Assess the reasons why Thatchers economic policies were controversial.

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Assess the reasons why Thatcher’s economic policies were controversial?

Thatcher became prime minister in 1979 with a majority of 42 seats, beating down her Labour opposition with the slogan ‘Labour isn’t working.’ Unemployment up until 1979 had been at a record high of 1 million people, and the electorate on the premise of tackling this unemployment brought Thatcher to power. However this soon proved not to be the case. By 1982, unemployment had risen to over 3 million, and Thatcher had been quoted saying “there is no such thing as society.” However economically, it can be seen that in order for her to bring down the inherited inflation that was at a staggering 28% (which was her primarty aim), unemployment was a by-product of this aim. The revenue that Thatcher received from North Sea oil, which was just coming on stream, she used to fund the benefits for the 3 million unemployed. This policy was very controversial as many thought that this was a waste of revenue that should instead have been spent on bolstering the NHS, or reducing the ever-increasing current account deficit. However, I think that reducing inflation was a more critical priority in order to get prices down, so that the majority of the electorate would see her responsible for making the ‘price of milk’ and the ‘price of butter’ go down.

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Thatcher also believed in ‘rolling back the state’ and cutting government spending. This was following the ideology of economist Freidrich Hayek. There were several methods that she persued which included privatisation of the national industries. Companies such as British Petroleum, British Telecoms, and Cable & Wireless were privatised, and this not only reduced government intervention, but also raised large amounts of capital for spending in other areas. By 1987, there had been 14 major companies that were privatised. This, like North Sea Oil was used to fund the cut in taxes. Macmillan viewed privatising these industries as akin to ...

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