Abstract
Labour Ministers’ diaries and memoirs of 1964 give an impression of instant and complete submersion in departmental work. At Housing and Local Government, Richard Crossman was not even aware of the financial crisis until 24 November.1 Wilson’s record plays down its significance, as if to counter the charge that after so long out of office an inexperienced government was caught on the hop.2 Yet the crisis was neither unexpected nor abrupt: the balance of payments trend had been quite clear and Maudling had outlined the government’s plans to meet the growing deficit to Callaghan on 18 June. The issue is more complicated than charges of inexperience and incompetence suggest. In the short term, and at the level of crisis management, the government acted decisively; what mattered was that in so doing it revealed that its leaders’ assumptions about international economic priorities were deeply at variance with what had been taken for granted inside the party and the trades unions during the springtime years before 1964.
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Notes and References
Apart from the memoirs and diaries, the best accounts of Labour’s performance are Brian Lapping, The Labour Government 1964–70 (1970),
and Michael Stewart, The Jekyll and Hyde Years (1977).
For economic policy, see W. Beckerman et al., The Labour Government’s Economic Record (1972)
and P. Browning, The Treasury and Economic Policy (1986), Chapters 1 and 2.
J. Bruce-Gardyne and N. Lawson, The Power Game, (1975) p. 119, gives a total of £695m. with £382m. in the current account.
What follows is based partly on interviews with Sir Donald MacDougall, Lord Cromer, Lord Roll and Lord Trend. But see Bruce-Gardyne and Lawson, The Power Game, Chapter 5; Wilson, The Labour Governments 1964–70, pp. 6–7;
J. Callaghan Time and Chance 1987, pp. 157–68;
G. Brown, In My Way (1972), pp. 104–5;
Susan Crosland, Anthony Crosland 1982, pp. 120–5;
J. Callaghan Time and Chance 1987, pp. 157–68; and Browning, The Treasury and Economic Policy, pp. 3–6.
John Scanlon Decline and Fall of the Labour Party , ′1934) p. 47.
Thomas Jones, Diary with Letters 1931–50 (1954), p. 20.
Dillon, Coombes and Hayes represented only one view: the professional economists who had been Kennedy’s advisers wanted the USA itself to get away from gold and fixed parity, and would have welcomed a sterling float. (Professor Sherman Maisel, interview, March 1984; also Robert Solomon ‘Maintaining the Status Quo’, in Managing the Dollar (1985), p. 193 et seq.; and Henry Brandon, In The Red: The Struggle for Sterling 1964–66 (1966), p. 28.
Clive Ponting, Breach of Promise: Labour in Power 1964–70 (1989), pp. 43–55, gives details culled from US sources, chiefly President Johnson’s papers, obtained under the Freedom of Information Act.
Douglas Jay, Change and Fortune (1980), Chapter 12.
Susan Crosland quotes William Armstrong to this effect (p. 123). On relations between Treasury and DEA, see Brown, In My Way, pp. 92,104–5. Some of Brown’s officials wanted DEA representation in No. 10, but this Wilson refused, preferring to let interdepartmental conflict exhaust itself outside, (cf. Donald MacDougall, ‘The Machinery of Economic Government’ in D. Butler and R. H. Halsey, Essays in Honour of Sir Norman Chester (1978), pp. 178–81.
OECD, Economic Survey: The United Kingdom (1965), p. 25.
Susan Strange, Sterling and British Policy (1971),
and Brian Johnson, The Politics of Money (1970) argued that the Johnson administration encouraged Britain to defend sterling’s existing parity throughout. The American documentation cited in Ponting, Breach of Promise (Chapter 3) confirms this and gives details of the highly secret undertakings by Wilson in September 1965. Callaghan had already tried to raise a fresh multilateral loan to ease the balance of payments constraints and give the National Plan a better chance (Callaghan, Time and Chance, pp. 186–7). He discovered quickly that the US authorities were more interested in the EEC’s future than any Anglo-American co-operation scheme: yet they still required him to hold sterling and fund Britain’s NATO commitments.
Cf. S. Pollard, The Wasting of the British Economy, p. 95; Roger Opie, ‘Economic Planning and Growth’, in Beckerman et al, The Labour Government’s Economic Record, p. 188. Also, generally, David Marquand, The Unprincipled Society (1988);
Andrew Gamble (building on Jacques Leuruez, Economic Planning and Politics in Britain, 1975), argued that the development of consensus around the idea of voluntary indicative planning was followed by ‘its inexorable destruction by the operations of the party political system’
A. Gamble and S. Walkland, The British Party System and Economic Policy 1945–83, 1985, p. 112.
Fears of extremism itself appeared to have existed in certain sections of the political elite. Various published hints exist about ‘conspiracies’ against the Wilson Government during 1965 (though very different from Cecil King’s somewhat ludicrous attempt in 1968 to groom Lord Mountbatten as leader of a coup). At not much more than the level of informal gossip is a story that ‘heads were counted’ among senior civil servants and some serving officers, in the summer of 196S, on how each would react to an extended crisis: if, for example, the Prime Minister had ordered British troops to suppress the Rhodesian rebellion. See also Peter Wright, Spy-catcher (1988), for hints that a handful of MIS hotheads had wind of this.
C. Booker, The Neophiliacs (1969), p. 289.
D. H. Aldcroft, Full Employment: The Elusive Goal (1984).
D. Jay, Change and Fortune Chapter 12; Wayne Parsons, The Political Economy of British Regional Policy (1988).
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© 1990 Keith Middlemas
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Middlemas, K. (1990). Labour’s Descensus Averni . In: Power, Competition and the State. Palgrave Macmillan, London. https://doi.org/10.1057/9780230378780_5
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