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To what extent has Labour economic policy since 1997 been consistent with Tory ideas 1979 - 1997?

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Introduction

To what extent has Labour economic policy since 1997 been consistent with Tory ideas 1979 - 1997? When the Conservative party gained power in 1979, they were converted to the belief that control of the money supply, was key to controlling inflation. Margaret Thatcher accepted Milton Friedman's argument, that rising inflation, which was proving very damaging to the economy and British competitiveness, was a direct result of government's neglect of monetary targets. The result of this was 'Monetarianism,' which resulted in rising interest rates, cuts in public spending, and VAT was almost doubled to try and curb the money supply. By the time Major was in power, the 'Monetarist' approach was all but scrapped, but it was accepted that control of interest rates was key to controlling the economy. This is what bought about the 'Ken and Eddie' show, where the Chancellor, Kenneth Clarke, and the Governor of the bank of England, Eddie George, met regularly to set interest rates, something which didn't use to involve the BOE and was solely a political tool. ...read more.

Middle

This is very consistent with Tory ideas regarding Trade Unions, ands I believe it is a big step away from Labours roots and traditional principals. Traditionally Labour has nationalised, Tories have privatised, and as the two parties have been in and out of power they have done exactly this to key industries such as coal gas and steel. In 1997 at the Labour party conference, John Prescott announced that Labour would not re-nationalise the train networks. This further confirmed the new orthodoxy, but also seemed to be Labour following in Tories footsteps. When Railtrack demised Labour replaced it with Network Rail, a government appointed board. Conservative may try and claim this is re-nationalisation, but it is more likely to be a sensible response to the problem. An area, which on the surface appears to be consistent with Tory ideas, is that of taxation. In opposition Labour promised not to raise the base rate, or the top rate of tax, as they didn't want to alienate the (usually Tory voting) ...read more.

Conclusion

This made them appear to be similar to the Conservatives, but as time has passed, it has become clearer that Labour is redistributive, and has made changes, that the Tories simply wouldn't have. In April 2002 they introduce Child Tax Credit, Paid for by the increased NIC. Also the introduction of working family tax credit ensures that people who work will be better off than if they stay unemployed and claim benefits. Other areas where Labour policy has appeared to be strongly departing from Tory ideas are the Minimum wage, which Tories would say is bad for business, and joining the social chapter, which was opposed by the Conservatives, who also oppose joining the ESC, but only for this government. Labour has made many changes which appear to be following Tory ideas and principles closely. They have been helped by a good economy to implement the changes that they've wanted to. I believe that they are moving away from the Conservative, as time goes on this will be even more noticeable. George Austin ...read more.

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