John Major: The Autobiography

I decided to signal my intentions unequivocally. ‘If it isn’t hurting, it isn’t working’ seemed to me to sum up what lay ahead, and I made that the theme of the speech. I also made it clear that I was in favour of a firm exchange rate for sterling, and did not agree with letting it fall. The ghost of Alan Walters had to be exorcised and the markets needed to know that I meant what I said about inflation.

My call to arms was well received by the audience in Northampton, and I drew from it in my first speech in the House as chancellor a few days later. I emphasised that we must eliminate inflation, and confirmed that I believed that membership of the ERM would help to achieve that. If the Prime Minister winced, it wasn’t noticed by those in the Chamber. Nor had she cause to, for I confirmed the mantra of the Madrid conditions. I also paid a deserved tribute to Nigel.

Though my tribute was sincere, our instincts were not always the same. I was concerned about the trade gap and had said so in speaking as chief secretary, whereas Nigel wasn’t. Nigel favoured an independent Bank of England, and I didn’t. Nigel had been prepared to shadow the deutschmark, while I had become convinced that this gave us all the disadvantages of ERM membership without the advantages.

Nor were those the only differences. Nigel, I felt, underestimated the importance of manufacturing; I worried about its decline. Nigel had cut back capital allowances; I was prepared to look at paying some of them in the first year. On this last point I was later convinced that some of Nigel’s policy was right and mine wrong. When I looked at the case for reshaping capital allowances I received a Lawsonian lecture from Judith Chaplin and Andrew Tyrie on the folly of this. To my regret they convinced me.

None of these differences diminished my admiration for Nigel as chancellor. He had misjudged inflation in the late 1980s because indicators such as soaring house prices were misread. As a result he left office with inflation rising sharply. Some of this was due to his unwillingness to let the exchange rate take the strain, or to compensate elsewhere. Even so, he did not deserve Nick Ridley’s harsh judgement that ‘He knew the economy was going badly wrong and he knew he was entirely and solely responsible.’ Nigel, like the rest of us, underestimated the depth of the recession to come in Britain and internationally, and believed he could see it out. The argument that he ‘got out just in time’ only came to look plausible much later.

In the first few weeks of my chancellorship my approach to inflation was well received, but months later when the policy really got to grips with the beast it was thought to be callous. Everyone paid lip-service to the principle of cutting inflation, but the hard-edged policies to do so were another matter entirely. But to me, bringing down inflation was pivotal, my constant objective and not an optional extra – and later this was the primary reason for our entry into the ERM. Nigel Lawson had advocated entry as early as 1985, securing the support at the time of Geoffrey Howe, Willie Whitelaw, Leon Brittan and Norman Tebbit. But Margaret – reinforced by Alan Walters’s arguments – said no.

Had there been another route open to us, endorsed, as ERM membership was, by business groups and commentators, I would have been delighted. But there was not. The ERM offered the lodestar we needed and, for all the finger-pointing after ‘Black Wednesday’ in 1992 (see Chapter 14), it worked. I disagree with those who say that inflation would have been tamed successfully by our interest-rate policy alone. But that lay ahead. Now, as chancellor, the problem before me was clear, even if the solution was not. Economic policy was falling apart and needed a new anchor.

Uncertainty over EMU and the ERM was rising, and so was the political temperature within the Conservative Party. The dispute over exchange-rate policy still had the potential to tear the government apart. Europe was a ticking time-bomb. Within days of my appointment as chancellor, Geoffrey Howe, the Deputy Prime Minister – in what Margaret Thatcher later described as a speech of ‘calculated malice’ – stressed that we should honour our obligations to Europe over the ERM. Yet another Cabinet split was signalled. Nigel’s resignation speech attacked the Prime Minister’s whole style of government, reflecting the quiet opinion of a growing number of Tories.

I was also confronted with more immediate problems. The Autumn Statement announcing public spending allocations was only weeks away. The budget would have to be framed in very constrained conditions, and no real work had yet been done on it. And the Community Charge was a millstone that could not be shed, so great was the Prime Minister’s commitment to it. Like every minister I had to make a conscious effort to avoid infuriating Margaret by referring to it as the ‘Poll Tax’. I didn’t always succeed.

On the Sunday following Nigel’s resignation the Prime Minister gave an unconvincing interview on Walden, the influential political programme hosted by Brian Walden, a former Labour MP. Nigel appeared on the programme a week later. They flatly contradicted one another while the Labour Party looked on in delight. As Margaret and Nigel set out their different interpretations of events it was an early illustration of the total disregard for the wider Conservative Party interest that was to become commonplace where European policy was concerned, and was to place the government on the rack.

In Cabinet one of my first tasks was to present a paper Nigel Lawson had prepared on ‘competing currencies’, which was an alternative to the Delors plan for EMU. Whereas the Delors plan was prescriptive and involved the arbitrary abolition of traditional currencies, Nigel’s paper advocated a gradualist, market-led coordination of economic policies across Europe. It was ingenious and inventive – and Cabinet readily accepted it – but even at the time, I think, it was clear that it was never going to work, because in a competition between the pound and the deutschmark, the German currency, with its greater depth, liquidity and credibility, was always going to win.

The scheme received a mixed reception when I presented it at my first ‘ECOFIN’, the EU’s regular monthly meeting of economic and finance ministers, on 13 November 1989. Unfortunately it came too late, and was seen in Europe as a wrecking tactic. The episode illustrated the alarm we felt over our European partners’ continuing enthusiasm for a single European currency. EMU was revived in the mid-eighties by Hans-Dietrich Genscher, the German Foreign Minister, and his French counterpart, Roland Dumas. It was then taken up by Jacques Delors, but would have got nowhere without strong German and French support. The ‘competing currencies’ proposal would not be the last time we tried to head off this Delors-inspired initiative, because of what we saw as its destructive power where our own economy was concerned. Nor was it the last time we were rebuffed.

Back in Britain, the party and the press were keen to learn what I intended to do. Their chance came two days later when, on 15 November, I delivered the Autumn Statement – my first substantial parliamentary appearance as chancellor since Nigel’s resignation. The events of the previous month meant that rather more attention was paid to my performance than might normally have been the case, but at least the annual spending round, which culminated in the Statement, was a part of the Treasury’s work I felt fully at home with. As chief secretary, I had worked with Nigel on his Statement. Now I delivered a package largely prepared by my successor in that job, Norman Lamont.

The forecasts in the Autumn Statement were the first acknowledgement that the economy was slowing down, and they attracted a good deal of attention. As it happened, the forecasts were wrong. It is notoriously difficult to make predictions when an economy is turning either to growth or recession, and most of the forecasts, although gloomier than many expected, were less gloomy than they should have been.

In the three weeks since my appointment I had had only a limited chance to put my mark on the Statement. But that didn’t occur to many journalists, who told their readers that by boosting spending and predicting hard times ahead I had single-handedly broken with the Thatcher – Lawson tradition. In fact it was the economic situation which did the breaking, for most of the spending increases were involuntary, being required simply to keep services at their current level as demand grew. I had not gone off in a new direction, but simply responded to circumstances. Indeed, had Nigel not left, he would have delivered a Statement along similar lines. What’s more, had he had his way on entry into the ERM when he first proposed it, the conditions I inherited might have been somewhat less dire.

The biggest increase in expenditure was on the NHS, and this was largely determined by the needs of the NHS reforms (see here (#ulink_9f82c4fb-d3da-5b5d-96bf-b54fbfcace12)). Financing these reforms was later to be cited as an indication that I had uncorked public spending and thus inflation. In fact this expenditure helped to mitigate the effects of the subsequent recession. The further spirals in inflation resulted from the continuing fall in sterling and the inexorable upward rise in prices that was the legacy of the late-1980s boom.

At the time, the Autumn Statement was well received, politically and economically, but soon after it sterling again came under pressure as a result of political and economic events. A Conservative backbencher, Sir Anthony Meyer, roundly attacked Margaret Thatcher in the Queen’s Speech debate after the State Opening of Parliament on 4 December. He announced the following day that if no one else challenged her leadership, then he would.

Tony Meyer was a loner, a fierce pro-European and a paternalist left-of-centre Tory. It was courageous of him to challenge a well-established prime minister with overwhelming parliamentary and national support, but everyone knew that his challenge would fail. And so it proved, as, after a cursory campaign, the Prime Minister romped home with 314 votes to thirty-three against, with twenty-four spoilt ballot papers and three abstentions. But the fact that there was a contest at all was significant. The challenge gave the markets a jolt, too. By late December sterling had fallen steadily to around DM2.72, thus damaging hopes of lower inflation and, as a result, of a reduction in interest rates.

The Autumn Statement was followed by renewed pressure for an increase in interest rates, which Norman Lamont, the Chief Secretary, supported. Economically, the case was finely balanced, but politically I thought there was no argument for it, and I refused. This was not because I subordinated interest-rate decisions to political considerations, but because given the mood in the markets and in Parliament an increase in rates would not have had the economic effects intended. It would add to the atmosphere of crisis, create political panic, ignite yet greater dissatisfaction in Parliament, and so rule out any good it might have done.

Margaret Thatcher knew that an increase would have been seen as the economic price to be paid for her political dispute with Nigel, so she naturally agreed with my decision wholeheartedly. In any event she wanted interest rates down, not up. It was ever thus in the latter years of her premiership – the anti-inflationary ‘Iron Lady’ is a myth.

Nonetheless, our working relationship at this time was very easy and relaxed. I was enjoying the Treasury and she was enjoying having a chancellor with whom she was comfortable. Our conversations were easy ones whereas hers and Nigel’s were not. I was much more open with her than Nigel had been, and she was with me.

But there were differences of emphasis between us. While I thought membership of the Exchange Rate Mechanism would help our anti-inflation policy, Margaret shied away from it. Her instincts – and Alan Walters’s arguments – had made her deeply hostile towards the ERM. Yet neither she nor anyone else was putting forward a serious alternative course of action, and I felt from the outset that she could be persuaded to enter if the decision to do so did not humiliate her.

EMU and the single currency were unpalatable to us both, and we agreed that we should oppose them, although we disagreed on how to do so. The Prime Minister simply wanted to say no. I knew this would be useless. It would not stop our partners going ahead, and would only deprive the UK of any influence over their plans. Margaret was dismissive, even scornful, of this argument. She did not grasp that I was not asking her to change her policy on the single currency – because I agreed with her on that – but to be more subtle in her opposition to it, and less dismissive of those colleagues who thought differently.

I saw also – though Margaret, I think, did not – the extent to which this policy dispute was hurting her with many in the party. It was not so much the policy itself as the dogmatic way she advocated it that was doing her such damage. She was in real danger. My pleas fell on deaf ears. She simply did not take the point. It was magnificent, but it was not politics, as events were to show within a year. In any event we did not begin to engage seriously on either the ERM or the single currency until the early spring of 1990.

Before that came my first budget. One of the attractions of being chancellor is the opportunity to deliver a budget. Iain Macleod once memorably remarked that ‘Money is the root of all progress,’ and he was right. For two years as chief secretary to the Treasury I had negotiated public spending allocations and learned that by releasing – or withholding – money it was possible to change political priorities. But in 1990 the options for making significant changes in the budget were grimly restricted. I was boxed in by the state of the economy.

This was brought home to me vividly in a letter I received from Nigel Lawson early in January 1990 offering some friendly advice for my first budget. The advice was good – even though it was uncomfortable. In essence, Nigel said: don’t put up taxes and don’t reduce them; don’t believe the seductive line that higher taxes will deliver lower interest rates; don’t reduce interest rates for some time; don’t on any account increase the £30,000 limit for mortgage interest relief (a constant demand of Margaret Thatcher’s); but perhaps raise motor car benefit scale rates and play around a little with indexation. All this was good economic advice, but not very exciting. I knew I would not be able to deliver the sort of radical budget I would have wished.

I began to examine the options within days of becoming chancellor. Whereas Nigel had been probably the most technically knowledgeable chancellor since Gladstone, he was not always sensitive to the frailties or needs of others. He did not know what it was like to run out of money on a Thursday evening, whereas I did. Nigel favoured the entrepreneurs who made the economy tick, and he had done much to benefit them. The Prime Minister favoured the hard-working strivers who were succeeding, and wished to help them to greater success. I wished to concentrate now on those who wanted to succeed, were prepared to work, but who were often trapped by circumstances from which they could not break out. They were my main concern, and I shall always regret that throughout my days of power the weakness of the economy – which our priority was to put back on an even keel – prevented me from doing more to help them.

The contribution I was able to make to them was to bring down the inflation by which they were being disproportionately hurt. In effect, this was just like reducing a pernicious and widely-based tax on the poor. But it was also, of course, removing a curse, not bringing a benefit, and had little political resonance. Worse still, the counter-inflationary measures we had to take inevitably hurt people, and often made us seem uncaring, and this, for me, was bitterly frustrating and galling.

I wished to bring a different emphasis to our tax and expenditure plans. Nigel’s radical budget of 1988 had dramatically reduced direct income tax for the higher-paid. It now seemed right for me to concentrate most on those who had least. I began to consider what we might do over a longer time-scale. I envisaged tax cuts exclusively at the lower end, aiming initially at a 20p basic rate and a higher threshold of income before tax bit. I favoured tax incentives to encourage self-provision and a radical reform of National Insurance contributions, which I saw as a lop-sided tax that bore only a passing relationship to social security entitlements. This – and much more – was in my mind, but in the prevailing economic conditions it could not go into my budget.

I did ask the Treasury for an in-depth examination of ‘a caring package for the budget’, but nothing very exciting emerged. The tax options they proposed didn’t help really low-income families, because they didn’t pay tax anyway, and public expenditure measures could only be limited as our national accounts swung from an annual repayment of debt to a large annual borrowing requirement. It was obvious even before the Treasury ministers’ and officials’ annual early-January weekend meeting at Chevening that we had no cash for an interesting budget, and would need considerable ingenuity if we were to produce one.

Over Christmas at Finings I closeted myself away from the festivities with papers prepared for the pre-budget discussions at Chevening. When I was reading them on Boxing Day Elizabeth, whose eighteenth birthday we had celebrated the previous month, asked me what I was doing. I explained to her that the Chevening weekend had become something of an institution. ‘So has Christmas,’ she said. ‘Put the papers away.’

The work over the early-January weekend at Chevening is intense, and so is the enjoyment. One traditional feature is the Ministers versus Mandarins snooker game, which in my year was won by Peter Middleton and Terry Burns against Norman Lamont and me. They had been practising at the Reform Club, which Norman and I thought was akin to cheating. ‘They give us boxes to work on while they practise,’ said Norman. Terry and Peter grinned: it was true.

Chevening itself was far from the house of my dreams. I found it austere and unwelcoming, unlike Chequers when I came to know it. Geoffrey Howe had loved it, and spent a great deal of time there. I went there as little as possible. Nevertheless, party games and leisurely strolls around the admittedly beautiful lake that lies to the rear of the house helped lighten our working weekend.

The economic situation was altogether less fun. In early 1990 we were coming out of a boom that had been unprecedented in scale, and driven by the private sector rather than by policy. Domestic consumer demand had far outstripped supply, and forecasts had failed to register the extent of it. Inflation had picked up despite a dramatic rise in interest rates and a tightening of fiscal policy. House prices had risen crazily following the stock market crash of 1987. Credit had risen and savings had fallen. Neither government nor private-sector forecasts had revealed the scale of what had happened. Forecasts were especially uncertain, and we were steering the economy in a fog. It was obvious that we would have to be cautious. The Chevening weekend illustrated that in spades.

Gradually, in meeting after meeting, a series of measures emerged. I knew that mine could not be a ‘big’ budget. The state of the economy meant that I was condemned, broadly speaking, to a fiscally neutral package. To enliven it I looked for some eye-catching innovations. Moreover, as this would be the first budget to be televised live, I wanted to present it in a way that would be understood as easily in the living room as in the foreign exchange dealers’ room. My working instruction to officials was: ‘We need to explain not only what we are doing but why, and also what we expect to come of it.’ I wished the presentation to be human and colourful, but the budget’s real importance lay in the substance, which the discussions at Chevening had largely preordained.

The physical compilation of a budget is daunting. Every day representations on what to do (or not do) come from a thousand sources. The Confederation of British Industry, the Institute of Directors, the Trades Union Congress, chambers of commerce, trade organisations, charities, banks, building societies and many others all want to have their say. So do Cabinet colleagues, all of whom make representations, some of them original, others no more than familiar and hoary perennials. The Health Department usually wants to put up tobacco duty; the Scottish Office to lower whisky duty; the Social Security Department to help the poor; the Department of Trade and Industry to help business; and so on. If there were a Ministry for Weather it would demand more sunshine each year.

On this occasion every representation was considered, though some were speedily discarded. The Financial Secretary Peter Lilley, the Economic Secretary Richard Ryder and the Paymaster General Malcolm Caithness sifted through a huge number of options and made recommendations.

As chancellor, I followed Nigel’s habit of huge meetings at which all Treasury ministers, together with officials – including ones from Customs and Excise and Inland Revenue – pored over ‘budget starters’ to examine them from every perspective. Only the most rigorous proposals survived this scrutiny, unless they were firmly backed by ministers as politically necessary. If officials didn’t like such propositions, they made their view clear. The ultimate dismissal is a smiling: ‘Of course, Chancellor, if you think it’s politically necessary …’ This implies disownership of the proposal, but also surrender.

Officials delivered their advice. Ministers made their decisions. The essential balance between an independent civil service and an elected government was maintained. Gradually, a package emerged. It was workmanlike, with some original touches, but not particularly exciting. Our ‘budget in a nutshell’ description was ‘a budget for savers’. We abolished Composite Rate Tax, an automatic levy on savings interest at source even when the saver’s income was too low to be taxed. This was a long-overdue reform. We encouraged wider share ownership and introduced the concept of Tax Exempt Special Savings Accounts (thenceforth known as TESSAs – the acronym was already in Treasury use, and was picked up by Gus O’Donnell, my Press Officer). It was my idea that we should do something for people with no savings, and offer them a tax-free advantage for saving comparable to those given to Personal Equity Plans (PEPs) by Nigel Lawson to the relatively well-off. I was determined to offer small savers – who had gained little or nothing from previous budgets – a tax advantage of real substance. TESSAs were my answer. I wished to build a savings safety net, and planned for TESSAs to run initially for five years, with individuals able to invest up to £9,000 over that period. They were a huge and instant success, and in due course around £30 billion would be saved in them by millions of small savers.

Tax changes were limited. Many were simply indexed for inflation, but there were increases for cigarettes, spirits, company car users and leaded petrol. There were innovations to encourage share ownership, small- and medium-sized businesses, training and charitable donations.

I decided also to help football. In recent years there had been tragedies at Bradford City and at Hillsborough, Sheffield Wednesday’s stadium, where inadequate safety measures had led to many avoidable deaths. This had registered deeply with a sports-loving nation. After an inquiry, Lord Justice Taylor had recommended some very expensive safety measures which only the top clubs could comfortably afford. I decided to cut Pools Duty by 2½ per cent for five years, provided the £100 million reduction in taxation was passed to the Football Trust for ground improvements. I wished to promote safety as well as more comfortable, less dilapidated grounds to attract families and deter hooligans. This populist measure was widely welcomed – though it only survived against much scepticism in the Treasury, offset by the support of the football enthusiast Terry Burns. Officials and advisers were worried that clubs were being given a tax advantage when they were able to spend millions of pounds on transfer fees. A proposed levy on these fees only fell after careful examination. When it was first suggested no one had any idea about the total value of transfers. Gus O’Donnell was dispatched to buy a copy of Rothmans Football Year Book, which listed all transfers, so that the Treasury could calculate how much the measure would raise. I shall remember for ever that Chris Waddle was transferred from Spurs to Marseilles for £4.5 million, whilst Gary Lineker joined Spurs from Barcelona for £1.5 million. Such is the diversity of information that can cross the desk of a chancellor.

Any chancellor is entitled to feel a twinge of nerves on budget morning as he emerges from Number 11 holding his red dispatch box aloft and makes for the House of Commons to deliver his statement, and as 3.30 p.m. approached I felt the adrenaline begin to pump. But, like all other chancellors, I had been well served by my officials. The final touches to my speech had been completed the night before; now it was printed and ready. I had finalised the text of my broadcast for later that evening – largely written by Anthony Jay, the co-author of the hugely successful television series Yes, Minister – and prepared what I would say at the meeting with backbenchers which takes place after the chancellor has concluded his statement. I checked through the briefings which would shortly be going out to the media, and finally, after lunch, walked around the Downing Street garden to clear my mind and rehearse the speech without the text to make sure I was familiar with it. The tipple in the glass by my side during my speech – the traditional chancellor’s privilege – was Hine brandy and water; Hine has long been a favourite of mine.

The most popular measure in the budget was a proposal to limit the impact of the Poll Tax, which was becoming ever more loathed by the day. I announced a doubling of the level of savings that would be disregarded when calculating Poll Tax rebates, from £8,000 to £16,000. This was wildly cheered, but led immediately to a huge row. The Poll Tax had been introduced a year earlier in Scotland – at the request of Scottish ministers – and I had not backdated the rebate improvement. Scottish Labour backbenchers scented a grievance to be exploited, and created a huge fuss even as I spoke. This was not quite unprecedented, but ran against Commons tradition, since budgets are usually received without interruption. Mine was not. Television had made its mark.

After I had sat down, the Scottish Secretary, Malcolm Rifkind, under pressure from the perennially hostile Scottish media, threatened to resign if he was placed in ‘an impossible situation’ by the rebate not being made retrospective. Since Nigel Lawson had resigned only months earlier, followed by the Employment Secretary Norman Fowler (to ‘spend more time with his family’), the prospect of another resignation was far from attractive. The cost of the concession – £4 million – was tiny, but what the Prime Minister and I took amiss was that we felt we were being bounced. Malcolm got his money, the Scots gloated, and I wiped egg off my face. It had never occurred to me that such a complaint could carry such force – but my education in Scottish politics had barely begun.

Overall, the joy-through-austerity merchants in the City – and in the press – were disappointed. They had wanted a ‘tough’ budget, with no increase in personal tax allowances. I didn’t agree, because I was too unsure of the economic forecasts and I feared that a tighter budget would lead towards recession. In retrospect, on this at least I was right and my critics wrong. However, the markets disagreed, and the pound fell on the exchanges. Nor did the Poll Tax assistance ease the anguish of electors. Two days after the budget we lost the Mid-Staffordshire by-election – held after the tragic death of John Heddle, who had entered Parliament on the same day as myself – with a massive 21 per cent swing against the government.

The EU’s regular ECOFIN meetings brought me into close contact for the first time with the Irish Finance Minister Albert Reynolds, later Prime Minister of Ireland, to whom I took immediately. Norma and I had breakfast with Albert and his wife Kathleen at an informal ECOFIN at Ashford Castle in Ireland. It was the first time I spoke about the ‘Irish Question’ with the man with whom I was later to establish the Northern Ireland peace process. Pierre Bérégovoy, who was to become Prime Minister of France, also became a friend, but was by no means an easy touch. I remember giving him breakfast at our Washington Embassy to try to sell him our policy on the ‘hard ecu’ (European currency unit) as an alternative to an abrupt change to a single European currency. Pierre was impressed by our embassy – which he compared to a ‘grand palace’ – but less so by our policy. Tragically, this engaging man later killed himself in sad circumstances.

I also saw the European bureaucracy at work, and witnessed the effectiveness of British representation. Our Permanent Representative at the EC was Sir David Hannay, a fiercely competitive diplomat, and visually almost the double of Nigel Hawthorne, Sir Humphrey Appleby in Yes, Minister. Sir David, however, was more formidable than Sir Humphrey, and the sight of him privately taking aside some hapless Euro-official to tell him the facts of political life was one of the delights of Brussels. I often averted my eyes from these occasions, since I hated the sight of blood.

I enjoyed the ECOFIN meetings. The atmosphere was far more workmanlike, and far more to my taste, than the Foreign Affairs Council, where pertinent observations were often loud with ‘waffle’. The finance ministers also formed a bond, because, unlike foreign ministers, they were excluded from European summits, which they resented. Blame for this absurd ruling is largely to be laid at the door of President Mitterrand of France, who regarded money as merely a means to an end, and finance ministers as ‘accountants’. This explained to me why financial realities were a second-order question for the European Council. At Maastricht we obtained agreement that finance ministers would attend when matters related to economic and monetary union were to be discussed. Ken Clarke’s sharp elbows made full use of this gateway.

There were some clashes in ECOFIN that taught me much about the politics of the European Union. We won battles to restrain tax harmonisation of VAT and to establish the European Bank for Reconstruction and Development in London. This bank was designed to help send investment into Eastern Europe, and was the biggest European institution we had attracted to the UK. It got off to a shaky start under Jacques Attali, President Mitterrand’s former advisor, but rapidly became established under his successor, Jacques de la Rosière.

At ECOFIN it became clear to me that our European partners were much more set on implementing the Delors Report on Economic and Monetary Union – and moving to a single currency – than I had realised. Whilst we regarded the move as a fanciful long-term ambition faced by enormous problems, they were regarding it as more or less a fait accompli. Criticising it was as heinous as spitting in church.