Tuesday, April 8, 2014

Thatcher: First Female Prime Minister of UK - Part 2

Thatcher's 1979 Cabinet
For about 20 years after entering the Hose Common, Margaret Thatcher rose to position Prime Minister, being the first woman to do so in the western hemisphere; and as she took the responsibilities, she faced a lot of challenges. With Britain being economically uncompetitive, unproductive, and in the brink of bankruptcy, Thatcher brought reforms, regardless of their popularity rate.

For her first term in office, she done remarkable, but also infamous, changes. In 1980, she passed a “right to buy” scheme for apartments. The scheme’s purpose was aimed to allow families to own an apartment by buying state-owned apartments from the government for prices below market prices.  She also passed in 1982 to a law that will reduce the number of strikes that were being conducted by the unions. She also cut the income tax from 33% to 30%. Though the acts were positive for the country, it was overshadowed by her bigger unpopular policies she also initiated.

As she started her job, she launched series of drastic changes that were publicly hated. She launched a massive government spending cuts that amounted to over £35 billion in 1980 alone. With the cuts, some welfare benefits were stop. In addition, subsidies to state industries were ceased. State enterprise were either to become profitable or to shut down. To increase the government revenue, she increased indirect taxation in form of value-added taxes. These policies were unpopular to the British public and were blamed for the recession in the 1980’s.

The recession that hit Britain in 1981 was one of the worst economic crisis that hit Britain. The production rate of the manufacturing sector shrunk. Unemployment was staggering, reaching its peak in 11.8% in 1984.To make matters worse, Thatcher initiated more spending cuts. The cuts were so unpopular that more than 300 economists showed opposition to it with a petition. Thatcher ignored the petition and continued her austerity program.

Although the policies were very unpopular, Thatcher proceeded knowing that it was best for the country. However, general elections were coming and outcome of victory was bleak. Then in 1982, an event that occurred an ocean away would save Thatcher from defeat.

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