In 1968, the British MP David Owen met his future wife in New York and took her to dinner. She chose the restaurant and as soon as Owen saw the menu, says Daniel Finkelstein in The Times, “he realised he was in trouble”. He could only afford a starter, and “after that they had to leave”. The problem wasn’t his income, but exchange controls – at the time, travellers were limited to a budget of £50 for a whole trip, in an effort to keep sterling in the UK. If this today seems “unthinkable, indeed half-mad”, that is thanks to Nigel Lawson. The former chancellor, who died on Monday aged 91, was so proud of his successful campaign to abolish exchange controls that he delivered his budgets wearing a tie with the inscription “EC 1939-1979”.
This is just one example of how profoundly Lawson shifted economic thinking – so much so that his political outlook “now seems entirely obvious”. His core belief was that economic success depended on, in his words, “the greatest practicable market freedom within an overall framework of financial discipline”. This was revolutionary, at a time when the idea of state planning was so entrenched that the government had been sucked into “determining everyone’s wages and regulating the price of bread”. Yet unlike the “Reaganauts” in the US, Lawson was under no illusion that tax cuts would produce enough revenue to pay for themselves. That’s why he so strongly backed Rishi Sunak for the Tory leadership over Liz Truss. “Sunak,” he wrote, “is the only candidate who understands Thatcherite economics.”
📊😇 When Margaret Thatcher promoted Lawson to chancellor after her second election victory in 1983, she knew he would do a good job. “I had by now,” she wrote in her memoirs, “come to share Nigel’s high opinion of himself.”