Economy

• Failed to match the growth rates of japan and Western Europe
• japan spent 0.9 on defence i 1964 whilst Britain spent 34
• Disappointing as he reverted to methods eerily similar to stop go economic
• What was the inherited issue?

  $800 million deficit

  • high defence expenditure
  • service economy
  • EEC and Japanese and German competition with Victorian infrastructure
• how did Wilson fail to address the economy?

  • National plan and DEA
  • brown competed with orthodox economists at treasury as he lacked government support
  • Devaluation of the pound was a reversion o stop go economics as he dramatised it with a speech
• National Plan

  • Gained him votes and the majority hikes to 92
  • hypocritical reversion to stop go economics that he campaigned against
• Wilsons attempts at dealing with the financial crisis were simply attempts at dealing with divided government and lacked long term foresight
• Criticisms of the national plan :

  • too Vague
  • growth targets and economic planning councils
  • volountary agreements about wages and prices wth unions and employers
  • unions decrease demands and manufacturers decrease orifurs
  • too optimistic
  • didnt address rooot issue which was service economy now
• 1966 majoirty increased to 96

  • national plan success
• pound devaluation :

  • 14%
  • deficit was yoo big
  • exports become cheaper and increase sakes
  • imports become expensive so domestic market supported
• criticism of pound devaluation

  • remembered as a mistake
  • addressed on tv
  • goods become expensive
• pound in your pocket speech implied poeple woiold be better off which they weren’t
• 1967 - EEC rejection again
• what does Wilson revert to?

  stop go economics

  • puts up interest rates
• The reversion to stop go reduced the deficit by 1970
• 1966 - Seamen strike cause a crisis

  • relationship between government and unions was breaking down
• Tried so hard to avoid devaluation that it damaged credibility
• White heat of technology :

  • transcend iseological Divides in party to temporarily win support
• The Concorde project with France ended up failing and cost over between 1 to 2 billion

  • main reason for its failure