Britain Growth Strategy Analysis
Growth Strategy and Performance of Britain
Growth Strategy
In the following analysis, we will study growth strategy of Britain from 1980 to 1990 and growth performance from 1980 to 2000. The decade of 1980s was marked by the premiership of Margaret Thatcher. Desire to study the economic impact of Thatcher’s economic policy made me opt for Britain. She was strong proponent of free market economics and was subject to scrutiny for her nonconventional economic policies, known as Thatcherism.
Thatcherism primarily called for reduction of government deficit, control of money supply with publicly announced targets, abandonment of price control, curbing government expenditure and reducing income tax, especially at upper and lower income.
By 1970s, Britain was resonated with ‘sick man of Europe’. Oil price shock led to recession. GDP plunged by, approximately, 3%. This coincided with double digit inflation and high unemployment rate. Accompanying these …show more content…
Thatcher had planned long term growth for British economy. Most of the policies of conservative government were focussed on: abolition of control and regulation on private sector such that the market finds its own way to determine price and allocation of resources; Trade union reforms; contraction of public sector and privatisation.
1. Decontrol and Deregulation of the Private Sector
Some of the measures taken by government, under this category, include lowering of income tax and abrogation of direct controls on free movement of capital, on prices and on minimum wages. Controls on exchange rate movement and price were abolished immediately. In 1978-79, the standard rate of income tax was 35 percent which was gradually reduced to 26 percent in 1988-89. During the same period personal allowances rose 23 percent, in real terms. Also, government took some steps, reluctantly, towards liberalisation of some markets. For example, in 1986 stock market was opened for domestic and foreign traders.
2. Trade Union
Growth Strategy
In the following analysis, we will study growth strategy of Britain from 1980 to 1990 and growth performance from 1980 to 2000. The decade of 1980s was marked by the premiership of Margaret Thatcher. Desire to study the economic impact of Thatcher’s economic policy made me opt for Britain. She was strong proponent of free market economics and was subject to scrutiny for her nonconventional economic policies, known as Thatcherism.
Thatcherism primarily called for reduction of government deficit, control of money supply with publicly announced targets, abandonment of price control, curbing government expenditure and reducing income tax, especially at upper and lower income.
By 1970s, Britain was resonated with ‘sick man of Europe’. Oil price shock led to recession. GDP plunged by, approximately, 3%. This coincided with double digit inflation and high unemployment rate. Accompanying these …show more content…
Thatcher had planned long term growth for British economy. Most of the policies of conservative government were focussed on: abolition of control and regulation on private sector such that the market finds its own way to determine price and allocation of resources; Trade union reforms; contraction of public sector and privatisation.
1. Decontrol and Deregulation of the Private Sector
Some of the measures taken by government, under this category, include lowering of income tax and abrogation of direct controls on free movement of capital, on prices and on minimum wages. Controls on exchange rate movement and price were abolished immediately. In 1978-79, the standard rate of income tax was 35 percent which was gradually reduced to 26 percent in 1988-89. During the same period personal allowances rose 23 percent, in real terms. Also, government took some steps, reluctantly, towards liberalisation of some markets. For example, in 1986 stock market was opened for domestic and foreign traders.
2. Trade Union