30 Years On. From September 1992,Tory financial crisis to September 2022 Tory financial crisis
On Friday 23rd September 2022 the current Chancellor made a fiscal statement. It promised tax cuts, primarily for the rich. Widely regarded as a disastrous move the impact was to cause a sharp drop in the value of the pound. It is projected interest rates will rise to 5.5% by Spring 2023 and quite possibly earlier than that.
We have been here before, almost exactly 30 years ago
On Wednesday 16th September 1992, ‘Black Wednesday’, the Tory Government withdrew the pound from the European Exchange Rate Mechanism (ERM). In order to protect the pound Chancellor Lamont raised interest rates from 10% to 12% in the morning, and then up to 15% in the afternoon.
The following day interest rates returned to 10% but the damage was done in terms of electoral standing. Voters with mortgages, perhaps more inclined to vote Tory, had seen the spectre of the cost rising by 50% in a day. If it had happened once clearly it could happen again.
By November 1992 polls were showing ratings of around 30% for the Tories and 50% for Labour. They changed little until the eventual election in 1997. Labour’s lead was nothing to do with Blair, who wasn’t Labour leader in 1992, but with an event so potentially cataclysmic in its impact that it stuck in voter’s minds.
It’s worth pointing out (thanks to Lindsey German for this point)that the October 1992 pit closure crisis underlined and amplified the Tory crisis. The Tories had spent the mid-1980s demonising and defeating the miners on pit closures. But when Heseltine tried again in 1992 the mood was very different. Public support swung behing Arthur Scargill and the NUM’s efforts to stop further closures.
The balance of Tory constructed financial crisis and industrial action is something that can move things forward in a positive way not for the few but for the many
Leave a Reply