Quote: El Barbudo "Because of what happened to the pound when it was in the ERM, I think you mean.
i.e. Lamont sat in his office without even a TV to watch the currency markets and, as runners kep coming in to tell how much further the pound had fallen, kept throwing money at it, impotently waiting and waiting for instructions from the equally vacuous Major who didn't even contact him.
Then Lamont had the brass neck to say he'd never actually been keen on the ERM anyway ... didn't stop him from taking the job did it?
Yeah ... I think Blair had a point about Tory economic credibility after that, actually.
'"
I don't support the idea of any kind of European currency regime, ERM or Euro, however in fairness to the Tories on this one, they were damned if they did and damned if they didn't, in terms of 'credibility'. They had made the decision to go into the ERM and had made a firm commitment in the election of May 1992 that the UK's economic policy would be run from within the ERM. That is a signal to businesses that the UK will be an ERM member.
When four months later, the pound comes under pressure - do they decide to quit the ERM at the first sign of trouble? With hindsight that would have saved us a lot of money that day, because we blew billions on ill fated interventions, but if we had quit early on in the day what would that have said about the UK government's 'credibility' for any future statements on its economic policy.
Once they made the decision that the UK would be in the ERM (the wrong one, IMO, as Mrs Thatcher warned), they had to pull out all the stops to try and keep us in when we came under pressure.
