Monday, 15 December 2008

Lord Lamont ... er ... rocks

An earlier Badger was on Channel 4 News this evening (feel free to hunt for a clip here) in a head-to-head with Will "Nobody Know What My Qualifications Are. Because I Don't have Any" Hutton* and some banking PR guy from HSBC on the topic of whether we should join the Euro.

Having spent the last sixteen years ruing the fact that he happened to be Chancellor of The Exchequer on White Wednesday, Lord Lamont politely let Will "Nobody Knows [etc]" Hutton ramble on for a bit, and then hit back with the following simple points, IIRC:

1. What makes you think they'd have us? For example, UK public borrowing is far in excess of the three per cent of GDP upper limit seen as a precondition for Euro-membership (altho' they waive this for France on regular occasions, of course).

2. What makes you think they'd have us at this particular rate?

3. The fact that the GBP/EUR exchange rate is fast approaching parity is a numerical quirk and irrelevant in the grander scheme of things.

4. Even if they let us join at today's rate, the example of Italy (which joined at an artificially low rate) shows that any perceived competitive advantage for exporters is soon competed away, as joining at a too-low rate merely stokes inflation in that country.

Like most of my political heroes**, Lord Lamont is perceived as a bit of a failure, and I never thought I'd say this, but frankly, tonight ... he rocked.

* According to Will's Wiki biog, he is "weekly columnist and former editor-in-chief for The Observer in London (which ought to set alarm bells ringing) and currently Chief Executive of The Work Foundation".

Like all self-respecting quango's, The Work Foundation is registered as a charity and it burns its way through £5 million of taxpayers' finest every year. It describes its income as 'consultancy' in its accounts, but of course it's only government departments like DBERR, The British Library, the BBC, the DCMS, and Channel 4 who "... are among those who have benefited from the lens provided by Public Value. Indeed it has been so successful that financial support was secured for a second phase of research which commenced in January 2007. This phase will examine how public institutions understand what the public values as well as how they shape expectations and demand."

** Neville Chamberlain, Jimmy Carter, Sir John Major etc.


Peter Risdon said...

I'd love to see you explain your list of political heroes.

Anonymous said...

1. Current EU Commission President Jose Barroso seems quite keen on us joining. Besides the 'stability and growth pact' exempts countries from the 3% annual stricture when a recession causes a 2% drop in GDP or more. Also the UK's total debt at 43% of GDP is a lot lower than most Eurozone countries.

2. They probably wouldn't - but it is a good rate to negotiate from - if the rate was too strong it would do far more harm -as our ill fated attempt to stay in the ERM proved - deflation can be worse than inflation.

3. It is a numerical quirk but a good psychological one to persuade voters.

4. Italy has always had inflation - today it is lower than their pre-euro days.

Finally Will Hutton tends to get his predictions right - you have to re-write history to make Lamont right about anything - yeah, like he deliberately got us chucked out of the ERM. The whole thing was a mess - we had a long boom after a big trough of a recession- there is no surprise in that and certainly no credit for that tosser to take.

Mark Wadsworth said...

PR, one of Enoch Powell's many erudite observations was that All Political Lives End In Failure. Ergo, anybody embarking on such a career ought to consider the serious possibility that his or her career may end that way, and also rather sooner and not in the circumstances they expected, even if they weren't actually to blame and did a relatively good job under the circumstances.


1 He would say that, wouldn't her?

2 Fair do's.

3 Are the voters really that thick? (don't answer that)

4 Maybe so. Just wait until they leave again, then we'll see. To be fair, UK inflation post-ERM ejection was lower than before.

As to your final para, if I had £5m a year and a government propaganda machine to back me up, most of my 'predictions' would be written as if I'd been right all along (WH is big on buy-to-let, isn't he? ouch).

When we joined the ERM that was on the back of Labour/Lib Dem support as much as anything. On tonight's showing, Lord L has retained a certain dignity. Unlike certain taxpayer funded quangistos with a large buy-to-let porfolio ...

BTW, if you are a currency guru, give me a few tips as to what currencies you have invested your hard-earned money in and then we can tot up gains and losses over the next year or so.

Anonymous said...

"When we joined the ERM that was on the back of Labour/Lib Dem support as much as anything."

Indeed. The Labour Party and the BBC have spun the line of Lamont being a disaster, yet the Kinnock government were advocating joining the ERM and would have been fighting the same problem, having 15% inflation etc. that Lamont did. Of course, the beeb would have just blamed Soros and reckless investors if Labour had done it.

Letters From A Tory said...

So basically Will Hutton, like many other Labour supporters, is doing a pointless job at a pointless quango wasting millions of pounds a year doing research that other independent institutions do all the time.


Lola said...

Hutton is useless, but clever. He belongs to the hand wringing Guardianistas. He's part of the same 'third way' bollocks of New labour and only makes a living because he's paid by his mates with our money.

Lola said...

In re Lamont and the ERM the Tories were bounced into joining by Labour/Libdums. The Tories lacked the confidence and political skills and enough sound people to make the argument against and in fairness their own pro-Europe faction wanted them to join. Thatcher didn't.

To make a successful single currency you need to be a 'country', not an alliance. The EU is not, yet, a country, although that is clearly what its apparatchiks want. To make a comparison between the US and Europe, Californians will happily bail out - for example - the Illinoisians, but the Germans will not bail out Italy (which is weird really "as they are countries that I still think of as the Axis"). And this is being demonstrated right now in the tanking of Italian sovereign debt and Germany's hard hearted attitude. Italy cannot devalue its currency to help itself.

It is irrelevant what Lamont did in the past if he is right now, which he is, and Hutton is wrong.

And another thing, in my view we want more currencies, not less. The monopoly of money by the state is dangerous as the state always ends up cheating us of our savings by inflating away its debts. Essentially it counterfiets on a grand scale. Socialists are the best at this because private capital is an anathema to their whole philosophy, as has been richly demonstrated since 1997. Let the commercial banks issue their own money and prove Gresham's Law that bad money drives out good - if it is at the same price.