These days, I suppose, we would be talking about the digital pound on your smart card rather than the pound in your pocket. But the effect is the same.

The year was 1967. The month November. The Chancellor James Callaghan devalued sterling by 14 per cent on global markets.

In an effort to appease the anxious citizenry, the Prime Minister Harold Wilson went on the telly and insisted that the change did not mean that “the pound here in Britain, in your pocket or purse or in your bank, has been devalued.”

Three years later, Harold Wilson was removed from office as voters opted for the Tory offer under Ted Heath – despite his palpable absence of charisma.

Why remind you of this, other than the collective satisfaction of reminiscence?

Simple. Harold Wilson never really recovered from the taint of financial incompetence. And he had a bigger Commons majority than the Tories have right now.

Full-blown financial disaster

Yes, it will be a challenge to reverse the gains made by Boris Johnson in 2019. But it is far from impossible.

This is a full-blown financial disaster. A falling pound. A £65bn intervention by the Bank of England to preserve the value of pension funds.

A warning from the IMF, for pity’s sake, that the UK Government’s measures were likely to make things worse.

Let us remember too that this crisis is home made. It was manufactured in Downing Street, numbers 10 and 11.

In her series of grumpy encounters with BBC local radio presenters, Liz Truss was at pains to defend the actions taken to curb energy bills.

All fine, dandy and inevitable. But the interrogators had asked her, quite rightly, about the planned £45bn tax cuts, mostly benefiting upper earners.

Those were not driven by conflict in Ukraine. They were not enforced by rising fuel bills. They were direct political choices.

Liz Truss made a series of platitudinous, crowd-pleasing promises to win the Tory leadership election. Her plans were duly dismissed as “fantasy economics” by her rival, Rishi Sunak.

Then, granted office, she proceeded to deliver on her pledges, ignoring warnings from political and official advisers.

Usurped by ideology

I spoke to a range of senior Tories this week. All utterly appalled by the direction of strategy. But Sunak supporters say they are not surprised: they say they warned that Liz Truss was a zealot, and so it has proved.

But what of the Chancellor, what of Kwasi Kwarteng? He must have been cautioned that his tax cuts, funded by a big increase in state borrowing, were potentially reckless. Yet he went ahead, side-stepping criticism by declining to publish concomitant economic forecasts. As one Tory said to me this week, he is either culpably negligent or has acted as an acquiescent patsy.

Let us back-pedal a little. As I noted last week, this was an entirely ideological economic statement. To be fair, it can be argued, as theoretical policy, that tax cuts will potentially stimulate economic growth.

The question of equity and distribution then arises but let us set that aside for a moment. Consider, purely, the prospect that reducing the state’s take from the economy might, in theory, stimulate activity.

The snag is that economic policy does not operate in a vacuum. Even if theoretically valid or at least arguable, it has to work coherently within prevailing conditions, not least the perspective of markets and people.

It has to be sensible and proportionate. The collective zeitgeist right now is anxiety and fear, both in powerful financial circles and in modest family homes.

You cannot ignore that. You cannot discount that. You have to work with it. Liz Truss and Kwasi Kwarteng did precisely the opposite; allowing ideology to usurp the place of economic caution. Not sure even their hero, Margaret Thatcher, would have approved or indeed emulated their approach.

So, what of the political consequences? To be blunt, those are of minimal importance right now as folk struggle to cope with the cost of living.

But it is right to take a slightly longer view and consider what might arise.

Firstly, among Tories. There is zero prospect of any form of coup to oust Ms Truss. Far too early and the party is weary of internal strife.

Rather, the talk is of efforts to persuade her and the Chancellor to moderate their stand or, at the very least, to provide an early statement of reassurance, setting out a strategy for future funding and restating the need to act with calm caution, rather than effervescent zeal.

The alternatives

And Opposition parties? Scotland has a choice – or, more precisely, those who dislike Conservative rule have at least two broad options.

They can be swept along in Keir Starmer’s “Labour moment”, casting their votes to replace the UK Conservative government.

Or they can heed Nicola Sturgeon’s prospectus and move to replace UK governance entirely, with Scottish independence.

Was it not intriguing to witness the vigour with which Keir Starmer excoriated the SNP in his party conference speech?

One would almost think he wanted to sideline the nationalists from the UK discourse, in order to regain Scottish seats. Which, of course, he does.

Primarily, Sir Keir is seeking to contrast Labour – his “party of the centre ground” – with ideological Conservativism.

But his was a single transferable speech. His promise of a greener, fairer Britain can also be deployed to counter the SNP offer.

Indeed, the Scottish Labour leader Anas Sarwar did exactly that. He contrasted the Starmer plan for a state-owned energy company with earlier Scottish plans sidelined by Ms Sturgeon.

This is all a potential headache for the SNP. Nicola Sturgeon knows that – and so was ready with a riposte. Firstly, she said that Labour’s energy plan, if translated to Scotland, would require further powers to implement.

Secondly, she listed other SNP policies – such as free prescriptions and higher benefits – which currently advantage Scotland.

Thirdly, she noted that Labour would not reverse Brexit. Her argument, in short, was that independence brought more change – and on a permanent basis.

Matters for another day. Indeed, another year. For now, the focus must be upon restoring stability in our economic system, against shocks both global and domestic.

Read more by Brian Taylor:

Liz Truss is prepared to be unpopular – she might get her wish

Three big challenges facing the new PM? Economy, economy, economy

No, Prime Minister – that won’t wash. This energy crisis is an absolute disaster