ANOTHER VOICE
The sacred doctrine that the pound must be worth at least 2.7780 deutschmarks
CHARLES MOORE
his Government does not seem to do very much, so why do people not admire it more? It is the devout wish of natural con- servatives (i.e. the great majority of human beings) that they should be left alone to get on with their lives, so why are more and more of them discontented with a govern- ment which appears to do exactly that? Everything seems so low-key and unstrenu- ous since Mrs Thatcher, and that, for Tories, is supposed to be a good thing. Isn't Mr Major Lord Salisbury without the rolling acres?
One answer is that the Government is interfering in our lives in a direct, simple and unpleasant way. It is insisting on very high interest rates. As a result, millions of people who never thought much about eco- nomics, but happily believed that their nat- ural desire to own a house also made eco- nomic sense, are now markedly poorer than they were three years ago. These people feel particularly angry because, until that time, the Conservative Government kept telling them how sensible they were being. After selling her house in Flood Street in 1985, Mrs Thatcher bought a new one in Dulwich because, as she explained at the time, if you do not get your money back into bricks and mortar in six months, you lose it. Many followed the leader, if on a less expensive scale, and it won't do now to describe most of them as greedy and fool- ish. The property-owning democracy was not a silly slogan, but an ideal realised by millions.
The present policy has changed those people's lives far more dramatically than would many more obvious forms of govern- ment interference. They borrow money, or own houses or run businesses whose value depends upon the capacity of others to bor- row money. Markets, i.e. people's wishes, decide the cost of most things, but it is Mr Lamont who decides what money should cost, so their livelihoods depend on Mr Lamont; he decides that it must cost what the Germans say it should cost, so their livelihoods really depend on the Bundes- bank.
There is not much of the spirit of Lord Salisbury here. It would not have occurred to Lord Salisbury that it was his or his Chancellor's business to set the price of money: that was up to the Bank of Eng- land. He would have been surprised to learn that the British Government denied the Bank of England this right and had offered it instead to the bank of Germany, and even more surprised that the Govern- ment had signed a treaty which proposed to abolish that money altogether. When he also learned that the same treaty estab- lished a common citizenship for everyone in Europe, and a common European for- eign and security policy, I suspect his imperturbability would have cracked and he would have demanded, from the recess- es of his great beard, who these foaming radicals were whose visionary scheme would enmesh the United Kingdom for ever in those foreign entanglements which it had been his life's work to avoid.
Now it may well be that Messrs Major and Hurd only urged British entry to the ERM in October 1990 for pragmatic rea- sons. It seemed like a good way of taking Mrs Thatcher down a peg and getting on better with Messrs Kohl and Mitterrand and lowering interest rates in time for the party conference. It may even be that they negotiated the Maastricht Treaty in a simi- lar spirit, thinking only of not causing too much trouble and showing that they were different from Mrs Thatcher and avoiding frightening the markets. They may well have been the political equivalent of 'rice Christians', converting to the faith, without the slightest interest in the theology, in the hope of a square meal. But the trouble is that the religious authorities take such con- versions at face value, and demand total obedience . You have to seek the 'heart of Europe' as if it were the Blessed Sacra- ment.
The consequence is that we do not have a genuinely pragmatic government, shrewdly judging each situation on its merits from a position of sturdy independence. We have a would-be pragmatic government enslaved to a dogma far more rigid than any of those that allegedly tied down Mrs Thatcher. That dogma insists that the pound must be worth at least 2.7780 deutschmarks. To make sure that it is, Mr Lamont has to put himself to the most extraordinary shifts. He has to stand outside his office and say that it really, honestly, is worth that, and will go on being so. He has to get the Bank to buy enough pounds to keep it so. He even pro- duces an ingenious plan to borrow more than £7 billion in foreign currency and use it to buy his own. For a day or two, the City thinks this quite brilliant, and then anxiety creeps in once more:
And now (as oft in some distemper'd state) On one nice trick depends the gen'ral fate.
We are in a curious position in which the policy manages to be unchangeable and fragile at the same time. Messrs Major, Hurd and Lamont feel that they must go on with what they (or at least, the first two) began, and yet they know that at any moment circumstances beyond their con- trol may break it apart. We tad' to sign Maastricht, they argued, because one coun- try could not defy the others; a few months later, one country did defy the others, with no apparent ill effects, but we still 'had to go on because we were the President of the EEC.
It would be quite wrong for us to have a referendum, Mr Major said, but it seems to be quite all right for the French to have one, and he has declared that he will be bound by its result. There has been no time since the intervention of the IMF in 1977, perhaps not since the Suez crisis, when we seem so clearly to have resigned our capaci- ty to run our own affairs. And we have done so in the name of a project which will certainly collapse if the French vote and quite likely do so even if they vote 'yes. Mr Major has not only nailed his colours to the mast, but lashed himself to the thing as well, and now the boat is holed below the waterline. I have enough faith in his politi- cal skills to think that he will somehow be able to escape just in time, while poor Mr Lamont sinks full fathom five, but it will be a narrow squeak. It is this impotence, and the curious determination to stay impotent, which makes it hard to appreciate the merits of this Government. Not many have noticed, for example, that it is probably the first really intelligent Tory Cabinet in history.It does not contain a single one of the tradi- tional numbskulls always thought necessarY in the past to steady the Buffs. All the Cab- inet ministers are bright and quick and work hard and know their briefs. Mr Pat- ten's policy for schools is right, and Mr Clarke will improve the police force, and Sir Patrick Mayhew will cause less mayhem than his predecessors in Northern Ireland, and Mr Lilley has original ideas for reduc- ing dependency on the state, and Mr Por- tillo is very fierce about public spending. But none of this makes much difference so long as the main policy shows that its authors prefer to trust the judgment of oth- ers to that of themselves.
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