The British economy has undergone structural, financial and political changes over the past thirty years. Different ideologies and policies have helped shape the relationship between government and the economy in various directions. Certain elements, such as state intervention, remain a subject of debate. Other factors, such as globalization, have emerged recently. The policies of the British governments as a whole were strongly shaped by the major economic events of this period, and the legacy left by the Conservative and Labor governments is still visible today. Using various sources and my own knowledge, I will assess the critical elements of the relationship between government and economies over the past 30 years, and their relative importance. The context of this relationship concerns political economy theory. This is the idea of ​​rationality and growth of the "free market" (a market in which there is no economic intervention or regulation by the state, except to enforce private contracts and property). First, it is essential to describe the characteristics of the relationship between government and the economy. Obviously, a government influences the functioning of an economy through its policies. The government uses two branches of policy, fiscal and monetary. Fiscal policy involves government spending while monetary policy involves manipulation of interest rates. Both policy instruments are designed to achieve growth. A government's attempts to influence economic activity in the national economy are defined as macroeconomic measures. Macroeconomics can be described as “the study of the national economy” (Morrison 2002, p.60). Even the government itself is run like a typical business in a free world...... middle of paper ... the world will succeed one day. Monopolies were created by privatization, but deregulation created nationalizations. This has forced a fine line to be drawn between government's roles in the economy. Globalization has seen individual businesses within an economy increase their status and influence, thereby excluding the power of government in their respective economies. Different parties have brought their respective philosophies to power in the United Kingdom. Enterprise, freedom of choice and increased competition in individual markets were the drivers of most government measures during this period. In my opinion, it is fair to say that the British economy and the British government have undergone structural, political and geographical changes, which have led to Britain maintaining its stranglehold in the battle between developed and developing economies..