For six long years, Budget after Budget, Harold Wilson worked away to increase the burden of taxation by £3,000 million… Along came the demon Barber, and in three years, not satisfied with cutting the whole of Wilson’s £3,000 million of tax increases, he cut a further £1,000 million as well.
Peter Walker MP, Conservative Party Conference, 1973
Yes, there really was a time when Anthony Barber, Chancellor of the Exchequer in Edward Heath’s 1970–74 government, was extremely popular, at least with the party faithful. And why not? By 1973, the economy was roaring ahead at 6.3 per cent (by contrast, 2.5 per cent has been pretty respectable for a long time).
Wages were rising strongly, controls on hire purchase and other forms of credit had been scrapped, and easy money was fostered by a deliberate policy of low interest rates. Spending was lavished on ‘prestige projects’ including a Channel Tunnel, a new airport in the Thames Estuary and the Hovertrain.
Does any of this sound vaguely familiar? It may become more so when you consider that Barber was never supposed to be Chancellor but stepped in after the short-lived tenure of Iain Macleod, just as the current incumbent was called in to replace Sajid Javid.
Barber had served in both the Army and RAF in the war, escaped from a POW camp where he studied law through the Red Cross, became a barrister in peacetime and an MP. He served as Minister of Health (what we would now call Health and Social Care Secretary) and became party chairman in 1967.
After leaving front-line politics, he became chairman of Standard Chartered Bank.
Yet despite all this, he is today remembered by those with an interest for one thing: the ‘Barber boom’, essentially the expansionary measures from 1972 onwards that led, first, to the balmy conditions described above, in the first half of 1973, and then the almighty bust at the end of that year, triggered by the ‘oil shock’ and exacerbated by the miners’ strike.
And by surging inflation. This had been running at 9.10 per cent in 1973, rising to 16.4 per cent in 1974 and peaking at 25 per cent the year after.
On went the brakes, out came the emergency powers, out went the lights. All these years later, the Barber boom overshadows his legacy. But is this fair?
Former Labour MP turned writer and broadcaster Phillip Whitehead thought not. In his book about the 1970s, The Writing on the Wall (Michael Joseph, 1985), he states that Heath was the architect of the ‘boom’ policy and over-rode Barber’s reservations. ‘A strong Prime Minister could carry the Cabinet against an amiable Chancellor.’
He quotes Barber:
There were one or two occasions when I really felt we were taking decisions on public expenditure where I felt I should have had more support. I got rather depressed and I used to come back and talk to Jean, my wife, and say: ‘Oh God, I’m fed up with this bloody job’… but I never put pen to paper or anything like that.’
To have resigned, Whitehead reports him as saying, would have been ‘to announce to the world that the spenders had won’.
But if Barber is relatively blameless, how did the disaster of the early-1970s arise? Heath must bear some of the responsibility, but as Robin Ramsay wrote in The Rise of New Labour (Pocket Essentials, 2002), the real issue was that Heath’s government had been blind-sided by City and financial interests into a wholesale liberalisation of credit creation.
‘This was the climax of all those attempts since the post-war era to get rid of government controls on banking.’
This was made easier for the City by the fact that Heath was kidded (or kidded himself) that liberalised credit would make UK banks more likely to behave like their German and Japanese counterparts and take long-term stakes in British industry.
‘This was nonsense, disinformation,’ writes Ramsay.
How are the then-and-now parallels likely to work out? Well, Barber was a lawyer who knew nothing about economics, and his boss wasn’t even a lawyer but a civil servant and international yachtsman.
Today, Barber’s successor Rishi Sunak is a former investment banker and hedge-fund type, which may suggest a nodding acquaintance with the dismal science. His boss is a former journalist-cum-light entertainer.
One step forward, one step back.
For having foreshadowed, albeit unintentionally, our present predicament, we nominate Anthony Perrinott Lysberg Barber as our Politician of the Year (dead).
other dead politicians of the year: