With the release last week of the official Treasury papers from the early 1980s, Thatcher’s first Chancellor emerges as an accomplished administrator and a bold politician willing to face widespread oppositionby Emily Stacey / December 1, 2016 / Leave a comment
Geoffrey Howe was one of Margaret Thatcher’s closest allies and confidants and together the two made history. From 1983 to 1989 as Foreign Secretary Howe strengthened Britain as a leading voice within the European Economic Community, helped to combat the spread of communism, negotiated a Sino-British Joint Declaration on the future of Hong Kong and was a key player in the Anglo-American relationship during the golden Reagan-Thatcher years.
Prior to the Foreign Office, Howe had initially served Thatcher as Shadow Chancellor between 1975-79, then spent four years as Chancellor of the Exchequer following the Conservative victory in 1979. After his resignation speech, Howe is most famous for his 1981 Budget Statement, one of the most controversial the British Treasury had ever submitted. The Conservatives defied conventional economic thinking by bringing in de-stimulatory policies during a time of prolonged recession.
It was famously criticised by 364 economists in a joint letter to The Times, detailing why the logic behind his deficit reduction plan was flawed. Within three months, however, the British economy was showing signs of improvement and by 1983 inflation had declined significantly from 11.9 to 3.8 per cent, a result that secured Howe’s reputation within government circles (although unemployment rose to a 50-year high).