Filed Under : 
His prime minister maintained subsequently that she did not know of this policy and that, had she known, she would have stopped it.Alas, she was fibbing She knew perfectly well what young Nigel was up to Nevertheless she disapproved of it. She believed it was impossible - more, it was wrong - to try to "buck the market", as she put it. Besides, she approved of what was happening despite Lord Lawson's endeavours She confessed that she liked a strong pound. They would have said instead: "This Brown, he is a tough fellow and no mistake. I tell you, Dr Schroder, to punish his own people he is not afraid. Cash into his country we must now put." And so the pound would have risen even higher, owing to Mr Brown's manifest virtue.We do not need a specially long political memory to recollect the time when Lady Thatcher and Lord Lawson were confronted by the same difficulty of a rising pound. After an improvement in the early weeks of May, we were blown off course by the seven weeks seamen's strike."Likewise, if Mr Brown had raised taxes, as the prig press was urging him to do, the screen-watchers and button-pushers would not have concluded that a prospective rise in interest rates, which partly accounts for the popularity of the pound, was accordingly unlikely Not a bit of it.
Having fomented the strike for his own purposes, Wilson then had the cheek to say to the House of Commons on 20 July 1966: "Sterling has been under pressure for the past two and a half weeks. Sovereignty is in the hands of a lot of men and slightly fewer women sitting before flickering screens and pressing buttons. There is little any government can do to control their decisions. Governments frequently get it wrong when they anticipate how the market will behave and act accordingly.In 1966, for instance, Harold Wilson sought to ingratiate himself with foreign opinion by "standing up to the unions" in the seamen's strike, making copious use of the security services in the process. The operation had completely the opposite effect to that intended.
Far from being impressed by the Labour government's firm resolve, the bankers concluded that it had lost any influence it might once have had with the brothers from the branches, who were now clearly out of control. What precisely they were, he perhaps prudently did not specify. But he gave us to understand that he and Mr Brown were fully in control. They could command the money markets, and the markets would obey, whoosh, just like that, as the great Tommy Cooper might have expressed the matter. It was only the production of unfortunate and undesired side-effects, again unspecified by Mr Blair, which prevented him and Mr Brown from taking the necessary corrective action.It is all great nonsense They have very little power to affect the course of events. Since 1972 the pound has floated except in the 1990-92 period, when we were members of the exchange-rate mechanism of the European Monetary System from which we were ignominiously expelled.A floating pound does not, as its proponents optimistically imagined in the 1960s, necessarily protect the country from financial crises such as we had suffered under Labour governments operating fixed rates in 1931, 1947, 1949, 1966 and 1967. This is the Government's most significant action to date, comparable to Sir Geoffrey Howe's abolition of exchange controls in 1979, which inaugurated the era of the sovereignty of the money markets.Indeed, much of the heated discussion of sovereignty and where it lies - at Westminster, with the judges or among the bureaucrats of Brussels - is now beside the point, of interest to students of constitutional theory rather than to practitioners in political reality.