Bernard Ingham: Experts still economical with their common sense

I am moved to regard all their works with a rich dose of scepticism, thanks to national and international economists admitting they were too pessimistic about the effect of Brexit, and also to the recently-revealed reports about Margaret Thatcher and the new PM, John Major, fratching in 1990 over economic management.

Let this be the year of reckoning for practitioners of the dismal science.

Over the last 45 years they have pretty consistently got it wrong.

They were up a gum tree over the supposed benefits of our entering the Common Market in 1973.

They were spectacularly caught out in the 1980s when 364 of the blighters wrote to The Times in 1981 warning that Thatcher’s housewifely economics would wreck the economy. By 1986 she had revived it.

They then went mad over joining 
the European Exchange Rate Mechanism – so berserk that Geoffrey Howe and Nigel Lawson, as Foreign Secretary and Chancellor, threatened to resign if Thatcher did not set a date for entry.

We can only conclude they never learn because, after our expensive exit from the ERM in 1992, they were just as keen on entering the European single currency which has devastated southern Europe.

They were up the creek without a paddle when the financial crash came in 2007-08.

Why, even the Queen felt impelled to ask why nobody had told us it was coming. A very good question, which still awaits an answer.

As for Brexit, it would be cruel to rub it in. But Lord Macpherson, the former head of the Treasury, the alleged architect of ‘Project Fear’, has now admitted that its effect could be limited.

If all this does not call for a critical reappraisal of the economists’ profession, I don’t know what does.

The trouble is that we tend – or did before the Brexit referendum – to take experts seriously, when we should recognise their inevitable fallibility as human beings.

In any case, economics is as much behavioural science as the study of money and markets.

Fortunately, not all economists go with the herd, but these brave souls are usually drowned out in the stampede of opinion.

My exasperation with the entire business of economics has been increased by the alleged row nearly 30 years ago between Thatcher and Major not merely about economic management, but also about the poll tax.

Major was intending to ditch the tax – and, indeed, did so.

As Thatcher’s Press secretary, the poll tax – or community charge, to give it its Sunday name – caused me endless trouble. Eventually, it was one of the reasons – the recurrence of inflation and division over Europe among the others – why the Tories fired a leader who had won three general elections.

I believe that the poll tax would have been grudgingly accepted if it had been introduced in a sound economy instead of one with soaring inflation and interest rates reaching 15 per cent.

But who lost control of inflation? Why the arch-economist of them all, Chancellor Lawson, a man consumed by his own cleverness in shadowing the Deutschmark behind the Cabinet’s back in a disastrously expensive experiment to contain the very inflation it caused.

It spelled doom not only for the poll tax but also the Prime Minister.

Yet the poll tax would at the very 
least have identified the big spenders – usually Labour councils – and applied more political pressure on them to curb their appetites because most people and not just a minority, as with rates, would have had to pay for it.

Their spending is still a problem.

While all this was going on political economists were also advocating sanctions against South Africa.

Thatcher’s opposition, notably at the Commonwealth Conference in Vancouver in 1987, is now reported to have infuriated the Queen because of her disruptive Commonwealth influence.

I plead guilty to causing some of this disruption.

The balloon went up when, at a Press conference in Vancouver, we revealed to the world that the pious Canadians’ exports to South Africa had risen while ours has fallen. The summit never really recovered.

But I believe Thatcher’s determination to apply political pressure on South Africa and ‘jaw jaw’ with President Botha at Chequers did probably more than often-broken sanctions to bring about political change and the release of Nelson Mandela.

The moral of all this is never to put your trust in experts.

By all means listen to what they have to say, then use your common sense. It’s more reliable.