"Tim Roll-Pickering" wrote:

Bruce wrote:

I never denied that he was the Chancellor who took us in, although support
for the move and at that particular level was widespread in political and
economic circles at the time largely as a means to control inflation.

On the contrary, inflation should have been controlled *before*
entering the ERM.

Which was partially attempted but the ERM was seen as a tool that would help
the job.


Not so. There were strict rules for joining the ERM that involved a
ceiling on the rate of inflation and a ceiling on the percentage of
GDP represented by a country's fiscal deficit. Both these rules were
broken or waived (your choice) to allow the UK to enter the ERM.

When Greece joined the Euro, the same blind eye was turned to Greece's
complete inability to meet the entry conditions, and by a large
margin. Only a fool repeats the same actions over again and expects
the consequences to be different.

Ironically, joining the ERM (and eventual membership of the Euro) was
sold by its protagonists to the Great British Public on the basis that
it would end boom and bust. Now, in 2012, we can see Germany has an
unprecedented boom and Ireland, Portugal, Spain and Greece are bust.
So much for the Euro.



As when Greece joined the Euro some years later,
the rules were bent to allow the UK to join the ERM and the result was
a political and economic disaster. Do we never learn?

Unfortunaely not. The history of 20th century British economic policy is
full of attempts to enter exchange rate schemes, often at rates that turned
out to be bad but which the consensus of opinion of the time fully
supported. The return to the Gold Standard in the 1920s at the pre-war rate
was another.


Absolutely.


The UK's entry to the ERM was entirely a political construct. We
entered at the wrong time and at the wrong exchange rate, purely to
satisfy the Europhile wing of the Tory party. Thanks to the ensuing
disaster, most of the Tory party has now seen sense and there are only
a small number of Europhiles left.

It is rewriting of history, which you accuse others of, to claim it was just
to satisfy Conservative Europhiles. It was the widespread political and
economic consensus of the day that the UK should strive to enter the ERM at
that rate.


There was no such consensus. In politics, the Labour Party was
horribly split on the issue, as were the Conservatives. Only the
LibDems were consistently pro-ERM and pro-Euro. In economics, there
was no sign of any consensus. As usual, of you asked ten economists
the same question, they would come up with ten very different but
equally well-argued answers.

I think all that can be said was that, at the time of ERM entry, the
Tories were more pro than anti. Labour was split to an extent that
was never tested. There may have been a slight majority of economists
in favour. But to say that there was 'a widespread political and
economic consensus' is stretching the point beyond credibility.

Still, some historian somewhere will no doubt include it in a book or
paper to be argued about for years to come. I suppose that rewriting
history is actually part of a historian's job. ;-)