1. 20 February 2017 by Sigrid Brevik Wangsness
The UK Economy
20 February 2017 by
Sigrid Brevik Wangsness

2. I. The First Industrialized Nation: 1750-1900
What is meant by the
Industrial Revolution?
When did it take place in Britain? Why was B. the first industrialized nation?
What happened during the Industrial Revolution in Britain?
Positive aspects? Negative aspects?

3. The First Industrialized Nation: 1750-1900
When and why were the
first British trade unions
established?
Britain was called the "Workshop of the World“ during the 19th century. What does that mean?
Are there other reasons why Britain became the leading industrial nation in the world in the 19th century?

4. II. Early 20th Century
1. Changes:
Stagnation of the British economy
Decline in traditional industries
Competition
- Other countries industrializing at an increasing speed
- Britain at a disadvantage since it was the first industrial nation

5. Early 20th Century 2. Still:
The financial centre of the world:
The City of London
Shipping, trade, exporter of capital (sterling)
The UK economy was an international economy even at this early stage

6. III. The Post-War Period in Britain
Declining world role
Slow industrial growth compared to the USA, Japan and West Germany
A managed economy (Keynes)
Consensus

7. The Post-War Period in Britain
Development of a mixed economy
Nationalization
No EEC in 1957 (not until 1973)
Building a welfare state, e.g. the NHS, free secondary education

8. The Post-War Period in Britain
1950s and 1960s: Boom
1970s: Recession (stagflation)
1978/1979: “The Winter of Discontent”
1979: M. Thatcher elected
Prime Minister

9. IV. Thatcherism
Some major questions to consider:
What is “Thatcherism”, and why are the policies named after Margaret Thatcher still the subject of heated debates after so many years?
There is no doubt that MT’s policies had a major impact on British society at the time ( ), but to what extent is Britain’s economy still influenced by the Thatcher governments’ policies?

10. Major Aspects of Thatcherism:
Rejection of Keynes’ ideas of a managed economy
As little government intervention as possible – deregulation
Let the market forces rule – free market and free trade

11. Major Aspects of Thatcherism:
Monetarism:
- Curb inflation (in 1979:more than 20%)
- Control the money supply
- Control the interest rate
Cut public spending
Cut taxes - shift from direct to indirect taxation

12. Major Aspects of Thatcherism:
Increase competition
Increase efficiency and productivity, rationalization
Privatization
Encourage employees and the general public to buy shares

13. Major Aspects of Thatcherism:
Encourage people to buy their own homes from the local councils
Promote an enterprise culture
Reduce the power of the trade unions
Deindustrialization
Free choice

14. Mark Knopfler – Why Aye Man
We had no way of staying afloat
We had to leave on the ferry boat
Economic refugees
On the run to Germany
We had the back of Maggie’s hand
Times were tough in Geordieland
We got wor tools and working gear
And humped it all from Newcastle to here

15. What were the effects of Thatcherism?
POSITIVE effects:
NEGATIVE effects:

16. V. New Labour’s Economic Policy
Inherited an expanding economy, and the average annual economic growth from 1997 to 2008 was 2.8%.
The British economy, so vulnerable in the past to global setbacks, proved remarkably resilient to the world downturn in ,
more than four years
after New Labour took
over.

17. No «Blairism»… New Labour’s economic policy:
Economic stability and accountability: “sound economic management”, “an end to boom and bust”
Gave the Bank of England independence to set interest rates in 1997
Less emphasis on free-market capitalism than previous conservative governments; New L’s blend of free- market capitalism and social justice

18. No «Blairism»…
No re-nationalization of the former state-owned companies ("Clause Four")
A third way? Community and partnership between public and private sectors (PPPs)
Working conditions and workers’ rights were improved, but unions did not regain their former influence on government policies

19. No «Blairism»… Introduction of a minimum wage in Britain
Attempts at reducing poverty
Some 2.5m extra jobs were created by 2008 (though the number of jobseekers also increased)
Attempts at improving Britain’s productivity

20. No «Blairism»…
Somewhat heavier taxes and more regulation for firms: from 1997 to 2008 the corporate tax burden rose from 34.8% to 37.3% of GDP
More public spending on health, transport and education (the need for a more skilled workforce)
Emphasis on innovation and new sectors of the economy
=Not a major change from previous
economic policy

21. Growth in the UK Economy: 1992 - 2008 = 16 consecutive years
Conservative governments:
Labour governments:
Financial crisis 2008/2009
UK economy in recession