An Interview with Lord Lawson

POLITICS An Interview with Lord Lawson

An Interview with The Rt Hon Lord Lawson of Blaby PC

In October 1989 Nigel Lawson resigned as Chancellor of the Exchequer after six years in the role, an earthquake in the landscape of British politics. Then Prime Minister Margaret Thatcher was outwardly calm; however, her personal papers, released in 2019, showed she was anything but. “She would have loved to have really punched hard, I think,” Chris Collins, a historian at the Margaret Thatcher Foundation, told the Guardian newspaper at the time.

Lord Lawson of Blaby was elected to Parliament in 1974 and served as a cabinet minister under Margaret Thatcher from 1981 to 1989. Among other things, he oversaw the deregulation of financial markets in 1986, known as the Big Bang.

Prior to the half-term break, three Eastbourne students – James Grout, Elizabeth Harvey and Sasha Rozanov, along with Dr Flanagan had the privilege of interviewing Lord Lawson, now 89, at his home in Eastbourne about his experiences in government and views on some current events. And, yes, in case you ’re wondering, Lord Lawson is indeed the father of another Lawson, who fortunately gets to run the show at Eastbourne unopposed and so will hopefully remain for many years to come. What follows are lightly edited excerpts from that interview. Lord Lawson’s complete account of his time as Chancellor can be found in his autobiography, Memoirs of a Tory Radical (Biteback Publishing, 2010).

Question: Can you talk to us about the day that [Michael] Heseltine resigned and how did that alter the mood in cabinet and Thatcher’s authority? Lord Lawson: We were in a Cabinet meeting when he resigned. It was a bit of a shock because he walked out very dramatically. But it was something that we were able to survive although, it was clear that he was extremely ambitious and thought that he ought to be the prime minister, and he was always there in the wings, as it were, following his resignation. In terms of the Tory party, we were at rather different ends of the spectrum but we always got on very well personally. Q: When you resigned from cabinet, how much impact do you think it had, not only on Thatcher but on her downfall? Lord Lawson: Well, I didn’t resign without great thought, and it was certainly not intended to dam-

age her. But, I think it was damaging for her. Q: Could you tell us a bit more about that, in what ways do you think your resignation most effect Thatcher’s government? Lord Lawson: Well I think that as time went on during her very long prime ministership she deteriorated, and her judgement deteriorated gradually, it was a very gradual process, and she became more and more intolerant of opposition. I have always been somebody who speaks their mind; there were many others in the cabinet who were critical of her but didn’t speak their mind. So I do think probably that my resignation -- and it’s not often that a Chancellor resigns, most ministers who leave are sacked -- did sort of consolidate a feeling that had been growing on the Tory benches. She was not, perhaps, as popular amongst her colleagues as she had been, but there was one particular thing that caused her downfall, which I tried to protect her from.

We were at rather different ends of the spectrum but we always got on very well personally

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She deteriorated during her long time as prime minister. At the beginning she was very careful, but as time went by, she became more and more careless, and towards the end she got obsessed with a proposal to change to a different kind of local tax, which became known as the ‘poll tax’. I tried very hard to persuade her not to do this and was unsuccessful. Q: Was it the influence of advisers that were pushing her towards these kinds of policies? Lord Lawson: Of course she had bad advisers, but you take that for granted. When she first became a leader, she was in favour of replacing the rates with something more related to peoples’ ability to pay. Fortunately, when she got in office, she forgot about all that… but she hadn’t really forgotten. And so later in her time, she suddenly took it up again and she espoused this disastrous proposal, which became known as the poll tax. By that time she was less amenable to reason. That was why she was voted out by her own party; it was an extraordinary thing. Here was this great prime minister, who had had numerous successes, who had won three elections in a row, and was voted out by her own party. It was simply because Conservative Members of Parliament had found that the poll tax was extremely unpopular. I tried very hard to persuade her that it was a bad idea, and so much so, that when I failed to persuade her, at the decisive cabinet meeting, I put in a “paper.” I don’t know whether [the practice] still exists: If any proposal goes to the cabinet of which the Chancellor of the Exchequer disapproves, he or she (but there’s never really been a she) can put in a “paper” explaining why this was not a good idea; which I did. So that’s all on the record. Q: Just going back to your time in cabinet with Margaret Thatcher; you said that she was more prone to talking than listening. Did she often come in with ideas and proposals and pre-made decisions, or did she genuinely value input from the cabinet? Lord Lawson: I don’t think she particularly valued input from the cabinet but I think she realised, certainly in the earlier years, that she had to take note of it. Q: Was it not a comfortable atmosphere for everyone to share their opinions or was everyone really open about discussing things? Lord Lawson: Well, people differ don’t they? I mean, I enjoyed it. If I disagreed with anything I would say so, and she actually enjoyed, for the most part -- not so much towards the end of her time –having a good debate and discussion. Q: In terms of your role in parliament, and obviously as Chancellor, what do you think was the greatest thing you achieved during your time? Lord Lawson: I think that the success of the British economy during that time, which was recognised all over the world, was great. When we took office in 1979 the British economy was a basket case, and around the world people pitied us. But by the end, the British economy was doing so well that we became an object of admiration and emulation throughout the world, so that was satisfying. And more specific things: we invented — and I played quite a big part in this because I’d been preparing it before we got into office — privatisation. And that had never happened anywhere in the world, not just in the U.K. Nationalisation was a one-way street; part of the economy would become nationalised and when that happened there was never any going back, and then even more bits became nationalised. Other countries became impressed with it and did the same thing. Indeed, my good friend Édouard Balladur, who was the French

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finance minister at the time, officially changed the title of his office to be the Ministry of Finance and Privatisation. That was an occasion where, not only did we improve our own economy, but we set a trend in much of the rest of the world. Q: So would you say that, 40 years on, the positive impact that privatisation had was short lived. There’s an argument that trains, Royal Mail, aren’t working as well now that they’re privatised. Would you regret any of the privatisation you’ve done?

Lord Lawson: No, I don’t regret any of it. The privatisation of the railways and Royal Mail occurred after my time. Nothing is ever perfect, but I don’t think there are many people nowadays arguing for wholesale renationalisation. Q: Turning now to the pandemic and our current period, what is your opinion on the government’s response to the pandemic? For example, how do you see the level of government intervention -- the furlough scheme, the “eat out to help out” scheme and the amount that the government is investing in the economy?

Lord Lawson: I think the furlough scheme was a sensible response to a crisis. The furlough is obviously very limited, in time I mean; it’s not going to go on forever. But as a short-term measure to deal with the crisis I think it was useful and sensible. We’re hopefully coming out of the pandemic crisis now. My main criticism of the government would be the lockdown policy, which I think is completely over the top.

Q: Do you mean the multiple lockdowns of the idea of a lockdown at all? Lord Lawson: Well, I think that I am instinctively unattracted by infringements of liberty, and this is a major infringement of liberty. But you could make a case for something of the kind until we got the vaccine; but now we have the vaccine, I think it is mistaken, completely mistaken. Q: So you sympathise with the fact that initially it probably did save lives and therefore you think it was worth it or too much? Lord Lawson: Yes, I think that initially you can make a case for it. But even then, the infringement of liberty is a heavy price to pay. I mean, I have no objection to people of a nervous disposition locking themselves down, that’s their choice, that’s fine. But making it legally compulsory is another matter. But anyway, we’re past that now because we have the vaccine which is a great success story.

Q: Well, you say we’re sort of past this period of lockdown, but how do you think it will have affected our democracy and, as you say, our liberties in the long run? Lord Lawson: Well, I hope it’ll never happen again, certainly. I think that the British people have been quite extraordinarily law abiding, and while that is, in principle, a good thing. I think that when the law goes too far, which it has done… it may have been sensible until the vaccine had been developed, but I think that now it is slightly scary, people doing what they’re told. I mean I was alive, and I remember it very well, during the war. And, we were under considerable threat in this country, but we never had anything like the lockdown which has been during this episode. Q: How do you feel about the economic consequences of the pandemic, for example inflation has doubled now?

Lord Lawson: I’m obviously worried. I think that there were a lot of things that were done, like, as you mentioned there, the furlough scheme. There were a lot of things which made sense as temporary measures, but the sooner we can get away from these crisis measures and get back to economic common sense, the better. Q: Can you see interest rates needing to rise in the immediate future?

The furlough scheme was a sensible response to a crisis

The infringement of liberty is a heavy price to pay

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Lord Lawson: I think they probably will; they probably will. When I first became Chancellor, the great enemy was inflation. I mean we inherited from the Labour government an annual inflation rate in the 20s [in percent terms] and projected to rise, so exorcising inflation was a primary objective of economic policy. And in a short time, we did it. I’m not saying that it will come back as badly as it was during the ‘70s. This is partly because of China, curiously enough. Because, China’s large contribution — obviously the Chinese regime is thoroughly odious — but their contribution to the world economy has been substantial. It is clear that global competition means that prices can’t rise as fast as they did in the ‘70s. But nevertheless, I think there is a real danger that inflation will take off and it is not all that easy to arrest it when it does. And the key to that is expectations. [Turning to Dr. Flanagan] I don’t know what you teach, but people who teach economics, in my opinion, don’t teach how important expectations are. And if the expectation that prices will rise takes root, then it is very difficult to prevent prices from rising. And of course inflation does huge damage, not just economic damage, but social damage. It makes saving not worthwhile. So I think although it has been largely removed from the discourse now, I don’t think you can ever say that it has been permanently removed. Q: What’s your opinion on the current Tory Party? Lord Lawson: Well, I think that the Conservative Party is the only party, which anybody in their right minds could vote for. I mean, no party is faultless but I think the other parties are worse, so that leaves the Conservative Party. Obviously you can’t talk about a party without talking about a leader, and I think Boris [Johnson], who I know well, though far from faultless, has a pretty good instinct of the way to go. And also, he has a knack, which is very useful, and it is greater than Margaret Thatcher’s (though I don’t think he’s anything like the political figure that Margaret was) but he does have a knack of winning elections, which is why he’s quite useful. As you know he was twice elected as mayor of London. There is no other Conservative whose ever been elected Mayor of London twice, or even once let alone twice.

Every election is a struggle between two sentiments: time for a change versus fear of change.

Q: Do you have any advice to Boris Johnson if you were to see him today?

Lord Lawson: Maybe, but I doubt whether he would take it. Q: When you say that you think that the Conservative Party at the moment is the only party that anybody in their right mind would vote for, is this because of your general dislike for the other parties or is it because of Labour leader Keir Starmer? Lord Lawson: Well, it is difficult to know what the Labour Party stands for now. And it is difficult to know what Keir Starmer stands for. And the other parties, they may be very nice people, but they’re of no consequence. Neither the Liberal Democrats or the Greens. So I think it is the destiny of the Conservative Party to government and if it governs badly it’ll be kicked out — quite right too — that’s how democracy works. Oppositions don’t win elections: governments lose them. Every election is a struggle between two sentiments: time for a change versus fear of change.