Among the numerous tributes being paid to the late Conservative chancellor Nigel Lawson, maybe essentially the most putting got here from Nicholas Macpherson, a former everlasting secretary to the Treasury.
Lord Macpherson tweeted: “One of the nice Chancellors of the twentieth century.
“His microeconomic reforms particularly on tax were both daring and substantial, and have stood the test of time. His intellectual energy and openness to debate was inspirational in the Treasury of the 1980s.”
That is a large testimony coming from somebody who labored at HM Treasury for practically 30 years and who served each chancellor from Lord Lawson to George Osborne.
Few folks, no matter their political persuasion, dispute Lord Lawson’s achievements.
Rating the post-war chancellors
But the place does he stand within the pantheon of post-war chancellors?
A really private view is that, whereas Lawson (1983-89) was definitely one of many best post-war chancellors, he was not the best.
While he was an imaginative and brave reformer, whose actions each inside and out of doors the Treasury undoubtedly boosted the competitiveness of the UK financial system and the residing requirements of many Britons, he additionally presided over an inflationary over-heating within the financial system that finally led to the recession of the early Nineteen Nineties.
No, the accolade of Britain’s finest post-war chancellor should absolutely go to his predecessor Geoffrey Howe (1979-1983), a reforming chancellor who did a lot of the heavy lifting that made potential Lawson’s later tax-cutting reforms.
Life within the Nineteen Seventies
For anybody who was not there on the time, it’s nearly inconceivable to explain the depths to which the UK financial system had sunk in the course of the late Nineteen Seventies, the sheer state of decrepitude within the public funds and, certainly, the general public realm.
Looking again, nearly 40 years on, it’s astonishing to assume that Britons had been as soon as topic to overseas trade controls limiting the amount of cash they might take in another country.
Changing that was one in every of Howe’s many reforms.
Despite his low-key manner, Howe was a radical, sweeping away not solely controls on overseas trade (a very revolutionary measure by which he had been inspired by Lawson), but additionally on credit score, pay and dividends.
He was additionally courageous, daring to boost taxes in his 1981 funds, regardless of the nation being in a recession on the time. It was a measure important to revive order to the general public funds even when it got here on the value of hastening the deindustrialisation for which many on the left nonetheless despise the Conservatives.
A present from Ken Clarke
Another Conservative of the 1979-1997 period, Ken Clarke (1993-1997), additionally deserves to rank extremely amongst post-war chancellors.
Clarke, once more, was a daring chancellor unafraid of taking robust selections to strengthen the general public funds.
The public sector borrowing requirement fell sharply throughout his time in workplace and, admittedly benefiting from a less expensive pound within the wake of ‘Black Wednesday’, he presided over an extended interval of unbroken progress in GDP.
Clarke bequeathed to his successor, Gordon Brown (1997-2007), an financial system firing on all cylinders. Not that Brown appreciated it.
A fly-on-the-wall ITV documentary, protecting his early weeks on the Treasury, captured a second at which officers spelled out to the brand new chancellor simply how sturdy an financial system he had inherited. Brown growled in response: “What do you want me to do? Send a thank-you letter?”
Insufficient credit score but additionally debits for Gordon Brown
Brown’s personal report is decidedly combined.
His best achievement was handy operational independence to the Bank of England – at a stroke giving the monetary markets confidence that the UK was severe about protecting inflation underneath management.
Interest charges had been decrease, consequently, than they’d have been had they continued to be set by politicians.
That, and the energy of the general public funds, enabled Brown to preside over one of many lengthy durations of financial progress in British historical past.
Another high quality achievement – one for which he in all probability doesn’t obtain ample credit score – was resisting the urgings of Tony Blair, his prime minister, for Britain to affix the eurozone.
In the debit column, Brown’s controversial tax raid on pensions early in his chancellorship did monumental and lasting harm to retirement financial savings on this nation.
That only a few personal sector employees now get pleasure from gold-plated ‘remaining wage’ pensions now’s a direct consequence of that raid.
It was additionally underneath Brown, who persistently borrowed greater than he had beforehand forecast, that the progressive deterioration within the UK’s public funds started.
Brown additionally launched extra complexity into the tax code that harm Britain’s competitiveness whereas his shake-up of monetary regulation, stripping the Bank of regulatory oversight of the banking sector, was arguably a contributing issue behind why the UK suffered extra harm from the worldwide monetary disaster than a few of its friends.
Underrated chancellors
Some chancellors are under-rated on the time and particularly on the time they go away workplace.
Into this class falls Norman Lamont (1990-1993), chancellor on the time of Black Wednesday, whose tenure on the Treasury is now extra kindly regarded by financial historians now than it was by commentators on the time.
It additionally applies to Roy Jenkins (1967-1970), who restored stability to the financial system following the devaluation disaster of November 1967, whereas additionally being unafraid to impose austerity regardless of it proving politically parlous.
Jenkins additionally left some of the memorable and lasting quotes of any chancellor along with his quip that inheritance tax is “a voluntary levy paid by those who distrust their heirs more than they dislike the Inland Revenue”.
Difficult to evaluate chancellor
Some chancellors are unlucky in that their phrases of workplace had been simply too quick for a correct evaluation of how nicely they did.
John Major (1989-1990) falls into that class, as do a lot of the chancellors of the Fifties, with the potential exception of Peter Thorneycroft (1957-1958), who is usually described as a ‘John the Baptist’ determine for Howe, such was his dedication to deliver public spending underneath management and produce order to the general public funds.
Read extra:
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Other chancellors are troublesome to evaluate as a result of their phrases of workplace coincided with nice nationwide crises that make it onerous to evaluate how nicely they could have performed in different circumstances.
Some would argue that applies to Hugh Dalton (1945-1947) though it have to be mentioned that, over time, his tenure on the Treasury has turn into much less kindly seen.
It in all probability applies, although, to Alistair Darling (2007-2010), to whom fell the duty of navigating the financial system by way of the monetary disaster and its aftermath and to Philip Hammond (2016-2019), the primary chancellor to attempt to handle the financial system because the UK went by way of the convulsions which adopted the Brexit referendum.
But the one chancellor who did handle the financial system by way of a disaster and who demonstrably succeeded in that activity, although, is Howe.
Source: information.sky.com”