Suez: the aftermath
Counting the cost of the Suez crisis has been assuming the guise of a political parlour game on the basis that anybody’s guess is as good as anyone else’s. So few members of parliament could have bargained for so great a shock as was delivered by Mr Macmillan, the chancellor of the exchequer, when he addressed the issue in the House of Commons.
After a lengthy discussion on the fall in gold and dollar reserves and the action taken to halt this process and strengthen stirling he went on to outline what the government intended to do in addition to mobilising external resources to fortify the economy. He pointed out that the interruption of oil supplies from the Middle East and the dislocation caused by the closing of the canal would add a fresh burden to the balance of payments.
He gave the broadest hint ever to be given in anticipation of a Budget that he was planning to increase income tax. How much is a matter for the future but it was an interesting feature that Mr Macmillan did, in passing, draw attention to the fact that the standard rate had been reduced by one shilling in the past four years.
He then announced his intention of raising petrol duty by 1s a gallon, which was expected to yield about £30m in the remaining months of the financial year. He was at pains to emphasise that this was a temporary measure for the duration of the emergency “or at least until a new Budget can review the whole situation”. But there are suspicions that it may become so much part of the national economy that its permanency will be assured.