The Chancellor of the Exchequer's secret files

What are the files?

Many of the files are primarily political, reflected in the naming. Minutes to the Chancellor from his special advisers form an important part, and party matters generally bulk far larger here than in the policy files despatched by HMT to Kew. In fact it is likely that the Private Office files contain much if not all of the Chancellor's political filing from this period. There is a near complete set of the minutes of the "Chancellor's Morning Meeting", known as 'Prayers', where Treasury ministers and special advisers (also sometimes the Treasury whip) discussed politics and policy in the absence of officials. These are the Chancellor's copies and some are annotated by him. Quite apart from the abundant material from special advisers, one finds correspondence and memoranda from the whips, the party chairman, and the head of the Policy Unit at No.10. There are many notes on meetings with backbenchers and correspondence with them too, revealing of the Chancellor's important role in party management. When Howe met the Conservative backbench Finance Committee immediately after delivering the 1981 budget, the file records a grisly mood: "Non-plussed, worried, very put out by the increase in petrol tax, and potentially furious about the failure to control public expenditure". Two long files deal with the upshot, a painful Conservative backbench rebellion which forced a 10p reduction in duty on diesel during passage of the Finance Bill. Such issues of parliamentary management rarely find their way to Kew, the Chief Whip's files almost all being destroyed by the Cabinet Office as possessing no historical interest, another non-component of the "definitive policy record".

There are drafts of some seminal speeches, elaborately researched and worked over, notably the Chancellor's Mais Lecture of May 1981 to which Howe evidently devoted a good deal of his time. And there are some highly political documents exchanged between Treasury ministers, such as a critique of the MTFS on the eve of its introduction written for Howe by his own Chief Secretary, John Biffen, which he unhelpfully copied to the PM. We find too Biffen's strangely relaxed response when Howe reproached him for publicly deviating from the policy line in a Parliamentary speech later in the year - evidently he was always "semi-detached". There is fragmentary material on very private discussions between economic ministers at Howe's private home in Vauxhall where doubts about the government's economic strategy were aired in July 1980 and Howe did his considerable best to bind the critics in, with the help of his senior special adviser, Adam Ridley. The Private Office papers reveal a similar operation in February 1981, when Carrington and Gilmour dined at No.11; Howe followed up by writing them long defences of his policy.

Substantial policy material is also present in the files, and roughly speaking the more politically sensitive the topic, the more you find in this collection. Very likely these were the issues the Chancellor was watching most closely, which itself lends value to the collection - as long as it is kept intact. Relaxation then abolition of exchange control make up four bulky files 1979-80, a detailed record of the first and one of the largest economic reforms of the Thatcher Governments. These show that the politicians were generally bolder than their official advisers, who were thinking of a process lasting 12-18 months rather than 6, the actual outcome. Officials successfully urged the policy be presented as a straightforward supply side reform, sarcastically dubbing it "making hay while the sun shines", reform being a lot easier with sterling riding high, as it was at the time. But the impact of abolition on the exchange rate and monetary targets, and hence the counterinflation stance, were also very much in mind, and very far from clear, an opacity that generated a last minute wobble within the Treasury in early October. Should they put it off till the budget perhaps? The worries were overcome as much as anything by sheer momentum - there would never be a risk free moment, it was just too late to turn back. The deed was done on 23 October. No one remotely guessed that the currency would continue rising as long and as far as it did, peaking more than a year away.

There is a huge file on the November 1979 "gilt strike", a financial crisis which forced the largest one day interest rate increase in British history. This contains a mass of original material not found in Kew; in fact it is clearly the key file on the topic because it opens with a note from the Chancellor's Private Secretary to the filing clerks stressing that it contains many original documents and begging them to keep it. (It is revealing that he worried about this, and had to ask rather than simply instruct: perhaps then, as now, the system had a mind of its own and was not good at distinguishing what to save from what to burn.) Among other interesting things, the gilt strike documents show the efforts made by Adam Ridley to find out what was going on in the City and to ensure the Chancellor had briefing from outside the machine. Ridley spoke directly with senior figures at the Bank in a style that the Governor of the Bank would not have approved, so he quite properly protected his sources.

There are many files on an even more central event, the 1981 budget. These include records of the very first discussions on the topic in December 1980 among Treasury ministers and special advisers, too secret to be circulated around the Treasury as a whole. These show that most of them were minded to tighten fiscal policy from the first, settling at a stroke the old argument whether the Treasury were pushed into this stance by No.10. In fact the man who later did most to claim paternity of the budget on behalf of No.10 - Alan Walters - is found writing the day after it was delivered to congratulate the Chancellor on his courage, the letter marked 'personal'. Alongside is one to similar effect from David English, the editor of the Daily Mail, fully recanting earlier front page demands for Howe's dismissal. Chancellors don't often receive letters like that; it almost deserves to be framed. There are minutes too of many meetings to plan the budget, not all of them at Kew, which reveals a new flaw in the "definitive policy record": even though as many as 25 copies were made of these meeting records, and they were circulated around the Treasury, they could still fail somehow to get put on a file down the line, everyone assuming someone else had done it perhaps.

An especially delicate, even painful, topic in the Private Office archive is that of civil service pay and conditions. There was industrial action in Whitehall throughout these years, pre-dating the election of the Thatcher Government in fact. Tax collection was a particular target for disruption, naturally drawing the Chancellor's attention. There are four files, three of them classified secret. On similar lines, there are three files on the decision in 1979 to uprate long-term social security benefits on a prices only basis, removing any connection to earnings. This was a hugely significant step for public spending totals over time, taken by the Conservatives before they came into office. Its controversial character made it a priority for early action, the file opening within a week of the government being formed. Sensitivity kept the paperwork close to the Chancellor and secure in the Private Office.

A useful feature of the Private Office files is that they often contain the originals of submissions to the Chancellor and other ministers, many of them annotated by Howe. The original of Terry Burns's May 1981 submission to Lawson suggesting he be "low-keyed" in talking about an economic upturn is much more valuable than any copy because Howe wrote across it the words "Wise counsel". We would not otherwise have known that he even saw it, let alone his reaction. There are many notes to and from the Chancellor and his inner circle, often informal in style - not given a security classification, however sensitive the content. Many of these were written by hand (such as Ridley's notes on the gilt strike), not simply to save time but by cutting out the typist to ensure that as few people saw them as possible. Most such material originated in, and by design never left, the Private Office, so that copies cannot be found at Kew.

The Chancellor's meetings with overseas ministers, including European business, are also strongly represented, another area of special sensitivity. There are papers circulated for meetings and extensive briefing material from officials, much of it annotated by Howe in the mauve ink the Chancellor used to make his remarks stand out (the Chief Secretary used green). There are official records of conversations and sometimes notes Howe himself took during the meetings - for example, of comments made at the July 1981 ECOFIN by Jacques Delors, then his opposite number in France. Like most good lawyers, Howe was an excellent and diligent notetaker. There is a separate file on the vexed question of Britain's contribution to the EC budget, where the Treasury took the toughest of lines in 1979-80, although one document shows Treasury ministers were privately keen to settle and would have backed joining the EMS if it would have won us German support on the budget. There is original correspondence from senior foreign officials and politicians, including members of the European Commission. Nor is the US absent. There is a fine series of political letters to the Chancellor from the Treasury's representative in the Washington Embassy, who doubled up as our Executive Director at the IMF. These were marked 'personal' and sent directly to Howe's Private Secretary, sketching the scene for him every few months.

Note that the file list below has gaps: there are none between 3 and 33, for example. That is because these numbers belong to files from later years, entered out of sequence for some reason. It is uncertain why so many of the files are designated 2A, 47A, 40A, etc, because in most cases there is no part B. Perhaps in some way they refer to material not properly sorted. The Treasury acknowledges that it is holding more Private Office material in 'unstructured' form, not found in the original database and so not subject to the FOI request which produced the present release. Some constituency correspondence is held it seems, personal to the Chancellor, and there are engagement files of some kind too. The Chancellor's appointment diaries might be found there, and would be good to have. All told there are surely considerable numbers of documents in these files the Treasury doesn't even own?

Although some of the files relate to 1979 and 1980, the filing system glimpsed here only got into full operation in 1981, so earlier records are something of a legacy from what went before and are significantly fewer.

Nigel Lawson's Private Office files

Three quarters of Nigel Lawson's Private Office files have been released. A handful of Lawson files were released earlier under FOI.

Nick Ridley's Private Office files

The Treasury has also released Nick Ridley's surviving Private Office files as Financial Secretary to the Treasury. These are diferent in form to the Chancellor's files, consisting largely of photocopies of minutes and meetings records relating to directly to Ridley with very little incoming correspondence. They are not listed in the spreadsheet already mentioned, so must derive from the 'unstructured' files already referred to. They are in rough chronological order - a sort of day file.

There is much of value in these documents. For one thing they show how very busy Ridley was - there are 288 pages in January 1983 alone. He worked on a remit of amazing breadth, covering everything from international banking (where he wanted bankers punished for reckless lending to weak sovereigns), the EC Budget and the moral hazards of social benefits to the minutiae of domestic tax arrangements ("Capital Allowances for rented television sets"). One find abundant evidence of Ridley's determination to thinking strategically - on pension reform and revival of the private rented sector, for example. There is evident also a dry sense of humour, a thing attractive in private but almost fatal in public, as in his mordant reflections on the subject of child tax allowances, sent in confidence to the Chancellor: "having children is (mostly) a voluntary activity. To make it too lucrative can increase the supply of children. If it is not lucrative enough one can forego the joys of having them, or even have one less".