#OTD 1992. Britain exits the ERM on ‘Black Wednesday’.

John Smith claims that John Major is “the devalued Prime Minister of a devalued Government”

The Sun goes with “Now we’ve ALL been screwed by the Cabinet”

A thread on how Smith and Brown went on the attack:

Labour called for an emergency debate on the ERM and the recalling of Parliament

On his debut as leader in the Commons Smith argued it was becoming a “not me Government”

“In view of the debacle, one would expect at least a word of explanation or apology, but there was not a hint of that by the Government whose most noted characteristic is that no one takes responsibility, no one resigns and no one takes the blame. They are a "not me" Government”

Smith argued that

“After all this, we are left with an economy and a society ravaged by recession. There is no more important priority in Britain today than the adoption of a programme for economic recovery. If that is not done, the price will be paid by millions of unemployed”

Smith then turned to an attack on the Conservatives management of the economy:

“The most ingenious and perhaps the most ironic of the Prime Minister's new excuse were in his first comments after he emerged from his air raid shelter. He told us that the problem was...

that the markets were irrational. What are we to make of that one? Now that the Prime Minister is possessed of a genuinely new insight, may we invite him to refrain from insisting that these irrational market forces should determine all aspects of our national life?"

“Given the total mismanagement that has been so vividly demonstrated, may we have no more assertions about the Conservative party's unique and expert knowledge of the working of markets?”

“the contribution to policy of which he appears to have been most proud, has been blown apart, and with it has gone for ever any claim by the Prime Minister or the party that he leads to economic competence. He is the devalued Prime Minister of a devalued Government”

Closing the debate for Labour was the Shadow Chancellor Gordon Brown

“We heard today a prime ministerial speech with no information of substance, no explanation, no justification and certainly no apology to the people of this country”

“He should apologise to the millions of home owners who were told that three years of high interest rates were essential to bring us nearer zero inflation and who are about to suffer higher inflation as a result of his new policy”

Brown went on to attack the attempt to shift blame to Germany:

“Our argument is that the Government can blame neither the Germans nor the exchange rate mechanism nor extraordinary events for the scale of what has happened. They have no one to blame but themselves”

Anticipating Norman Lamont’s eventual resignation, Brown predicted how it would end:

“First, they will cut down his appearances in the media: sightings of him will become rarer and briefer as the Trade Secretary and the Home Secretary begin to take over”

“Then, the Prime Minister will repeat that the Chancellor is wonderful, marvellous, brilliant and courageous. the Prime Minister will say that the Chancellor is an air raid shelter”

“Next, the Chancellor will go to the Conservative party conference and, despite all the efforts—perhaps an interest rate cut to make the Chancellor's speech more acceptable —the ovation will be shorter. Some people will not even stand”

“Next, another meeting of the 1922 Committee will be called—of course, just to take stock. Finally, newspapers will be told that the Chancellor has become semi-detached. The Downing street press office will ask newspapers to focus less on the Chancellor's successes…

…and more on his eccentricities and excesses such as singing in the bath on the road to an announcement that he is about to spend more time with his family. The procedure is well known in the Conservative party. It is not a question now of "whether" but "when".

“The tragedy is that at this stage it is not the Government who will pay for the problems that they have created. Instead millions of British people will pay, after being hammered by the recession, with another round of public spending cuts”

Jim Callaghan – the last Chancellor forced into a pound devaluation – commented:

“The sky is darkening with the wings of chickens coming home to roost”.

William Hill cuts odds on Lamont’s resignation by the end of October to evens:

“We have had quite a few telephone calls from punters wanting to bet on the Chancellor resigning. But the situation is so volatile, he could go before we decide what odds to offer”