Harold Wilson, the 1964–66 Sterling Crisis and ‘The Second Try’

According to Schenk, the historiography of Britain’s accession to the EEC has neglected monetary issues despite their subsequent importance.1 When it comes to Britain’s second application to join the EEC, it seems plausible that monetary issues acted as the spur for Wilson to take an initiative on Europe. ‘The timing of the initiative thus points to the 1966 July sterling crisis as Wilson’s main source of motivation.’2 A Cabinet reshuffle followed from this crisis, with the result that George Brown moved from the Department of Economic Affairs to the Foreign Office on 11 August 1966. The appointment of ‘an ardent pro-European’ as Foreign Secretary was ‘seen as tantamount to a decision to take an initiative on Europe’.3 The crisis was ‘Labour’s Suez’; ‘it fundamentally altered what the Party’s leading figures thought they could do as a government’.4 ‘The July 1966 crisis, by causing people to consider what devaluation would really mean, began to indicate the fault line, which was not identical to the old tribal boundary.’5 A fundamental question remains that needs to be discussed. While the existing historiography almost unanimously points to the impact of the sterling crisis on Wilson’s decision to apply to join the EEC, it has failed to examine the implications of ‘the fault line’. As Daddow suggests, ‘“something changed” in British politics during the 1960s’.6 Chapter 6 attempts to shed more light on what that change was from the point of view of monetary diplomacy and external economic policy.