Nigel Lawson is one of those strange, very successful individuals, who is often right in small things but has been staggeringly, stratospherically wrong in big things.
He was wrong about encouraging people into debt to buy homes (see my book Broke), wrong about the house price inflation that would result. He was wrong about Big Bang and about personal pensions. He has been horribly wrong about global warming (carbon dioxide levels hit 400 ppm for the first time this week). Now he is wrong about Europe and Britain's future.
Here are six reasons why he is wrong that we need to ditch the EU and throw in our lot trading with the Far East:
1. Long distance trade is going to get increasingly expensive as energy prices accelerate.
2. Our biggest markets are in continental Europe and it seems bizarre to lock ourselves out of those privileges for the uncertainties of China.
3. It isn't clear why we should be any more successful trading with the Far East outside the EU than we are inside the EU.
4. To trade there, we particularly need manufacturing industry which - thanks to the high pound caused by the North Sea Oil era - we no longer have, at least not on the scale we need.
5. Given that, if we are intending to concentrate our trading efforts in financial services, then it will unbalance the UK economy even further and corrode our own real economy.
6. Trading primarily with the Far East will mean reducing wages to their level if our own services are going to be competitive, and this will exacerbate our economic problems.
But despite all this, the interventions of Lawson and Lamont this week will have a familiar ring about them for political historians, because the Conservative Party has always been split three ways on trade:
(a) Free trader internationalists looking for regulated markets (Kenneth Clarke, Damian Green and the pro-Europeans).
(b) Turbo-capitalism aficionados, looking for extreme de-regulation - not actually free trade in its traditional sense (see my blog on this) (Nigel Lawson).
(c) Mildly xenophobic nationalists, tariff reformers and Little Englanders (the UKIP tendency).
Most of the parliamentary Conservative party comes under the heading of (a) but daren't say so. A fatal division seems to me to be emerging that could not just sink the coalition but looks remarkably like the disastrous intervention by Joseph Chamberlain in 1903 on what was then known as tariff reform, a kind of Fortress Empire policy that later inspired Oswald Mosley, and closest to (c).
Chamberlain's campaign split the ruling Conservatives, and the government was held together entirely by the tenacity and skill of the Prime Minister Arthur Balfour, who kept his hands very close to his chest indeed. It was at this point that one of Balfour's closest allies described himself as having "nailed his colours firmly to the fence".
The chaos that ensued allowed the Liberals in with a landslide victory in 1906 so complete that it was able to lay the foundations of the welfare state.
Here are a few lessons we might do well to learn from that. First, there is nothing in common between (b) and (c) except a scepticism about the EU. Lawson and UKIP are actually pedalling very different political philosophies indeed, and this will become clear as UKIP sets out its stall.
Second, the Liberals won against Chamberlain by uniting the nation in favour of the old Liberal version of free trade, because it underpinned national prosperity, affordable food and world peace. That is how any defence of the European Union needs to be cast.
The Joy of Six 1107
8 hours ago