Spectator Inquiry: questions for Lord Lawson

Gawain

I would love to know how he would have responded to the current crisis if he had been Chancellor.

With regard to the past I would like to know whether he thinks the balance of the economy in the 80s shifted too far towards financial services.

Chris Carter

Who saved the economy first time round then screwed up by inflating the late 80's housing bubble and resigned over Thatcher's reluctance to join the ERM...so, yes, a highly appropriate "expert"!

Andrew

The fact that Lawson oversaw a housing bubble is very pertinent.

Did he see the bubble at the time?

Were there metrics available to the Lawson Treasury to warn of the bubble?

If not, did anyone think to develop some once the bubble had burst?

If so, were these metrics still available to the Brown Treasury?

Does he think the Brown Treasury became addicted to stealth taxation such as Stamp Duty and therefore disabled the warning signals?

Ian C

Chris Carter's point needs answering if Lord Lawson is to have the credibility he needs to make an accepted contribution. He was plainly, at first, a very successful Chancellor (as is claimed - wrongly in my judgement - for Brown) whose reputation was at best diluted over 1990's recession and the resulting ERM debacle that arose from interest rates being far too high for the British economy as a result of the battle between growth and inflation.

So, to the real question - to what extent does he think that today's situation came about from an over-reaction to that 1990's recession arising from allowing interest rates to remain too low for too long in the boom years of post 2001? And how could it have been foreseen and acted upon in those boom years when it was difficult for him to see the trouble being stored up by his policy of shadowing the D-Mark in the late 1980's?

Frank Smith

Could we compare and contrast banking regs in Canada and the UK? I understand the Canadian regs prevented their banks taking any share in the debt-boondoogle in the States.

BM

How do you find a way to run financial markets clean of corruption and looting? How do we iron out the sharp practices we have seen in the last decade without crippling over-regulation?

Nicholas Hallam

Looking forward, I should like to know whether he sees global environmental concerns as presenting an obstacle to rapid economic recovery.

Tony Colvin

I would like you to ask Lord Lawson whether he thinks that a significant portion of the trillions of dollars of CDSs (Credit Derivative Swaps) held by banks are the result of their gambling on outcomes in which they have no financial interest in the underlying financial instrument.
(There are, of course, legitimate CDSs which are a form of insurance. These are not at issue).
If the answer is yes, then Lord Lawson should be asked whether the correct action is now for governments to pass legislation that will make these CDS contracts nul and void.
Bankers will doubtless protest that a contract is a contract and must not be nullified through legislation.
But bankers are not the ones suffering the consequences of their turning banks into casinos.
It is in the public interest to get these CDSs out of the system, and only legislation can do this at a stroke.
Tony

mart

Fraser, please concentrate on what to do now. Write-ups of what HAS happened are two-a-penny now, and anyway the best time to do a full job on that is in 5 years' time.

What should (and should not) happen now - this is something John Redwood tackles daily on his site, and is the "narrative" we most need in order to see HMG's present-day actions in their present-day context.

So I would like to see questions asked of Lord Lawson that will address the "what now" questions.

Kind regards

Josh

Does he regret pursuing the disastrous policy of tailing the German currency, and does he think a fixed exchange rate would help or hinder Britain now?

Jonathan

How can we better align risk, reward and ownership over the long term? Particularly in the banking sector where employees have the unique ability to 'create' money and award themselves bonuses out of this created money.

It seems that bank employees (from CEO downwards) have done very well for themselves during the boom times of the last few years and then left the shareholders (the owners) with the losses.

It seems that divided and complacent shareholders were not exercising enough ownership of what was going on in the bussiness they owned. Could there be a better ownership structure - e.g. Goldman's used to be a partnership and seemed to be better run because of it.

Ray

Chris - Lord Lawson 'inflated' the UK economy in 1988-89 because (in common with every other finance minister at the time) he over-estimated the likely impact of the 1987 Stock Market crash. Hindsight, as they say...

And yes, he was wrong about ERM. But like quite a few Conservative politicians who have since been mugged by reality, he failed to comprehend the fact that ERM was principally a political project aimed at creating European superstate, rather than just a handy mechanism for stabilising currency fluctations.

Swiss Bob

Guido Fawkes has a post up today on Brown's Home Buy policy. The USA had/has the Community Reinvestment Act that forced the banks to lend to people who were poor credit risks.

Does Lawson agree that the sub prime debacle was caused by failed socialist policies and regulation or does he blame the markets, and bankers for being greedy? (Bears, woods etc).

Wilhelm

Lord Lawson

How on earth did you lose soo much weight ? What is the magic secret ?

Chris Rose

Brown did not listen to advice and did not dampen things down c2005.

When he was Chancellor, what sources of advice did Lawson find valuable and why did he not listen attentively to them c1989?

Chris Carter

Ray - indeed. Call him as an "expert" on getting things wrong - that's valuable in itself - but let's not pretend he was cleverer than anyone else please.

oldtimer

What are Lord Lawson`s top three causes of the present catastrophe? What are his top three remedies?

Hugh

Sir,
The Board of Banking Supervision was set up in the eighties to capitalise on the painful lessons learnt from the eighties recession, and presumably that of the seventies too. Brown first neutered and then binned this important watchdog.
Do you think that this body would have warned of Brown's depression if it had still been in existence?
Was Brown properly warned by the opposition of the importance of this body as an institutionalised source of warning for just the hazards we have driven into?
Do you think he would have listened anyway?

bitter and twisted

If I can afford to emigrate, should I? If so, where? Is this country sunk?

Pete

'Global Warming'

As an AGW sceptic , how do you suggest we stop all parties throwing good money after bad on this issue?

Tiberius

To what extent were the regulatory failures of the Treasury/BoE/FSA regime created by Brown exacerbated by the characteristically casual attitude towards government by New Labour?

oldtimer

A supplementary question:
Do you agree with the view that the solution will rest with the passage of time and further falls in asset prices rather than the "actions" of governments - especially "actions" which pile yet more debt on top of the debt that is already there?

King Prawn

How big a mistake was the decision to expand money supply to prevent the dot.com recession in 2001/02 in leading to the depression we have at the moment.

Does Lord Lawson think that one of the first things that the next Tory government should do is transfer public pension schemes from defined benefit to defined contribution schemes. Do you think that Cameron (or anyone else for that matter) will be tough enough to face down the inevitable union disruption.

Susan Hill

Given that Lord Lawson was one of the first to expose the myths of Global Warming now known as Climate Change, how much would he estimate we could save over the next 5 years by simply dropping every project, nationally and on a local government level, that spends money on this nonsense ? (I`d ask the same question internationally but it isn`t as relevant.) And given that a lot of people still believe in GW/CC in spite of his efforts and those of many reputable scientists, how would he persuade them that, to paraphrase Obama, 'the science is NOT there.' ?

Martin Conboy

The question I would like asked is: "Given the existing powers held by the FSA since its creation in 1998, could it, if it had acted correctly, have prevented the banking crash?" and if the answer to that is Yes, then the next question "In which case should the board of the FSA be blamed for incompetence?"

TGF UKIP

Bank of International Settlements figure in November 2007 for over-the-counter equity, interest and debt derivatives was $400,000 bn.

What is Lord Lawson's estimate of how much of this is "toxic", or less euphemistically, worthless, and does the UK government actually have the wherewithal to remove British Banks' share of that $400,000 bn from bank's balance sheets without massive "quantitative easing" and corruption of the currency.