MOTHER KNEW BEST:

Why Thatcher gave in: Treasury papers reveal sorry saga (Larry Elliott and Ashley Seager, February 10, 2005, Guardian)

The story of how the Conservative government took the fateful decision to join the exchange rate mechanism and set itself on the road to financial disaster and political nemesis revealed in the official papers on Black Wednesday is a tale of a prime minister at odds with her chancellor. [...]

The long countdown to Black Wednesday began in the mid- 1980s. The documents recount how Nigel Lawson, then chancellor of the exchequer, decided that Britain should join the ERM. Margaret Thatcher, however, disagreed.

A paper from a senior Treasury official, Stephen Davies, written in 1993 and released yesterday, said the differences between Lawson and Thatcher became so pronounced that Lawson resigned in 1989.

One of the sections removed makes it clear that the removal of the prime minister's veto on ERM membership "was determined by her own increasing political weakness". Eventually, she did a deal with Lawson's successor as chancellor, John Major, and Britain announced its membership on October 5 1990 at a rate of DM2.95. As the Treasury later admitted - again in a deleted section - it was "not an optimal time" for the UK to join the ERM.

The Tories got what they deserved for embracing Europe and dissing the Lady.

Posted by Orrin Judd at February 9, 2005 9:20 PM