POLITICS
A statement of mists and mellow fruitfulness
NOEL MALCOLM
Lawson Pulls It Off' said one head- line last week after the price-floor for BP shares had been announced. 'Lawson's Wheeze Works' said another, when the dealing started comfortably above the floor and stayed there. On the face of it, the Chancellor of the Exchequer is not the most likely figure on the political scene to send the sub-editors' imaginations scur- rying through the works of Angela Brazil and Richmal Crompton. Even the imagina- tions of Labour MPs, it seems, have suddenly been flooded with pre-war copies of The Magnet: last week Mr Tony Banks was reproved by the Speaker for describing the Chancellor as a 'fat bounder', in an exchange which deserves to be studied closely by students of socio-linguistics. Mr Banks: 'the fat bounder . . . .' Mr Speaker: `I object to that expression.' Mr Banks: `The corpulent gentleman.' Mr Speaker: `Almost as bad.'
The Corpulent Owl of the remove has never quite been one of the lads. He joined the school at a late age, and always seemed too clever for his own good. Mr Lawson's brand of crushing superiority is so superior that it seldom stoops to impatience; in Parliament his characteristic expression is a sort of sigh of disappointment, indicating that the honourable gentleman opposite has failed once again to understand a point or to ask an intelligent question. For the honourable gentleman sitting behind him, this is an attitude which tends to promise confidence while at the same time en- couraging a certain sense of distance. There was a revealing moment of light relief during his autumn statement, when he announced that inflation would rise slightly next year before falling again later. A voice from the Opposition benches called out, 'That's what he always says'; from the Conservatives a chorus of back- benchers shouted gleefully in reply, 'and he's always right'.
In some ways, however, Mr Lawson's years in office seem to have mellowed him. The man who took the 'corset' off the clearing banks in 1980 (did the headlines say 'Mr Lawson Pulls It Off?) has, how shall I put it, loosened up and become more expansive. 'Another L61/4 million for improvements to school buildings? Another £65 million for Urban Develop- ment Corporations? My dear fellow, you shall have them.' The Chancellor's smile as he doles out increases in public expendi- ture is not the forced smile of someone who feels the need to humour his assailant while he is being robbed; nor is it the perfunctory smile of someone who feels that if spending must be done then it must be seen to be done. He seems to be enjoying himself, happy to let public spending rise in real terms provided it continues to fall as a percentage of output.
This is the two-card trick which Labour finds so infuriating — and understandably so. On Tuesday, the Shadow Chancellor complained that Mr Lawson was at the same time claiming credit for increasing expenditure and claiming credit for reduc- ing it. Mr Lawson's reply was witheringly superior; a lesson on elementary statistical theory, together with the observation that of course the Shadow Chancellor was new at his job. The statistical theory was correct, needless to say: and yet there is something rather galling about Eman who boasts of reducing his spending also boast- ing of the fact that he is not reducing it as much as he could. As a general rule, the process of cutting public expenditure does get progressively more difficult the longer it goes on: the things which can be cut most easily are cut in the early years, and what you are left with is the residue of things which are hardest to reduce. You find yourself in the position of the small boy handing round the box of chocolates with the explanation: 'The ones with hard cen- tres are the ones with teeth-marks in them.' But the impression remains that Mr Lawson has been biting less hard during the last year or so.
The turning-point came in the 1986 autumn statement, with its glowing prom- ise of higher spending which completely outshone the accompanying pledges to reduce borrowing. Some critics com- plained about the loss of intellectual in- tegrity; others warned that a slogan of `Cuts, what cuts?' would never convince an electorate which had spent the last four years telling itself that it had been cut to the quick. Although the election victory may not have been gained by that particu- lar slogan, it did help to prove (if proof were needed) that intellectual integrity does not win votes. Now this year's state- ment reveals that the contingency reserves are to be built up to the unprecedented level of £101/2 billion in 1990-91. The significance of this date was not lost on the Opposition. Economists may argue arcane- ly about the timing of Kondratieff waves, but Labour Party economists are becoming increasingly certain of the timing of Law- son waves, which every four years sweep the Tories in at high tide.
It is so unfair. Labour's hopes must be pinned now on the economic consequences of last month's crash, which may yet ruin the Chancellor's long-term plans. But in the short term it all gets even more unfair: far from wrecking things, the stock market collapse may in some ways have a usefully corrective effect on the economy. Over- heating will be cooled down, and credit will contract through the operation of psychol- ogy rather than higher interest rates. In- deed interest rates will probably fall furth- er, with beneficial effects on industry and on the rate of inflation. The economic objections to further tax cuts will have been removed; this week's statement shows that the Chancellor will have £13 billion to play with by the end of the financial year, which means that he could reduce income tax by 2p and still have room to manoeuvre.
These rosy projections are, of course, for the short term only, where a minor recessionette will be perfectly manageable. If America lurches next year into a genuine slump and takes the rest of the world with it, Mr Lawson will need all the contingency reserves he can find. But until that happens his superiority will remain intact.
As a footnote to history, the aftermath of the BP flotation last week gave a striking example of just how far the deification of the Chancellor has progressed. The public row about who should get the credit for thinking up the price-floor scheme was undignified, and what it revealed about the decision-making process was unremark- able. Ministers are always making deci- sions on the basis of a range of options presented to them. What was remarkable in this case was the widespread assumption that if the idea was a clever one, it could only have come from the brain of Mr Lawson himself. It is as if he had been credited with personally designing the oil rigs when he was Energy Secretary. One might call it the North Korean version of the doctrine of ministerial responsibility: in North Korea, I am told, Kim Il Sung is generally believed to have invented the television. This is surely going too far. Mr Lawson need not be omniscient; being always right is quite good enough.
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