There has not been an appreciation of sterling on this scale since 1981 and we all know what

There has not been an appreciation of sterling on this scale since 1981, and we all know what happened to industry then In another sense, though, there is no dilemma. If the economy is expanding fast enough to run the risk of higher inflation, it needs cooling down. The bigger the boom is allowed to grow, the bigger the bust that will follow.Contrary to popular belief, both levers of macroeconomic policy, monetary and fiscal, are already being applied, a tight Budget and rising interest rates. Wages are rising faster than prices, job vacancies are at the highest levels in recent memory, and the strong pound is boosting spending power on imports.For the time being, home demand seems strong enough to offset falling export orders. The British Chambers of Commerce Survey was presented as a tale of struggling exporters, but the detail showed higher turnover, new job creation and skills shortages in both manufacturing and services.

Unfortunately, it is industry that is being forced to pick up the tab.Yesterday’s figures for high street sales were uncomfortably upbeat and undeniably back to boom levels. They did not even include some of the goodies the windfall money is likely to be spent on, such as cars and holidays Nor are the windfalls the only consideration. The old distinction between long-term savers and short-term hot money might reasonably be reintroduced so as to make membership a reward for loyalty.Another useful reform would be to up the level of support members need to stand for election from the present 50 to 500 or more. This would prevent a repeat of frivolous and disruptive campaigning like Mr Hardern’s.Building societies obviously do still have an important and constructive role to play in the provision of financial services, helping to ensure a more vibrant and competitive market place than would exist in a world populated only by banks. It is a tribute to Nationwide’s members that that they were prepared to vote for the public good over narrow self interest. Perhaps New Labour might learn a thing or two from them.The economy needs to cool down graduallyNo shopping spree is ever for free and the one caused by the pounds 38bn in shares from converting mutuals is fast coming home to roost. It seems quite wrong that feckless, disloyal carpetbaggers should be allowed to nip in in this way and steel the family silver.The Government’s starting point, therefore, should be to invest in membership certain duties of loyalty and longevity.

This could easily be done, as Mr Davis and others point out, by introducing a two to five-year qualifying period for membership. The hatches could be further battened down by reversing the ill-thought out Building Societies Act, rushed through by the last government in its dying moments, which gives all building society depositors equal rights of membership. Nationwide argued it in compelling and forthright fashion.In the Nationwide vote, we have probably also witnessed the first significant back lash against the carpetbaggers. It is plainly neither moral nor justified for these people to be able to whip in at a moment’s notice and share in the spoils of conversion. Building society membership should carry certain duties of trusteeship, for members are in effect guardians of assets build up over generations.

Other building societies have caved in and failed to put the case against conversion. This is really the first time members have had an opportunity to hear something different. To be fair on Mr Robinson, he’s hardly alone in failing to spot the growing backlash against the likes of Mr Hardern. Nearly everyone believed the Nationwide would fall, incredible though the slate of pro-conversion rebels seemed. Nobody could quite believe members were going to look a gift horse in the mouth and turn down the chance of free shares How wrong they were.