18 NOVEMBER 2000, Page 49

Market extremes

From Mr Edward Pearce Sir: Surely Tony Benn (Books, 21 October) is wrong and Andrew Roberts (Letters, 4 November) wronger. The truth is surely this: the economy was retrieved by Denis Healey. He first enforced expenditure reductions after wildly wrong Treasury forecasts had encouraged Labour (and Denis Healey) to follow an unaffordable expansionary course. He then, by accepting tempered IMF terms, of which we were swiftly rid, quietened a market which had been driven frantic by Treasury statistics that were as wildly wrong in the opposite direction.

As for Mrs Thatcher, Mr Roberts's saviour, would it not be more true to phrase it in this way: she confused a petro-currency with a healthily exporting strong economy, like Germany, stumbling into a measure of unemployment at 3.5 million, powerful enough to 'tame the overrnighty trade unions' — and tame the manufacturing sec- tor at the same time! She was later, in an act without precedent in the 270 years of the prime ministership, dismissed by her own party after a tax, not seen since 1381, and imposed as an irrational act of class war, had provoked riots in 14 towns and alienated all middling and much Conservative opinion.

As for the present, sound economy, did it not arrive like this: the devaluation of the currency in 1992, inadvertently reached at a time of recession, worked because demand, at grievous personal and small-business cost,


had been shattered. But what followed were the lowest inflation figures since the early Fifties, and those subsequent blessings by way of investment and growth of which Mr Brown is the careful but fortunate custodian. Edward Pearce

Thormanby, York