Nigel Lawson: Policy

“The acid test of monetary policy is its record in reducing inflation. Those who wish to join the debate about the intricacies of different measures of money and the implications they may have for the future are welcome to do so. But at the end of the day the position is clear and unambiguous. The inflation rate is judge and jury.”

Nigel Lawson

Mansion House Speech (17 October 1985), quoted in The View from No. 11: Memoirs of a Tory Radical (London: Bantam, 1992), pp. 480-481.

Money , Future

“We had to dispel the notion that the way to economic success lies through a sort of fiscal levitation. That was the abiding post-war delusion—that governments could spend and borrow their way to prosperity, and fine-tune the performance of the economy through something known pretentiously as demand management…It used to be an establishment nostrum that you need a budget deficit to get economic growth. That was the belief which lay behind the notorious letter by 364 economists in March 1981. We have given the lie to that, decisively. There can no longer be any argument about it. Everyone—or almost everyone—now accepts that the proper role of macro-economic policy is to keep downward pressure on inflation and to maintain a stable framework in which the private sector can expand.”

Nigel Lawson

Nigel Lawson, Tax Reform: The Government's Record (Conservative Political Centre, June 1988).

War , Lie , Way , Decision

“Economic and monetary union…is incompatible with independent sovereign states with control over their own fiscal and monetary policies. It would be impossible…to have irrevocably fixed exchange rates while individual countries retained independent monetary policies…such a system could never have the credibility necessary to persuade the market that there was no risk of realignment. Thus EMU inevitably implies a single European currency, with monetary decisions…taken not by national Governments and/or central banks, but by a European Central Bank. Nor would individual countries be able to retain responsibility for fiscal policy. With a single European monetary policy there would need to be central control over the size of budget deficits and, particularly, over their financing. New European institutions would be required, to determine overall Community fiscal policy and agree the distribution of deficits between individual Member States…It is clear that Economic and Monetary Union implies nothing less than European Government…and political union: the United States of Europe. That is simply not on the agenda now, nor will it be for the forseeable future.”

Nigel Lawson

Speech to the Royal Institute for International Affairs, Chatham House (25 January 1989), quoted in The View from No. 11: Memoirs of a Tory Radical (London: Bantam, 1992), p. 910.

Communication , Decision , Future , Country

“The time has come for a wholly new approach to economic policy in Britain. The overriding need is for a long-term stabilisation programme to defeat inflation, recreate business confidence and provide a favourable climate for economic growth. At the head of such a programme must lie a firm commitment to a steady and gradual reduction in the rate of growth of the money supply, until it is consistent with our best guess at a potentially sustainable rate of economic growth. Only in this way can inflation be wrung out of the system. But this alone is not enough…An equally important part of a long term stabilisation plan has to be a reduction in the present Budget deficit…Indeed, something akin…to the old balanced Budget discipline needs to be restored: the secret of practical economic success, as overseas experience confirms, is the acceptance of known rules. Rules rule: OK?”

Nigel Lawson

The Times (14 September 1978), p. 16.

Money , Lie , Secret , Way

“…this Budget represents a continuation of the policies which we have pursued consistently for nearly nine years, and which we will continue to pursue—a continuation of the steps that we have taken in nine previous Budgets, and of the major reforms that we have introduced in other fields, too, all of them designed to encourage and reward enterprise and so to liberate the energies of the British people. The tax changes in this Budget consolidate Britain's move from a high-tax country to a low-tax country, at all levels. Since 1979, the top rate of income tax has been cut from 83 per cent. to 40 per cent. The basic rate has been cut from 33 per cent. to 25 per cent. The corporation tax rate has been cut from 52 per cent. to 35 per cent. The small companies' rate has been cut from 42 per cent. to 25 per cent., and the 15 per cent. additional tax on savings income has been abolished altogether.”

Nigel Lawson

Speech http://hansard.millbanksystems.com/commons/1988/mar/21/budget-resolutions-and-economic-situation in the House of Commons (21 March 1988)

People , Change , Country

“…it is already clear that the policies that we have been pursuing have brought about a profound cultural change in this country. That, indeed, is what it is all about. For that cultural change is the only route to the economic success that we all wish to see, and which is no longer promise but reality. No longer do people accept that economic policy should be about regulating everyone's lives and imposing penal tax rates, in the illusion that that will benefit those on lower incomes. Instead, it is now widely recognised except on the Opposition Benches that one cannot make the poor rich by making the rich poor and that there are enormous benefits in getting the state off people's backs, in transferring decision-making from the state to the people. And it is now abundantly clear that giving greater freedom and greater incentives has removed the shackles that have held back Britain for so many years and has liberated a great surge in enterprise.”

Nigel Lawson

Speech http://hansard.millbanksystems.com/commons/1988/mar/21/budget-resolutions-and-economic-situation in the House of Commons (21 March 1988)

People , Reality , Decision , Freedom

“The policy that we have been pursuing has already brought economic success. This country is now experiencing an economic miracle, comparable in significance to that previously enjoyed by West Germany and still enjoyed by Japan.”

Nigel Lawson

Speech http://hansard.millbanksystems.com/commons/1988/mar/21/budget-resolutions-and-economic-situation in the House of Commons (21 March 1988)

Success , Country