In any league table of national figures who have been consistently wrong on almost every major judgement Nigel Lawson must rank close to number one. As Britain and his party reel from the impact of intolerable intergenerational and geographical inequality, stagnating productivity, a vast personal debt burden, and now the poison of Brexit, Lawson is the man most closely associated with the ideas and policies that have brought us to our current pass.
With a wholly unjustified reputation for being an economic superman that buoys up his no less unjustified self-confidence, Lawson remains an insidious, if wizened, scorpion, as indiscriminately dangerous to his own side as to his ideological opponents. Beware his carefully targeted venom even if his attacks only prove you are in the right: millions will have immediately sided with the chancellor, Philip Hammond, when Lawson called for his resignation because he was undermining a hard Brexit. Too many people remain in thrall to this out-of-time hulk that should be towed out to sea.
Yet, extraordinarily, he is the ringleader of a group of Thatcherite ultras who now crowd on to our airwaves, exploiting the mythology of Thatcherite greatness to insist Britain must make a complete break with the EU. Alongside him there are the baby scorpions – Sir John “Vulcan” Redwood, Lord (Peter) Lilley along with the more genial, if no less wrong, Norman Lamont. Corbynistas may be throwbacks to the 1970s, but engaging with today’s media is to climb into a different time warp – back to the 1980s, a decade of wrongheaded mistakes masked by an unsustainable credit boom, forewarning what was to come 20 years later.
Lawson, like the Bourbons who had learned nothing and forgotten nothing, believes Brexit “gives us a chance to finish the Thatcherite revolution”. In an FT article in September 2016 he set out his stall. Boasting he was a member of the Thatcher government that “transformed the British economy” with “thoroughgoing supply-side reform and judicious deregulation”, he argues that Brexit gives the opportunity to abandon the “vast corpus of EU regulation” that overburdens the economy. On top, because we do not need and should not seek an agreement to trade with Europe, we can be free to trade and “strike trade deals with the rest of the world”. (Apparently, we don’t need trade deals with Europe while we do need them with others. Consistency was never a Bourbon virtue.) Thus will Britain complete what Lady Thatcher began.
It is a farrago of inconsistent nonsense, resting on the unchallenged assumption that the 1980s transformed the economy for the better. They didn’t. Last week, Thames Water released an excoriating internal report acknowledging that, at current rates of investment, it will take 357 years to renew its water trunk mains even as the number of sometimes life-threatening water main bursts climbs. The merits of privatisation have never seemed more questionable. This is a company that has been looted by its private equity owners for the last decade. In his self-regarding book, The View From Number 11, Lawson writes that the then deputy prime minister, Willie Whitelaw, had the deepest misgivings about water privatisation, which Lawson dismissed. Whitelaw’s judgment has proved the more enduring.
What of the “judicious deregulation” of the financial system in general, and the building societies in particular, which was so economically transformative? The 1986 Building Societies Act, setting in train the demutualisation of the building societies, along with the big bang of the same year, are widely regarded as two of the foundation policies of the 2007/8 financial crash. Their obsessed Thatcherite authors believed socialist regulation was holding back British banks and building societies, which should be free to compete and lend without constraint that was necessarily and always a source of economic inefficiency. Without this act, no Northern Rock and HBOS 20 years later. Without big bang, allowing US investment banks in London to become broker-dealers and inventors of the financial derivatives then prohibited in New York, fewer of the weapons of mass destruction that later were to so exacerbate the financial crisis. Whatever else, this was not “judicious deregulation”.
What also of the liberalisation of the labour market – code for breaking union power? Again, 30 years on, as the IMF worries about the decline in real wages across advanced industrialised economies, the doctrine that stripping workforces of rights and bargaining power is such a masterstroke is being reassessed. Yes, excess union power is palpably bad. But, equally, lack of countervailing worker power creates the world we have today – gig jobs, reliance on debt to sustain living standards and stagnant productivity. There is a balance to be struck, but Thatcherite Bourbons don’t do balance.
The list of mistakes is awesome: tax “reform” that was code for biasing the tax system to favour the better off and inherited wealth; the dogged pursuit of money-supply control in the midst of a credit boom, so generating high real interest rates; an over-high exchange rate and the accelerated deindustrialisation of Britain’s regions. And let’s not forget the consistent undermining of capital investment through over-zealous, indiscriminate control of public spending growth. There were pluses – Lawson foresaw the debacle of the poll tax – but history will be a harsh judge of his role in those years. Yet he is held in awe by his party and broadcasters alike. It is his same unblinking belief that government and regulation can only do bad that lies behind his crusade against climate change, establishing and chairing the Global Warming Policy Foundation from 2009. It can’t be the case, he argues that, even if global temperatures are rising, which he doubts, that there is any link with human activity. For that would require – horrors – governmental efforts to change behaviour, which are always and everywhere destructive, immoral and forms of backdoor socialism.
His attitude to Brexit, like those of his fellow Thatcherite comrades, springs from the same mindset. The EU aims to better its citizens’ circumstances: most Britons welcome regulations that insist on high product standards, data privacy, parental and worker rights and environmental protection that take the brutal edge off the world the Thatcher Bourbons have created. They, of course, hate it. The hard Brexit for which they argue with religious intensity is certainly the precondition for completing the Thatcherite revolution. Time to call them and their failures out – and fight them to the last.