The Economic Wisdom of Nigel Lawson

Ryan BourneFormer UK Conservative MPNigel Lawson passed away this week. As Margaret Thatcher ’s longest‐​serving Chancellor of the Exchequer (1983–1989), Lawson’s legacy on economics is a complex one. While his policies in the late 1980s led to a boom and bust cycle, exacerbated by the mistaken decision to enter the European exchange rate mechanism, his overall impact was positively transformative, steering the country towards a smaller government, free ‐​market economic policy.Lawson ’s ingenuity came to the fore in opposition, when he brokered an amendment with Labour rebels to the 1977 Finance Act. This ensured that income tax thresholds would be uprated by inflation as the default each year — creating a new hurdle to prevent governments from sneakily taxing households when inflation was high.His early tenure in the Thatcher government saw Lawson as a driving force behind the abolition of exchange controls. As energy secretary, he then masterminded the stockpiling of coal. This strategic move empowered Thatcher ’s government to confront the militant trade union in that industry, allowing the country to pursue labor market reforms. Impressively, Lawson also laid the groundwork for the privatization of nationalized industries such as British Gas, British Airways, and British Telecom.As Chancellor, Lawson oversaw a growing UK economy that caught up with its European counterparts. The combination of strong growth and restrained...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs