Wilson, Labour, and the Sixties 1964–1970

Harold Wilson's two governments (1964–66 and 1966–70) promised to modernise Britain through the "white heat of technology." In practice, Wilson's premiership was dominated by economic crisis — above all, the devaluation of sterling in November 1967 — and by ambitious but uneven social reform. The 1960s saw transformative legislation on capital punishment, homosexuality, abortion, divorce, and censorship, yet the decade also exposed the limits of government's ability to manage the economy and reshape society.

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Wilson's Background and the 1964 Election

Key Fact	Detail
Background	Born in Huddersfield, Yorkshire; grammar school and Oxford (youngest Oxford don of the twentieth century at age 21); a meritocrat in contrast to the aristocratic Douglas-Home
Political career	President of the Board of Trade under Attlee (1947–51); resigned with Bevan over prescription charges (1951); became Labour leader in February 1963 after Gaitskell's sudden death
"White heat" speech	At the Labour conference in Scarborough on 1 October 1963, Wilson declared that Britain needed to be "forged in the white heat of this scientific revolution" — contrasting Labour's modernity with Conservative amateurism
1964 election	Labour won on 15 October 1964 with an overall majority of just 4 seats (317 to 304). The result was partly a rejection of the tired and scandal-hit Conservatives rather than enthusiasm for Labour
1966 election	Wilson called another election on 31 March 1966, winning a comfortable majority of 98 (364 to 253)

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Economic Policy: Crisis and Devaluation

The Balance of Payments Crisis

Wilson inherited a balance of payments deficit of approximately £800 million. The central economic question of his premiership was whether to devalue sterling from its fixed rate of $2.80.

Option	Arguments
Devalue	Would make British exports cheaper and imports dearer, helping to correct the trade deficit. Many economists, including Nicholas Kaldor, favoured immediate devaluation
Defend the rate	Wilson feared that devaluation would be seen as a "Labour devaluation" (Attlee had devalued in 1949), damaging the party's economic credibility. The US also pressured Britain to maintain the rate, as sterling's weakness threatened the dollar-based Bretton Woods system

Wilson chose to defend the rate through deflationary measures — spending cuts, credit restrictions, and a prices and incomes policy. This constrained the government's ability to invest in public services and modernisation.

Devaluation (18 November 1967)

After repeated speculative attacks on sterling, the government was forced to devalue from $2.80 to$2.80to2.40 — a reduction of 14.3%. Wilson's television broadcast included the much-mocked reassurance: "It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued."

Historiographical Debate: Jim Tomlinson (The Labour Governments 1964–1970, 2004) argues that Wilson's decision to delay devaluation was his greatest mistake, wasting two and a half years of political capital on a doomed defence of an overvalued exchange rate. Ben Pimlott (Harold Wilson, 1992) offers a more sympathetic assessment, arguing that Wilson's options were genuinely constrained by American pressure and the fragility of the international monetary system.

The Department of Economic Affairs (DEA)

Wilson created the DEA under George Brown to rival the Treasury and drive economic planning. The National Plan (September 1965) set a target of 25% growth in national output by 1970. The Plan was rendered irrelevant by the deflationary measures taken to defend sterling. The DEA was effectively dead by 1966 and was abolished in 1969.

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Social Reform: The "Permissive Society"

The Wilson governments oversaw a remarkable programme of social liberalisation, although most reforms were introduced as Private Members' Bills rather than government legislation: