Editing Roy Jenkins (section)

==Chancellor of the Exchequer (1967–1970)==
From 1967 to 1970 Jenkins served as [[Chancellor of the Exchequer]], replacing [[James Callaghan]] following the [[devaluation]] crisis of November 1967. Jenkins' ultimate goal as Chancellor was economic growth, which depended on restoring stability to sterling at its new value after devaluation. This could only be achieved by ensuring a surplus in the [[balance of payments]], which had been in a deficit for the previous five years. Therefore, Jenkins pursued [[deflation]], including cuts in public expenditure and increases in taxation, in order to ensure that resources went into exports rather than domestic consumption.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 311.</ref> Jenkins warned the House of Commons in January 1968 that there was "two years of hard slog ahead".<ref>{{Cite web|url=https://api.parliament.uk/historic-hansard/commons/1968/jan/17/public-expenditure#column_1804|title=PUBLIC EXPENDITURE (Hansard, 17 January 1968)|website=api.parliament.uk}}</ref>

He quickly gained a reputation as a particularly tough Chancellor with his 1968 budget increasing taxes by £923&nbsp;million, more than twice the increase of any previous budget to date.<ref>Edmund Dell, ''The Chancellors: A History of the Chancellors of the Exchequer, 1945–90'' (London: HarperCollins, 1996), p. 357.</ref> Jenkins had warned the Cabinet that a second devaluation would occur in three months if his budget did not restore confidence in sterling.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 318.</ref> He restored prescription charges (which had been abolished when Labour returned to office in 1964) and postponed the raising of the school leaving age to 16 to 1973 instead of 1971. Housing and road building plans were also heavily cut, and he also accelerated Britain's withdrawal [[East of Suez]].<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', pp. 313–314.</ref><ref>Dell, ''The Chancellors'', p. 354.</ref> Jenkins ruled out increasing the income tax and so raised the taxes on: drinks and cigarettes (except on beer), purchase tax, petrol duty, road tax, a 50 per cent rise in [[Selective Employment Tax]] and a one-off Special Charge on personal incomes. He also paid for an increase in family allowances by cutting child tax allowances.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 319.</ref>

Despite [[Edward Heath]] claiming it was a "hard, cold budget, without any glimmer of warmth" Jenkins' first budget broadly received a warm reception, with [[Harold Wilson]] remarking that "it was widely acclaimed as a speech of surpassing quality and elegance" and [[Barbara Castle]] that it "took everyone's breath away".<ref name=autobiography/> [[Richard Crossman]] said it was "genuinely based on socialist principles, fair in the fullest sense by really helping people at the bottom of the scale and by really taxing the wealthy".<ref>Richard Crossman, ''The Diaries of a Cabinet Minister, Volume II: Lord President of the Council and Leader of the House of Commons, 1966–69'' (Hamish Hamilton, 1976), p. 723.</ref> In his budget broadcast on 19 March, Jenkins said that Britain had been living in a "fool's paradise" for years and that it was "importing too much, exporting too little and paying ourselves too much", with a lower standard of living than France or West Germany.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 323.</ref>

Jenkins' supporters in the Parliamentary Labour Party became known as the "Jenkinsites". These were usually younger, middle-class and university-educated ex-Gaitskellites such as [[Bill Rodgers, Baron Rodgers of Quarry Bank|Bill Rodgers]], [[David Owen]], [[Roy Hattersley]], [[Dick Taverne]], [[John Mackintosh (Scottish politician)|John Mackintosh]] and [[David Marquand]].<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', pp. 330–331.</ref> In May–July 1968, some of his supporters, led by [[Patrick Gordon Walker]] and [[Christopher Mayhew]], plotted to replace Wilson with Jenkins as Labour leader but he declined to challenge Wilson.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', pp. 332–335.</ref> A year later his supporters again attempted to persuade Jenkins to challenge Wilson for the party leadership but he again declined.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 334.</ref> He later wrote in his memoirs that the 1968 plot was "for me...the equivalent of the same season of 1953 for [[Rab Butler]]. Having faltered for want of single-minded ruthlessness when there was no alternative to himself, he then settled down to a career punctuated by increasingly wide misses of the premiership. People who effectively seize the prime ministership – Lloyd George, Macmillan, Mrs Thatcher – do not let such moments slip".<ref>Jenkins, ''A Life at the Centre'', p. 260.</ref>

In April 1968, with Britain's reserves declining by approximately £500 million every quarter, Jenkins went to Washington to obtain a $1,400 million loan from the [[International Monetary Fund]].<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 336.</ref> Following a further sterling crisis in November 1968, Jenkins was forced to raise taxes by a further £250&nbsp;million.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 339.</ref> After this the currency markets slowly began to settle and his 1969 budget represented more of the same with a £340&nbsp;million increase in taxation to further limit consumption.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 340.</ref><ref>Dell, ''The Chancellors'', p. 359.</ref>

By May 1969, Britain's current account position was in surplus, thanks to a growth in exports, a drop in overall consumption and, in part, the [[Inland Revenue]] correcting a previous underestimation in export figures. In July Jenkins was also able to announce that the size of Britain's foreign currency reserves had been increased by almost $1&nbsp;billion since the beginning of the year. It was at this time that he presided over Britain's only excess of government revenue over expenditure in the period 1936–7 to 1987–8.<ref name=autobiography/><ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', pp. 341–342.</ref> Thanks in part to these successes, there was a high expectation that the 1970 budget would be a more generous one. Jenkins, however, was cautious about the stability of Britain's recovery and decided to present a more muted and fiscally neutral budget. It is often argued that this, combined with a series of bad trade figures, contributed to the Conservative victory at the [[1970 United Kingdom general election|1970 general election]]. Historians and economists have often praised Jenkins for presiding over the transformation in Britain's fiscal and current account positions towards the end of the 1960s. [[Andrew Marr]], for example, described him as one of the 20th century's "most successful chancellors".<ref name=Marr/> [[Alec Cairncross]] considered Jenkins "the ablest of the four Chancellors I served".<ref>Alec Cairncross, ''Living with the Century'' (Lynx, 2008), p. 251.</ref>

Public expenditure as a proportion of GDP rose from 44 per cent in 1964 to around 50 per cent in 1970.<ref>Dell, ''The Chancellors'', p. 357.</ref> Despite Jenkins' warnings about inflation, wage settlements in 1969–70 increased on average by 13 per cent and contributed to the high inflation of the early 1970s and consequently negated most of Jenkins' efforts to obtain a balance of payments surplus.<ref>Campbell, ''Roy Jenkins: A Well-Rounded Life'', p. 346.</ref><ref>Dell, ''The Chancellors'', p. 367.</ref>