Tuesday 20th July 1982
Peter M [Peter Middleton] phoned ask me mtg with FST [Nick Ridley] - Gvr [Gordon Richardson] wanted to have £500m 1989 £500m 20013 as taps - latter to straighten out the maturity structure - I said NO
E - confused debate on LA Expenditure GREAS etc. - £18,800m “allocated” but expected that addn 700m would in fact be spent
- enable no increase in rates if wages held to 5%
Max political furore
Norman T’s [Norman Tebbit] job splitting approved - also he mentioned extending YWS to domestic servants - He had talked to GEC etc about job splitting - not to the Central Bureaucracy for Industry (CBI) [sic]
Lunch at James Capels - I gave account of monetary policy and the long term aims
Ec Sec [Jock Bruce-Gardyne] - agreed - some £500 Bn OK
Gvr/Chancellor [Sir Geoffrey Howe] meeting - Gvr must have £1 Bn
Chancellor agreed £ Bn tranchettes
Gvr - shorts no good, all 2013
JB/G [Jock Bruce Gardyne] protested - presentationally silly for inflation
Low point in yield curve 12%, JB/G
Chancellor agreed £500m long £250 short
What should be long - 2013 or 1998
C/E wants to tie it up and go away for holiday
→ Gvr would not want to come back
Index - Long tap for 2011
250 - 1989, 1998
JBG came to see me and said how annoyed he was with Gvr - matter of face - JB.G said he would tolerate 300 - 1989 - 300 1998 but he thought Gvr would object and say he wanted 2013
- could I frighten Geoffrey [Sir Geoffrey Howe] - No. 10 Big Bertha [ie, MT as the big gun, to frighten Howe?]