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Presentation Outline. IV. Political and Economic Change Collectivist Consensus Britain ‘s accession to the European Union (EU) Thatcher’s economic reforms Blair’s Third Way Northern Ireland and the Good Friday Agreement. IV. a) Collectivist Consensus.

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  1. Presentation Outline IV. Political and Economic Change • Collectivist Consensus • Britain ‘s accession to the European Union (EU) • Thatcher’s economic reforms • Blair’s Third Way • Northern Ireland and the Good Friday Agreement

  2. IV. a) Collectivist Consensus • Though the major political parties (Labour & Conservative) differed over how much the government should spend or how much taxes should be cut, they both accepted the post-war welfare state from 1945-1979

  3. Features of the Consensus • The establishment of the National Health Service (NHS) in 1948 gave universal access to health care • The government nationalized the railways, telecommunications, coal industry, and transportation networks creating millions of stable, government jobs • Unemployment insurance and old age pensions were introduced in 1948 as well

  4. The welfare state and John Maynard Keynes • The collectivist consensus was based on the theory of British economist John Maynard Keynes • Keynes argued that governments should spend money to keep employment high

  5. Keynesian ideas in effect HIGH ACTIVITY Government saves money UNCHECKED ECONOMY Government spends money LOW ACTIVITY KEYNESIAN THEORY IN EFFECT

  6. IV. b) Britain’s accession to the European Union (E.U.) • Prime Minister Heath signs the European Economic Community (EEC)Agreement adding the U.K. to what would later become the EU in 1973

  7. The UK gave up sovereignty over its trading practices, but refused to join the E.U. banking system and continues to use its own currency, the Pound, to this day • The UK has an uneasy relationship with the EU and is not as committed as other states such as Germany, France, or The Netherlands

  8. Thatcher’s finds a new economist theorist • Thatcher based her policies on the ideas of Austrian economist Friedrich Hayek • Hayek argued that high unemployment was sometimes necessary to keep inflation down • He strongly supported privatization of national industries

  9. Thatcher privatized the railways, the telecommunication, coal companies, and electricity • She reduced funding to the NHS • She cut social services and welfare • She privatized pensions • As a consequence, unemployment remained high, but GDP grew • Many Conservative Party MPs grew dissatisfied with Thatcher’s right –wing policies and replaced her with a new leader John Major in 1990

  10. Since Thatcher private companies compete to deliver electricity- this has kept electricity prices low for consumers

  11. IV. c) Thatcher’s economic reforms • Thatcher rejected the collectivist consensus • She did NOT believe in Keynes’ economic theories • She believed that neoliberal reforms such as privatization were the best way to keep the U.K. competitive P.M. from 1979-1990

  12. Increasing GDP but a relatively high unemployment rate

  13. IV. d) Tony Blair’s Third Way • Blair was elected with a huge Labour majority in 1997 and remained Prime Minister until 2007 • He did NOT reverse the privatization that Thatcher had introduced and tried to balance welfare spending with tax cuts and privatization

  14. The “Third Way” was an attempt to provide an alternative to the Left/Right divide under Thatcher • Blair rejected traditional Labour Party platforms such as nationalization and favored a balance between the interests of workers and industry • Blair also continued to support interest group pluralism

  15. Blair’s democratic reforms • Reduced the number of hereditary peers in the House of Lords Championed devolution: • Called referenda which established the Scottish and Welsh Parliaments • Established an elected mayor of London and the London Assembly • Played a key role in bringing devolution to N.Ireland(Good Friday Agreement)

  16. IV. e) The 1998 Good Friday Agreement • Peace Settlement in Northern Ireland signed by the Republican Catholics and the Protestant Unionists • Approved by a referendum in Ireland and Northern Ireland • Led to the establishment of the Northern Ireland Assembly

  17. Terms of the Good Friday Agreement • Power sharing executive between Protestants and Catholics • All Protestant and Catholic paramilitary organizations are to be decommissioned (This includes the IRA) • Possibility of reunification between Northern Ireland and the Republic of Ireland remains an option in the future

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