By chance I knew Margaret Thatcher rather better than a junior civil servant might have been expected to, not least from giving her some maritime briefings during the First Gulf War. On another occasion Denis and I once got absolutely blind drunk in Lagos – I had been given him to look after for the day, and the itinerary started with the Guinness brewery and went on to the United Distillers bottling plant, before lunch at the golf club. I had to reunite him with his spouse for the State Banquet and quite literally fell out of the car. Happy days.
I can say I was on first name terms with her – she always called me by my first name. Except unfortunately she thought that was Peter. I recall she came out to Poland when I was in the Embassy there and I was embarrassed because she knew me, and thus greeted me more warmly than my Embassy superiors. The problem was lessened by her continuing to call me Peter very loudly, even after I corrected her twice.
In person she was frightfully sharp, she really was. If you gave her a briefing, she had an uncanny ability to seize on the one point where you did not have sufficient information. She also had that indescribable charisma – you really could feel when she entered a room in a way I have never experienced with anybody else, not Mandela or Walesa, for example. You may be surprised to hear that in person I found her quite likeable.
Yet she was a terrible, terrible disaster to this country. The utter devastation of heavy industry, the writing off of countless billions worth of tooling and equipment, the near total loss of the world’s greatest concentrated manufacturing skills base, the horrible political division of society and tearing of the bonds within our community. She was a complete, utter disaster.
Let me give one anecdote to which I can personally attest. In leaving office she became a “consultant” to US tobacco giant Phillip Morris. She immediately used her influence on behalf of Phillip Morris to persuade the FCO to lobby the Polish government to reduce the size of health warnings on Polish cigarette packets. Poland was applying to join the EU, and the Polish health warnings were larger than the EU stipulated size.
I was the official on whose desk the instruction landed to lobby for lower health warnings. I refused to do it. My then Ambassador, Michael Llewellyn Smith (for whom I had and have great respect) came up with the brilliant diplomatic solution of throwing the instruction in the bin, but telling London we had done it.
So as you drown in a sea of praise for Thatcher, remember this. She was prepared to promote lung cancer, for cash.
And see-
During these two years Lawson’s public image remained low-key, but from the 1986 Budget (in which he resumed the reduction of the standard rate of personal Income Tax from the 30% rate to which it had been lowered in Howe’s 1979 Budget), his stock rose as unemployment began to fall from the middle of 1986 (employment growth having resumed over three years earlier). Lawson also reduced the budget deficit from £10.5 billion (3.7% of GDP) in 1983 to a budget surplus of £3.9 billion in 1988 and £4.1 billion in 1989, the year of his resignation. During his tenure the rate of taxation also came down. The basic rate was reduced from 30% in 1983 to 25% by 1988. The top rate of tax also came down from 60% to 40% in 1988 and the four other higher rates were removed, leaving a system of personal taxation in which there was no rate anywhere in excess of 40 per cent.
The trajectory taken by the UK economy from this point on is typically described as “The Lawson Boom” by analogy with the phrase “The Barber Boom” which describes an earlier period of rapid expansion under the tenure as Chancellor of Anthony Barber in the Conservative Government of Prime Minister Heath (1970 to 1974). Critics of Lawson assert that a combination of the abandonment of monetarism, the adoption of a de facto exchange-rate target of 3 Deutsche marks to the pound (ruling out interest-rate rises), and excessive fiscal laxity (in particular the 1988 Budget) unleashed an inflationary spiral.
Lawson, in his own defence, attributes the boom largely to the effects of various measures of financial deregulation. Insofar as Lawson acknowledges policy errors, he attributes them to a failure to raise interest rates during 1986 and considers that had Margaret Thatcher not vetoed the UK joining the European Exchange Rate Mechanism in November 1985 it might have been possible to adjust to these beneficial changes in the arena of microeconomics with less macroeconomic turbulence. Lawson also ascribes the difficulty of conducting monetary policy to Goodhart’s Law*.
His tax cuts, beginning in 1986, resulted in the “Lawson Boom” of the British economy, which had halved unemployment from more than 3,000,000 by the end of 1989.[12] However, this led to a rise in inflation from 3% to more than 8% during 1988, which resulted in interest rates doubling to 15% in the space of 18 months, and remaining high in spite of the 1990–1992 recession which saw unemployment rise nearly as high as the level seen before the boom began.
Source: http://en.wikipedia.org/wiki/Nigel_Lawson
*Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.
Footnote: While watching inflation in the early 80’s, I decided (rightly or not) that a tin of sardines would be a good indicator of food prices generally, and since then have maintained my interest in this economical (formerly) and nutritious product. Around 1984, at Wm. Low stores* in Scotland, a single tin cost 21p. Today, the RRP for a pack of twelve is £13.79 – that’s £1.15 a tin – and you’ll be lucky to see one much under £1. Say 500% increase in 30 years – or 16.7% inflation.
Thatcher – saviour of the economy? Pffft.
*RIP, thanks, Tesco. (prop. Shirley Porter’s dad. SP, it will be remembered, flogged off London cemeteries to developers @ 3p a building site, and gerrymandered by evicting council tenants. Also a Thatcherite.)
Komodo
18 Apr, 2013 – 10:27 am the pound of today is worth only a third (apparently) than it was thirty years ago. Mind you we would have to compare incomes as well to see if subjectively we are domestically poorer. Had the Blair/Brown combo maintained the same approach they inherited, our present huge deficit and national debt might have been avoided. Margaret Thatcher was so obsessed with putting the unions in their place and following monetarist theories she was blind to the consequences that decimated manufacturing. The question is whether it would have survived international competition had she not been there? She also knew she had oil and gas to replace the coal and fill her coffers. Indeed it could be said that her shaky start was rescued by the Falklands victory, which empowered her to take on the miners but it was really north sea oil that saved her bacon.
“Mind you we would have to compare incomes as well to see if subjectively we are domestically poorer.”
Depends what you mean by “we” for one thing. And very much on the commodity in question: house and rental prices as a proportion of wages have risen enormously. Sardines, possibly less so, maybe a 250% hike? My income hasn’t increased 500% in 30 years, anyway. Also factor in the reduced/ not greatly increased relative price of consumer goods due to advanced manufacturing techniques and re-investment on the Pacific Rim*…China was broker than we were when Thatch decided to go for the City option. Now it owns 1/3 or so of US debt.
But my point is that inflation has not gone away. Money is worth less and less: more equity is attached to less liquidity, The headline inflation figure disguises the rottenness of the economy.
*”Labour costs”, you shout, delightedly. No. Automation.
Rust in peace.
“before lunch at the golf club” Do you mean the Ikoyi Club?