In the News
The former Chancellor of the Exchequer, Nigel Lawson has died aged 91. He was undoubtedly one of the most significant ministers to serve under Margaret Thatcher between the years 1981 to 1989 before falling our with her over the issue of UK membership of the European Exchange Rate Mechanism.
Nigel Lawson was Chancellor of the Exchequer in the UK from 1983 to 1989. During his time in office, he implemented a number of key economic policies, including:
- Tax cuts: Lawson cut taxes across the board, including income tax, corporation tax, and capital gains tax. He argued that these cuts would stimulate the economy and encourage investment. The most significant tax cut was a reduction in the top rate of income tax from 60% to 40% in 1987.
- Monetarism: Lawson was a strong believer in monetarism, which is the belief that the government should control the money supply in order to control inflation. He used interest rates to control the money supply, and he was often willing to raise interest rates sharply in order to keep inflation in check.
- Privatization: Lawson was also a strong supporter of privatization, which is the sale of state-owned assets to private companies. He argued that privatization would make the economy more efficient and would raise money for the government.
- Deregulation: Lawson also deregulated the economy, which meant reducing the amount of government regulation on businesses. He argued that deregulation would make the economy more competitive and would encourage investment.
Lawson's economic policies were controversial, but they had a significant impact on the UK economy. His tax cuts and deregulation helped to create a more prosperous economy, but his use of high interest rates to control inflation also led to a recession in the early 1990s.
Privatisations under Nigel Lawson
The following UK businesses were privatized when Nigel Lawson was Chancellor of the Exchequer:
- British Aerospace (1981)
- British Telecom (1984)
- British Gas (1986)
- Rolls-Royce (1987)
- British Airways (1987)
- Scottish Power (1991)
- National Power (1991)
- Regional Electricity Companies (1990–1991)
- Water Companies (1989–1990)
These privatizations were part of a wider programme of economic liberalization that was implemented by the Conservative government of Margaret Thatcher. The government argued that privatization would make these businesses more efficient and would raise money for the government. The privatizations were also popular with many voters, who saw them as a way to reduce the size of the state.
However, the privatizations were not without their critics. Some argued that they led to higher prices for consumers and that they benefited the wealthy at the expense of the poor. Others argued that they led to a decline in the quality of services provided by these businesses.
Nigel Lawson resigned as Chancellor of the Exchequer in 1989 after a series of disagreements with Prime Minister Margaret Thatcher. The main issue was Thatcher's decision to re-employ her economic adviser, Alan Walters, whom Lawson had opposed. Lawson felt that Walters was undermining his authority and that his policies were not in the best interests of the British economy.
Lawson's resignation was a major blow to Thatcher's government and helped to precipitate her own downfall a year later. It also marked the end of an era of economic policy-making in Britain that had been dominated by monetarism.