How Successful were MT's economic policies?

Successful were MT's economic + social policies?

Inflation

• Retail prices x2 1973-1979
• MT believed that inflation:
  • eroded M.C savings therefore reducing social stability
  • made Uk industry overpriced
  • reduced incentives + enterprise
  • was fuelled by govt spending
  • was a direct result of Keynesianism
  • could only be tackled by reducing money in circulation

Taxation Policies

• intitial govt measures made inflation worse --> honoured pay awards + gave t low paid workers, VAT increase pushed up prices
• Therefore 1980/81 budgets meant: cuts to govt spending, reduced govt borrowing, increased taxes --> described as most unpopular budgets in history 

Howe's Policies + economic problems

• had a +tive impact on inflation but contributed to economic downturn
• rate @ which prices rose reduced form 18% to 4,5% 1980 --> 1983
• manufacturing output fell 14%
• unemployment x2 to 3mn 1979…