Lord Lamont of Lerwick: Lord Speaker's Corner | House of Lords | Episode 13

Lord Lamont talks tackling inflation, controlling interest rates and growing up in Shetland in the latest episode of Lord Speaker’s Corner.
‘Although I personally would not have joined the ERM and although I personally didn't think it was a disaster when we had to leave, I think the period we were in the ERM for two years did actually do the economy a huge amount of good.’
Norman Lamont, now Lord Lamont of Lerwick, was Chancellor of the Exchequer in the early 90s, and was responsible for trying to restore stability after the UK dramatically crashed out of the European Exchange Rate Mechanism (ERM) on ‘Black Wednesday’. In this episode, he shares with Lord McFall of Alcluith what was going on behind the scenes and explains that despite it being ‘a political disaster… a great humiliation’, it set up the following 15 years of growth.
‘I did actually go and see both Gordon Brown and Tony Blair when they were in opposition. And I told them that it wasn't my business to do anything to help the Labour Party, but I think it would be in the interest, thought it would be in the interest of the country, if they made the Bank of England independent.’
Lord Lamont also explains how he suggested to Gordon Brown and Tony Blair to make the Bank of England independent, having not managed to convince John Major to do the same when he was Prime Minister. He also explains how we have got to where we are with interest rates today, by introducing a policy to use interest rate setting to target a set percentage for inflation.
Born in Shetland, Lord Lamont also explains how growing up there influenced his perspectives on the UK and Europe, and talks about his hopes for the UK's relationship with the EU post-Brexit.
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[@andrewbaldwin4454]

Thank you very much for this wonderful interview. Everyone should read Lord Lamont's memoir "In Office". Arguably he was the best Chancellor of the Exchequer Britain had over the last half century. He made the Bank of England the first inflation-targeting central bank in Europe, and the Inflation Report that he introduced became the model for similar reports by other central banks, including the Bank of Canada. It was a shame that Lamont's initial long-term inflation target range, from 0% to 2%, was quickly forgotten about, even by Lamont himself, who doesn't mention it in his memoirs. A one-percent inflation target would be better than a two-percent target. Bank of Canada Governor John Crow wanted to go to a one-percent inflation target at the time of the initial renewal of the inflation-control agreement in December 1993, and it is too bad that he didn't get his way.

[@syedadeelhussain2691]

Remember the ERM Crisis of 1992 - Black Wednesday, and later wrote my dissertation on the OCA - Optimal Currency Area, as introduced to us in his seminal contribution to International Macroeconomics by the Late Robert Mundell. George Soros smelled that the Pound was overvalued due to bad inflation numbers. Therefore his Quantum Fund punted on the Pound Sterling and sold short the British currency because the inflation differentials between Germany and the UK widened which implied the Sterling had to adjust downwards to restore equilibrium in forex markets and restore the DM - Pound Sterling Parity Condition. That meant the UK either left the ERM or continued to intervene in the forex market via the money market by raising short-term baseline interest rates or selling the DM to keep its value within the allowable trading bands.

[@DJDJ-fl2nv]

So let’s hope the Public Inquiry looks at the inequities within the legal and judicial system as it played such a significant part in the Post Office scandal...these are still played out in civil litigation every day for many thousands of individuals...same themes just individual cases...

[@MagicNash89]

That lasty comment about Sunak was just utter nonsense🤣

[@Rachel_M_]

How's Miss Whiplash doing these days?