Seven years in the madhouse. A moody, irascible Shetlander or a faithful friend? Malcolm Rifkind on the two faces of Norman Lamont and continuing civil war in the Tory party

In Office: The Autobiography of Norman Lamont

Norman Lamont <em>Little, Brown, 567pp, £20</em>

I

Norman Lamont opens his memoirs with a splendid confession. He informs his readers that the austere surroundings of the Treasury, with its uncarpeted floors and wide corridors, "always used to remind me of a Soviet psychiatric hospital". For those of us who were ministers from spending departments and who had to negotiate our budgets with successive chief secretaries, it was not the floors and the corridors that often reminded us of a madhouse but the behaviour of the inmates themselves.

With that uncharitable comment may I now go on to make an even more controversial judgement. Norman Lamont was a very good chancellor of the exchequer and, probably, among the best qualified at the beginning of his tenure. As he reminds us, he was the only person ever to have held the three offices of financial secretary, chief secretary and chancellor, and he spent seven consecutive years at the Treasury. He was bold, consistent and innovative with a passion for radical reform.

Why, then, did he also become the most unpopular politician of the century? He records how, visiting his son's school just after he had been sacked, a young boy pointed and said to his mother: "It's that man who ruined the country." The verdict was unfair but was widely held.

In part, Lamont's problem was that nobody else expected him to become chancellor. Before his appointment, in 1990, he had been only briefly in the cabinet and had little reputation with the public as a whole; it was assumed that John Major had appointed him as a reward for his role as campaign manager in his successful bid to become prime minister.

This lack of a prior public reputation became combined with a difficult public personality. He is not a very good politician; so much so that he might take this remark as a compliment. He can be moody and irascible in public as well as in private; he had a tendency to walk out of meetings that were not going his way; he does not suffer fools gladly; he has all the pessimism of the moody Shetlander that he is. Yet those of us who have had the privilege of working with him know that he can be charming and witty, a delightful raconteur and a faithful friend. He was also, often, his own worst enemy. He confesses, in his book, "the awkward truth is that I enjoyed a little too much being mischievous".

In Office is remarkably honest: the author proud of his achievements but also very candid about his failures. There is no self-pity, and while he is very critical of John Major's premiership he is warm and generous in some of his tributes to his former boss. There is, however, one revealing stylistic tendency. When he is being complimentary to John Major it is "John", but when he is being critical "John" becomes "Major". The latter, I regret to report, greatly outnumber the former.

Much of the narrative is concerned with the events of Black Wednesday, when Britain was forced out of the ERM. Lamont makes no secret of his lack of grief, although the "singing in the bath" story is, sadly, a myth. I suspect that another myth is the claim that billions of pounds of our reserves were lost that day because the prime minister refused to see his chancellor for a couple of hours, preferring to chat instead with some of his backbenchers. I am not privy to what actually happened that day (I was in a swimming pool in the south of France when my private secretary told me interest rates had gone up to 15 per cent), but my guess is that the cock-up is a more likely explanation than conspiracy.

In one respect, Norman Lamont is very unfair. He complains that precious hours were lost because the prime minister insisted on a collective discussion including Michael Heseltine, Kenneth Clarke and Douglas Hurd before the suspension of our membership of the ERM could be announced. But the most crucial decision of the Major years could not have been taken by just the prime minister and the chancellor. Indeed, later in the book, one of the author's complaints against John Major is that "ideas were often floated . . . without adequate collective consideration". He can't have it both ways.

Europe, in one form or another, dominates the book and has become the central theme of Norman Lamont's political life. Although he has become a firm Eurosceptic and I remain a supporter of Britain's role in the European Union, I prefer Lamont's judgement on the single currency to that of Kenneth Clarke. Lamont rightly says that it is "the most important constitutional issue to face Britain since it first joined the Community in 1973", and that ultimately the euro "would lead to the creation of a European government and state". I have never understood why Ken Clarke maintains that the single currency is simply an economic reform without serious constitutional implications for Britain's sovereignty. You cannot abolish your national currency and allow major economic decisions to be taken collectively by majority vote without that seriously eroding your country's independence.

But if I am with Lamont on that I am profoundly against him in his attack on Major's "wait and see" policy between 1995 and 1997. He writes that "it is difficult to see why Major was so determined in trying to keep his options open on the single currency unless he really did think that a Conservative government needed to join". It is really not difficult at all.

If a decision had been necessary in the national interest at the time, a decision would have been taken and I have no doubt that it would have been to stay out of the single currency for the foreseeable future. But a decision was not necessary then and, indeed, remains unnecessary now, two years later, which is why Tony Blair hasn't taken one and has kept his party united and the country quiet.

The only reason for deciding to stay out of the euro in 1995 would have been a political one, in order to help us unite the party and win the election. Lamont is being uncharacteristically naive. If John Major had forced a decision in 1995 his deputy prime minister and his chancellor would have resigned, and up to 50 Tory MPs would have agreed with them. The government would have become a minority administration and would have collapsed within days. One can say, in retrospect, that the result of the 1997 election was not much better but the scale of the defeat was not expected by anyone at that time.

Lamont's central charge against Major's government is that we were in office but not in power, a remark he made in his speech to the Commons after he had been sacked. In so far as the accusation is justified it has only a little to do with the then prime minister's personality. The central reasons were that John Major never had the majority enjoyed by Margaret Thatcher during her years in power and he was faced, on his own back benches, with a substantial group of hardline Eurosceptics who were quite willing to see their party destroyed if it was necessary to advance their beliefs. Some of them still are.

Sir Malcolm Rifkind was foreign secretary, 1995-97