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User Name Thread Name Subject Posted
GUEST,rarelamb BS: Happy Birthday Mrs Thatcher-13 Oct 1925 (165* d) RE: BS: Happy Birthday Mrs Thatcher 17 Oct 05


Ok, I've put forward some speeches that show that she believes and free markets and a defender of democracy. I could go on but I think the point has been made.

Let's now go to her legacy.

http://www.bized.ac.uk/current/mind/2003_4/170504.htm

"This article will look at some of the main features of Thatcherite economic policy 25 years on.
Rubbish piling up during the refuse workers strike in 1979.

When Mrs Thatcher won the election in 1979, economic growth stood at just over 2% but this apparently respectable figure hid many problems. Unemployment had been rising from 2% to 4% reaching a million and inflation stood at 13.4%. The election was fought in the shadow of the 'winter of discontent' - public sector workers throughout the UK went on strike following frustration with policies that attempted to restrain their pay to keep inflation under control. Rubbish went uncollected, as dustmen amongst others seemed to reflect the growing trend towards industrial unrest that gave the UK such a bad reputation.

Image: Rubbish piling up outside Charing Cross Hospital in London during the refuse workers strike in 1979. Rats loved it though! Title: Rubbish Pile. Copyright: Getty Images, available from Education Image Gallery.

The government was borrowing 8.5 billion a year with total government debt standing at nearly 44% of GDP and had previously borrowed from the International Monetary Fund (IMF) to ward of a balance of payments crisis. Sterling was strong, causing pressure on exporters who in turn were hampered by the lack of attention to quality and the poor reputation British manufactured goods had around the world. Things were not good. Mrs Thatcher promised a new approach.

At the heart of Thatcherite economics were the following:

    * A belief in freeing up markets
    * De-regulation to encourage enterprise and efficiency
    * Reducing the influence of government
    * Reducing the strength of the trade unions
    * Cutting personal taxation and shifting the burden to indirect taxation
    * Increasing incentives to enterprise and improvement
    * Increasing public involvement in business - shareholding for example
    * Increasing public property ownership - through the sales of council housing
    * A focus on monetary policy to control inflation and economic growth

It is hard for those who have not lived through this period to understand the impact these policies had. The years after the end of the Second World War had seen government take an increasing hand in the economy - Keynesian demand management was the order of the day. If unemployment - the main focus of such policies, were too high, the government would engineer economic growth through operating a budget deficit - spending more than it received in tax revenue. The multiplier effect would lead to economic growth and unemployment would fall. Booms in the economy could be dealt with through a reverse of this policy.

Mrs Thatcher however, believed that such policies lead to society becoming too reliant on the state to provide - especially with regard to the economy. The British car industry was typical of such a problem. Widespread industrial unrest, massive losses, increased competition and poor quality products had weakened the car industry. Being such a key industry in terms of employment - including all the ancillary work that goes with it - led successive governments to use taxpayer's money to support the industry. Such support could not go on indefinitely.

State owned utilities such as gas, electricity, telecommunications and water along with other nationalised industries like steel and coal, were all seen as being inefficient and victims of state control. Mrs Thatcher intended to bring competition to these industries, to make people appreciate the necessity of operating in real world markets, as a vital plank of her policy as well as bringing people into contact with share ownership and thus having greater understanding of how businesses work.

During the next 13 years, most state owned enterprises were privatised, share ownership amongst ordinary people increased dramatically, most of these enterprises became efficient profit making organisations although the cost was seen as being massive. Thousands of jobs were shed in the drive to profitability prior to privatisation; the industrial landscape of Britain changed beyond recognition, communities were laid waste - especially in the coalfields and steel-producing areas of the UK and services became the dominant business type.

Mrs Thatcher oversaw cuts in income tax - the bands were reduced and the top rate cut from 83% to 40% whilst the lower band was also cut. To replace this, VAT was increased from 8% to 15% and then again to 17.5%. Targets were set for the growth in the money supply as attempts to cut inflation were strengthened.

In addition, Mrs Thatcher passed numerous bits of legislation cutting the power of the unions. There were high profile strikes by the miners in 1984 and the print workers in Wapping in 1986, following the sacking of 6000 of them after their refusal to accept new working regimes by Rupert Murdoch's News International Group. Both of these strikes were long and violent but Mrs Thatcher stood firm. The unions would not blackmail the country and the failure of both strikes led to a new approach by the unions and a new attitude to industrial relations.
Confrontations between strikers and police at the News International Plant in Wapping.

Image: The sacking of 6000 print workers led to regular violent confrontations between strikers and police at the News International Plant in Wapping in East London. Title: Strike Conflict. Copyright: Getty Images, available from Education Image Gallery.
Police surround striking coalminers.

Image: High profile police action and the reluctance of some miners in key areas such as parts of Nottinghamshire to join in, prevented the miners' strike from having the effects on the country that it had in 1972. The strike was seen as being a test case in the battle between militant unions and the government. Title: Coalminers Strike. Copyright: Getty Images, available from Education Image Gallery.

By 1987, inflation had been brought down to around 4%, unemployment was falling albeit from a high of 12% of the working population - a total of 3-4 million people depending on whom you believe - and economic growth was rising at between 4 and 5%. Government debt had fallen to 27.7% of GDP by 1990 with the government running a budget surplus of some 6 billion.

To all intents and purposes it was an economic miracle. Mrs Thatcher had succeeded in creating for herself a whole economic philosophy much of which endures not only in the UK but also in many other European countries. Even Tony Blair managed to use the same quote from St Francis of Assisi to describe government as Mrs Thatcher did on the steps of 10 Downing Street on the day of her accession to office!
Mrs Thatcher makes a speech in front of a crown logo.

Things did start to go wrong - the economy grew too fast by the late eighties, and inflation was rising. The brakes were put on but it caused a deep recession lasting into the middle nineties. Despite this crash, the legacy of Mrs Thatcher still seems to be that she turned round the country and that she made people become aware of the necessity for stable economic policies, for paying our way, standing on our own two feet and not expecting someone else to bail us out of our problems. The relative economic stability we now seem to enjoy does, in many people's eyes, depend in large part to the medicine that Mrs Thatcher gave us; it inculcated a new approach to the economy, even though at the time we didn't enjoy it.

It is now fourteen years since Mrs Thatcher resigned. Whatever anybody thinks of her, she left an indelible mark on the UK economy that does still have an impact on economic policy making."



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I wanted to highlight this:

"To all intents and purposes it was an economic miracle. Mrs Thatcher had succeeded in creating for herself a whole economic philosophy much of which endures not only in the UK but also in many other European countries. Even Tony Blair managed to use the same quote from St Francis of Assisi to describe government as Mrs Thatcher did on the steps of 10 Downing Street on the day of her accession to office!"

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