The Financial Policy Study Of Harold Wilson's First Government (1964-1970)

In the economical development of the Western European countries, the UK is a model which is worth studying very much: the UK was the first country to bring about Capitalist industrialization, but since World War II, the UK's economy gradually declined actually; the UK continuously took the economic liberalism as a model, but since then,two parties (the Conservatives and the Labor) started to carry on the state intervention, and the macroeconomic regulation and control spontaneously…How does the government carry on the intervention to the state economy?Harold Wilson's first government (1964-1970) as a new Labor government taken out of office more than a decade, its election manifesto"New England"quite impressive, but there were many contradictions between the economic situations at that time in Britain and the implementation of the manifesto. This dilemma made the government"to be attacked front and rear", and eventually Wilson won the"smart prime minister,"while the government had marked as the"most unsuccessful Labor government". Why? It was said that the reason was that economic measures the Wilson government taken failure to cure the"British disease", so this period of economic polices and measures were considered failures. The fiscal policy was the central link of the Britain's demand management after world warⅡ. Therefore on the foundation of drawing on the experience of the existing achievements, and under the background of the Keynesianism, this article analysis the role of the fiscal policy in demand management and the stage of the demand management, as well as the influences the fiscal policy provided for the subsequent governments. This article makes the fiscal policies of the Wilson's government as the object of study, with expectations that making an objective fair and just assessment to these policies and providing beneficial model to our country's economic development.From a historical angle of viewpoint, and based on the historical facts, this essays carries on the empirical analysis to the first Wilson Government's financial policy, with the expectation of makes a more objective appraisal to it. This article is divided into four parts. The first part mainly introduces the origin of the financial policy of Wilson's government. In this part, first it introduced the post-war British economic achievements and problems in the past two decades, and analysis the changes of British economic policy briefly; Secondly, it analysis the period of the dominant economic theory—the Keynesianism and the demand management, designating that Keynesianism is the main basis to formulate the economic policies. Finally it is Wilson's cabinet, proposing that the government's economic strategy is"National Plan", and its main policy instrument is financial policy. The second part mainly analysis the early fiscal measures and their effects. The government resolved the balanced revenues and expenditures crisis by means of a series of direct approaches and severe deflation measures, but the greatly unstable politics and economic situations led to its defeat, although there were some achievements. The third part analysis the fiscal policy's implementation and results of the government's later period. This part indicating the tight fiscal policy still dominate this period and having achieving great success, in large part due to a series of deflationary measures. The last part is the assessment and positioning of the first Wilson government's fiscal policy. The article thought that the fiscal policies of the Wilson's government achieves limited success and reflects the demand management during this period reached its peak and started to declining. At the same time, its financial policy has affected the later government to make a "fresh start" and approach to monetarism.