Mrs Thatcher, North Sea oil and the hegemony of the City

Introduction

I began writing this in the early 1980s. If you were then reading the Guardian or the Observer, and knew a little, simple economics, it didn’t take genius to notice that while the UK’s manufacturing economy was being decimated by Conservative Party economic policy, the City of London was booming. More interestingly, and less frequently commented on, the UK economy as a whole was becoming self-sufficient in oil, without apparently gaining anything from it. Ah-ha, I thought, I smell a big rip-off. I wonder how it’s being done? So I did a little digging, though I could see how the ideology of the Thatcher wing of the Tory Party connected to the disappearance of oil revenues from the UK economy; and wrote a piece called ‘The Theft of North Sea Oil’ which I eventually sent to Tribune in 1986. The editor at the time, Phil Kelly, quite rightly declined it: it wasn’t anywhere near finished. I put it in a file and got on with other things. But I continued to collect the odd reference on the subject. One day…

What follows begins with a long digression through the Tory economic policies of the early years of Thatcherism. I then attempt to show how these policies connect to North Sea oil.

I was provoked to dig out the old file just before Christmas. I was flipping through the biography of Sir Keith Joseph by Morrison Halcrow and read, for the umpteenth time, about the Thatcher-Joseph focus, circa 19756, on the need to control the money supply as the cure for inflation.(1) But for the first time it struck me that ‘controlling the money supply’ might look like a surprising ambition for a group of Conservatives. After all, the ‘money supply’ is the territory of the banks; and the Conservative Party, if it is anything, is the party of the bankers, the City. Put it another way: how does one ‘control the money supply without controlling the money suppliers?(2)

Mr Heath gets it wrong

The hitherto arcane issue of the money supply got onto the mainstream political agenda in the 1970s because of the Heath government’s famous ‘dash for growth’ — notably cheap credit and expanding public borrowing and expenditure. This produced the British economy’s traditional balance of payments deficit as imports were sucked in faster than domestic production increased. At that point, financial orthodoxy said that domestic consumption be reigned in to correct the balance of payments deficit and maintain the external value of sterling. Instead, Heath floated the pound. Nothing, not even the international value of sterling, was to get in the way. (President Nixon had already floated the dollar.)

Heath’s gamble didn’t work for two reasons. In the first place, with no commercial or economic experience, Heath simply didn’t understand British capitalism. Given the right expansionist conditions, Heath believed, British capitalism would pour investment into the domestic manufacturing economy. It didn’t: and, as a result, ‘during 1972 and 1973 Heath became increasingly critical of what he saw as the unpatriotic caution of businessmen in the face of the opportunities which he believed the Government was creating for them…… [h]e used to lecture the banks on their national responsibility, urging them to invest directly in industry like German banks….'(3) Secondly, barely noticed by the media or the Labour Opposition — and, if his biographers are anything to go by, barely noticed by Heath himself — with the Competition and Credit Control Act (CCC) of 1971 his government had relaxed many of the controls on the banks in the UK.(4) The clearing banks began churning their files, generating credit — literally ‘printing money’ — and lending it, not to British manufacturing as Heath hoped, but to the property markets and the so-called ‘fringe banks’ (which in turn lent it on again, largely into property speculation). William Keegan points out that CCC, originally sought by the Bank of England, became a part of the ‘dash for growth’ when Chancellor Anthony Barber made bank loans tax deductible for many purposes, including the purchase of homes, second homes and shares — encouraging what was then ‘the biggest credit binge in British post-war history’.(5)

In their entertaining account of this, Heller and Willatt noted that, ‘What had been created, under the eyes of the Bank of England, was a simulacrum of the lethally unbalanced Wall Street of the late and roaring twenties…….. between mid 1970 and early 1974 M3 (currency, current bank accounts and deposit accounts) rose by the previously unthinkable amount of 270 per cent …. As for the property boom, which would have been impossible without the heavy financing from the banking system, the Bank’s sole reaction was a mild directive to the banks in the autumn of 1972, requesting them to make credit less freely available to property companies and for non-industrial purposes.'(6) By 1974 inflation in Conservative Britain was at 20%. (7)

How much of this inflation was directly attributable to the activities of the banks is impossible to quantify. In this period there was undoubtedly some wage inflationary pressure coming through from the British trade unions — not to mention the 1973 increase in the price of oil. Nonetheless, as Douglas Jay pointed out, ‘Between December 1971 and December 1974 the total assets of British banks rose from 36,865 million to 85,204 million — a rise of 48,339 million or 131 percent.’ ‘Printing money’ with a vengeance! (8)

The politics of inflation

Before they got into power, members of the Thatcher-Joseph wing of the Tory Party were happy to look part of this reality in the face. Here is a 1978 view of the Heath years from Rhodes Boyson MP, one of the original English nationalist supporters of Mrs Thatcher. Noting the budget deficit generated by the Heath government and the money supply increases, he commented that, ‘It was this monetary incontinence (sic) which fanned the flames of the 1973-4 inflation…. the true cause of the February 1974 election and the Conservative defeat.'(9)

But Boyson is only looking at half the picture. He blames the Heath government for the increase in the money supply, when in fact most of it was generated by the banks themselves. (10)

Nowadays, not only does the Conservative Party never mention the role of the banks in the great inflation of the 70s, as far as possible they attempt to attribute it to the Labour Government which took office in 1974. Nigel Lawson, for example, writes in his memoir, ‘The annual rate of inflation had risen, seemingly inexorably, from 3 per cent under the Conservative governments of 1951 to 1964, to 4 per cent under the first Wilson administration, to 9 percent under Heath and to 15 percent under the Labour government of 1974 to 1979. By the time Margaret Thatcher became the Prime Minister, the British economy was trapped in the cycle of low growth and high inflation which economists called “stagflation”; and mainstream Keynesianism was intellectully and politically bankrupt of solutions to it.'(11)

Year zero

This is the core of the Tory counter revolutionaries’ view of 1979 as ‘year zero’, preceded by a ghastly, Keynesian, quasi-socialist, inflationary nightmare. But on his own figures, between 1945 and 1970 annual inflation rose from 3 to 4 per cent — one per cent in 25 years, a better record than his monetarily sophisticated, politically correct regime managed in the 1980s, for example. Expressed like this, the unavoidable inference from Lawson’s figures is that things started to go wrong in 1970; and the reader may notice that 1970 was when we got a Conservative Government which, among other things, in the name of ‘freedom’ and ‘competition’, let the bankers off the leash. By using ‘average’ inflation rates in this way Lawson is able to present the Heath years as only ‘averaging’ 9% inflation — concealing the 20% (and rising) which the Labour Government inherited on taking office in February 1974. (12)

So the Labour Party inherited the mess and, once again, began putting the Humpty Dumpty of British capitalism back together again. Though the details of how that was partially accomplished do not concern me here,(13) it is interesting to note that so successful was Chancellor Denis Healey in reigning in the banks once again, that by 1978 monetarist Thatcherite Tory MP Rhodes Boyson wrote that ‘Dennis Healey…. could, with some truth, blame the [inflationary] increase on the monetary policy of the previous [Heath] government’; and concludes his account of inflation in the 1970s by talking of ‘Labour’s monetary restraint’, following the fall of the Heath government.(14)

The first Thatcher government

Coming into office in 1979, the so-called monetarist wing of the Tory Party had two basic beliefs about the economy.(15) The first was that the Public Sector Borrowing Requirement caused high interest rates and ‘crowded out’ private investment.(16) In November 1979 the White Paper, The Government’s Expenditure Plans 1980-81 began with the statement, ‘Public expenditure is at the heart of Britain’s economic difficulties.’ The second central belief was that they had to ‘control the money supply’, in order to control inflation.(17) The problem was: quite what ‘controlling the money supply’ meant in practice, they weren’t too sure.(18) In his memoir Nigel Lawson bemoans ‘so little work in Opposition on the conduct of monetary policy’.(p. 17) In 1979 the Tories knew as much about ‘controlling the money supply’ as the Socialist Workers Party, say, knows about organising a socialist economy.

The City’s agenda

Behind the rhetoric of the politicians, however, there was another economic agenda, and one which was ready to be implemented on day one of the Conservatives’ administration. Unconcerned by the mess created by partial deregulation of the financial sector between 1971 and 1974, the City wanted more of the same — and got it. Between 1979 and 1982 the government:

• abolished exchange controls;
• ended the restrictions on building society lending — starting them off on the road to becoming banks — and thus beginning the great credit explosion of the later 1980s;
• abolished the so-called ‘corset’, the restrictions on bank lending which had been introduced by the previous Labour government;
• abolished the Reserve Assets Ratio which made the banks hold at least 12.5% of their deposits in some specified range of liquid assets;
• and abolished hire-purchase restrictions.(19)

At the top of this City shopping list was the abolition of exchange controls. Among the lobby for their abolition were ‘most of the top people at the Bank of England, especially those responsible for administering exchange controls’ (20), Nigel Lawson — and Mrs Thatcher, who tells us in her memoir (p. 44) that she ‘took greatest personal pleasure in [their] removal.'(21)

The result of the abolition of exchange controls was visible almost immediately: capital hitherto invested in the UK began going abroad. In the Guardian of 21 September, 1981, Victor Keegan noted that ‘Figures published last week by the Bank of England show that pension funds are now investing 25% of their money abroad (compared with almost nothing a few years ago) and there has been no investment at all (net) by unit trusts in the UK since exchange controls were abolished.’ (22) But this dose of ‘freedom’ for the financial sector, what Nigel Lawson calls ‘liberalisation’, made a nonsense of the Thatcher government’s stated desire to ‘control’ the money supply.

As Lawson himself notes in his memoir (p. 72), scrapping exchange controls meant that ‘money aggregates [became] more difficult to predict and control.’ For ‘more difficult’ read impossible. Shortly after this he states, ‘If inflation is to be squeezed, money has to become more difficult to borrow. And in a liberalised system that must mean paying a higher price for it.’ (p. 76)

Lawson conflates money becoming more difficult to borrow with money becoming more expensive to borrow. But having scrapped all the controls over the amount of money the banks could lend, he doesn’t have much choice. The problem for the Tories, qua party of the City, of how to control the money supply without controlling the money suppliers, was solved by scrapping the controls over the banks, giving the money suppliers their heads — and then insisting that they charge very high interest rates on the loans!

But how could a government so apparently intent, first and last, on restoring ‘sound money’, by ‘controlling the money supply’, decide to abolish exchange controls? Nigel Lawson is admirably candid. On p. 41 of his memoirs he tells us that without the abolition of exchange controls, ‘the City would have been hard put to remain a world-class financial centre.’

City interest first, theory second.

What did she know?

How well Mrs Thatcher understood any of this isn’t clear. Having told us in her memoirs how proud she was to have been associated with the abolition of exchange controls, she spends the next hundred pages intermittently complaining about the level of interest rates her government had imposed. It is clear that like the other ‘monetarists’ in her government, Mrs Thatcher didn’t really know much about ‘controlling the money supply’ and seems to have assumed it could be done relatively easily and quickly. When she saw that it couldn’t, and what the consequences were on the domestic economy of the regime of high interest rates, she began looking for a way out.

As Nigel Lawson keeps reminding readers in his memoir, Mrs Thatcher didn’t like what you had to do to get inflation down under a ‘liberalised’ system. The veritable Countess of Soundmoney, Mrs Thatcher was among those who did not accept, as Lawson did, that the only way to ‘control’ the money supply was by using high interest rates to depress the domestic economy. Lawson sneers in his memoirs (p. 77) that ‘there was no more assiduous seeker for gimmicks which would supposedly give us tight money without high interest rates than Margaret Thatcher.’ (Emphasis added.) In fact, he only mentions one such ‘gimmick’, something called Monetary Base Control; viz. instead of trying to influence the demand for money via interest rates, trying to control the supply of money more directly by setting a target for the banks’ reserves with the Bank of England: in other words, by literally trying to control the amount of money the banks could lend.(23)

Thatcher versus the Treasury and the Old Lady

Thanks to the Thatcher and Lawson memoirs, we now can glimpse the struggle between Mrs Thatcher and her advisers, mostly from the Centre for Policy Studies, on the one side, and the Treasury and Bank of England — and their political front-men, like Lawson and Howe — on the other.

In October 1979 Chancellor Geoffrey Howe announced the end of the remaining exchange controls (some had been scrapped in June). The next month the Thatcher government raised interest rates to a minimum 17% where they stayed for eight months. The champagne began to flow in the boardrooms of the banks. This was the City-Treasury orthodoxy, represented by Lawson, the City’s man.(24) Against them were Mrs Thatcher and a group of unofficial advisors — theoretical monetarists such as Brian Griffiths, Gordon Pepper and Alan Walters — who urged the adoption of control of the monetary base.(25)

Mrs Thatcher’s interest in MBC had come through her contact with Alan Walters and with economist Gordon Pepper, one of the leading British monetarist. Pepper ‘had established a private line to Margaret Thatcher when she was Leader of the Opposition…. [and] persuaded her that a given degree of monetary tightness could, through MBC (monetary base control), be secured at an appreciably lower level of interest rates than the UK was experiencing. Given her — by no means unique — detestation of high interest rates, a promise of sufficient monetary tightness to bring down inflation at lower interest rates had an irresistible appeal.'(26) Pepper, who edited monetary bulletins published by the stockbrokers, Greenwells, was one of the first within the City to express concern at the growth of the money supply in the 1970s.(27) Pepper seems to have taken ‘controlling the money supply’ seriously.

But the system wouldn’t have it. Nigel Lawson tells us that The Bank of England ‘deeply disliked the whole idea of MBC’, and he ‘was convinced that such an experiment had a chance of success only if those responsible for its implementation wished to make it a success. Given the Bank’s profound antipathy, it would all too likely have proved the disaster they predicted.'(28) In other words, the Bank was not under political control, and would make MBC fail. And Mrs Thatcher tells us that, ‘the Treasury were not prepared to move to the system of monetary base control which Alan [Walters] favoured and to which I was attracted by [his] clear and persuasive analysis.'(29) (Emphasis added.) Instead, the Thatcherites got the Treasury’s consolation prize: ‘Bank of England and Treasury officials were instructed to put together proposals for changing the methods of monetary control, with a view to moving away from excessive reliance on high interest rates.'(30) (Emphasis added)
‘Action this day’ it wasn’t.

The Bank of England and Treasury proposals on monetary control were published in March 1980 as a so-called ‘green paper’ — a discussion document — which ‘stopped well short of a move towards a monetary base system’.(31) While sterling M3 was to remain the guiding light of policy, changes in methods ‘ consistent with the eventual adoption of a monetary base system’ were also introduced.(32) (Emphasis added.)
‘Consistent with’ and ‘eventual’ — this was looking down a long, foggy road. Mrs Thatcher and the MBC lobby had been repulsed. The attempt to ‘control’ sterling M3, the indicator of ‘the money supply’ chosen by the Treasury and the Bank of England, using high interest rates, would continue to be the government’s policy. Recession and unemployment would reduce inflation.

No pain, no gain.

The thing about theories is…

By the summer of 1980 it had become clear to the Thatcherites that the sterling M3 was not behaving as their neat little theories said it would. But it’s not that Thatcher and Howe had lost touch with the real economic world: Mrs Thatcher tells us that ‘On Weds September 3 [1980] Geoffrey Howe and I met to discuss the monetary position….. the money supply figures had been rising much faster than the target we had set in the Medium Term Financial Strategy at the time of the March budget. It was hard to know how much of this was the result of our removing exchange controls in 1979 and our decision in June to remove the “corset” — a device by which the Bank of England imposed limits on bank lending.'(33) Not only were she and Howe in touch with the problem — their beliefs about the relationship between money and inflation were being falsified — they were in touch with the other, more effective way to control the money supply: stop trying to control borrowing, with high interest rates, and control lending.

Those techniques, unfortunately, went completely against the grain of the ruling Tory group at the time. The ideologies of mainstream British political parties consist of a few over-arching concepts and buzz words which define the legitimate area of operations. For the Thatcherite Tories, freedom is one of the key concepts, and the idea that removing exchange controls and removing the ‘corset’ — both acts increasing freedom, albeit the freedom of the banks — could be a bad thing was thus going to be hard to accept.

‘Holidaying in Switzerland…. Mrs Thatcher met Fritz Leutweilerm, head of the Swiss Central Bank, and the economist Professor Karl Brunner of Rochester University in the US…..[who] both blamed the Bank of England, saying its method of controlling the money supply was all wrong. The answer to controlling inflation was to control the monetary base.'(34) Thus fortified, Mrs Thatcher called a meeting in early September 1980 to discuss MBC again. At that meeting, according to one of its participants, Christopher Johnson, ‘After a memorable debate with academics and City economists on 29 September 1980….. the Bank and Treasury officials joined in rejecting the plan [MBC] as impracticable, to Mrs Thatcher’s disappointment.'(35)

Mrs Thatcher then faced the most awkward of choices. She knew their present policies, the policies of the London financial sector, mediated through her Chancellor, were wrecking the domestic economy. On the other hand, she could not persuade (or force) them to adopt her policy — some people you just can’t ‘hand-bag’ it seems — and thus had to make the best of a bad job. She looked for the get-out clause that would rationalise her defeat. She found hers in ‘Monetary analysts [who] argued that both of these liberalisations had misleadingly bloated the sterling M3 figures.'(36)(Emphasis added.) Reality can be ignored: the figures aren’t real. The real, underlying sterling M3 was alright beneath this misleading, bloating effect.(37)

Just under two months later, on 24 November 1980, Chancellor Howe announced a number of minor economic changes, framed by the explanation that ‘These steps would be consistent with the gradual evolution towards a monetary base system and will help to judge how far such a system will contribute towards our medium-term monetary objectives.'(38) (Emphases added.) ‘Consistent with’ and ‘gradual’ — it’s those words again. In his memoir Nigel Lawson drawls, ‘An experienced Whitehall watcher would have seen that this was in fact the thumbs down for MBC.’ (39)

One more push for MBC

Repulsed again, The Prime Minister and her closest political allies tried again to impose MBC on the system — and hopefully reduce the interest rates which were crippling the British domestic economy (but making a fortune for the banks). They commissioned Professor Jurg Niehans, a Swiss monetarist, recommended by Walters, John Hoskyns and Alfred Sherman of the Centre for Policy Studies, to study the British system and its experience since the Tories took office.

Let’s not hurry past this. The Prime Minister appoints an independent, foreign economist to inspect and evaluate the British Treasury and the Bank of England? In Mrs Thatcher’s account of it, Niehans reported that the high interest rates imposed in the attempt to bring down sterling M3 ‘had caused the pound to rise so high, imposing such pressure on British industry and deepening the recession. The report argued that we should use the monetary base rather than sterling M3 as the main monetary measure and suggested that we should allow it to rise in the first half of 1981. In short, Professor Niehams thought monetary policy was too tight and should quickly be loosened. Alan [Walters] emphatically agreed with him.'(40) (Emphasis added.)

Yet Niehans came and went and nothing changed.(41) (Lawson signals the importance of this episode by omitting it entirely from his memoir.) Mrs Thatcher and Walters tried once again to get MBC off the ground, but, says Lawson, ‘The issue was satisfactorily put to bed with the promise of ‘further studies’ of the US and German systems.'(42)(Emphasis added.)

In other words: the first big interest group Mrs Thatcher took on was the City — and she lost. She learned her lesson and never went up against them again until the battle over the European Monetary System.

The end of monetarism?

On 16 November 1980 the Bank of England finally reduced the Minimum Lending Rate from 14%. This, argues David Smith, was a direct consequence of the notorious speech calling for a ‘Bare knuckle fight’ with the government over economic policy made by the Director General of the CBI, and the Chair of ICI, warning Mrs Thatcher that the recession was so serious his company was about to announce a third quarter loss.(43) This interest rate reduction is now seen as the end of the monetarist experiment, for the monetary figures did not justify the rate cut.

So what had really happened between 1979 to 1981? The conventional view is that the Thatcherite Tory economics team made a mistake. William Keegan can speak for this view. ‘What the Medium Term Financial Strategy had failed to take account of was the crucial importance of the exchange rate…. because the figures [in 1979-81] for the growth of money supply were running well above the targets in Lawson’s MTFS, interest rates were kept high, attracting overseas funds to London, and maintaining the pound at a level where it continued to cause serious damage to industry. Monetary policy was in fact tight, but not according to the MFTS.'(44)(Emphasis added.) This is tacitly conceded by Mrs Thatcher: ‘Before the end of Geoffrey Howe’s Chancellorship the value of the pound against other currencies — the exchange rate — was also being taken into account.'(45) (Emphases added.) In other words, for some — by inference, most — of the Chancellor of the Exchequer’s first term of office, the exchange rate was not only not being given economic priority, it wasn’t even being taken into account.

This is a unique, indeed bizarre event for a country which trades as much of its Gross Domestic Product as Britain. David Smith: ‘Given Britain’s post-war history of currency pressures, it was incredible that it took several years and two Conservative Chancellors before it was admitted that the pound was, after all, more important than domestic monetary targets.'(46)

But Smith is in danger of missing the point a little. Howe and Lawson et al had no target figure for the exchange rate so long as sterling rose. As Lawson himself makes clear in his memoir, they positively welcomed a rising pound. But as they showed in October 1981 when the pound began to fall, suddenly they did have a target figure, and interest rates went back up from 14% to 16%. The reduction granted the previous year at the climax of the complaints about the effects on British industry was immediately cancelled when the value of the pound was threatened.

But was it just a mistake, a bizarre oversight, or acute ideological blindness, as many believe? I don’t think so. Speeches by Lawson and Howe in the years before taking office show that they had already been thinking about this. Something is missing from this picture.

The City versus industry

From 1975 onwards, after inflation, the prospect of North Sea oil revenues was the biggest item on the horizon of the UK economy. There are essentially two economies in the UK. One is the domestic, manufacturing economy and its allied services; the other consists of the City of London and its support services in the south east — and some multi-nationals with bases and plant in the UK. Since before 1900 the British economy has been a protracted struggle between the domestic manufacturing economy and the City.(47)

The City’s dominance in the 1980s could hardly be more obvious. Manufacturing output fell by about 20% and the City boomed. House building plummeted, thousands slept on the streets, and billions were invested in the City’s expansion into dockland. The banks made so much money in the early 1980s that the Tories eventually levied a notional ‘windfall tax’ on them — more than compensated for by tax allowances on bad overseas loans announced in 1983.(48)
Imagine a Britain in which the City declines by 20% and manufacturing is doing so well a ‘windfall profits’ tax has to be levied on it…..

Although this City-industry divide is blindingly obvious once it is pointed out, the conflict between the makers of things and the movers of money has remained politically unspeakable for most of this century.(49)

Rooted in the trade unions, and thus in the domestic manufacturing economy, the Labour Party saw the forthcoming oil revenues, at a minimum, as representing freedom from the constraints of balance of payments deficits generated when previous post-war governments (Macmillan, Wilson, Heath) had tried to expand the domestic, manufacturing economy. (Quite what Labour would have done with the oil revenues had they won the election of 1979 is as unclear to me.) But the financial sector and the Tory Party had some other, definite ideas. Rather than have the oil wealth invested in the UK, in manufacturing or infrastructure developments, the City wanted to use it to recreate the City’s traditional role of financier to the world. (This, incidentally, is the real subtext to the ‘Victorian values’ guff spouted occasionally by Mrs Thatcher.) To achieve this, they first had to get rid of exchange controls, and in 1977 the Bank of England tried (and failed) to persuade the Labour Cabinet to abolish them.(50)

Singing the City’s song

How did City interests work their way through into the thinking of the Tory Party? They were expressed in the Thatcher faction’s obsession with controlling the money supply (and thus, they believed, with controlling inflation, the perennial preoccupation of the banker). By 1977 the Conservative Party’s shadow spokesmen were all beginning to sing a similar song. On 27 August The Times reported shadow cabinet member Leon Brittan stating that ‘the best use the UK could make of the economic benefits of North Sea oil would be to let the pound rise in a genuinely free float’. On 29 October it reported shadow Treasury minister David Howell advocating a ‘strong pound’; and on November 1 it reported shadow Chancellor Geoffrey Howe calling for ‘the relaxation of exchange controls…. [which] would boost overseas investment and increase opportunities to improve Britain’s invisible exports.’ In other words, let the City handle the money and shunt it abroad.(51)

These views were also circulating in the City of London itself. The economist Gordon Pepper, then the monetary expert at the City firm of Greenwell, and as Nigel Lawson tells us, a man with Mrs Thatcher’s ear, edited a Special Monetary Bulletin, published by Greenwells. In the edition of 1 July 1977, ‘The Economic Implications of North Sea Oil’, Pepper concluded that sterling should be allowed to float freely and exchange controls should be relaxed, allowing the oil revenues coming in to be balanced by capital exports going out. He argued thus: if revenues build up, the balance of payments surplus will lead to pressure on the money supply, leading to faster inflation and lower growth. He concluded: ‘If the authorities do not intervene heavily in the foreign markets and resist an appreciation of the pound then North Sea oil will have a beneficial effect on the economy. If…. they continue their present policy of intervention to push the [sterling] rate down, monetary growth will tend to be excessive and will damage growth.’

In one neat little package, concern about monetary growth produces (a) abolition of exchange controls (old money out to balance new oil money in), and (b) an appreciating pound — the two things the City needed.(52)

Helping the domestic economy — by investing abroad!

In a speech in the same month, July 1977, shadow Chancellor Geoffrey Howe suggested that scrapping exchange controls would prevent the pound rising too far and damaging manufacturing.(53) (Howe returned to this theme in his November 1 speech, quoted above, in which he said that ‘Relaxation [of exchange controls] would also prevent the pound from rising artificially high and damaging the competitiveness of our exports.’) The idea that the oil revenues would raise the value of the currency and thus damage manufacturing was taken up in the economics media. On 26 November, 1977, the Economist discussed the so-called ‘Dutch disease’, the experience of the Dutch economy in the early 1970s when gas from the North Sea hit the Dutch economy. The resulting reduction in energy imports caused a trade surplus, and a rise in the value of the guilder. This made Dutch exports more expensive and imports cheaper. This argument was put by Hugh Stephenson in The Times in the same month, again concluding that the ‘Dutch disease’ could be avoided by lifting exchange controls.(54) Eighteen months later the most influential financial journalist of the period, Samuel Brittan, announced in the Financial Times (July 3, 1980) that scrapping exchange controls had become the ‘only serious way of preventing North Sea oil from imposing a contraction in manufacturing…..'(55)

The crucial ‘error’ was the Thatcher government’s decision to use high interest rates to ‘control’ the money supply. For, as Frank Blackaby noted in 1980, even if the government — i.e. the Treasury and the Bank of England — did indeed hope that a substantially increased capital outflow would help to keep the exchange rate down, it did not happen. ‘Far from discouraging capital inflows, the government — pursuing a high interest-rate policy in the interests of its money supply target – has encouraged them.'(56)(Emphasis added.)

Abolishing exchange controls and a government willing to impose record levels of interest rates ‘to control the money supply’ produced what Tom Nairn described as ‘dream conditions for London’s financial apparatus in 1980 and 1981’.(57)

Oil — the excuse

The beauty of the simple-minded ‘monetarism’ which the Thatcher government espoused in 1979 and 1980 was the way it justified putting up and keeping up interest rates until sterling M3 behaved in the way predicted by the theories. Throughout 1980, as sterling M3 refused to fall far enough, the value of the pound appreciated — eventually up to $2.40 — and British manufacturing slumped and collapsed. Oil provided a convenient explanation for that rise in sterling. A headline in the Sunday Times Business News of July 20, 1980, proclaimed ‘How North Sea oil is killing our industry’ (p. 56). This thesis reached some kind of apotheosis the following year in R. J. Forsyth and J.A. Kay’s ‘Oil Revenues and Manufacturing output’, in which ‘[a] contraction of manufacturing output and an increase in the domestic absorption of imported manufactures’ had become ‘the only means by which the British economy can benefit from the North Sea.'(58) (Emphasis added.)

So, in the end, the financial experts concluded, there was no alternative. Oil was bound to push up the value of sterling because oil-backed currencies are attractive to foreign capital. The rise in the value of sterling between 1979 and 1981, which destroyed a quarter of British manufacturing industry, was merely the mechanism through which the balance of trade between this country and the rest of the world corrected itself. When we had to import large quantities of oil, a large proportion of manufacturing output was needed to pay for it. Importing no oil, we need less manufacturing output.(59) Had we attempted to maintain the pre-oil volumes of manufacturing output, our economy would have run a huge trade surplus and that would have pushed up the value of sterling even further. In 1978, we learn from Frank Blackaby, ‘a senior Treasury official laconically remarked, “Perhaps we can either have North Sea oil or manufacturing industry, but not both.” ‘ (60)

And so, in this best of all possible worlds, far from being a bad thing, the massive flight of capital from this country between ’79 and ’83 was a good thing, helping to balance the capital inflows from the North Sea, preventing an even bigger trade surplus and the destruction of more British manufacturing! It was this situation which led former Treasury official Leo Pliatsky, to write, intending no irony, that, ‘It is understandable that people are frustrated that more primitive (sic) countries which produce oil have used the revenues from it to finance industrial and social development while in Britain both have been cut back since the North Sea oil came on stream’.(61)

Indeed.

The theory follows the money

As always, economic theory followed the money. Frank Blackaby noted in 1980 that ‘just at the time when oil output was building up, there was a major swing in fashion in thinking about the exchange rate. Up to 1977, the doctrine had been to use the exchange rate to preserve competitiveness — indeed, this principle was written into the first letter of intent at the time of the 1976 IMF loan. The doctrine was then changed to assert that (a) there should be no exchange-rate policy, and (b) that a high exchange rate was a good thing.’ (Emphasis added.) Blackaby called this ‘one of those unfortunate accidents which have so bedevilled British economic policy since the war’.(62)(Emphases added.)

In the same year, coming from a similar liberal-Keynesian position, the Guardian‘s Victor Keegan asked, ‘What happened to the oil revenues which, five years ago, led people to expect the dawning of a new age of prosperity? Most of it, in the supreme irony of economic history, has gone to pay out unemployment to those who wouldn’t have lost their jobs if we hadn’t discovered it in the first place.'(63) (Emphasis added.)

But of course ‘the doctrine’ on exchange rate policy changed in 1977 with the dawning of oil revenues. These ‘ironies’ and ‘accidents’ always work in the same direction — in the interests of the City, not the manufacturing economy — and have done so since the restoration of the gold standard. Nothing was more certain, for example, than that Britain would join the ERM at too high a sterling value for the manufacturing sector. ‘Twas ever thus.

The London financial elite had always wanted a high sterling exchange rate: it attracts other peoples’ money to London (they make money handling money), and it usually forces up domestic interest rates — ‘to maintain the value of the pound’ — so their domestic loans pay more. It’s a wonderful system — and yes, it really is the racket it appears.
The theory follows the money. That’s all there is to it. There has never been a clearer illustration of economics as ideology.(64)

The big rip-off

In the Thatcher period the City was given its head. Exchange controls were abolished, interest rates jacked up and almost all of the remaining financial controls were scrapped. Accompanying this was the elaborate charade of ‘self regulation’ — i.e. non regulation — the ultimate expression of the City’s independence from the rest of British civil society. The result was the ‘loadsamoney’ culture in the 1980s, and the fantasies being put out about by the City and the Treasury that Britain was on some natural evolutionary path towards becoming a post-manufacturing or post-industrial ‘service economy’.(65) It didn’t matter that Britain was making fewer and fewer products, they would be replaced by more and more ‘financial products’ (a term which came into use in the mid 1980s, as the language also followed the money). This was accompanied by the expansion of the City’s cultural hegemony out from the financial pages of the non-tabloid newspapers into the mass media, as all-purpose, self-serving, ‘experts’ on everything.

The Reagan/Thatcher period was marked by colossal, officially sanctioned rip-offs of the savings of the citizen. In the US this was done through the looting of local banks, the so-called Savings and Loans, and the use of taxes to subsidise the expanding arms industries. In Britain, the money has been made in three main ways: first, through the consequences of privatisation — the conversion of the taxes of the many to the property of the few; second, through the privatisation process, sell-offs organised by City merchant banks, making (it is reliably alleged) hundreds of millions in fees — fees the government refuses to disclose on grounds of ‘commercial confidentiality’;(66) thirdly, as consultants and experts, ‘advising’ the public sector. This parasitical activity on the remnants of the British state reached an absurd climax with the news in March this year that the Department of Social Security paid out more than 100 million in management fees in 1993 — while only giving 97 million in grants to the poor.(67)

But is this what she intended?

What now looks increasingly odd to me is that it should have been has been Mrs Thatcher — the woman who grew up in the corner shop, the apparent champion of the small business and the entrepreneur, the nearest thing we’ve had since the war to a serious poujadist figure, who should oversee the decimation of British manufacturing — small business no less than medium and large — by the transnational interests of the City of London. Was it simply that, like most other people, she never saw that there was some disaggregated vision of Britain? Never saw that there was conflict between industry and the City? Did she simply share the ‘assumption that the interests of the City were identical to those of the country’?(68) That would be the answer of most people, I think. I am no longer so sure. For every so often there are glimpses of a kind of shadow Thatcher, generally concealed from the public gaze.

• In their biography Wapshot and Brock note of Mrs Thatcher in the 1960s that ‘She showed a noticeable bias against the City in favour of business interests — a not unusual rhetorical stance among many leading Conservatives of the time.'(69)
• In 1981 an article in the Guardian headed ‘Are the banks to blame?’, included this: ‘At a pre-budget lunch with the Committee of London Clearing Bankers, top executives were unable to get a word in, so persistently did she lecture them on their shortcomings….. Mrs Thatcher’s attitude is usually traced to her displeasure at the role of the banks in the sudden expansion of lending last year when “corset” controls were removed, undermining money supply policy…. the uncannily similar background of an explosion of bank lending to the personal sector which is already being likened by some City analysts to the Barber boom of the early 1970s’.(70)
• In 1988, the Sunday Telegraph carrried a piece headed ‘Honours snub to City is resented’, which began, ‘There is growing unease in the City of London at an apparent snub meted out in the New Year’s Honours list in the year of “Big Bang”….bank bench MPs with City backgrounds are upset at what they see as a calculated example of Mrs Thatcher’s dislike for the money markets and the businessmen who work in them…’ An unidentified Tory MP was quoted as saying that ‘The Prime Minister has long been disenchanted with the City. She feels that it is politically inept and that it could have been much more helpful over the government’s BP share rescue operation which, after all, bailed the brokers out. Mrs Thatcher is also known to disapprove of the high salaries some City businessmen have been paid since Big Bang.'(71)
• In his memoir Nigel Lawson comments on p. 93 that ‘Margaret had no love for the banks’.
• And in his fascinating account of the rise of Thatcherism, written from a seat inside the Conservative Central Office, John Ranelagh comments (p. 245) that Mrs Thatcher ‘was not sanguine about…. the shift in Britain from manufacturing to service industries.’

Perhaps it was just politics. The Conservative Party is a coalition of interests and beliefs. The fragments above suggest to me that Thatcher wasn’t just a simple-minded English nationalist who bought the City of London’s ‘line’. More that the English nationalist Thatcher was also a practical politician who, having been defeated by the Treasury-Bank of England-City axis in 1980/81, accepted the financial sector (and economic policy) as off-limits. It was only when the issue of the UK joining the European Monetary System (EMS), as a step towards European Monetary Union, came to a head that the nationalist in her reappeared. The result was that ‘for the first time, Margaret Thatcher appeared to be colliding with the City, and thus with some of the people whom she had “made” during the previous decade…..[she] was now acting against joining the EMS which the City, anxious to maintain its centrality as a dispenser of services, wanted to join…… interests which she did a great deal to create and to sustain were finding her not so useful any more.'(72)

And so Maggie flunked it

Mrs Thatcher was of the generation who lived through the Second World War,(73) and it was her ally, Nicholas Ridley, who said in 1990 that the EMS was a ‘German racket’. (He might have added, just like the US racket [the dollar area] and the British racket [the sterling area] before it.) So she made her famous speech at Bruges opposing the movement towards European integration — but had signed the Single European Act already; lost from her cabinet, in rapid succession, Nigel Lawson and Geoffrey Howe, the original political architects of City hegemony; and finally resigned.(74)

This ending to her career could have been avoided. She could have faced down the Cabinet, sacked a few, openly and publicly rejected the ERM, and appealed to the nationalist sentiments in the English — and I mean English, not British — voter. It might have worked, who can say? It’s never actually been tried by anyone in such a leadership position. At any rate, she could have gone down fighting. Instead, she gave in and quit — just as she had done in 198081 over Monetary Base Control.

Notes

1. A Single Mind, MacMillan, 1989.
2. This distinction is all the more interesting for in Joseph’s case, as Halcrow’s biography is honest enough to point out, Joseph’s conversion to monetarism was partly a reflection of the experience of the Joseph family firm, Bovis, during the secondary banking boom of 1971–3. Bovis bought a ‘fringe’ bank which had duly gone bust in the slump which followed the boom in late 1973. ‘There was a clear link in Joseph’s eyes between the rashness of Bovis’s attempt to cash in on secondary banking and the rashness of the Heath government’s dash for growth.’ Halcrow p. 57.
3. Campbell, p. 526.
4. For details, see Moran.
5. Keegan 1985, pp. 556.
6. Heller and Willatt, p. 102.
7. Teresa Gorman MP, now one of the ‘radical right’ group of Tory MPs who supported Mrs Thatcher, first entered politics in 1974, standing as a business-sponsored independent, anti-Conservative candidate in protest against the Heath government’s 20% inflation. Gorman, pp. 1623.
8. Jay, p. 148.
   Heller and Willatt note on p. 60: ‘the expansion of the money supply by 60% per cent in two years, an unprecedented surge which made hyper-inflation inevitable.’On the same subject Moran says on p. 56: ‘In the two years following the introduction of CCC, the most commonly used measure of the money supply (conventionally called M3) rose at an annual average rate of 26%….. in no year since records began had the growth in the money supply reached double figures’.
9. Boyson, 1978, p. 57 This is one of the key texts of Thatcherism in my view, because Boyson, like Mrs Thatcher, saw and expressed things simply and unselfconsciously.
10. Moran p. 70.
11. Lawson p. 29.
12. This period, 1974-79, contained some of the psy-war assaults on the Labour government run by various ad hoc alliances of spooks and ex spooks with finance from the City — and the 1976 IMF loan episode, in large part the consequence of what turned out to be ‘errors’ by the Treasury. On the ‘errors’ see Healey pp. 4012, William Keegan, ‘The farce that was ’76 in the Observer, 21 March, 1982, and Victor Keegan and Richard Norton-Taylor ‘Cuts forced by IMF “unnecessary” ‘ in the Guardian, March 18, 1982. The press stories were based on the revelations of former Treasury official Leo Pliatsky. In his memoir Healey wrote: ‘I cannot help suspecting that the Treasury officials deliberately overstated public spending in order to put pressure on governments which were reluctant to cut it.’ Healey p. 402.
13. See Douglas Jay, ch. 18 for example.
14. Boyson pp. 589. Healey notes on p. 434 that while he ‘never met a private or central banker who believed the monetarist mumbo-jumbo….. no banker could afford to ignore monetarism as long as the markets took it seriously.’ To ‘satisfy the markets’ therefore, he ‘began to publish the monetary forecasts [the Bank of England] had always made in private, and then described them as targets’.William Keegan points out that ‘a table published in the 1982 Medium Term Financial Strategy showed that monetary growth under four years of the ”inflationary” Labour Government had averaged 10% (end 1974 to end 1978), whereas from end 1978 to end 1981, the average rate of growth had been 15%.’ Keegan 1989, p. 88.

    And so, as we are constantly told by the British left, monetarism arrived under Labour. Well, sort of. It depends what is meant by monetarism. All economies, even command economies, have to ‘control the money supply’ to some extent. Why should a Labour chancellor be presumed to be indifferent to the volume of credit and money in the economy?

15. Lawson, pp. 667, quotes a paragraph from a 1978 article of his on these beliefs.
16. This supposed relationship between the size of the PSBR and interest rates has been comprehensively falsified. As this was being written in December 1993 the PSBR was around 50 billion and interest rates were around 6%.
17. As an undergraduate in the early 1970s I did a subsidiary course in economics. One of the topics we did was the quantity theory of money — and why it was a joke. It would be hard to exaggerate the contempt in which such beliefs were held by orthodox economists of the period.
18. ‘Although the Tories in opposition spent a lot of time on drawing up lists of possible cuts in public expenditure, and although they agonized over the perennial no-man’s-land topic of trade union reform, monetary policy received little consideration’. Keegan 1985, pp. 1245. See also pp. 137-9 for a discussion of this.
19. These measures are proudly listed by Nigel Lawson in his memoir on p. 626.
20. Lawson p. 39.
21. My sister keeps reminding me that Mrs Thatcher was married to a director of an oil company and must have been getting at last some of her economic ideas from him.
22. Guardian, 2 September, 1983, ‘UK’s overseas assets jump to 42.4 billion’. These figures are a tribute to the efficacy of exchange controls.
23. On MBC, for example, see the discussion in Llewelyn (ed), pp 56-60. Lawson pp. 80/81 for his reasons for rejecting it. Milton Friedman, the guru of monetarism, commented that ‘Direct control of the monetary base is an alternative to fiscal policy and interest rates as a means of controlling monetary growth.’ Cited in Smith p. 95.
24. On line five of the first page of chapter one of his memoir, Lawson tells us that his father was ‘the proprietor of a small but successful firm in the City of London’. Lawson was the quintessential ‘City man’.
25. Thatcher pp. 133/4.
26. Lawson pp. 79/80.
27. Keegan 1985 p. 41 Throughout 1981 and 1982 there were rumours that Pepper would be the next Governor of the Bank of England. See, for example, the half page devoted to his views in Guardian 6 November, 1981, where he is described as ‘a potential governor of the Bank of England’.
28. Lawson pp. 80/81 ‘The idea [of MBC] was always repugnant to the Bank of England — which takes its primary function of being “lender of last resort”, to the banking system more seriously than the achievement of any quantitative target.’ (Emphasis added.) Keegan 1989, p. 69.
29. Thatcher pp. 133/4.
30. Smith p. 94.
31. Smith p. 95.
32. Ibid.
33. Thatcher p. 125.
34. Keegan 1985, p. 153. I rather doubt this ‘holidaying’ story. More likely she was at the annual gathering of the Mount Pelerin Society, worshipping at the shrine of Hayek.
35. Johnson p. 34.
36. Thatcher p. 125.
37. This is as classic a case of psychological denial as you are ever likely to get. Mrs Thatcher represents the pre-Freudian, pre-war world. This was undoubtedly part of her appeal.
38. Lawson p. 85.
39. Ibid.
40. Thatcher pp. 133-4 In June that year Niehans repeated at the LSE the seminar he had given in private in February. See Guardian, June 27, 1981. On the Niehans report see also Keegan 1985 p. 160.
41. The Economics Editor of the Sunday Times commented on 14 June, 1981, that ‘There will be no further step towards monetary base control…’I’d better make it clear that my discussion of MBC isn’t meant to suggest that I think such a technique alone would have worked. The attempt to control something as complex as inflation in the economy of a modern industrialised society with what Edward Heath called ‘one club’ is simply idiotic — or masks something else.
42. Lawson p. 480.
43. Smith p 98.
44. Keegan 1989 p. 71.
45. Thatcher pp. 688/9.
46. Smith p. 154.
47. There is now a large literature on this. There is a discussion of that literature in Niall Ferguson’s recent review essay, ‘Bankers: Beyond Conspiracy Theory’, in Twentieth Century British History, vol 4, 1993. The exposition which first struck me was Frank Longstreth’s essay ‘The City, Industry and the State’, in State and Economy in Contemporary Capitalism, ed. Colin Crouch, London 1979.
48. See ‘Banks to get tax relief on bad overseas loans’ in the Guardian, 21 January, 1983.
49. Just how unspeakable can be seen by the way otherwise intelligent people reach for euphemism ‘service sector’ when the subject looms. Former Conservative Cabinet member Jim Prior, who hated Thatcherism and almost all its works, is willing to write that the Thatcher Treasury team’s ‘attitude to manufacturing industry bordered on the contemptuous’, but then uses the euphemism of ‘service economy’ for the City. (Keegan 1989 p. 63) Even former Cabinet Minister and founder member of the Thatcherite tendency, the late Nicholas Ridley uses it. Blunt enough to write that ‘It isn’t vital, as socialists seem to think, that we have a large manufacturing sector’, he too lapses into ‘service economy’ when he means the City. Ridley, p. 71.
50. Healey p. 435.
51. The general tenor of the oil debate can be seen at a glance in The Times Index for 1977, especially p. 375, under Economic situation and policy.
52. Pepper assumed exchange control abolition would see capital going out. It doesn’t seem to have occurred to him that hot money would pour into London attracted by the high interest rates produced by the Thatcherites’ desire to ‘control’ sterling M3. Pepper didn’t factor in high interest rates.
53. Quoted in Riddell p. 34.
54. Hugh Stephenson, 7 November, 1977. Entirely coincidentally, of course, this was the period when the Bank of England was trying to get the Labour government to scrap exchange controls.
55. Brittan’s piece was headed, ‘Deindustrialisation is good for the UK’. The same view was expressed by Roy Peters in ‘Overseas Portfolio Investment — Developments Since the Abolition of Exchange Controls’, in the NatWest Quarterly Review, May 1981: ‘It may be that the only way to protect manufacturing industry in the short term is to ensure that there are sufficient outflows on the capital account to stop sterling rising further.’
56. Frank Blackaby, ‘Exchange-rate Policy and Economic Strategy’ in Three Banks Review, June 1980.
57. Nairn p. 392.
58. Fiscal Studies, July 1981.
59. Hamish MacRae in the Guardian, October 13, 1981: ‘As the energy sector grows, something has to shrink.’
60. What he really meant was, ‘From manufacturing, oil and the City, you could have two of the three.’ Except it would never occur to him to even think of not having the City of London — or having a diminished City.
61. Pliatsky p. 194.
62. Blackaby op cit.
63. Victor Keegan, Guardian, 16 May, 1983.
64. To some commentators from outside the UK, it all looked simple enough. In 1981 the Norwegian economist Oystein Noreng wrote that the Tories’ monetarism could be seen ‘as a deliberate policy of keeping the petroleum revenues outside the UK domestic economic circuit and preventing them from benefitting UK manufacturers in the form of increasing access to capital’. ‘Petroleum Revenues and Industrial Income’, Oystein Noreng, in Oil or Industry, eds. Terry Barker and Vladimir Brailovsky, Academic Press, London 1981, p. 232. Which was, more or less, precisely what Gordon Pepper had recommended in 1978, quoted above, though Pepper framed it in terms of keeping the revenues from inflating the money supply.
65. Lawson appears to believe that as oil revenues decline, manufacturing, wrecked in the 1980s, will spontaneously regenerate itself! See Lawson pp. 195/6.
66. What did privatising a public utility amount to? Write, print and distribute a brochure; print a lot of application forms; send them out; collate the names and addresses of the buyers; collect X million pounds. Something I missed out? I think Hull City Council’s Housing Benefit Office could do it. One of the great rip-offs of the 20th century.
67. Observer, 27 March, 1994, ‘City Advice cost DSS 100 million’.
68. Ranelagh, p. 261.
69. Wapshot and Brock p. 80.
70. Guardian, 16 September, 1981. There is an echo of this on p. 125 of her memoirs, where she describes how, in 1980, she discussed with Chancellor Geoffrey Howe, whether the unwanted rise of sterling M3 was attributable directly to her government’s policies of abolishing exchange control and the ‘corset’.
71. Sunday Telegraph, 3 January, 1988.
72. Ranelagh p. 260.
73. Not that she did anything. The great patriot actually spent the war in school and then, in 1943, she went to university.
74. On April 10, 1990, A.V.R. Smith, the Western Goals Institute’s Executive Director referred to a ‘conspiracy to undermine the Prime Minister….. the determination of the financial oligarchy to STOP THATCHER AT ALL COSTS.’ (Emphasis in original) This comment was in a letter which accompanied a Western Goals’s Viewpoint paper, Hit-job on Margaret Thatcher, which traced Mrs Thatcher’s troubles to the 1989 Bilderberg meeting in Spain and her refusal to endorse the plans for an independent European Central Bank.Western Goals, now defunct, were of some interest as the bearers in this country of American conspiracy theories about the trans-national elite groups like Bilderberg and the international banks. Certainly there was a conflict between Mrs Thatcher, the nationalist, and the trans-national, globalising forces attempting, through the idea of European unity and the mechanism of the independent European bank, to impose on the EC members the hegemony of finance re-established in Britain in the 1980s. But Western Goals were simply wrong to see this directly linked to groups like the Bilderbergers and the Trilateralists (and others), as if such groups functioned as executive committees of trans-national capitalism. There is no evidence that this is the case. They are more policy-forming, agenda-setting and concensus-seeking. In the end Mrs Thatcher was removed by her Conservative colleagues who feared that she was going to lose them the election.

    That Bilderberg story, I seem to remember, started in Spotlight in the United States.

Books cited

NB All books published in London unless otherwise stated.

• Boyson, Rhodes — Centre Forward: A Radical Conservative Programme, Temple Smith, 1978.
• Campbell, John — Edward Heath, Cape 1993.
• Gorman, Teresa — The Bastards, Pan, 1993.
• Heller, Robert and Willatt, Norris — Can You Trust Your Bank?, Weidenfeld and Nicolson, 1977.
• Halcrow, Morrison — Keith Joseph: A Single Mind, Macmillan, 1989.
• Healey, Denis — The Time of My Life, Michael Joseph 1989.
• Jay, Douglas — Sterling: a plea for moderation, Sidgwick and Jackson, 1985.
• Johnson, Christopher — The Economy Under Mrs Thatcher 1979–90, Penguin, Harmondsworth, 1991.
• Keegan, William — Mrs Thatcher’s Economic Experiment, Penguin, Harmondsworth, 1985.
• Keegan, William — Mr Lawson’s Gamble, Hodder and Stoughton, 1989.
• Lawson, Nigel — The View From No. 11, Corgi, 1992.
• Moran, Michael — The Politics of Banking, MacMillan, 1986.
• Llewelyn, David T. (ed.) — The Framework of UK Monetary Policy, Heinemann, 1982.
• Nairn, Tom — The Break-up of Britain, Verso, 1981
• Pliatsky, Leo — Getting and Spending, Blackwell, Oxford, 1982.
• Ranelagh, John — Thatcher’s People, Fontana, 1991.
• Riddell, Peter, — The Thatcher Government, Martin Robertson, 1983.
• Ridley, Nicholas, — My Style of Government, Hutchinson, 1991.
• Smith, David — The Rise and Fall of Monetarism, Penguin, Harmondsworth, 1987.
• Thatcher, Margaret — The Downing Street Years, HarperCollins, 1993.
• Wapshott, Nicholas and Brock, George — Thatcher, Macdonald, 1983.