ABSTRACT
Usually, Chancellors face the opposite problem: premiers are apt to press their own ideas on the Chancellor. Macmillan made the Treasury cut income tax in 1959, refused to deflate in 1960 and in 1962 imposed a prices and incomes policy (Barnes 1987, Macmillan 1972 and 1973). Wilson’s involvement fluctuated but on the central issue of the 1970s-pay policy-imposed a policy on the Treasury. Heath, not Barber, drove the U-turn from free market policy to expansionist intervention, over-riding objections that inflation would increase (MacDougall 1987, Campbell 1993). Mrs Thatcher left her imprint on every aspect of economic policy throughout her government (Young 1989, Keegan 1984 and 1989, Lawson 1992). Usually this influence is exercised in the course of the Chancellor’s routine consultations with the premier. But there are two rarer modes of intervention which, although infrequent, show the potential extent of the Prime Minister’s influence: a long-term refusal to contemplate a policy option; and the short-term assumption of responsibility for some aspect of economic policy.
