My Labour Love Affair: National Plan (1965)

National Plan (1965):

‘Published in September, setting out Wilson’s Labour government’s plan to raise the British growth rate to 25 per cent between 1964 and 1970. The plan embodied the hopes of the early 1960’s that Britain’s economic growth , which lagged behind all other major Western European economies, could be increased with the help of a plan which would lay out the implications of such an acceleration. The plan was ‘indicative’, laying out forecasts and possibilities, rather than a soviet-style plan with companies instructed on how much to produce. Such planning had been practised in France since the 1940’s, but there the state had substantial control over the allocation of investment capital, which was not the case in Britain. The 1965 plan relied primarily on companies increasing their output in response to a more expansionary stance by the government. However, even by the time it was published, the Labour government had started to slow the rate of demand growth in order to help the balance of payments, and the plan’s targets became wholly unrealistic with the sharp deflationary measures of July 1966. The plan was closely associated with George *Brown, as secretary for economic affairs. Its eventual failure was an important factor in Brown’s declining role in the Labour Party in the later 1960’s. For the Labour government, the failure of the plan is usually seen as a consequence of the unwillingness to devalue the pound in 1964 and hence the failure to break out of the ‘stop-go’ cycle of economic policy which Labour had so criticised in the 1950’s and early 1960’s. The actual rate of growth for the plan period was 2.6 per cent’.

From, John Ramsden, Professor of Modern History at Queen Mary, University of London.

References: ‘The National Plan’, London, 1965.

References: Pamela Meadows, ’Planning’, in Frank Blackaby (ed.), ‘British Economic Policy 1960-1975’, Cambridge, 1978.

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