Abstract copyright UK Data Service and data collection copyright owner.
The 1964-1970 Wilson governments were committed to economic planning and consensus with both sides of industry, designed to deliver 4 per cent growth and industrial modernization. But it achieved only 2.4 per cent average annual growth. This arose from a lack of confidence, arising from a weak external balance, on the part of the financial markets that the sterling-dollar rate of 1£=$2.80 was sustainable. Ultimately the pound was devalued by 14.3 per cent in November 1967. Wilson’s defence of the pound has often been criticized. It has been argued that by drawing on external support to supplement the reserves Labour gave overriding influence over macroeconomic policy to foreign central bankers and the IMF whose main concern was not growth but a fall in imports, to be achieved by deflation. Devaluation, it is said, would have freed Britain from such influences. Yet the evidence suggests that throughout 1964-67 the case for an adjustment was not as powerful as has been assumed. Only in the autumn of 1967 did devaluation become inescapable, following bad trade figures occasioned by dock strikes, a global economic slowdown and the closure of the Suez Canal during and after the Arab-Israeli War. The events of 1968, when the exchange rate came under renewed pressure and the budget was by the government’s own admission ‘punishing’ suggests the choice between disinflation and devaluation may have been illusory. At the same time the measures taken to protect Sterling after 1964 were largely successful exercises in the control of speculative forces which were gaining strength in an increasingly interdependent world economy. The government’s actions reveal a commitment to managed markets at home and within the international environment: they were not rewarded with rapid growth but by 1970 they had arguably freed the UK from its ‘balance of payment constraints’.
Main Topics:
The material falls into two distinct parts. First, there is a set of graphs covering aspects of macroeconomic policy and outcome. Most of these have been compiled using material in the time series data provided in National Statistics Online. Particular attention is paid to the balance of payments. The period covered sometimes extends beyond the years under investigation (1964-1970), in order to achieve some sense of relative performance. The second part consists of files of my own research notes covering key aspects of the study. Three of these are chronologies of crucial events (the 1965 Sterling crisis, the 1967 devaluation of Sterling, a narrative of the troubled history of Sterling in 1968). The fourth is a discussion of macroeconomic policy in 1965-67. These notes are based on secondary and, above all, on primary source material. The greater part of the latter was found in the National Archives, Kew, London. The format of these research notes varies between summaries of events, documents and leading actors’ views (as recorded in their published diaries), and some discursive sections arising from my own interrogation of the source material. They provide the raw material for the published work which has started to emerge from this project.
No sampling (total universe)
Transcription of existing materials
