Obituary: Nigel Lawson (1932 - 2023)
Conservative chancellor for most of the 1980s and a leading figure of Thatcherism, latterly famous as "father of Nigella" and climate change sceptic
(Note: I wrote this hastily for a newspaper which ended up not having space to run it, so I’m putting it here unedited. I could extend it but I can see it sprawling so here it is as submitted, about 800 words.)
Nigel Lawson, who was chancellor of the Exchequer for more than half of Margaret Thatcher’s time in Downing Street, was one of the intellectual powerhouses behind the transformation of the United Kingdom. He cut taxes, turned a budget deficit into a surplus and oversaw the deregulation of financial services known as “Big Bang”. Yet his time at the Treasury also saw a rise in inflation and interest rates, and his enthusiasm for the European Exchange Rate Mechanism would see his relationship with Thatcher sour and ultimately lead to his resignation in 1989.
Born to an affluent Jewish family in Hampstead, he read philosophy, politics and economics and Christ Church, Oxford, and after National Service in the Royal Navy, he joined the Financial Times as a journalist. By 1966, he was editor of the Spectator.
His editorial stance, like the outlook of many proto-Thatcherites of the time, was stiff and austere in economic terms, believing in limited public spending and lower overall taxation. But in other terms he was towards the liberal wing of the Conservative Party, for example opposing the US war in Vietnam, and eventually supporting Michael Heseltine.
After a first failed attempt, Lawson was elected MP for his Leicestershire seat in 1974, just under a year before Thatcher would be made leader of the opposition. When the Conservatives returned to office in 1997, he became financial secretary to the Treasury, before being promoted to energy secretary in 1981. Here he laid the groundwork for the countries’ future and his legacy, preparing for a likely strike by coal miners and appointing the divisive and uncompromising Scoto-American tycoon Ian Macgregor as chairman of the National Coal Board. He also set in train the process of privatising the gas and electricity industries.
In 1983, when Sir Geoffrey Howe left a vacancy at Treasury, Lawson was the obvious choice as Chancellor. His first years were spent reforming corporation tax and gradually switching the burden from direct to indirect taxation. His 1986 Budget lowered the standard rate of income tax for the first time since 1979, and in October that year, the City of London’s financial markets were deregulated, switching to on-screen electronic trading and admitting foreigners to the Stock Exchange.
His six-year stint as chancellor saw the economy grow in the so-called Lawson Boom: taxes were cut, unemployment tumbled (halving in just three years), house prices rose by 20 per cent in a situation in which there were more homeowners than ever before. But there was underlying fragility, with interest rates and inflation on the up. Lawson tried to counteract inflation by moving closer to continental economies. Although Thatcher vetoed joining the ERM until 1990, he attempted to emulate it by secretly shadowing the Deutschmark from 1987.
When the prime minister re-employed her old economic adviser, Sir Alan Walters, who favoured floating exchange rates, in 1989, it drove a wedge between her and her chancellor. Lawson, increasingly unhappy and frustrated, resigned in October. In his resignation speech to the Commons, he took a swipe at Walters, describing one article he had written as “represent[ing] the tip of a singularly ill-concealed iceberg, with all the destructive potential that icebergs possess.”
Lawson remains a difficult figure to assess, not least because of his post-political career book on dieting. Intellectually brilliant and disinclined to hide the fact, he was for a while a dominant and successful chancellor until his relationship with Thatcher disintegrated. Yet he never had a personal claque either in the Commons or the party, and while he was never a realistic leader in waiting, his legacy is now invoked by Conservatives of all hues. That, in the end, is perhaps not a bad record to leave behind.