Nigel Lawson

Lawson in 2010

Nigel Lawson, Baron Lawson of Blaby PC (11 March 1932 – 3 April 2023) was a British politician. Originally a financial journalist, he was editor of The Spectator from 1966 to 1970. He was Chancellor of the Exchequer between June 1983 and October 1989 during the government of Margaret Thatcher and oversaw a sizable reduction in taxes as well as the privatization of many state-owned companies. He fell out with Mrs Thatcher over the issue of European monetary co-operation and resigned suddenly over her having supplanted him with one of her own advisers.

Quotes

Editor of The Spectator

• Today 'nationalism' is out of fashion among the opinion-formers. Thanks to a superficial misreading of history, it is accused of having been responsible for two world wars and has widely come to be regarded as a political sin of the first magnitude, fortunately found only in such antiquated and obsolete figures as General de Gaulle. In fact the real danger comes from ideologies not nationalism; for while a nation may properly respect the nationhood of others, an ideology knows no frontiers...Once [the Tories] lose their claim to be, in the fullest sense, the 'national party', they are left, as they are in danger of being left today, either as the party of the 'individual' – a noble but to most people an austere and forbidding creed – or else as the party of the middle classes, which condemns them to a permanent minority.
  • 'A Tract for the Tories', The Spectator (1967), quoted in The View from No. 11: Memoirs of a Tory Radical (London: Bantam, 1992), p. 8.

Backbench MP

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

Secretary of State for Energy

• The Conservative Party has never believed that the business of government is the government of business.
  • Speech in the House of Commons (10 November 1981)

• No industry should remain under State ownership unless there is a positive and overwhelming case for it so doing. Inertia is not enough. As a nation, we simply cannot afford it.
  • Speech in the House of Commons (10 November 1981)

Chancellor of the Exchequer

• The successful sale of British Telecom...reveals a vast and untapped yearning among ordinary people for a direct stake in the ownership of British enterprise. Investment in shares has begun to take its place, with ownership of a home and either a bank or building society deposit, as a way for ordinary people to participate in enterprise and wealth creation. We are seeing the birth of people's capitalism.
  • On the privatisation of BT (November 1984), quoted in The View from No. 11: Memoirs of a Tory Radical (London: Bantam, 1992), p. 224.

• Economically and politically, Britain can get along with double digit unemployment.
  • Interview with George F. Will (December 1984), quoted in William Keegan, Mr Lawson's Gamble (London: Hodder & Stoughton, 1989), p. 140.

• Those who, in the nineteenth century, argued the dangers of a mass democracy in which a majority of the voters would have no stake in the country at all, had reason to be fearful. But the remedy is not to restrict the franchise to those who own property: it is to extend the ownership of property to the largest possible majority of those who have the vote. The widespread ownership of private property is crucial to the survival of freedom and democracy. It gives the citizen a vital sense of identification with the society of which he is a part. It gives him a stake in the future—and indeed, equally important, in the present. It creates a society with an inbuilt resistance to revolutionary change.
  • Maurice Macmillan Memorial Lecture (June 1985), quoted in The View from No. 11: Memoirs of a Tory Radical (London: Bantam, 1992), p. 206.

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

• It is here that Britain's weakness lies. The plain fact is that labour costs per unit of output in British business and industry continue to rise faster than is consistent with low unemployment and faster than our principal competitors overseas. Productivity is, certainly rising quite rapidly, but pay is rising faster still. It is this—and not our alleged dependence on oil—that constitutes the Achilles' heel of the British economy.
  • Speech in the House of Commons (18 March 1986)

• Nothing could be further from the truth than the claim that we have a choice between cutting tax and cutting unemployment, for the two go hand in hand. It is no accident that the two most successful economies in the world, both overall and specifically in terms of job creation—those of the United States and Japan—have the lowest level of tax as a proportion of GDP. Reductions in taxation motivate new businesses and improve incentives at work. They are a principal engine of the enterprise culture, on which our future prosperity and employment opportunities depend.
  • Speech in the House of Commons (18 March 1986)

• It is worth recalling that during the 1960s, and again in the 1970s, Britain's growth rate was the lowest of all the major European economies. By contrast, during the 1980s, our growth rate has been the highest of all the major European economies. This greatly improved growth performance has been accompanied by falling inflation, which at 3½ per cent. in 1986 reached the lowest figure for almost 20 years. 
  • Speech in the House of Commons (17 March 1987)

• During the 1960s, and again in the 1970s, growth in manufacturing productivity in the United Kingdom was the lowest of all the seven major industrial countries in the world. During the 1980s, our annual rate of growth of output per head in manufacturing has been the highest of all the seven major industrial countries.
  • Speech in the House of Commons (17 March 1987)

• But despite the undoubted success so far, there is still a barrier along Scotland's road to prosperity. That barrier is the pervasive presence of a hostile attitude to wealth creation, to the enterprise culture on which economic success in a free society depends. That is not to say there is no enterprise in Scotland: of course there is. Rather that it is frequently swamped by an overriding sense of dependence on the state. Large areas of Scottish life are sheltered from market forces, and exhibit the culture of dependence rather than that of enterprise.
  • Speech in Glasgow (23 November 1987), quoted in The Times (24 November 1987), p. 2. The Scottish Sun reported Lawson's speech under the headline ‘Will ye stop your snivelling Jock?’ (James Mitchell, Conservatives and the Union (1990), p. 113)

• ...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.
  • Speech in the House of Commons (21 March 1988)

• ...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.
  • Speech in the House of Commons (21 March 1988)

• 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.
  • Speech in the House of Commons (21 March 1988)

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

• Our achievement...has been to show that you can build far greater, and far more lasting, prosperity by letting people co-operate in the freedom of the market place than by making them submit to the coercion of Government regulations and state bureaucracy. If you look around the world today, East and West, even in Soviet Russia and Communist China, you will see that lesson being taken to heart...The truth is that a prosperous world based on free and open markets is a world of co-operation and interdependence between the people of all nations. By contrast, a world of closed, State controlled economies is a world disposed towards confrontation and conflict.
  • Speech to the Conservative Party Conference (13 October, 1988).

• The fears of recession in the aftermath of Black Monday have turned to fears of the economy racing ahead too fast, with inflation edging up and a substantial current account deficit...people understandably feel more confident about their future than they've done for decades, but as a result they have been borrowing more and saving less...coming on top of a massive income investment boom, it's all been just a bit too much of a good thing.
  • Speech to the Conservative Party Conference (13 October, 1988).

• If I really believed in Friedman's economic theory, then I'd be quite satisfied to spend the rest of my life with a garden hose shoved down my throat, being filled with custard by representatives of the people of China.
  • Speech to the Conservative Party Conference (13 October, 1988).

• 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 foreseeable future.
  • 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.

Later life

• To govern is to choose. To appear to be unable to choose is to appear to be unable to govern.
  • Quoted in the Daily Mail (London, 26 March 1991), as cited in The Columbia Dictionary of Quotations, ed. Robert Andrews, Columbia University Press (1993), p. 381

• The National Health Service is the closest thing the English have to a religion, with those who practice in it regarding themselves as a priesthood.
  • The View from No. 11: Memoirs of a Tory Radical (London: Bantam, 1992), p. 613.

Quotes about Lawson

• Nigel Lawson was certainly, in so far as anyone can be qualified in advance, the best qualified Chancellor of the postwar epoch. His memoirs are an outstanding record of life at the Treasury in the 1980s.
  • Edmund Dell, The Chancellors: A History of the Chancellors of the Exchequer, 1945–90 (London: HarperCollins, 1996), p. 491.

• The combined efforts of Government policy since 1979 have been not to improve but substantially to worsen our competitive position. We have gone from a huge manufacturing surplus of £5.5 billion in 1980 to a 1986 third quarter deficit of £8 billion a year...Even with oil production continuing for some time, the current account has gone from a £3 billion surplus to a deficit predicted by the Chancellor of £1.5 billion...Sadly, the Government's great contribution, having refused to stimulate the economy by more respectable means, is a roaring consumer boom, which there is not the slightest chance of their moderating before an election. A roaring consumer boom does not, to any significant extent, mean more employment. In our competitive position, worsening under the Government, it means overwhelmingly higher imports, a still worse balance of payments position and a classic path to perdition. To have produced, after seven and a half years, the combination of total monetary muddle, a worsened competitive position, a widespread doubt in other countries as to how we are to pay our way in the future, a desperately vulnerable currency and the prospect of an unending plateau of the highest unemployment in a major country in the industrialised world is a unique achievement over which the Chancellor is an appropriate deputy acting presiding officer.
  • Roy Jenkins, Speech in the House of Commons (6 November 1986)

• It was in the autumn of 1983...[that Lawson] replied, when I asked how he would wish to be remembered, that he would like to be seen as 'the British Erhard' – a reference to the man credited with the West German 'growth miracle' after the war.
  • William Keegan, Mr Lawson's Gamble (London: Hodder & Stoughton, 1989), p. 119.

• Something always goes wrong when Nigel goes abroad.
  • Margaret Thatcher (September 1986), quoted in William Keegan, Mr Lawson's Gamble (London: Hodder & Stoughton, 1989), p. 188.

• I made Nigel Lawson Chancellor of the Exchequer – an enormous and to most people unexpected promotion. Whatever quarrels we were to have later, if it comes to drawing up a list of Conservative – even Thatcherite – revolutionaries I would never deny Nigel a leading place on it. He has many qualities which I admire and some which I do not. He is imaginative, fearless and – on paper at least – eloquently persuasive. ... I had by now come to share Nigel's high opinion of himself.
  • Margaret Thatcher, The Downing Street Years (London: HarperCollins, 1993), pp. 308–309.

• I also said, 'You're in a dreadful position with wages going up at 8.4 per cent or more and inflation only by 3.5 per cent. We're pricing ourselves out of all the markets'. He [Lawson] said, 'Yes but it's very good electorally', to which I said, 'Yes but that's not the right view to take in the long run for the country'.
  • Woodrow Wyatt's diary (9 December 1986), quoted in Sarah Curtis (ed.), The Journals of Woodrow Wyatt. Volume One (London: Pan, 1999), p. 242.