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Political Changes In British History

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Political changes in British history

Pre-war consensus

After the 2 World War the British economy was marked by many crises of varying strength.

The international system which British capitalism was developed within - the empire - had collapsed. British industry had, instead of expanding trade with colonies, to switch-over to compete with highly industrialized countries, especially USA, later on West Germany and Japan.

British industry fell more and more behind, especially because of the country's older production equipment, a lower technological level and a working class which was less integrated in capitalist society.

During Winston Churchill's PM year, a rise to a new era of state intervention happened, also defined as a broad range of agreement on economic and social policies between the Conservatives and Labour. One of the main goals of the post-war consensus was to establish a welfare state, financed by taxation of market and interest rates.

But this created many alleged problems: a disputed between the Labour party itself, many believed that the concept of consensus "state intervention" is so flawed that it should be discarded while others believed it should intervene far more then it did .

The second 'consensus'

In 1979, after a long number of strikes and rising public dissatisfaction, the Conservatives won the parliamentary election, with Margaret Thatcher as the leader. The new government entered with one overriding intention: to reverse socialism. Mrs. Thatcher's monetarist program called for deregulation, tax cuts, better use of supply side policies and a tough control of the money supply in order to keep inflation low. But she also entered upon a miserable economic scene that would only get worse. Her policy of high interest rates hit business, extending a deep downturn.

Upon Mrs. Thatcher's entering, income tax was cut immediately and compensated for a successive rise in VAT (value-added tax), representing an important shift from direct to indirect taxation.

Under Mrs. Thatcher, the state interference in the marked was reduced (Thatcher believed that state interference was a threat to social order) and Britain was leading the way in a global wave of privatization - that is the sale of state-owned industries.

Mrs. Thatcher pressed now on with a gradually more radical agenda. The Community Charge - better known as the 'Poll Tax' - was an attempt to replace the old local tax system. Its introduction in Scotland in 1989 was highly unpopular; however it became the government's policy.

Disturbances broke out in London in 1990 following its introduction in England and Wales. Towards the late 1980s, questions arose about the future of Britain's economic and political relationship with Europe and of the case for Economic and Monetary Union. On this topic the government became deeply divided. Mrs. Thatcher rejected any form of political or economic integration with Europe, believing that it would create a threat to the economic success her government had achieved in the previous decade.

This resulted in a sharp division and internal conflicts inside the party, which ended whit Margaret Thatcher resigning on 22nd November 1990, being replaced by her earlier minister John Major.

John Major claimed he supported a less hard form of capitalism in contrast to Mrs. Thatcher's capitalism.

In 1991 John Major officially confiscated the unpopular poll tax and made a number of changes, which should give legal protection to the unwell, female workers, consumers and families.

Even though he made some changes, Major still continued a number of programs which Mrs. Thatcher had started - for instance the privatization of area health boards.

Concerning the EU policies, the prime minister distanced himself to his predecessor's



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