Between
the early-1960s and the mid-1970s British
governments made extensive changes to the
framework of British economic policy, both
internal and external. Many of these policy
changes, some of them quite fundamental,
which were made in these years no longer
resonate; instead, the late-1970s is generally
seen as the period in which everything changed
in economic policy. It is our contention,
however, that between 1961 and 1976 the
major changes that took place in British
economic policy had the potential to be
as fundamental and as long lasting, and
thus as significant, as those that took
place in the years that followed. These
changes encompassed both the domestic and
external dimensions of the United Kingdom’s
economic policy and, unusually, were often
characterised by alterations not just to
policy instruments and policy settings but
by changes to the very goals of policy.
For example, the early- to mid-1960s saw
a concerted attempt, first by the Conservative
government and then by its Labour successor,
to shift Britain towards a system of tripartite
economic planning in the domestic policy
arena. In the process, governments amended
and recalibrated domestic policy goals,
with the introduction of targets for economic
growth, and with higher growth itself, made
the primary goal of economic policy. Alternatively,
in the realm of international financial
policy, one might point to floating of the
pound in 1972 or, more fundamental, the
withdrawal of foreign official sterling
balances in 1977 and thus the downgrading,
perhaps even effective ending, of sterling's
reserve currency role. Both in the domestic
and in the external policy arenas therefore
changes took place that involved both substantial
changes both to the instruments of policy
and to policy goals.
Drawing from relevant theoretical work
in political science, this paper will examine
the policy changes that occurred in the
1960s and early-1970s in both domestic and
external economic policy and will consider
why those changes, despite their potential
for fundamental change, proved to be less
significant than their architects hoped.
We will ask whether any part in the failure
of those policy changes to fulfil their
potential was played by discrepancies between
the respective internal and external policy
agendas.
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