Despite Jenkins' warnings about inflation, wage settlements in 1969–70 increased on average by 13 per cent and contributed to the high inflation of the early 1970s and consequently negated most of Jenkins' efforts to obtain a balance of payments surplus. Shadow Cabinet (1970–1974) After Labour unexpectedly lost power in 1970 Jenkins was appointed Shadow Chancellor of the Exchequer by Harold Wilson. Jenkins was also subsequently elected to the deputy leadership of the Labour Party in July 1970, defeating future Labour Leader Michael Foot and former Leader of the Commons Fred Peart at the first ballot. At this time he appeared the natural successor to Harold Wilson, and it appeared to many only a matter of time before he inherited the leadership of the party, and the opportunity to become Prime Minister. This changed completely, however, as Jenkins refused to accept the tide of anti-European feeling that became prevalent in the Labour Party in the early 1970s. After a special conference on the EEC was held by the Labour Party on 17 July 1971, which Jenkins was forbidden to address, he delivered one of the most powerful speeches of his career. Jenkins told a meeting of the Parliamentary Labour Party on 19 July: "At conference the only alternative [to the EEC] we heard was 'socialism in one country'. That is always good for a cheer. Pull up the drawbridge and revolutionize the fortress. That's not a policy either: it's just a slogan, and it is one which becomes not merely unconvincing but hypocritical as well when it is dressed up as our best contribution to international socialism". This reopened the old Bevanite–Gaitskellite divide in the Party; Wilson told Tony Benn the day after Jenkins' speech that he was determined to smash the Campaign for Democratic Socialism. At the 1971 Labour Party conference in Brighton, the NEC's motion to reject the "Tory terms" of entry into the EEC was carried by a large majority. Jenkins told a fringe meeting that this would have no effect on his continued support for Britain's entry. Benn said Jenkins was "the figure dominating this Conference; there is no question about it". On 28 October 1971, he led 69 Labour MPs through the division lobby in support of the Heath government's motion to take Britain into the EEC. In so doing, they were defying a three-line whip and a five-to-one vote at the Labour Party annual conference.