The Chancellors of the Exchequers and their policies 1945-2007

The Chancellors of the Exchequers

Pink: increased tax      Blue: Corporate tax      Yellow: decreased tax       Red: Historiography

1945-1947 Hugh Dalton 

·         An important goal for Dalton in 1945-47 was to maintain low interest rates. He wanted to avoid the high interest rates and unemployment experienced after the First World War and to keep down the cost of nationalization. Dalton gained support for this policy from John Maynard Keynes as well as officials from the Bank of England and the Treasury.

·         Budgetary Policy:

a)      increased food subsidies

b)      heavily subsidised rents to council house tenants

c)       the lifting of restrictions of house-building, the financing of national assistance and family allowances

d)      Extensive assistance to rural communities and Development Areas.

·         Dalton was also responsible for funding the introduction of Britain's universal family allowances scheme.

·         Dalton significantly increased spending on education (which included £4 million for the universities and the provision of free school milk)

·         According to Jeffreys:  Dalton’s policies as Chancellor reflected “an unprecedented emphasis by central government on the redistribution of income”.

1947-1950 Stafford Cripps 

·         He increased taxes and forced a reduction in consumption in an effort to boost exports and stabilise the Pound Sterling so that Britain could trade its way out of its crisis.

·         He strongly supported the nationalisation of strategic industries such as coal and steel.

·         From 1948 to 1949, Cripps maintained a high level of social spending on housing, health, and other welfare services, while also maintaining the location of industry policy.

·         In  1950:

a)      the house building programme was restored to 200,000 per annum (after having previously been reduced due to government austerity measures)

b)      income tax was reduced for low-income earners as an overtime incentive

c)        and spending on health, national insurance, and education was increased

·         Source 1: Britain 1945-2007 by D. Murphy and P. Walsh-Atkins

“Despite at times desperate economic circumstances the achievements of the 1945 government are astounding.  It should not be forgotten that the government was faced with a shattered economy and in many places a physically shattered environment as well… Yet the government set about with a will to repair this damage and to build new homes and schools of a better quality than anything seen before”

1950-1951 Hugh Gaitskell 

·          His time as Chancellor was dominated by the struggle to finance Britain's part in the Korean War which put enormous strain on public finances. The cost of the war meant that savings had to be found from other budgets, and a controversial decision was made to introduce charges for prescription glasses and dentures on the National Health Service.

·         Purchase tax was increased from 33% to 66% on certain luxury items such as cars, television sets, and domestic appliances.

·         Entertainment tax was increased on cinema tickets

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