MAYBE ten or more years ago, I first appreciated the extent to which someone’s position in age in relation to their siblings influenced them in adult life. Put simply, a chap running his own craft workshop in Stroud or taking his band on the road for a tour of modest venues would more than likely have an elder brother in the law, for example, and a big sister who was a GP.
A gross generalisation? Absolutely.
Similarly, attitudes to inflation must be coloured to a large extent by the generation to which one belongs. Personally, I hate it, but then I was 14 when the annual rate headed for 25 per cent and had just started work when it was back at about 20 per cent in the early days of the allegedly-tough era of Margaret Thatcher, about whom more later.
Public debt, on the other hand, leaves me pretty much unmoved. Unlike inflation, high levels of borrowing can reduce very quickly when an economy recovers.
I recall Nigel Lawson as Chancellor claiming that he would be able to hold public sector borrowing at the equivalent of one per cent of gross domestic product. The opposition did not believe him and, in a funny way, the opposition was proved right, because the following year the Chancellor did not borrow anything at all and the year after, 1989, he announced a repayment of public debt.
We have the March figure for the Consumer Prices Index on Tuesday. In the year to February, the rate was 2.8 per cent, up from 2.7 per cent in the year to January. Expectations are that it will breach three per cent in the middle of the year.
For the record, the Bank of England has a target rate of two per cent a year, a level not seen since late 2009.
So here is a prediction. When the authorities finally get round to the idea that it is time to get the CPI back under control, it is going to prove a lot trickier than they think. In the meantime, the combination of high price rises and low pay rises will continue to weigh down on any hopes of a sustained recovery. On which topic, all eyes are now on April 25, and the first estimate of GDP in the first quarter.
Should this figure be negative, tipping us into the first treble-dip recession since before the war, expect Minister to use the word ‘snow’ a lot.
1) That legacy in full et (very) cetera
TO be honest, I’d had enough of the saturation coverage of Lady Thatcher’s demise by Tuesday morning. The passing of an interesting figure from an interesting time in British history has been blown out of all proportion, both by her fans and by those who seem to have walked straight out of Private Eye magazine’s fictional ‘Tufnell Park Stop Fatcher Action Group’ (joint chairs Dave and Deidre Spart).
So forget the wall-to-wall coverage. Here is all you need to know about the ‘Thatcher legacy’.
She was right about:
Defence, including Cruise and Trident missiles and the Falklands campaign, although not uniquely so. The pro-military quartet at the top of the previous Labour government – James Callaghan, David Owen, Denis Healey and Roy Mason – would have thought and acted along much the same lines.
Secondary strikes, i.e. industrial action against an employer who is not party to the original dispute and cannot affect the outcome. She was entirely correct to tighten up the law in this area, although I am pretty sure the courts had ruled against such action not long before Margaret Thatcher’s 1979 election victory.
The Exchange-rate Mechanism and the single European currency. She did not know much about economics but she was instinctively and triumphantly right on these big issues and all the grand people were not.
She was wrong about:
Industry. All you need to know about the roaring success of Britain as a ‘service economy’ is that we have run a balance of payments deficit every single year since 1984. How are we paying for this rake’s progress? By selling assets to foreigners. Now you can see why Heathrow Airport, Cadbury and a chunk of our power-generating capacity – among many other key assets - are in overseas hands.
Trade unions in general. What sort of conservative sets out to break hierarchical, deeply traditional organisations with a fondness for blazer badges, banners and brass bands?
The single European market. Plenty of people, many of them on the Labour side, warned in 1985 and 1986 that this was the first step towards a European state. The lady was not, alas, for listening, until it was far too late.
The jury is still out about:
Privatisation. Good riddance to Post Office Telephones, I’m rather less sure about the benefits of these grasping supposedly-private utilities who seem to rook the customer at every opportunity.
Council house sales. Home ownership is a wonderful thing, but the fact that Housing Benefit now accounts for more than one per cent of GDP may have something to do with the fact that we sold all that public housing.
De-regulation. There hasn’t, overall, been any – lighter regulation for the financial sector came alongside ever-more onerous regulation of the individual: no-smoking day and compulsory seat-belts both happened on the watch of this allegedly classical liberal.
2) That man again!
GOING through the ‘Thatcher legacy’ point by point rather than trying to wrap it all up in some windy overview does seem to prove the point that it is, ultimately, issues that matter, not personalities. Perhaps that is her real legacy. She proved that Tony Benn was (on this point at least) right.
3) Part of the union?
ANOTHER news item, another man called Tony. Last week, The Daily Telegraph reported that the British edition of Vogue had agreed to a new standard contract under which models would not be under pressure to pose naked and would be provided with safe and comfortable working conditions.
There’s a funny thing, I thought. Back in the very early Seventies, a London lawyer called Tony Defries, having been ousted from a senior position with a union for fashion photographers, decided to found a union for fashion models. The initial meeting, at which Defries proposed that they should refuse to work until they were given a share in the copyright of their photos, was a mixed success.
One of those present said afterwards: ‘They were all too loyal to their agencies, and anyway they burst into tears.’
Defries, his Scargillite phase now over, went on to manage 2013 chart topper David Bowie, and indeed I am indebted for this anecdote to Peter and Leni Gillman, authors of Alias David Bowie (Hodder and Stoughton; 1986).
4) I had my doubts about the peace process until…
…an Irish cricketer had to apologise for tasteless Twitter remarks about Lady Thatcher’s death. That’s right. An Irish cricketer. As the only Brit in a family of five, my wife and children being Irish nationals, I have a vested interested in lasting friendship between our two great nations. But the Irish playing cricket? I look forward to hurling at Lord’s.
Thanks again for reading and enjoy the weekend.
Going South: Why Britain Will Have A Third World Economy By 2014, by Larry Elliott and Dan Atkinson is published by Palgrave Macmillan