As in previous chapters, we conclude by assessing the four squeezes that have been qualitatively described here in the light of the three sets of issues raised in the opening chapter about the politics of fiscal squeeze.
Tax and Spending, Depth and Duration, Blame and Control
Although, as noted at the outset, the four fiscal squeezes described in this chapter all took place against a broadly similar economic background—of low unemployment accompanied by inflation and repeated balance of payments crises threatening the currency in the 'Bretton Woods' era of fixed exchange rates—their political characteristics were different, and that underlay the different balance between revenue and spending in the various squeezes. The 1950s Butler squeeze, like the Geddes Axe of the 1920s, was designed to restrain spending so that taxes could be cut to satisfy those voters who wanted lower taxes, whereas, as already noted, the first Labour squeeze of the 1960s (arguably begun by the Conservatives' 1963 budget) represented the opposite approach, of raising taxes to pay for election promises of increased spending. That government faced the voters in 1966 having raised both taxes and spending, while claiming to have dealt effectively with an economic crisis that it blamed on its predecessors.
However, the other two squeezes considered in this chapter—the Heathcote Amory/Selwyn Lloyd revenue squeeze of the early 1960s and the Jenkins revenue and spending squeeze of 1968-69—presented a more problematic mix of revenue and spending for the parties concerned. The first involved a right-of-centre government imposing significant tax increases to check inflation and stabilize the currency, while the second involved a left-of-centre government both imposing swingeing tax increases and reversing election promises it had made to increase spending in several electorally important domains such as housing and education. There were 'exogenous' forces in the sense of pressure on the currency that prompted both of those squeezes and helped to shape the balance of revenue increases and spending cuts, which in both cases cut across what might be assumed to be the normal predilection of right-of-centre parties to squeeze by cutting spending and left-of-centre parties to do so by raising taxes.
On the issue of blame versus control which we raised in Chapter One, in none of these cases does there seem to have been any serious move to pass the poisoned chalice of selecting spending cuts to an outside committee like the Geddes and May Committees of the 1920s and 1930s. Indeed, as in the case of the post-1945 Labour Government discussed in Chapter Five, this was an era in which all the main elements of economic and financial administration— monetary policy, economic forecasting, and tax and spending decisions— were directly in the hands of ministers rather than delegated to others who could take or share the blame.