FISCAL FORTITUDE

Can't pay? Won't pay. That's Major Duncan. Robert Verkaik reports

When you book in at the Grange Hotel, which sits half-way up a cliff on the Cumbrian coastline at Grange-over-Sands, there's something very familiar about the entrance hall. The station, you discover, was built as a miniature replica of the hotel. This is the sort of imperial extravagance that characterised a golden era of low inflation and high GNP - an era still remembered by at least one of the town's residents.

Major Arthur Duncan, 75, a regular at the hotel and the very embodiment of Empire values, opted out of inflation when he retired from the Army in 1981. Since then, he has adopted a fiscal policy so strict it puts to shame anything the Treasury has delivered. He simply goes without many everyday items, while other essential groceries he buys in bulk. For example, he no longer buys red meat: "Twenty years ago, I bought about 75 pounds of textured vegetable protein. I asked the salesman what its shelf-life was, and he said `indefinite', so I expect that lot to last me for the rest of my life. At the time, it came to four- and-a-half pence per pound."

The major's views on pricing are well known in the town. Anything with a 99 in the price, he describes as "downright deception". "I don't think traders know what inflation is,'' he says. ``I say to them, `What right do you have to put up your prices by so much per cent when inflation is such and such?'" For those shopkeepers who he feels have gone too far, he reserves his ultimate weapon - the trade boycott.

The delicatessen was an early casualty, and when his barber raised his prices from £2 to £2.50, the major told him he was going to cut his own hair. "I said 25 per cent increase - that's far above inflation." When he changed papers, from the Telegraph to the Times, the newsagent started charging him an extra ten pence a week for delivery, so the major cancelled his order.

But the most famous victory in his battle against rising prices is not ten years old. The major had been harassing the owner of the Grange for some years about the price of...well, everything. "One day I came in and he had put up the price of bitter by two pence to 35p for half a pint. I said, `I'm not paying 35p for half a glass of beer.' In the end, he said I could have it for 33p - for life."

To his credit, James Alexander, the Australian owner of the Grange (regarded by the major as a foreigner, and therefore partly responsible for lowering the tone of the town), has stuck to the agreement, and has created a special "Major" button on his bar till. ``Even if he sells the hotel,'' the major adds, ``it will be in the contract that I shall continue to have my beer for 33p for the rest of my life.'' Mr Alexander, who is currently selling bitter for £1.50 a pint, accepts that his may have been a rash offer, but feels that only someone with the major's economic foresight could have understood the real value of the deal.

The major lives in a flat at the bottom of the hotel grounds and visits the hotel bar daily to claim his cut-price tipple. Mr Alexander greets him as "Major", and the major responds with "Morning, MD". The inevitable Fawlty Towers comparison isn't lost on either man. "I don't really like him addressing me as `the major','' Duncan confides, ``because people always turn round expecting a war or something."

In fact, most of the people who turn round when the major arrives are looking forward to one of his famous lectures on how to defeat inflation. And what he tells them is that he has found buying in bulk reaps its own rewards. After returning dozens of coupons on a bulk purchase of Heinz tinned soups, he won a brand new Austin Metro. Wholly uncorrupted by the experience, he immediately sold it to the local garage and spent the money on rust-proofing his old Daihatsu, which, as you might expect, clocks up no more than 2,000 miles a year.