11 - The influence of the City over British economic policy, c.1880–1960

Summary

The historiography of the British financial sector's resilience and success in the midst of Britain's ‘one hundred year decline’ is one of Britain's few growth industries. To do full justice here to the range and complexity of the work which has been produced on this subject is not possible, but at the risk of over-simplifying some of the analyses which have been developed it is perhaps worth outlining the central contentions which have emerged from some of the more important contributions in the field. The first is that the City's survival and prosperity has not simply been the product of happenstance or the financial sector's own market capabilities. Rather it has been contended that the City owes a great deal of its success to the fact that British economic policy has, over the long-term consistently supported and fostered its interests. Perhaps the most pungent statement of this argument can be found in the work of Sidney Pollard. In his essay on the decision to return to gold in 1925, and in his more recent indictment of British economic policies between 1945 and the 1980s, Pollard has argued convincingly that the policy outlooks of successive British governments have favoured City interests. Pollard's central concern throughout, however, has been to analyse the effects of policy rather than to explain how policies were arrived at, and thus although the notion of City influence is implicit in much of his work it has not been Pollard's concern to show how, if at all, the City has exercised influence.