The Chancellors (30): John Major


John Major, 1989-90

Conservative, under Thatcher

Kitty Muggeridge once said of David Frost, that ‘he rose without trace’. It is somewhat tempting, if not entirely fair, to say the same of John Major (you can read about his career as a whole here, and his very brief stint at the Foreign Office here). He certainly got lucky, insofar as Sir Geoffrey Howe’s falling out with Thatcher sent him to the Foreign Office, and then Nigel Lawson’s resignation sent him to number 11 (and Howe’s resignation to number ten).

He became chancellor at a difficult time for Thatcher, and her government. The Poll Tax was much hated, inflation was rising, interest rates were at 15%, Thatcher was unpopular and Labour ahead in the polls. Publicly, Major looked to bear down on inflation: ‘if it isn’t hurting, it isn’t working’.

The causas belli of Lawson’s resignation had been the arguments he had with Thatcher over the Exchange Rate Mechanism, which Lawson and the Treasury wanted to join, believing that a stable and strong pound would be a consequence, and that would help win the battle against inflation. For Thatcher, that was a step along the road to monetary union and a single European currency, a process to which she had signed up in the Single European Act, but was now bitterly opposed, seeing it as a threat to national sovereignty.

Major agreed with his officials, and Lawson. After a year of patient badgering, he got his way. Sterling joined the ERM, pegged (with a 6% leeway) to the Deutschmark at DM2.95. It would prove to a grievous error, akin to that of re-joining the Gold Standard in 1925. DM2.95 would prove to be an unsustainably high rate, and doomed sterling to crash out on Black Wednesday, in 1992.

By then, of course, Major was prime minister. As prime minister, he had considerable virtues alongside his much advertised flaws, and nothing in the way of luck. However, as chancellor, he had one big decision to make, and he got it very wrong. Ironically, the decision he made as just a month before he entered number ten, perhaps did more than any other to undermine his position as prime minister did. In that sense, Major was the author of his own downfall.

Nonetheless, Major remains one of ten chancellors to also be prime minister (one of six to go direct from number eleven to number ten), as well as one of 13 to be chancellor and party leader. He is also one of nine men to have been both chancellor and foreign secretary, as well as being one of just three men to have been chancellor, foreign secretary and prime minister (five to have been foreign secretary, chancellor and party leader). The trace may have been brief, but a trace there certainly was.

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