Move to massage unemployment data

Posted on December 30, 2011

Geoffrey Howe proposed massaging unemployment figures to keep the figure below 3m as jobless levels grew to almost three times that of the Winter of Discontent two years earlier.

In a series of exchanges with Margaret Thatcher, Mr Howe, then chancellor, proposed 2.9m as the unemployment forecast for 1982-3, while admitting the Treasury’s actual figures suggested it would be 3.1m-3.2m.

“Obviously we should prefer to avoid publishing … a figure of over 3m,” he said, adding that 2.9m was the lowest figure they could publish and still remain “credible”.

He exercised similar creativity with the inflation forecast, proposing 10 per cent, even though that was “at the bottom end” of the Treasury’s internal forecasts.

A response from Mrs Thatcher’s advisers noted approvingly that Mr Howe had accepted the need to balance credibility with political expediency but urged that he go further still, particularly as earnings and inflation figures would be seized on by public sector unions pushing for higher settlements.

A hand-written note from the prime minister said she shared those “worries” and proposed publishing even lower figures than those Mr Howe suggested.

Mrs Thatcher’s team also considered sophisticated manipulation tactics more akin to advertisers than politicians.

Referring to the need to garner support for curbing trade union power, John Hoskyns, head of Mrs Thatcher’s policy unit, proposed: “We should try – implicitly and subtly, not very obviously – to link in people’s minds the moral similarity between high pay claims demanded with menaces and other forms of anti-social behaviour, including rioting and looting.”

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