Some of Baker’s views are well outside the mainstream. He believes, for example, that central banks are complicit in state-managed economic growth that amounts to “monetary socialism” and should be disbanded. As he describes how the global monetary system is “basically a big confidence trick”.
He thinks the cost of living crisis is likely to lead to a crunch debate about fiscal and monetary policy. “High inflation plus rising interest rates is really going to add up to misery for millions of people. And the answer to it is, of course, free markets, strong property rights, sound money and low taxes. And the Conservative party’s gonna have to rediscover its capacity to deliver those things,” he says.
“I believe we’re heading for a bond market storm as a result of inflation rising and the Bank of England raising interest rates. Boris Johnson will face a choice between dramatically slashing spending or changing the Bank’s mandate.”
In 2020, the former chancellor Sajid Javid and the former treasury minister Lord O’Neill, in what Baker describes as “an obviously co-ordinated way”, called for the Bank of England’s inflation target to be scrapped in favour of nominal gross domestic product targeting. Baker is worried this idea will be adopted in order to keep the quantitative easing taps on.
“You can keep debasing the currency with money printing up to the point at which people start worrying you’re never going to stop, which is when the currency collapses. If the Prime Minister and the Treasury are daft enough to change over to a monetary system that allows money creation into an environment of higher inflation, we could destroy the currency. That’s what is on the table.”
At his Parliamentary assessment board Baker had to write an essay on why he was a Conservative. He’d just read Friedrich Hayek’s essay Why I am Not a Conservative. “I basically just regurgitated it onto the page. And they said to me: ‘That’s one of the best essays we’ve ever read!’”
Indeed, he voted Liberal Democrat in his first general election and only became a Eurosceptic after the 2007 Lisbon Treaty, which he describes as a “mortal sin”. As a Christian, he has no issues with shared sovereignty and as a classical liberal, he’s all in favour of free movement of goods and people. For him, Brexit is first and foremost a question of democratic accountability.
“I always understood that there would be downsides and difficulties to leaving the EU. Much as I hate customs paperwork, much as I hate having to have rows about SPS [sanitary and phytosanitary] measures [on food imports] in Northern Ireland and all the rest of it, those rows are worth having in order to maintain the principle that the public get the government they vote for.”
It is that principle that drove him to become one of the of the so-called ‘Spartans’ – the 28 Tory MPs who voted against May’s Brexit deal on three occasions. But his refusal to compromise doesn’t mean he isn’t reflective. “I am filled with regret and lament that our country has ended up so bruised and divided. I didn’t like either [referendum] campaign very much. I particularly didn’t like the [Leave] bus [emblazoned with the promise to spend the £350m ‘sent to Brussels’ each week on the NHS] and I said so during the campaign, which was controversial. People seem to have forgotten that.”
