The Queen's College Record 2023

Obituaries
period which spanned the UK’s departure from the Exchange Rate Mechanism (the
ERM), the introduction of inflation targeting, independence for the Bank of England
and the creation of the Monetary Policy Committee which Alan joined as a founder
member in late 1997, ending his long Treasury career on a high.
Relations between the Bank and the Treasury had not always been easy. But in Alan
I had an opposite number whom I could trust totally. We shared an early experience
when we were sent in September 1992 to Frankfurt and Bonn to persuade the
German authorities that 2.95 DM was the right exchange rate for sterling inside the
ERM. We knew that there was no such thing as the right exchange rate for all time, but
we dutifully presented our coloured charts and argued the British case. Two days later,
the UK was forced out of the ERM by massive speculation. Later described as “the
world’s most unsuccessful diplomatic mission”, our visit to Germany not only brought
us together but, interestingly, created close ties to the economists in the Bundesbank.
Departure from the ERM was a blow not just to the Government but to the Treasury.
Things had to change. But with Alan and Terry in place, the Treasury went out of its
way to help the Bank come out of the shadows and play a more independent role
in policy-making. When the Bank’s Inflation Report first appeared in early 1993, the
tradition of the Treasury editing the Bank’s publications ended. And Alan ensured
that happened.
Alan and I would meet often and talk, among other things, about how we might
suppress what we described as the “forces of darkness”. Alan had no tolerance for
those people, often intellectually second-rate, who tried to preserve their own power
by bureaucratic means. Throughout his career, Alan was the scourge of conventional
wisdom. Our country needs people who think deeply and speak out rather than wait
to see which way the wind is blowing. I shall always remember Alan’s broad smile
and chuckle as news arrived of the latest setback for the forces of darkness.
In the 1997 New Years Honours list, three notable names received knighthoods,
Alec Bedser, Paul McCartney and Alan Budd. They represented the highest form of
triathlon: cricket, music and economics. Alan was later promoted to Knight Grand
Cross of the Order of the British Empire and became a GBE.
In 1999, to my sorrow, Alan decided to leave the Bank of England’s Monetary Policy
Committee and the following year became Provost of this College. That did not
end Alan’s public service. He was a member of the Panel charged with producing
a formula for funding the BBC, chaired an important committee which reported
on gambling in the UK, and, perhaps most remarkably of all, Alan was asked to
investigate the circumstances surrounding the granting of a visa to David Blunkett’s
lover’s nanny. At the time, Blunkett was Home Secretary, and it is testimony to the
esteem in which Alan was held that no-one challenged his analysis of events and
Blunkett duly resigned. What is clear from all this is not only Alan’s extraordinary
96 The Queen’s College | College Record 2023