Large scale document archive

1981 Jan 17 Sa
Archive (Hoskyns MSS)

Monetary policy: Hoskyns diary (Chequers meeting) [discussion of “PSBR crisis”]

Document type: Declassified documents
Document kind: Diary
Venue: -
Source: Hoskyns papers (privately held)
Journalist: -
Editorial comments: Reproduced from John Hoskyns Just in Time (2000), pp260-261
Importance ranking: Key
Word count: 341
Themes: Executive, Conservatism, Monetary policy, Public spending & borrowing, Taxation

Sunday 17 January 1981

Picked up Alan at 11. To Chequers early so parked and talked then drove in just after 12.30 to find we were the first there. The group assembled for lunch Margaret, Geoffrey, Keith, Alan Walters, Terry Burns, Robin Ibbs, David Young, David Wolfson, Norman Strauss and self. A jolly lunch which helped Margaret to relax. We started at about 2.30 with introductory words from me and then comments on the present situation from Alan and Robin to put to bed the idea that we were being ‘too pessimistic’. Then I talked to three of my charts the first of the total strategy and then to two on freeing up the labour market and the control of public spending. When we broke for tea Keith and Geoffrey rounded on me asking why I was doing exactly the opposite of what I’d said we’d do (i.e. we would talk about methodology not specific problems). I explained that we had to start from an agreed picture of the strategy and that examples allowed Margaret to feel that we weren’t just waffling about theory. Margaret overheard us and joined in saying, ‘I thought we were going to do the strategy paper.’ I explained that the strategy paper didn’t need ‘doing’. It was just background. (I sometimes wonder if we will ever stop talking at cross-purposes with the politicians.) So Margaret then said, ‘Well, let’s talk about the methodology.’

…we [then] plunged straight into the latest version of the PSBR crisis. Apparently all the latest forecasts said that public expenditure is continuing to ‘run away from us’ and we can’t see any end to it. So, in Keith’s words, we ‘face a cliff edge in two or three years’. General talk about how to line up the key colleagues once we’ve decided what the likely solutions have got to be. As we spoke, Margaret said, ‘We really should have taken some of these measures a year ago.’ We ended up drinking with Margaret after Geoffrey, Keith and Terry had gone, agreeing our work programme for following this up (the Treasury will not do more than the arithmetic). Finished at 7.15 and drove back to Suffolk by 9.30 and talked it all through with M. [wife] I don’t feel at all relaxed about things though I think David Young’s probably right that we’ve achieved more today than we realised.

[Extract from John Hoskyns Just In Time: Inside the Thatcher Revolution (London, 2000), pp. 260-1.]