I'm Backing Britain - Economic Background

Economic Background

The year 1967 had seen the British economy suffering from several difficulties. Despite tax increases announced in July 1966, the 1967 budget had set the greatest deficit in post-war history of £1,000m. Each month, the Board of Trade published figures of the 'balance of trade' between exports and imports which seemed to show an ever increasing deficit, The closure of the Suez Canal after the Six-Day War hit exporters, as did an unofficial dock strike which broke out at the end of September. Having put up the bank rate to 6% on 19 October, on 18 November, the Government abandoned three years of attempting to maintain the exchange rate and devalued the Pound sterling from $2.80 to $2.40. Although an economic defeat, devaluation was perceived as an export opportunity which British industry needed to seize.

Arising out of devaluation, John Boyd-Carpenter (Conservative Member of Parliament for Kingston-upon-Thames) wrote to The Times in a letter published on 13 December 1967 suggesting that "If a number of people, particularly in responsible positions, would set by an example by sacrificing say the first Saturday of every month and working on that morning without extra pay, profits or overtime, it would give an example to others at home, and show the world that we were in earnest". He complained that capital equipment stood idle from Friday afternoon to Monday morning.