On catching up with Norman Lamont at a recent dinner, the New Statesman was keen to hear his thoughts about the latest recession — not least because he was chancellor in John Major’s government during the recession of the early Nineties.
Back at the end of 1990, it fell to Lamont to tell us that the UK was heading into a recession — not with statistics and economic jargon but with the simple sentence: “I prefer the common-sense view: is business really rough, is that a recession? And business, I know, is pretty rough for people at the moment.”
Fast-forward 20 years, and there are signs that the UK is now emerging from another recession, sparked this time not by spiralling inflation, but the worst banking crisis since the Thirties.
That, according to Lamont, was down to what he calls “a climate of complacency and excessive risk-taking”, in both the US and the UK.
But Lamont, who recently defended Gordon Brown’s interview with Piers Morgan in a diary piece for the NS, also argued that Brown should have listened to the economists who argue that bust follows boom as sure as night follows day.
“I remember Nigel Lawson, when he was chancellor of the Exchequer, in the Mansion House uttering the words, ‘Not even a Conservative government can abolish the cycle’,” Lamont told us last week, “and that is something that Brown should have remembered.”
Lamont should know. The recession that he inherited when he entered No 11 in 1990 followed several years of prosperity in the late Eighties that became known as “the Lawson Boom”. Sadly, Yazz and the Plastic Population’s number-one hit of 1988, “The Only Way Is Up”, proved equally overexuberant.