With yesterday’s (April 8th) news dominated by the death at the age of 87 of Baroness Thatcher, the UK’s first and so far only female Prime Minister, we look at what she did for the country’s small businesses during her three periods of government.
The daughter of a small business owner herself, Margaret Thatcher believed in private enterprise, not state control, and by the time she left power, coming in, as she did, to a country in the grip of union leaders, her arguments for free-market economics, lower taxes and deregulated financial markets had been adopted across the political spectrum.
However, she was finally forced out of office by the Conservative party itself after refusing to compromise on a property tax – the notorious poll tax – that had led to mass non-payment.
With echoes of what we are experiencing today, the country fell into recession in 1980, with gross domestic product (GDP) contracting for five consecutive quarters and unemployment spiralling to what is still a record 11.9 per cent.
However, Mrs Thatcher rejected stimulus policies and preferred to control inflation and cut the public sector workforce while concentrating on making Britain the first European country to engage in a major privatisation effort.
She also encouraged ordinary people to buy shares and take out mortgages, so that a whole new raft of owner-occupiers were born instead of the tenants of the state that had existed before.
After her third election victory in 1987, the economy rebounded, with annual GDP growth peaking at 6.7 per cent in the first quarter of 1988. However, it was then that she moved to change local property taxes, introducing the poll tax, which was a flat-rate levy on every resident.
Prime Minister David Cameron described her last night as the ‘patriot Prime Minister and whatever people thought or think of her policies, there is no doubt that she changed the face of business and politics in the UK.
Mark East offers businesses and individuals with a range of accounting, tax and audit advice.