The Medium-term Financial Strategy

Roy Hattersley

Chapter 3 in Economic Priorities for a Labour Government, 1987, pp 37-46 from Palgrave Macmillan

Abstract: Abstract For years the Government has never tired of telling us that its economic policy is built around and dependent upon the Medium Term Financial Strategy. Despite the air of mystery which surrounds that strategy, its basic ideas are simple. Indeed, they are too simple. The MTFS is an intellectually unsophisticated policy. It has been applied with a lack of subtlety but with an excess of evangelical zeal. The method of its application — almost as much as the central error in its concept — has produced calamitous results for the United Kingdom economy. The Medium Term Financial Strategy produced a 2 000 000 increase in the unemployment total, a slump in investment, a collapse of manufacturing, and annual tax bill which has grown by £29 500 million, the highest real interest rates in our history, record numbers of company liquidations, an increase in poverty, a widening gap between the rich and the poor and massive cuts in public services — all this despite the uncovenanted bonus of North Sea oil revenues.

Keywords: Exchange Rate; Interest Rate; Money Supply; Real Economy; Inflationary Expectation (search for similar items in EconPapers)
Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-18608-2_3

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DOI: 10.1007/978-1-349-18608-2_3

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