The Chancellors (18): Harold Macmillan

Harold Macmillan, 1955-57

Conservative, under Eden

You can read about Macmillan’s carer as a whole here, and here; about his time as foreign secretary here.

If Macmillan was supremely qualified to be foreign secretary, in some ways he was no less qualified to be chancellor. He had thought seriously about industrial policy and economics  since he first entered politics. He was an early adopter of Keynesianism and his book The Middle Way and the Conservatives post-war Industrial Charter reflected this.

That line of thought was not directly relevant to the situation Macmillan found when he went to the Treasury in 1955. Before the 1955 election, Butler’s giveaway budget had over-inflated the economy; after, he had taken back most of what he had given. When Macmillan came to the Treasury, he used his position to force Eden to agree to further cuts in spending, restrictions on credit and an increase in interest rates.

This showed the strength of Macmillan’s position: to get his way, he had raised the prospect of resignation. He had struck a hard bargain to begin with, insisting that he have overall charge of domestic policy, primarily to guard himself against his rival, Butler. In truth, Eden’s position was not strong. Quickly, his colleagues turned on him, growing increasingly fed up with his interference, brittle nerves and inability to chair cabinet: like naughty children, they passed around notes in cabinet meetings mocking him.

If Macmillan wanted to be a reforming chancellor, he didn’t show it. It might be that he had no time before the government were subsumed by Suez. Macmillan started out as a hawk, but being chancellor he was soon exposed to the realities to Britain’s economic and financial vulnerability. As early as August, Macmillan’s permanent secretary advised him that if Britain acted without US support, sterling would be vulnerable. By September, he advised that sterling would have to be devalued unless the crisis was ended. Macmillan would later deny that it was the pound that lay behind his volte-face.

When Eden’s ill health saw him take a rest cure, Butler had to carry the can. When Eden could not carry on, Macmillan was thus in a stronger position than his rival. Whatever else he might have lacked in his brief spell at the Treasury, he certainly didn’t lack luck. Macmillan thus became one of ten chancellors to serve as prime minister too (one of 12 to become party leader), and one of six to go straight from number eleven to number ten. He was also one of nine men to have been both chancellor and foreign secretary even if, like John Major after him, his tenure in both offices was brief, before ascending the last rung of the ladder.