Politics and the Pound: The Conservatives' Struggle with Sterling

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Macmillan, 1996 - Economics - 364 pages
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The pound has haunted Britain's politicians for most of this century. From Winston Churchill's ill-judged return to the gold standard in 1925 through Harold Wilson's devaluation in 1967 to John Major's Black Wednesday it has been a symbol alternately of national pride and national decline.
The tension between politics and the pound has never been greater than during the Conservatives' rule since 1979. The malign neglect of the first Thatcher term brought the unprecedented surge in sterling's value which triggered the deepest recession for fifty years. Nigel Lawson's conversion to the European exchange rate mechanism foreshadowed a fatal clash between chancellor and prime minister which first destroyed her cabinet and then her premiership. An economic miracle dissolved into a mirage.
John Major's decision to join the ERM led in turn to an entanglement between the pound and Europe which threatens the most damaging split in the Conservative party since the beginning of the century. The ERM experiment ended with the humiliation of Black Wednesday. But now Britain must face up to the Franco-German project for a single European currency. Whether Britain joins or stands aside from economic and monetary union, sterling will continue to dominate the politics of the 1990s.
Philip Stephens provides the first authoritative account of this explosive mix of economics and politics. The author's unique access to senior politicians and officials provides a rare insight into how economic policy is made in modern Britain - and into the continuing political struggle over Britain's place in Europe. It will appeal to anyone interested in how Britain has been governed since 1979 and how it will be governed at the turn of the century.

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About the author (1996)

Philip Stephens is an Associate Editor and Political Commentator at the Financial Times.

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