Civil Service treated Wilson with 'suspicion'

THE Labour Government returned to office after an absence of 13 years to be confronted by crises over the economy and nuclear weapons - and a suspicious civil service. Cabinet documents released today show how Harold Wilson's Government was overw helmed by events, before it could begin to implement its programme.

The first Cabinet meeting took place on 19 October 1964, and the record shows that the policies in the manifesto had not been costed, and could not be afforded once they realised the extent of the budget deficit.

The Treasury had told the incoming Prime Minister that the economy was likely to be in deficit by £800m in 1964, with little prospect of improvement.

James Callaghan, the Chancellor of the Exchequer, told the meeting that the Government might need to borrow from the IMF, as other countries would only lend money if the Government was seen to be tackling the economy effectively.

Official papers avoid mention of the term "devaluation" despite the fact that it is thought to have been ruled out at a meeting on Saturday 17th October at 11 am. The only discussion of the subject, in elliptical language, is in preparations for a telegram to the US President, Lyndon Johnson, who was briefed by Mr Wilson on the economic position. In it devaluation appeared to be ruled out "for all time".

The telegram, sent on October 24, said: " We have considered and rejected two alternative courses of action: the first, with all its repercussions on the international exchanges, will be obvious to you, and this we have rejected now and for all time".

The ambivalent relationship between the civil service and Harold Wilson began even before the election date was even named. After a Labour party political broadcast outlined plans for reform of Whitehall, Sir Tim Bligh, Sir Alec's principal private secretary, told the Prime Minister that informal consultations were underway between Mr Brown and the head of the civil service, Sir Laurence Helsby.

The following comment reveals much about both future tensions within the Labour Cabinet, and the civil service's view of Mr Wilson and his top colleagues. Sir Tim wrote: "Apparently Mr Brown claimed to be speaking on behalf of Mr Wilson but this seems tobe unlikely on two counts. Mr Wilson plays his cards very close to his chest and leaves no room for the space of a fly, let alone George Brown; secondly, Mr Brown claimed that Labour Party Policy was to have a Minister for Production who would be an overlord in the economic field (and this would be him), helped by a whipper-snapper Chancellor of the Exchequer (who would be Mr Callaghan)."

While recommending that contacts should be permitted Sir Tim's minute to the prime minister added:" You are entitled to feel that Mr Wilson's head, big though it is getting, is not quite big enough yet to enable him to have talks with the Civil Service".In a later minute Sir Tim added, in true Sir Humphrey style:" In a way these sorts of consultations are safer if you do not know about them!"

Again he added revealing comments about the Labour leadership: "Wilson is discreet because he likes everyone to think he knows everything and therefore does not need to consult anyone. Mr Brown and other colleagues are not discreet partly because they donot claim omniscience and partly for other reasons".

But the civil service eagerly helped Mr Wilson to develop a policy which kept the country's nuclear weapons - despite its election pledge to rid the country of an independent deterrent.

Documents show Mr Wilson's Government began softening its position as soon as it came to power. Just 11 days after the election Patrick Gordon Walker, the Foreign Secretary, visiting Washington attacked US-backed plans for a mixed-manned surface fleet. This, he argued, would not satisfy the Germans' desire for a role in defence policy. But instead Mr Gordon Walker floated a less costly alternative: a larger force of British and US Polaris submarines and British V bombers with a German veto.