Shadowing the deutschmark
Do you remember way back when the issue of the day was whether we should be "shadowing the deutschmark"? Perhaps, you even remember the days when the issue was whether we were shadowing the Deutschmark.
I am reminded of that time by the appearance in the Telegraph of an article by Nigel Lawson - Chancellor of the Exchequer in those heady days.
The argument at the time was between, in Margaret Thatcher and Nigel Lawson, the two most powerful and opinionated members of the government. Lawson wanted us, not only to shadow the deutschmark ie ensure that Sterling closely followed the German currency, but also join the Exchange Rate Mechanism. His view, if I recall correctly, was that British politicians lacked the will to control inflation on their own and needed the discipline of the Europeans (and especially the Germans) to do it. To lick inflation we would have to import the cure.
Which is funny, because not only are we about to enter our twelfth year without a serious inflation scare but also our twelfth year since we last tried to fix the pound against the deutschmark or any other currency for that matter.
The Good Lady was right.
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Do I remember? Could I forget what extraordinary times they were? Nigel Lawson was a genuine heavyweight to John Smith's clever lawyer, but in the final analysis a fatally triumphalist, boom-and-bust Chancellor. On August 31st 1988 he managed to bring to an end to forty years of unbroken growth in the property market. His policy of shadowing the DMark was an unmitigated disaster, surpassed only by Major and his ERM adventure during his brief stay at no.11. Poor old Norman Lamont had the thankless task of cleaning that mess up and taking all the necessary but unpopular decisions to get us through an unnecessary, man-made recession. It was Lamont's tough Spring Budget of 1993 that gave a fair wind to Kenneth Clark's Chancellorship - and Gordon Brown's.
As it happens, today Lawson, Major and Lamont are, to varying degrees, sceptical on Europe. Clarke and, apparently, Brown are enthusiasts. And that is the puzzling thing - that the men who actually experienced Europe's impact on our economy are on one side of the fence while those whose reputations profited most from the painful repair process are on the other.
One more thought: assuming that "Castrol" Hain does not succeed in talking the other fourteen member states out of writing tax harmonisation into the new constitution, what will there be left for a future British Chancellor to do?
Do I remember? Could I forget what extraordinary times they were? Nigel Lawson was a genuine heavyweight to John Smith's clever lawyer, but in the final analysis a fatally triumphalist, boom-and-bust Chancellor. On August 31st 1988 he managed to bring to an end to forty years of unbroken growth in the property market. His policy of shadowing the DMark was an unmitigated disaster, surpassed only by Major and his ERM adventure during his brief stay at no.11. Poor old Norman Lamont had the thankless task of cleaning that mess up and taking all the necessary but unpopular decisions to get us through an unnecessary, man-made recession. It was Lamont's tough Spring Budget of 1993 that gave a fair wind to Kenneth Clark's Chancellorship - and Gordon Brown's.
As it happens, today Lawson, Major and Lamont are, to varying degrees, sceptical on Europe. Clarke and, apparently, Brown are enthusiasts. And that is the puzzling thing - that the men who actually experienced Europe's impact on our economy are on one side of the fence while those whose reputations profited most from the painful repair process are on the other.
One more thought: assuming that "Castrol" Hain does not succeed in talking the other fourteen member states out of writing tax harmonisation into the new constitution, what will there be left for a future British Chancellor to do?
Posted by Guessedworker on June 18, 2003