To what extent are government still able to exert meaningful control over the UK economy?
To what extent are government still able to exert meaningful control over the UK economy?
The extent to which government are able to exert meaningful control over the economy is subject to the power government has. In most Mixed economy such as the UK, government usually has control over Fiscal policies, which is the use of government spending and taxation to influence the economy, however how much they spend depends on the party that is governing the economy at that time. Traditionally Labour is viewed as “tax and spend” party, whilst Conservative encourages Free trade, deregulation of the economy, and lower taxes. They aim to reduce government spending and national debt. Nevertheless, government has to consider the wider economy and the global financial market before resulting in polices as the policies they implant can result in an economy that is either booming or an economy which is on the verge to bust. Government may lack control over the UK economy, due to their membership with the European Union, which has created many legislation that has made it difficult for the UK government to entrench policies nationally. In additional, Government no longer has control over interest rates, which means they no longer have control over the supply and demand for money but The Bank of England is accountable to government, so if government wishes they could intervene. In this essay, I will outline few of the main reasons that enable government to exert control over the economy, I will also evaluate these points along with reasons that prevent government from controlling the UK economy.
Government controls fiscal and supply side policies in the UK, Fiscal policy is the control of the amount of public expenditure as well as the revenue they can create via taxation. Whilst supply side policies are government policies which increase the amount of ‘supply’ that is capable of being produced over the long term .Thatcher’s monetarist government in the 80s were very keen
The extent to which government are able to exert meaningful control over the economy is subject to the power government has. In most Mixed economy such as the UK, government usually has control over Fiscal policies, which is the use of government spending and taxation to influence the economy, however how much they spend depends on the party that is governing the economy at that time. Traditionally Labour is viewed as “tax and spend” party, whilst Conservative encourages Free trade, deregulation of the economy, and lower taxes. They aim to reduce government spending and national debt. Nevertheless, government has to consider the wider economy and the global financial market before resulting in polices as the policies they implant can result in an economy that is either booming or an economy which is on the verge to bust. Government may lack control over the UK economy, due to their membership with the European Union, which has created many legislation that has made it difficult for the UK government to entrench policies nationally. In additional, Government no longer has control over interest rates, which means they no longer have control over the supply and demand for money but The Bank of England is accountable to government, so if government wishes they could intervene. In this essay, I will outline few of the main reasons that enable government to exert control over the economy, I will also evaluate these points along with reasons that prevent government from controlling the UK economy.
Government controls fiscal and supply side policies in the UK, Fiscal policy is the control of the amount of public expenditure as well as the revenue they can create via taxation. Whilst supply side policies are government policies which increase the amount of ‘supply’ that is capable of being produced over the long term .Thatcher’s monetarist government in the 80s were very keen