The Thatcher Revolution - Economics (Complete notes AQA - 10/16)

These notes are for the 'Making of Modern Britain' course on AQA and as such follow the spec, although would be useful for all modern britian courses. They contain hystoriography, detail and explanations. 

The notes are devided into the sections of the spec, therefore there are 16 documents (as there are 4 areas (politics, economics, society, and foriegn policy) and there are 4 periods (Post war, Wilson + heath, Thatcher, and Blair)). 

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Page 1

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The
`Thatcher
Revolution',
1975-1990
­
Economy


Monetarist
policies
and
their
impact
on
the
economy;
the
extent
to
which
the

economy
had
been
transformed
by
1990

Wilson
1974-1976

Denis
Healy
­
Chancellor
of
the
Exchequer



1974
Budgets
­
deflationary


- Tax
increases

o £1,500
million
increase

o 3p
increase
in
standard…

Page 2

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- Inflation

o 1975
26%
inflation


- Wages


o 1975
35%
a
year

- Unemployment

o 1975
700,000

o 1976
1
million

- Balance
of
Payments

o 1974
$1.5
billion

! made
worse
by
the
price
of
oil

- Deficit


- Stagflation
continued

- Industrial
production

o Lower
in
1975…

Page 3

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- Deal
with
the
sterling
crisis
caused
by
concerns
of
over
borrowing

- Spending
cuts
were
a
condition
of
the
loan

o £3000
million
cuts
over
2
years,
and
taxation
increases.

o Some
see
these
spending
cuts
as
the
end
of
consensus.

o Sell
£500
million
BP
shares

! 17%…

Page 4

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o 1.6
million

1979
­
Economy
in
a
fairly
good
place


- Unemployment
falling

- Inflation
falling

- Improved
balance
of
payments

Historiography

- David
Childs


o The
rapid
improvement
in
the
economy
was
`based
on
the
fact

North
sea
oil
was
starting
to
flow'.

- William
D.
Rubenstein

o…

Page 5

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o Taxes
should
be
reduced
so
that
people
could
keep
more
of
their

earnings.

o Businessmen
should
chase
markets,
make
profits
and
create
new

jobs.

o Unsuccessful
businesses
should
be
allowed
to
fail
and
not
be
bailed

out
by
government.

o Conservatives
should
not
have
economic
planning
and
policy.

o…

Page 6

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Chancellor
of
the
Exchequer
-
Geoffrey
Howe


Right
to
buy
­
1980
Housing
Act

- Why
introduce


o It
had
been
a
pledge
in
1979,
well
received
by
voters.

o It
gave
people
something
for
the
hard-earned
money
they
paid
­

rather
than
wasteful
rents.

o Raised
revenue
and
cut…

Page 7

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! Tories
had
pledged
to
honour
the
pay
rises
agreed
by

Labour
before
the
election.

! VAT
made
prices
higher
thus
driving
up
inflation.


· RPI
4%
increase
from
VAT
alone.


! Oil
prices
were
rising.

! By
the
end
of
1980
inflation
was
21.9%


o Value
of
the
pound…

Page 8

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o The
final
abandonment
of
Keynesian
economics.


o In
the
middle
of
the
worst
economic
crisis
since
1945.

o The
economy
was
being
squeezed.
The
belief
was
that
inflation

would
be
squeezed
out
of
the
system
once
and
for
all.


- It
was
a
highly
controversial
Budget.

o 364
economists…

Page 9

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o Encourage
people
to
have
a
sense
that
they
owned
something
that

developed
the
nation.

- Criticism


o Many
shared
Labour's
ideas
­
that
privatisation
encouraged
greed.

They
rejected
`popular
capitalism'.


o It
didn't
help
that
many
leading
politicians
(usually
Conservatives)

gained
highly
lucrative
seats
on
the
board
once
they…

Page 10

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- 27
October
1986
­
the
change
happened
overnight.

o Largest
deregulation
of
the
London
stock
market
in
modern
times.

o It
transformed
London
and
restored
London
to
the
financial
status

it
had
enjoyed
in
1914.

1987
`Black
Monday'
­
October

- Event

o Stock
Markets
around
the
world
were…

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