Margaret Thatcher and Economic Reform

For most of the post War period the British economy had been in relative decline. Some argued that this was inevitable, that it reflected fundamental weaknesses in British society or even the British character.

Government intervention was therefore regarded as the answer to these alleged weaknesses.

It only slowly dawned on people that the exact opposite diagnosis was the correct one. Government was doing too much, and the wrong things. . . .

So we also set out to create a framework favourable to enterprise: We cut penal rates of income tax and the tax on companies and we abolished some taxes altogether. We slashed burdensome regulations to encourage small businesses, the seedcorn of economic growth. We restored the balance in law both between trade unions and employers, and between unions and their members. . . We embarked on a vigorous programme of privatisation—forty-four major businesses so far—spreading ownership of capital and property ever more widely.

These policies were dramatically successful. The performance of the British economy was transformed.