19 November 1967: Harold Wilson’s ‘pound in your pocket’ little white lie

On this day in 1967, Harold Wilson went on television to reassure viewers that the “pound in the pocket” would be unaffected by the devaluation of sterling.

Harold Wilson
Harold Wilson: devalued the pound, but not the one “in your pocket”
(Image credit: ©  Rolls Press/Popperfoto via Getty Images/Getty Images)

In 1967, Britain suffered a balance of payments crisis, spending (importing) more than it was earning (exporting). That made it crucial to keep the pound strong. The hitch was that supporting the pound was fast becoming unaffordable: the Bank of England burned through £200m in gold and foreign currency reserves in just one day alone. And so in November, sterling was devalued by14.3% against the dollar.

It was a personal defeat for Prime Minister Harold Wilson. But on 19 November, he went on radio and television to reassure consumers that devaluation "does not mean, of course, that the pound here in Britain, in your pocket or purse, or in your bank, has been devalued". It didn't take an economist, however, to tell you that that was nonsense.

"That broadcast will long be remembered for that sentence", crowed Conservative MP and future prime minister Ted Heath in Parliament. "It will be remembered as the most dishonest statement ever made." Wilson had fibbed. The pound in your pocket is, of course, the same pound that is used to import food and other things from abroad. Prices were going to have to rise.

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But while it was hoped that British farming and manufacturing would get a boost, not everything could be made or grown here. "Devaluation means moving resources from consumption to the balance of payments", wrote The Times. "It means an initial reduction in this country's living standards."

So, who was to blame for Britain's distress? "Candidates abound", said The Times' economic editor, Peter Jay. "Was it the fault of the gnomes, the moaning minnies, the selling-Britain-short brigade'? Or was it the wild-cat strikers, the tightly knit groups of politically motivated wreckers?" Perhaps the culprits were to be found abroad

Chris Carter

Chris Carter spent three glorious years reading English literature on the beautiful Welsh coast at Aberystwyth University. Graduating in 2005, he left for the University of York to specialise in Renaissance literature for his MA, before returning to his native Twickenham, in southwest London. He joined a Richmond-based recruitment company, where he worked with several clients, including the Queen’s bank, Coutts, as well as the super luxury, Dorchester-owned Coworth Park country house hotel, near Ascot in Berkshire.

Then, in 2011, Chris joined MoneyWeek. Initially working as part of the website production team, Chris soon rose to the lofty heights of wealth editor, overseeing MoneyWeek’s Spending It lifestyle section. Chris travels the globe in pursuit of his work, soaking up the local culture and sampling the very finest in cuisine, hotels and resorts for the magazine’s discerning readership. He also enjoys writing his fortnightly page on collectables, delving into the fascinating world of auctions and art, classic cars, coins, watches, wine and whisky investing.

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