Economic policy Key terms/ definitions Detail about policy Successes Failures or problems
Right to Buy 1980 Housing Act - gave the People could buy the houses they Very popular - over 2 million had taken Undermined social housing, not
Right to buy council houses were renting advantage by 1986 economically successful.
Aim was to provide incentives for Home ownership was 68% by 1990 Reduced housing stock as profits from
people with generous scheme and Politically and socially successful. sales had to be used to reduce council
33-50% discounts for long term Appealing to the working class (classic debts, not build more houses
tenants Labour voters). Families had to be housed in B&Bs
(government has to pay for this)
Inflation Interest rates are used as a Interest rates raised to 17% in The value of the pound increased. Higher interest rates made it more
mechanism to control inflation. 1979. expensive for businesses to borrow.
Increase in the value of the £ made it
harder for businesses to export.
High interest rates led to a decline in
growth and output.
Inflation is still creeping.
Unemployment Maintaining low levels of The British industry had to be Unemployment eventually decreased. Manufacturing output fell by 15% in 2
unemployment was no longer prepared to be more competitive years.
seen as the primary aim. even if it resulted in a rise in Steel production cut by 13%.
unemployment. Year No. Unemployed 1983 - unemployment rose to over 3m
(13.5% of total workforce).
1979 7.1 million
1981 6.1 million
1984 5.3 million
1987 5.1 million
1990 5.0 million
Privatisation Believed that the private sector 1984 - the sale of British Telecom. Between 1979 & 1990 the number. of Privatised enterprises sold off cheaply
was more dynamic and 1986 - the sale of British Gas. individuals owning stocks and shares went in order to ensure all shares were
efficient than the public sector High profile advertising campaign up from £3m to £9m. taken up.
at running and delivering goods seeking to maximise the purchase
and services of shares by ordinary people.
Plans to privatise the NHS were
drawn up (not pursued until the
1990s).
Deregulation Removing regulations to make Loan Guarantee Scheme - made it Financial deregulation freed up the City of Productivity did not increase by much.
it easier for businesses to trade easier for small businesses to London and the financial markets from the 1970s - GDP growth 2.2%
and grow thus encouraging borrow money. (Removed checks tight controls of the Bank of England. 1980s - GDP growth 2.2%
wealth creation. to borrow money). Foreign banks could now operate as
The Enterprise Allowance Scheme stockbrokers.
- encouraged the unemployed to London became one of the financial
start up their own businesses by capitals of the world allowing it to
giving them £40 a week for up to a compete with Wall Street.
year.
Economic Realignment The long term economic trends Britain’s economy was moving Led to investment and regeneration in The foundations of working class
were affecting Britain’s away from being based on some areas. communities were crumbling.
industry. manufacturing and heavy industry In London, the Canary Wharf became the The north-south divide was
Old labour intensive industries and became based on services. second most important financial district in sharpened.
were facing foreign This shift was embraced by the the UK (after the City of London). Old traditional industries contracted.
competition and had to Thatcher government. Increased ill health, depression,
compete with technological alcoholism, and drugs.
innovation. 1981 - series of riots in London,
Birmingham, Liverpool, and Leeds.
- Scarman report stated the
key reasons for the riots
were race and poverty.
Right to Buy 1980 Housing Act - gave the People could buy the houses they Very popular - over 2 million had taken Undermined social housing, not
Right to buy council houses were renting advantage by 1986 economically successful.
Aim was to provide incentives for Home ownership was 68% by 1990 Reduced housing stock as profits from
people with generous scheme and Politically and socially successful. sales had to be used to reduce council
33-50% discounts for long term Appealing to the working class (classic debts, not build more houses
tenants Labour voters). Families had to be housed in B&Bs
(government has to pay for this)
Inflation Interest rates are used as a Interest rates raised to 17% in The value of the pound increased. Higher interest rates made it more
mechanism to control inflation. 1979. expensive for businesses to borrow.
Increase in the value of the £ made it
harder for businesses to export.
High interest rates led to a decline in
growth and output.
Inflation is still creeping.
Unemployment Maintaining low levels of The British industry had to be Unemployment eventually decreased. Manufacturing output fell by 15% in 2
unemployment was no longer prepared to be more competitive years.
seen as the primary aim. even if it resulted in a rise in Steel production cut by 13%.
unemployment. Year No. Unemployed 1983 - unemployment rose to over 3m
(13.5% of total workforce).
1979 7.1 million
1981 6.1 million
1984 5.3 million
1987 5.1 million
1990 5.0 million
Privatisation Believed that the private sector 1984 - the sale of British Telecom. Between 1979 & 1990 the number. of Privatised enterprises sold off cheaply
was more dynamic and 1986 - the sale of British Gas. individuals owning stocks and shares went in order to ensure all shares were
efficient than the public sector High profile advertising campaign up from £3m to £9m. taken up.
at running and delivering goods seeking to maximise the purchase
and services of shares by ordinary people.
Plans to privatise the NHS were
drawn up (not pursued until the
1990s).
Deregulation Removing regulations to make Loan Guarantee Scheme - made it Financial deregulation freed up the City of Productivity did not increase by much.
it easier for businesses to trade easier for small businesses to London and the financial markets from the 1970s - GDP growth 2.2%
and grow thus encouraging borrow money. (Removed checks tight controls of the Bank of England. 1980s - GDP growth 2.2%
wealth creation. to borrow money). Foreign banks could now operate as
The Enterprise Allowance Scheme stockbrokers.
- encouraged the unemployed to London became one of the financial
start up their own businesses by capitals of the world allowing it to
giving them £40 a week for up to a compete with Wall Street.
year.
Economic Realignment The long term economic trends Britain’s economy was moving Led to investment and regeneration in The foundations of working class
were affecting Britain’s away from being based on some areas. communities were crumbling.
industry. manufacturing and heavy industry In London, the Canary Wharf became the The north-south divide was
Old labour intensive industries and became based on services. second most important financial district in sharpened.
were facing foreign This shift was embraced by the the UK (after the City of London). Old traditional industries contracted.
competition and had to Thatcher government. Increased ill health, depression,
compete with technological alcoholism, and drugs.
innovation. 1981 - series of riots in London,
Birmingham, Liverpool, and Leeds.
- Scarman report stated the
key reasons for the riots
were race and poverty.
