CITY AND SUBURBAN
The 'Treasury needs a man to say no or not tonight, Virginia
CHRISTOPHER FILDES
The Chief Secretary must sit on the Treasury's cash-box until the iron enters into his soul. Nobody sat tighter than Jack (now Lord) Diamond, in place throughout Harold Wilson's first government. A pair of Labour members once came to him with a pet ploy and asked for public money. There are, he told them, three questions. First: ought we to do it? Yes, you make a good case, it fits in with our policy, I'm persuad- ed. Second: can we afford to do it? Yes, there's some money in a contingency reserve which we could use for it. The third question is: are we going to do it? — and the answer's no. Chief Secretaries need to talk like that, and if they don't no one else will, but of late they have lost the knack. John Major pleased everybody, but in his day the revenues were rising. His succes- sors, Norman Lamont and David Mellor, let public spending rise and then saw their revenues collapse, leaving them to bridge the gulf by borrowing. Stand back from the scene, and you can see that the Treasury now has not one sound economic policy but two wrong ones — two mistakes in differ- ent directions, with the Treasury hoping that they will cancel each other out. Fiscal policy (heavy borrowing) is too lax, mone- tary policy (high interest rates) is too tight. Fiscal policy must take more of the strain — or, to put it another way, if the Govern- ment did not plan to spend and borrow every penny it could find, it would leave some for the rest of us and the price of money could come down. That is the job of the new Chief Secretary, Michael Portillo, and until he gets it right nothing will go right. He should take lessons from Lord Diamond in the art of saying no. No, John, no, David, not tonight, Virginia, no.
Previous page
