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8 March 2010

A “nightmare“ experience?

The Tories' economic adviser on the Thatcher years.

By Daniel Trilling

Sir Alan Budd, an economic adviser to the Conservatives, warns (as my colleague George Eaton has pointed out) that an incoming Tory government would have to raise taxes, despite the party’s attempts to reassure potential voters otherwise.

As luck would have it, Budd pops up in an episode from Adam Curtis’s 1992 documentary series Pandora’s Box that explores the influence of economic ideas on British politics. Budd reflects on the Thatcher government’s dalliance with monetarism in the early 1980s, a policy that led to record unemployment figures and the devastation of Britain’s industrial centres, many of which have never recovered:

CURTIS: For some economists who were involved in this story, there is a further question: were their theories used to disguise political policies that would have otherwise been very difficult to implement in Britain?

BUDD: The nightmare I sometimes have, about this whole experience, runs as follows. I was involved in making a number of proposals which were partly at least adopted by the government and put in play by the government. Now, my worry is . . . that there may have been people making the actual policy decisions . . . who never believed for a moment that this was the correct way to bring down inflation.

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They did, however, see that it would be a very, very good way to raise unemployment, and raising unemployment was an extremely desirable way of reducing the strength of the working classes — if you like, that what was engineered there in Marxist terms was a crisis of capitalism which re-created a reserve army of labour and has allowed the capitalists to make high profits ever since.

Now again, I would not say I believe that story, but when I really worry about all this I worry whether that indeed was really what was going on.

You can see that Budd is very cautious about expressing his own views — but you might wonder, perhaps, how they square with a shadow chancellor who promises to be “tougher than Thatcher“, or with the recent New Statesman/ComRes poll in which 34 per cent of Tory parliamentary candidates named Margaret Thatcher as their political hero.

The episode of Pandora’s Box is available to view here in full, along with a thoughtful blog post by Curtis himself.