POLITICS

Mr Lawson closes his eyes and imitates the action of a hedgehog

NOEL MALCOLM

eeing Nigel Lawson sitting with his head bowed during the Queen's Speech, and his eyes closed (as if silently abjuring the world and all its cares), I could not help thinking of Milton's Samson musing on his past.

All mortals I excelled, and great in hopes, Fearless of danger, like a petty god

I walked about admired of all and dreaded On hostile ground, none daring my affront.

How changed, how fallen was this stooped figure now with his darkened orbs, eyeless, as it were, in Parliament at the mill with slaves. But Milton's Samson, on the other hand, had not been jiving away into the small hours at a 'Swinging Sixties' evening in the Camden Palace.

• Lawson Agonistes is not quite a tragic figure. This is partly because some of his much publicised misfortunes over the last few weeks are already beginning to seem entirely petty, and partly because his spe- cial personal qualities make him peculiarly well suited, temperamentally, to riding out the storm. He is not the sort of person to put his head in his hands a la Keith Joseph and agonise over where he went wrong. Nor is he the sort of person to feel dismayed and betrayed by the desertion of his fair-weather friends: he never went round sucking up to them in the first place, so why should he mind if they stop sucking up to him?

Nor, again, is Mr Lawson showing any signs of being racked by indecision over what to do next. That, one might almost say, is part of his problem. There are so few things that he can do. To cancel the tax cuts of the last Budget would be politically impossible, even if there were sufficient economic reasons for doing so, which there are not. (The downward trend in the trade figures predates that Budget by a year and a half, and even if every penny of the tax cuts for 1988-9 had already been spent on foreign goods, that would account for less than a quarter of this year's deficit.) To try to impose new restrictions on credit or hire-purchase would be ineffectual: the fluidity of the international financial sys- tem is such that the Government could not stop credit from flowing back into the economy if the demand for it were there. So the Chancellor has only one trick left: raising interest rates.

According to the fable, the fox knows many tricks in the art of self-preservation, while the hedgehog knows only one — but it is a good one. God and nature, you might feel, had designed Mr Lawson to be a wily, resourceful, altogether foxy fellow. Politics and economics have forced him, instead, to imitate the action of a hedge- hog. No wonder his recent performances have struck many observers as prickly.

It may be that the only sensible thing.for the Chancellor to do is to roll himself into a ball and wait for six months or so until the high interest rates have begun to have their effect. The trouble is that holding tight, in politics, never looks like a very strong defensive position — what do you say in the meantime? Nigel Lawson's favourite way of passing the time during his speeches nowadays is to embark on long statistical denunciations of the last Labour govern- ment. His conference address at Brighton this year consisted of almost nothing else. But it is the peculiar achievement of the Thatcher era that reference to the world of Wilson and Callaghan now sounds as re- mote as accounts of plagues and famines under the Han dynasty.

Last month Mr Gordon Brown beat the Chancellor at this game, by quoting articles

he had written in the 1960s when he was 'the humble editor of a magazine'. The humble editor had argued, apparently, that the balance of payments should be 'the over-riding priority' of any government. It is nice to know that editorials in The Spectator can prove so damaging to gov- ernments but a little depressing to think that it takes 20 years for them to have that effect.

Fortunately for the Chancellor, the pub- lic has lost interest since the 1960s in the role of the trade figures as an essential indicator of economic health. Nor has the public quite regained its interest in infla- tion, which dominated all popular econo- mic discourse until five or six years ago. inflation is still below the threshold of genuine public concern; and its peak next year will probablY scrape under that magic figure beyond which it ceases to be mere background noise and becomes instead a real Leitmotiv of public debate.

'To gain distinction you must get credit.' If that point is ever reached, Mrs Thatcher will be able to turn to Sir Geof- frey Howe and say, 'Darling, they're play- ing our tune.' Conquering inflation was the great imperative of the early Thatcher years, the moral absolute which would justify any amount of belt-tightening. On Tuesday Mr Lawson actually complained that the Opposition had not said anything about inflation in the wording of their amendment. He is in the awkward position of wanting people to worry about the danger of inflation just enough to accept the need for the squeeze on interest rates, but not enough to make them lose confi- dence in his stewardship of the economy.

But something has changed, in any case, about the tone of voice with which this Government talks about inflation. In the old days the conquest of inflation was a holy war, with the Blessed Margaret as its Joan of Arc. For Mr Lawson, inflation is simply an intellectual problem which de- mands to be solved. It may be the most important problem — on Tuesday he described it as the only real problem facing the economy — but it is a problem to be approached theoretically, in terms of the mechanics of economic causation. One feels, therefore, that he is unlikely to tune in to much public sympathy on this issue. He is out there on his own, isolated not only from the public at large but also from most of his own party, who sat rather glumly through most of his speech on Tuesday and never quite seemed to recov- er from his initial announcement that there would be 'no change of policy'.

The conquest of inflation is a moral duty on governments, of course, and it would be no bad thing if this Government were to recover a little of its old crusading zeal. But there is one strong reason why the Govern- ment may prefer a more coolly technical approach. For it is an extraordinary (and, so far as I know, unnoticed) fact that this Government is more dependent on infla- tion for the fulfilment of its policies than any previous administration. On a whole range of issues (child benefit, the mortgage tax relief limit, student grants after 1990, etc) the Government's policy is to freeze allowances at their nominal value and let inflation do the dirty work. It must be difficult to play at being St George when all the while you are keeping the dragon tethered at the bottom of the garden and feeding it the household scraps.