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Main stories Former Chancellor says his recession had a purpose 13 April 2009 Former Chancellor Lord Lamont of Lerwick has said that the recession he presided over in the early 1990s had a purpose in getting inflation down; the current downturn, he said, is a ‘crash’ and ‘an accident’. “The two crises are very different. I think one has to remember Thatcher’s law that the unexpected always happens and just when you think you have sorted something and it can’t get any worse then something unexpected comes along and your in-tray instead of being called impossible becomes unbelievable. “At a time of crisis, you go from hand to mouth and can lose clarity.” And he squarely blames Gordon Brown for the current crisis who, he says, “ran the Government’s finances on the basis that there would never be another slowdown”. Speaking to Holyrood magazine, Lamont also said that “doing what I had to do was like fighting a war…people get hurt in a war”, and that the recession in the early 1990s “was just as much an international crisis as Gordon Brown is saying this one is”. However, he added that “the recession of the early 1990s had a purpose, which was to get inflation down and was a recession we had to have”. “This recession is a crash, an accident, the one we had, although it was painful, very painful, was, to some extent, a consequence of the Government being determined to get inflation down so one never lost one’s sense of purpose, or at least, I didn’t, or a sense of direction. What would be terrifying if one was Chancellor now is one is just trying to stop something happening whereas we knew where we were going and after Black Wednesday, we had even greater opportunities and I thought the whole thing worked well to the advantage of the country and one of the beneficiaries, of course, was Labour who inherited a very strong economy.” Lamont says he started to worry about the potential for an economic crisis in 2006 when he became concerned about escalating house prices and the role given to the Bank of England. “The Prime Minister is subject to a lot of criticism and you could say that no more boom and boost was just a phrase and what does it matter but I think it mattered in two ways; some people believed him and acted accordingly and secondly, he believed it and ran the Government’s finances on the basis that there would never be another slowdown and all the time he was Chancellor, I kept saying to myself, ‘this man is running incredible risks’.” Asked whether he felt that too often politics get in the way of sound economic judgement, he said: “I think that is always the great problem for Chancellors of the Exchequer. Because you are dealing with huge issues and see that the country has to come first and politics should come second. Chancellors are always accused of being non-political and people say you are not taking account of the politics but often you can’t and fiddling around with the economy to take into account some by-election or whatever, can do great damage. “I think politics shouldn’t intrude and I think it is a bit at the moment because I think that Brown is open to the same accusation that Obama is getting that they are both of them, by nature and instinct, big spenders and they are re-engineering the economy, saying it is to deal with the crisis but actually, it’s because they quite like doing it.” Related articles: Poor won’t be made to shoulder the burden of cuts, pledges Clegg 5 September 2010 Scotland’s man in the Cabinet 5 September 2010 Councils ward off “death tax” 5 September 2010 Foulkes criticises Dewar over Parliament 5 September 2010 Sustainable Development Commission’s future uncertain 5 September 2010 See all articles in this category Submit a comment |
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