Reluctant and unlucky Chancellor in the Heath government who presided over the 'Barber boom'
Monday 19 December 2005
Anthony Perrinott Lysberg Barber, politician: born 4 July 1920; called to the Bar, Inner Temple 1948; MP (Conservative) for Doncaster 1951-64, for Altrincham and Sale 1965-74; PPS to the Under- Secretary of State for the Air 1952-55; Assistant Whip 1955-57; Lord Commissioner of the Treasury 1955-57; PPS to the Prime Minister 1958-59; Economic Secretary to the Treasury 1959-62; Financial Secretary to the Treasury 1962-63; Minister of Health 1963-64; PC 1963; Chairman, Conservative Party Organisation 1967-70; Chancellor of the Duchy of Lancaster 1970; Chancellor of the Exchequer 1970-74; President, National Union of Conservative and Unionist Organisations 1973; created 1974 Baron Barber; chairman, Standard Chartered Bank 1974-87; married 1950 Jean Asquith (died 1983; two daughters), 1989 Rosemary Surgenor (née Youens, died 2003); died 16 December 2005.
Anthony Barber had the misfortune, as Chancellor of the Exchequer between 1970 and 1974, to be associated with the "Barber boom". This resulted from a praiseworthy attempt to end the cycle of stop-go management of the British economy. It all ended sadly, with a sudden steep increase in Arab oil prices, accelerating inflation, the miners' strike, election defeat, and the loss of the Conservative Party's reputation for economic competence. Most assessments of the records of post-1945 Chancellors have placed Barber near the bottom of the list.
Tony Barber was a good example of the self-made professional politician coming to the fore in the Conservative Party in the 1960s. More than half (11) of the Conservative cabinet of Sir Alec Douglas-Home in 1964 were Old Etonians. Heath's 1970 cabinet had only three. Barber was one of the new men. Throughout his career, his lack of pomposity, his loyalty, straightforwardness and application won him the admiration of colleagues.
Barber's father was a successful manager of a private limited company. His working life ended abruptly after he reported the financial improprieties of his employer to the Inland Revenue. His reward was summary dismissal, without compensation. Tony was some 10 years junior to his two brothers, Noël, who became a distinguished foreign affairs reporter and best-selling author, and Kenneth, who became a banker and, in later life, also an author. The family was brought up in the East Riding of Yorkshire, and Tony Barber kept a Yorkshire home for much of his life. He was educated at Retford Grammar School and when he left, aged 18, was articled to be a solicitor. His life changed within months, with the outbreak of the Second World War.
Barber had a remarkable war. He saw action in the retreating army at Dunkirk in 1940. Keen to be involved again, he was seconded to the RAF, as a pilot in the Photographic Reconnaissance Unit. In 1942 he was obliged to bale out over Mont St Michel; he spent the rest of the war as a POW. He made a number of ingenious and daring escape attempts, succeeding once, only to be recaptured. On this occasion be managed to reach Denmark, where he was able to speak the language because his mother was Danish. After the last failure he decided to study for a law degree in his spare time. He got a First.
On his return to civilian life in 1945 he gained a grant to enter Oriel College, Oxford. With his law degree behind him, he read Politics, Philosophy and Economics for the next two years. He then passed his Bar exams and became an active barrister. But he was also interested in politics and was adopted as Conservative candidate (the only applicant) for Doncaster for the 1950 general election. He faced a 23,000 Labour majority, even though redistribution had effectively reduced this somewhat. Barber reduced the majority to less than a thousand and in the 1951 general election he won, by less than 500 votes.
The seat was always marginal and it took him some time to decide to concentrate on politics and give up what was becoming a lucrative practice as a tax barrister. He also met his future wife, Jean Asquith, a Conservative candidate in a neighbouring seat. She was a great supporter and he was deeply affected by her sudden death in 1983. Barber held the marginal seat until 1964, when the Conservative run of election victories was halted. He was then chosen for the safe Altrincham and Sale constituency, which he won in a by-election in February 1965, and held until his retirement in September 1974.
Barber's political progress was steady rather than spectacular. He spent three years in the Whips' office, where, for part of this time, Ted Heath was Chief Whip. From 1958 he spent nearly two years in 10 Downing Street as PPS to Harold Macmillan. Macmillan appreciated his aide's dedication and Barber's political education was greatly advanced by the relationship. Macmillan moved him in October 1959 to the Treasury, first as Economic Secretary and then as Financial Secretary. In these four years he showed his hallmark qualities of great stamina, attention to detail and general competence.
In October 1963 Barber finally entered the cabinet of the new prime minister, Alec Home, as Minister of Health. The Government lasted only 12 months and he had no time to make a mark. That waited until he became chairman of the party. Heath had succeeded Home as party leader in 1965 and there was no love lost between him and the chairman, Edward du Cann. Heath replaced du Cann with Barber in 1967. The post involved Barber's spending much time touring the constituencies, raising morale, defending Heath, and trying to stifle support for Enoch Powell. He held his nerve during the 1970 general election campaign, when many in the party thought that all was lost. He sought reassurance in the optimistic canvas returns and doubted the doom-laden opinion polls.
The first few weeks of the Heath government were the most tumultuous in Barber's political career. He was made Chancellor of the Duchy of Lancaster and given responsibility for negotiating Britain's entry into the European Community. But, after five weeks, the Government was shaken by the sudden death of the Chancellor of the Exchequer, Iain Macleod. Heath sent Barber to the Treasury. No doubt this move reflected Heath's respect for Barber; and his desire to have a trusted colleague there. Heath had never trusted the Treasury, which he suspected was too cautious and did not share his support for Europe. But Barber did not welcome the move. On his way to see Heath he said to a friend, "I hope he is not going to ask me to be Chancellor." He had already decided to leave politics for a job in the private sector in two years.
Tony Barber was a small, wiry man, prematurely bald, and a desperate smoker. Smoking was forbidden in Health's Cabinet Room and Barber retreated to nooks and crannies in No 10 to enjoy a cigarette. For a time Heath thought that his withdrawals from meetings were designed to check if there had been a change in the Bank Rate.
In his first two Budgets Barber implemented the tax reforms which Macleod had largely worked out in opposition. He unified Income Tax and Surtax, abolished Purchase Tax and the Selective Employment Tax, and introduced VAT. This was a complex reform, as was the decimalisation of the currency in 1972. But his hopes of amalgamating parts of the social security and tax systems through a tax credit system, in order to eliminate means tests, were lost with the Government's defeat in the February 1974 general election.
The central problem was that the Government's whole economic strategy was undermined by circumstances largely beyond its control. The ending of the Bretton Woods exchange system produced great instability. The rise of militant trade unionism posed a challenge to any anti-inflation policy and made the Industrial Relations Act inoperable. The steep increase in commodity prices and the quadrupling of Arab oil prices fuelled inflation. Above all, the Government faced the new situation of rising inflation and unemployment. The old Keynesian methods of economic management, although generally accepted, were approaching their demise.
Ted Heath was deeply involved in the crucial decision to reverse election pledges and introduce statutory controls of prices and incomes in 1972, a policy that made huge demands on his time. The "dash for growth", the attempt to achieve a 5 per cent annual growth rate between the first half of 1971 and 1973, was reflected in the 1972 Budget. This provided incentives for investment and greatly increased public spending. Britain was about to enter the EEC and Heath wanted British industry to enter in a confident mood and to make the most of the European opportunities.
But Barber also presided over a huge increase in the money supply, following the removal in November 1971 of controls over bank advances. In the quest for economic growth he was prepared to let the exchange rate go and the pound was floated in 1972. (It is worth stating that the decisions to float the pound, expand the money supply and aim for a 5 per cent rate of growth were widely supported among economists and across the political spectrum.)
Under Barber the voice of the Treasury was probably weaker in Whitehall than it has been since 1979. In the field of incomes policy, Ted Heath relied increasingly on Sir William Armstrong, the former Treasury mandarin who was now head of the Civil Service and his chief adviser. As late as autumn 1973 Heath was still talking about economic expansion. Barber and the Treasury knew better. In July 1973 and January 1974, on the eve of the general election, he introduced substantial cuts in public expenditure. The Government could not reflate with the high level of inflation. In the end, the miners' strike helped to destroy the objectives of achieving steady economic growth, stable prices, full employment and a balance of payments surplus.
The new Labour government blamed the Conservatives for the rate of inflation and for losing control of the money supply. A revived school of monetarists captured Margaret Thatcher, and Barber and Heath were reviled, not least in their own party. At the time, however, there was much support from economists and the media for the economic policies.
Tony Barber was still relatively young (54) when he left politics for a career in the City. He became chairman of the Standard Chartered Bank and remained in post for 13 years. The job involved extensive travelling to overseas branches and he was able to renew acquaintance with many political leaders, particularly in the Third World. At one time his public relations adviser in the bank was a young John Major.
Barber also maintained a modest role in public life. He was a member of the Franks Committee inquiry into the Falklands, which concluded that the Argentine invasion of the islands could not have been anticipated by the Thatcher government. He was also a member of the peacemaking Eminent Persons Group which visited South Africa in 1986. He successfully held out, as a minority of one, in opposing the extension of sanctions to bring about further change.
As Chancellor, Barber started with the disadvantage of being seen as a replacement for the charismatic Macleod. He had the misfortune to be in charge of economic policy during a period when economic prospects were bleak. In later years he kept his own counsel on public affairs although in private he deplored the way that Heath and then Thatcher treated their successors as Conservative prime ministers. He refused lucrative offers to publish his memoirs, although in 1996 an ultra- discreet memoir, Taking the Tide, was published privately and little noticed. By this time politicians' memoirs were expected to spill the beans.
After the death of his second wife in 2003, Tony Barber moved from his home in Surrey to Suffolk, to be near his younger daughter, Josephine. His later years were clouded by the onset of Parkinson's disease.
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