ABSTRACT

Inflation control had been at the centre of Mrs Margaret Thatcher's economic thinking in Opposition, during the 1979 election campaign and during the first six months of her government. The government's success on the inflation front is challengeable on the often advanced criticism that it was achieved at too high a cost in unemployment or lost manufacturing output. The prospect of future tax cuts, central to any Conservative electoral appeal, as had been shown in May 1979, was relegated behind inflation control as the Chancellor's priority. The November 1982 mini budget confirmed the optimistic mood—despite the fall in sterling, which was much appreciated by manufacturing industry but which held long-term implications for inflation control. National Insurance Surcharge was cut by 1 per cent, economic growth of 1.5 per cent and 5 per cent inflation predicted for 1983 and overpayments of social security benefits clawed back.