Lamont’s lament – when good predictions go bad

What’s the worst prediction you’ve ever heard? It’s a tough choice; history is littered with an infamous few. Could it be Michael Fish reassuring viewers over concerns there might be hurricane force winds, a few hours before one of Britain’s worst storms of the Twentieth Century hit South-East England in 1987? Or perhaps it’s Alan Hansen’s assertion that Manchester United would “never win anything with kids”, months before their Premier League and FA Cup double in 1996?

Well there’s another that’s reared its head over the last few days, one which left its maker widely ridiculed for his timing. As the twentieth anniversary of Black Wednesday came and went over the weekend, so did a few chuckles in the media over Norman Lamont’s famous statement from 1991, the year before Black Wednesday, that “the green shoots of economic spring are appearing once again." For the record, the deterioration that led to the Pound being removed from the Exchange Rate Mechanism in September 1992 is estimated to have cost the UK economy £3.4bn.

But just how bad was Lamont’s prediction? Its timing led many to question the then Chancellor’s wisdom, and it undoubtedly caused the Conservatives reputational damage in the eyes of the electorate. It certainly cost Lamont – he left the Government in 1993. But as then Prime Minister John Major explained to Andrew Marr over the weekend, history might well have proved Mr. Lamont right. In the years that followed, the United Kingdom entered an unprecedented period of economic growth (although much of it occurred under Blair’s Labour Government).

The problem for Lamont was that his statement was a high-risk, low-reward one. It could only be proven long after the event, and politics is a short-term game. Lamont made himself a hostage to fortune in the immediate aftermath, as any sign of economic stagnation was sure to be seized upon by the media. Conversely, any sign of economic growth that reinforced his prediction was likely to provide a far less salacious story for the press.

Instead of making such a triumphant statement, Lamont should have simply pointed to the evidence that supported his assertion. In doing so he would have given himself greater wriggle room once Black Wednesday struck.

This time the Conservatives have played it far smarter. By using the retired former Prime Minister John Major to make their case, they have used someone who need not worry about short-term concerns or his media profile. If the economy goes to hell in a handcart, the leadership can easily distance itself from his comments.

Tom Yazdi
Consultant
tom@linstockcommunications.com