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Instead, to the profound dismay of Labor's left wing and the trade unions, he set in motion the classic Tory remedies for the "stop" part of the stop-go cycle and, moreover, set them in motion awkwardly. First came a 15% surcharge on imports, a small tax incentive to exporters and a vague plan for regulating wage increases. When that failed to stem the run on the pound, Wilson raised the bank rate from 5% to the "crisis level" of 7%. The panic only increased, so Wilson appealed to the Club. Bank of England Governor Lord Cromer and the professionals of the U.S. Federal Reserve Board got on the transatlantic phones. Working all through one night, they secretly rallied their central banker colleagues around the world and came up with $3 billion in pledges to rescue the pound.
The speculators were beaten off, and the pound gradually recovered, until the next expansion-fueled strain on sterling's resources. It came in July of last year. To meet it, Wilson took, as he told President Johnson, "steps that have not been taken by any other democratic government in the world." He froze wages and prices for six months, to be followed by another half-year of "great restraint." Government-investment programs were slashed by $370 million, indirect taxes raised 10% and another 10% surcharge slapped on higher income brackets. Wilson told the British people that the massive austerity was required "to save the pound."
Hitlerian Mistakes. The pound, as it turned out last week, was not to be saved this time, despite nearly 18 months of Wilsonian deflation that has pushed unemployment up to 555,000 in a work force of 20 million, slowed the country's industrial growth to a meager 1.5% and created widespread dissatisfaction with Wilson's stewardship as Prime Minister. A Gallup poll published last week, before devaluation, found Wilson's "the most unpopular of all postwar governments" in Britain. Another poll a week earlier indicated that an election now would produce a landslide Tory victory, installing Edward Heath as Prime Minister with a 150-seat majority in the House of Commons. In the past 18 months Labor has lost six of eleven by elections, as many as Harold Macmillan's troubled Tory regime dropped in five years in office.
Wilson is in almost as much trouble within his own party. The Utopian Socialists condemn him for sacrificing theory to the hard facts of economic life. The leftists and unionists suspect him of endorsing "a permanent pool of unemployment" to encourage holding wages in check. When National Coal Board Chairman Lord Robens announced two weeks ago that mine employment would drop by 80% in the next twelve years, angry groups of mineworkers threatened to pull out of Labor and start a new political party. Major business leaders that Wilson had drawn into government service have been resigning, and the predictable fire from the Tory business community at a Socialist Prime Minister has been heavier than normal. Imperial Chemical Industries Chairman Sir Paul Chambers recently accused Wilson of making the same economic mistake as Hitler.