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‘Unwept, unhonoured and unsung’: Britain's import surcharge, 1964–1966, and currency crisis management

Published online by Cambridge University Press:  28 May 2013

Richard Roberts
Richard Roberts*
Affiliation:
King's College London
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Abstract

This article examines Britain's temporary import surcharge introduced in October 1964, a largely overlooked but significant dimension of the 1964 sterling crisis. Import surcharges (temporary supplementary tariff) were illegal under GATT rules and aroused fury among trading partners. Britain's surcharge is placed in context by consideration of the use of import surcharges by other countries under Bretton Woods as currency crisis management and balance of payments measures, notably Canada's import surcharge of 1962–3 that inspired Britain's. Developed by the Conservative administration from 1963, a 15 per cent surcharge was introduced by the newly elected Wilson government as a radical alternative to deflation or devaluation to help correct the record balance of payments deficit and meet the gathering sterling crisis. As a currency crisis management measure the surcharge worked in Canada but in Britain it made matters worse and was soon supplanted by conventional measures. Deemed a failure and discredited, the surcharge was eventually lifted in November 1966 ‘unwept, unhonoured and unsung’ (Financial Times). Nevertheless, while in place the surcharge provided significant temporary assistance to the improvement of Britain's balance of payments.

Keywords

currency crisisimport surchargesterlingWilson administration

JEL classification

N2: Financial Markets and Institutions N7: Transport, Trade, Energy, Technology, and Other Services F1: Trade F3: International Finance
Type
Articles
Information
Financial History Review , Volume 20 , Issue 2 , August 2013 , pp. 209 - 229
Copyright
Copyright © European Association for Banking and Financial History e.V. 2013 

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