Tough choices in 1968
After months of delay and denial, politicians of every hue are now telling us that spending cuts in public services are imminent. As Panorama discovers this week though, they're not quite as keen to tell us specifically where these cuts might be.
We are being told that doing nothing is not an option, given a budget deficit that is expected to top £175bn this fiscal year.
So as Panorama attempts to look forward and predict what services might be under threat, we also find ourselves in similar territory if we look back more than 40 years.
In January, 1968, Britain had a Labour Government under the leadership of Harold Wilson that was struggling with a deficit running at £800m.
Much of the debt had been inherited from the previous Conservative government, but difficulties like the closure of the Suez Canal during the Arab-Israeli war and the disruption caused to exports by dockyard strikes meant that Wilson's government could do little to keep debt levels in check. The international value of sterling plummeted. No-one wanted to buy it.
After months of denial and a desperate rearguard action including tax rises and a halt on public building works, on 19 November 1967, Wilson announced the devaluation of sterling on the foreign currency markets.
He attempted to quell concern and confusion in a television broadcast by stating: "It does not mean the pound here in Britain, in your pocket, in your purse or bank has been devalued." His message did not succeed.
Devaluation was primarily an attempt to boost British exports, but domestically economic problems continued.
In Panorama's 1968 programme, 'Where Will the Axe Fall?' the options on the table were laid bare. You can watch a clip here:
The re-introduction of NHS prescription charges, abolition of free milk in secondary schools and the postponing of raising the school leaving age to 16 were just some areas where public spending was reined in.
Fast-forward 40 years and huge public debt is once again forcing Whitehall to make agonising choices on where that axe may fall.
As Mervyn King, Governor of the Bank of England said rather aptly last week in the final part of 'The Love of Money' when discussing the latest global recession, there is "no new paradigm here at all, this is something we've seen on many occasions over several hundred years, but the fact that we've seen it in the past and not been able to improve things is a worry. People who think the world has changed, I'm afraid, have not read history."