantages

  • High unemployment -> peaked at 3.2 million in 1985
  • Some historians argue Thatcher was lucky due to discovery of the North Sea oil which subsidised some of her policies
  • Policies caused a North South divide with high poverty and unemployment more common in North -> unemployment in Wales increased from 70,000 in 1979 to 160,000 in 1986
  • Increased gap between the rich and poor -> income of the richest rose 62% by 1992 and the income of the poorest fell by 18%
  • GDP fell from being ranked 11th in 1973 to 14th in 1997
  • Public expenditure increased from 37% of GDP in 1979 to 39% in 1989, and 44% in 1997
  • Economic growth not seen as a dramatic change from growth of 3.3% in 1960s

Evaluation

Thatcher's policies did help some, such as the 'Yuppies' (young, urban professionals), but she can be considered lucky due to context of the time (Falklands and North Sea oil) as the success may not be wholly due to her policies. Furthermore, there were dramatic social effects of her policies and the high unemployment led to greater government spending, so can be seen as counterproductive.

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