Letter: The secret of Houdini Harold

Sir Fred Catherwood
Sunday 08 June 1997 23:02 BST
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Sir: Thank you for the parallels between Tony Blair and Harold Wilson ("The cautionary tale of Labour's last moderniser", 4 June). There are others. If Harold Wilson boxed himself in with an overvalued exchange rate, Tony Blair has boxed himself in by yielding up both of government's main levers on the economy: interest rates to the Bank of England; and taxation to his promises to our much more materialistic electorate.

Houdini Harold escaped and, at the end of six years, the trade deficit of pounds 376m had been turned into a surplus of pounds 871m, the manufacturing investment needed to sustain it had increased by 44 per cent to a level only a little less than it is now and unemployment was only a shade over half a million - and all that without open access to the EC.

In those days we were much clearer about the object of the exercise, which was to shift of resources into industrial investment, in order to give us the trade surplus on which we depended (and still do) for domestic expansion and full employment. Without that clarity of practical purpose I do not see how Tony can do the same trick.

Sir FRED CATHERWOOD.

Balsham,

Cambridgeshire

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