Politics
The micro Lawson
Charles Moore
Asadder and a wiser man? Certainly there was the world of difference between Mr Lawson's demeanour last year and this. A year ago, he was bouncy. His manner, which, because of its bluntness and lack of sycophancy, normally fails to charm MPs, was infectiously enthusiastic. I understand these things, Mr Lawson seemed to be saying; I enjoy the work, and because I understand what I am doing, I can change things. He triumphantly per- suaded his own party to let him have a go.
He came back on Tuesday conscious that bounce would this time be an irritating quality: the Tory party was no longer in the mood to find Tigger diverting. Many of its members felt more like Eeyore. The City, too, which has been disposed to think that Mr Lawson is a bit cavalier with the figures and uncertain in the management of the exchange rate, wanted to be soothed. Mr Lawson responded appropriately. He was respectable. His tone of voice and his face and several tracts of what he said were grey, not with that ineradicable greyness which is Sir Geoffrey Howe's personal hue, but because grey is this season's colour and, for this season at least, Mr Lawson was keen to dress correctly. And he was serious about real setbacks. Neither infla- tion nor public borrowing nor public spending is as it should be, even without Mr Scargill, and he was not disposed to dress this mutton as spring lamb.
All this was consoling to MPs. The main reason why they tend not to like Mr Lawson is that he does not give them much respectful attention. This time, they seemed to feel that he had been listening. Sacred pensions, sacred mortgage tax relief are sacred still. The press, after all the fuss about VAT, was squared; the middle class was unimpaired. Only the increased con- tributions by employers to the National Insurance of the better paid is likely to arouse real resentment.
But one should not imagine that Mr Lawson is beaten, or born again, or even reformed. He is simply more circumspect, more wily, more political. Last year, he was on about something; this year, he is on about the same thing. His biographer, if he ever has one, will probably conclude that he was on about it throughout his political career. If it is a little difficult to discern what he is on about, this is more to do with the conventions of Budgets than with any obscurity on the Chancellor's part. A Budget which Parliament understands announces large, macro-'economic mea- sures, which tell the economy to stop, go, or do both things at once.
So when Mr Lawson said that this was a Budget for jobs, he was mocked, of course, because it was what he would say, but he was also misunderstood. To Parliament and press, a Budget for jobs still means, above all, a programme of public spending. Anything else sounds less. To know what Mr Lawson's Budget means, rather than what it sounds like, we must go back to what he says he is trying to do.
Fortunately, this is easily done. Being a former editor of this paper, and ipso facto an experienced member of the scribbling classes, the Chancellor is not shy of setting out his ideas. He did so before the 1979 election, and, unlike most ministers, who are made vague by office, he did so no less distinctly when he was first in the Treasury and when he was Energy Secretary. He still does so. In his Mais Lecture of June last year, he elaborated his description of economic policy since 1979 as 'the British Experiment'. Before Mrs Thatcher, he said, governments thought that unemploy- ment was controlled by macro-economic policy — the securing of economic growth by demand management — and that infla- tion was controlled by micro-economic policy — 'the panoply of controls and subsidies associated with the era of in- comes policy'. In the 'British Experiment' (a sleight of hand, that phrase: he original- ly called it the Thatcher Experiment), 'the proper role of each is precisely the oppo- site of that assigned to it by the convention- al post-War wisdom'. Your macros look after prices, your micros find the jobs.
Because micro is, as it sounds, small, it is not beautiful to the vulgar imaginations of MPs. And Mr Lawson, in his new, cautious guise, is greatly disposed to parade its charms. But this is a micro:Budget, a part of Thatcherism's answer to the grand certainties of the 1944 White Paper on Employment. It is the forerunner of a series of measures which will emerge from the Departments of Education, Trade and Industry, Employment, and Health and Social Security in the next two or three months.
Mr Lawson is trying to work out how to make more people capable of doing work, to keep the price of their work low enough for them to be more likely to get a job, and to encourage their actual or potential employers to expand in a way which allows them to take on more people. Since train- ing was rescued from the dirigisme of the early days of the Manpower Services Com- mission, the Youth Training Scheme has been quite successful in underwriting em- ployers in doing training themselves, rather than getting civil servants to train people in skills which no market requires. In his Budget, Mr Lawson announced a once-for-all increase in the money for the YTS to make it applicable to all 16 and 17 year olds not otherwise catered for. The idea is that employers will, as in Germany, find such training essential, and pay for it themselves.
As well as training people, the YTS introduces school-leavers to real work for low pay, which has long been a covert aim of government policy. This week, Mr Lawson made it a declared aim, and linked it with his disapproving noises about Wages Councils, his relaxation of rules about unfair dismissal, and his concentra- tion on removing tax and national insur- ance from the poorest paid. He also decreed that employeri should pay less in their national insurance contributions for their lower paid workers. The greatest number of redundancies has been among this group of people, whom flabby educa- tion and easily available welfare have tended to make unfit for work, unwilling to work and unattractive to employ. Even with those who have not been able to get jobs for very long periods, the evidence suggests that acquaintance with work which it is not prohibitively expensive for the Government to provide improves their chances of a job. Mr Lawson is adding another 100,000 people to the 135,000 who already clean up churchyards, help old ladies, etc, in the Community Programme. Because he was trying to reassure the markets of his good macro intentions, Mr Lawson allowed his presentation of his micro reforms, except for his national insurance reforms, to be somewhat sub- dued. Besides, he knows that their success depends on other reforms. Will there be real deregulation — of rents, of wages, of planning and health and safety? Will weird and expensive special regional subsidies contine to distort industry? Will Mr Fowler really find it in himself or his civil servants to control housing benefit or child benefit, or to relate the receiving of a benefit to tax and to a closer calculation of financial need? Experience suggests that there is not much hope. Nevertheless, one does detect a certain determination and a certain co- ordination. At just the moment when people are beginning to say that Thatcher- ism is running out of steam, it seems in reality to be gathering pace. This is not the moment to spoil things by asking whether the British worker is the sort of person who will want to respond to the new 'challenges' that are coming his way. It is not the time to enquire whether the British economy has enough basic strength to produce the recovery which the Government's calculations assume. It would be churlish to point out that each and every British government, whichever way it arranges its micros and macros, unites with the others in its ability to increase taxes and public spending and so defeat most of its aims as it goes along. All that needs saying this week is that Mr Lawson is still busy with his experiment, and it is interesting to sit in the laboratory and watch the clever way in which he mixes the substances in the test tubes.
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