Nigel Lawson
Nigel Lawson, Baron Lawson of Blaby,
PC (born
March 11,
1932), a
British politician, was
Chancellor of the Exchequer between June
1983 and October
1989. His tenure in that office was longer than that of any of his predecessors since
David Lloyd George (
1908 to
1915), though it was surpassed by
Gordon Brown in
September 2003. Lawson is the father of journalist and food writer
Nigella Lawson and of
Dominic Lawson, the former editor of
The Sunday Telegraph.
After studying at
Westminster and
Christ Church, Oxford, Lawson began his career as a financial journalist and progressed to the positions of
city editor of
The Sunday Telegraph in
1961 and
editor of
The Spectator (
1966â€"
1970) before becoming
Member of Parliament for
Blaby in
Leicestershire in
1974 (a position he held until retiring at the
1992 General Election). While in
opposition, he co-ordinated tactics with government backbenchers
Jeff Rooker and
Audrey Wise to secure
legislation providing for the automatic indexation of tax thresholds to prevent the tax burden being increased by inflation (typically in excess of 10% per annum during that parliament).
On the election of
Margaret Thatcher's government, Lawson was appointed to the position of
Financial Secretary to the Treasury. Although this is the third-ranking political position in the British Treasury, Lawson's energy in office was reflected in such measures as the ending of unofficial state controls on mortgage lending, the abolition of exchange controls (October 1979) and the publication of the
Medium Term Financial Strategy. This document set the course for both the
monetary and
fiscal sides of the new government's economic policy, though the extent to which the subsequent trajectory of policy and outcome matched that projected is still a matter for debate.
In the cabinet reshuffle of September 1981, Lawson was promoted to the position of
Secretary of State for Energy. In this role his most significant action was to prepare for what he saw as an inevitable full-scale strike in the coal industry (then state-owned since
nationalization by the post-war government of
Clement Attlee) over the closure of pits whose operation accounted for the coal
industry's
business losses and consequent requirement for state subsidy.
Lawson was a key proponent of the Thatcher Government's
privatization policy. During his tenure at the Department of Energy he set the course for the later privatizations of the gas and electricity industries and on his return to the Treasury he worked closely with the Department of Trade and Industry in privatizing
British Airways,
British Telecom, and
British Gas.
After the government's re-election in 1983, Lawson was appointed Chancellor of the Exchequer in succession to
Sir Geoffrey Howe. The early years of Lawson's chancellorship were associated with tax reform. The 1984 budget reformed
corporate taxes by a combination of reduced rates and reduced allowances. The 1985
budget continued the trend of shifting from direct to indirect taxes by reducing
National Insurance contributions for the lower-paid while extending the base of
value-added tax.
During these two years Lawson's public image remained low-key, but from the 1986 budget (in which he resumed the reduction of the standard rate of personal
Income Tax from the 30% rate to which it had been lowered in
Sir Geoffrey Howe's 1979 budget), his stock rose as
unemployment began to fall from the middle of 1986 (employment growth having resumed over three years earlier).
The trajectory taken by the UK economy from this point on is typically described as 'The Lawson Boom' by analogy with the phrase 'The Barber Boom' which describes an earlier period of rapid expansion under the tenure as chancellor of
Anthony Barber in the Conservative government of
Sir Edward Heath (1970 to 1974). Critics of Lawson assert that a combination of the abandonment of
monetarism, the adoption of a
de facto exchange-rate target of 3 deutschmarks to the pound (ruling out interest-rate rises), and excessive fiscal laxity (in particular the 1988 budget) unleashed an inflationary spiral.
Lawson, in his own defence, attributes the boom largely to the effects of various measures of
financial deregulation. In so far as Lawson acknowledges policy errors, he attributes them to a failure to raise interest rates during 1986 and considers that had Margaret Thatcher not vetoed the UK joining the
European Exchange Rate Mechanism in November 1985 it might have been possible to adjust to these beneficial changes in the arena of
microeconomics with less
macroeconomic turbulence. Lawson also ascribes the difficulty of conducting monetary policy to
Goodhart's Law.
Lawson opposed the introduction of the
poll tax or a Community Charge, as a replacement for the previous rating system for the local financing element of local government revenue. His dissent was confined to deliberations within the Cabinet, where he found few allies and where he was overruled by the Prime Minister and by the ministerial team of the responsible department (Department of the Environment).
The issue of exchange-rate mechanism membership continued to fester between Lawson and Thatcher and was exacerbated by the re-employment by Thatcher of
Alan Walters as personal economic adviser. Lawson's conduct of policy had become a struggle to maintain credibility once the August 1988 trade deficit revealed the strength of the expansion of domestic demand. As orthodox monetarists, Lawson and Thatcher agreed to a steady rise in interest rates to restrain demand, but this had the effect of inflating the
headline inflation figure. After a further year in office in these circumstances Lawson felt that public articulation of differences between an exchange-rate monetarist, as he had become, and the views of Walters (who continued to favour a floating exchange rate) were making his job impossible and he resigned. He was succeeded in the office of Chancellor by
Sir John Major.
After retiring from front-bench politics, Lawson decided, on his doctor's advice, to tackle his weight problem. He lost five stone (70 pounds, 30 kg) in a matter of a few months, dramatically changing his appearance and went on to publish a best-selling diet book.
In
1996, Lawson appeared on the
BBC topical quiz show
Have I Got News For You and, as a former Chancellor (regarded as one of the "big four" Government positions) became something of a coup as the guest who had previously held the highest political office. He was, however, happy to go on the show and take a mild amount of ribbing from the regulars as he was plugging his diet book at the time.
Lawson has been married twice:
*
Vanessa Salmon, from 1955 to 1980 (one son (
Dominic Lawson) and three daughters (including
Nigella Lawson)
*
Thérèse Maclear, from 1980 to present (
one son and one daughter)
* The
Primrose League Gazette (Nov/Dec 1988) carried a front-page article by Nigel Lawson headlined
The New Britain.
