By Paul Goodman
Follow Paul on Twitter.
To the Carlton Club yesterday evening…for a Taxpayers' Alliance's dinner to celebrate the 1988 budget, the silver anniversary of which takes place this year. That's the one in which Nigel Lawson, the then Chancellor, cut corporation tax from 27p to 25p, raised personal allowances by twice the rate of inflation, cut the basic rate of tax from 27p to 25p and – in the best-known measure of all – the top rate from 60p to 40p.
The dinner can thus be seen as a call to George Osborne to follow this example (though the Chancellor has made his own cut in the top rate, and is following the example of another well-known Thatcher budget – that of 1981, in which Lawson's predecessor, Geoffrey Howe, cut the growth in spending and raised taxes). Lawson himself was present, and addressed the dinner. So what did he say? He told those present that:
It's tempting to conclude from all this that Lawson, the man who acted from principle, was a rather unpolitical Chancellor and that Osborne – the man who's been immersed within his party almost since University – is by far the more political of the two. I think that depends what one means by "political". Lawson seemed to me to have a very acute sense of political timing. His axiom is: work out clearly what you want to do, and do as much as possible right at the start.
Act from principle, certainly – and don't worry too much about what the opposition is doing and thinking. But act at the moment of maxiumum strength and your opponent's moment of maximum weakness. Above all, realise what you do and don't have the power to do. Chancellors and government can't create wealth – that's for business and people. But they must use the tax and spending framwork to set the conditions under which wealth creation can happen.
If Lawson had a message about the coming budget at all, I read it as the punchline to one of the best-known jokes in the world: "I wouldn't start from here."