THE ECONOMIC WEEKLY ANNUAL NUMBER FEBRUARY 1965

From the End By-Election Rebuffs and After

Patrick Gordon Walker's dramatic defeat at is not the only by-election rebuff that the Labour Govern­ ment has suffered. At Nuneaton, another safe constituency, the Labour majority was halved at the election held to find a seat in the Commons. The Liberals have not been slow to smell their opportunity. Jo Grimond has warned that "if Wilson wants to stay in office he really must start doing things which appeal to a wider public than the hard-core of the left- wing socialist voters". So the question is: with his majority reduced to three, wilt trim his policies and seek an arrangement with the Liberals?

THE dramatic defeat of Patrick pared with the 50.3 per cent votes the the margin has been declining since Gordon Walker at the Leyton by- Labour candidate received at the November (when Labour was 11,5 per election came as a complete surprise, General Election, at the by-election he cent ahead) but the Opinion Polls, not only to the Labour Party, but to received only 42.4 per cent while the Leyton and Nuneaton notwithstanding, the Conservatives as well. Naturally, Conservative candidate increased his still suggest that the country is inclined of course, the Labour Party had not share from 33.5 per cent to 42,9 per to support the Government. expected that Gordon Walker — a cent, with the Liberal percentage stranger to the constituency — would dropping from 16.2 per cent to 13.9 The Race Issue be able to poll the majority that the per cent. popular sitting member, Reginald While a full inquest will no doubt Sorensen had commanded (readers in These figures in themselves give be made into the two by-elections, India will remember Sorensen for the some indication of the state of mind certain factors stand out quite clearly active role he played in the campaign of the electors. To begin with, mere which account for the disappointing for the independence of India). liven was a certain amount of apathy which results. The first factor — which so the conversion of a majority of is reflected in the smaller percentage most people will admit was the funda­ 7,926 into a loss by 205 votes came as of the poll. The decline in the Liberal mental factor — was the artificial a complete shock and baffled all the vote shows that many who had voted creation of by-elections in order to get prophets. The Nuneaton result, where Liberal went over to the Conservatives. senior members of the Government Frank Cousins was, it is true, return­ None of these figures, however, can seats in the House of Commons. In ed, but the Labour majority was halv­ explain the very substantial drop that both the local constituencies, there ed, is also cold comfort for ihe was recorded in the vote for the was deep resentment — particularly in Labour Party. Labour Party candidate. Leyton where Sorensen was extremely popular and had represented the con­ What lies behind the results of these Special Factors? stituency successfully for many years, two important by-elections — the The position at Nuneaton, where and also in Nuneaton where the iepre~ first since the General Election and, Frank Cousins came in with a majority sentative was a local man — at the therefore, indicators of popular feeling that was halved, was that 60.8 per imposition of candidates from outside. with regard to the Labour Govern- cent of the electors voted compared Loyalty for the old members combined ment's first few months in office? Arc with 80.1 per cent at the General with antipathy towards the "carpet they to be taken as a vote of censure Election. Labour's proportion if the begging" methods imposed by the top on Wilson's 100 days, or are they poll dropped by 3.9 per cent, the echelons of the Party was deeply freak results brought about by special Conservative's proportion increased by resented and led to the abstention of circumstances which do not apply to 5.8 per cent and that of the Liberal many Labour supporters who probably the country as a whole? With Labour's candidate dropped by 1.9 per cent. assumed that despite their staying majority reduced now to three, what is away, the Labour candidate would be the effect likely to be on the policy Although these results have natural­ elected and their gesture of protest which the Government will follow, And ly come as a shock to the Labour would not harm the parliamentary what are the possibilities of an early Party, the leaders believe that these position of the Party. Personality- election? These are some of the are freaks, the products of special wise, nobody could have been more questions that naturally come to mind local factors, and do not mirror the different from Reginald Sorensen, an as a result of Leyton and Nuneaton. opinion of the country as a whole; old and trusted friend of the com­ munity, and looked upon as every­ Liberals Vote Tory this they believe is more clearly reflect­ ed in the Opinion Polls which just body's favourite uncle, than the rather At the Leyton by-election, 57.7 per before the by-elections, still showed a quiet, aloof and reserved Foreign cent of the electorate voted compared bias in favour of the Labour Party. Secretary. with 70.2 per cent at the General Elec­ For example, the Gallup Poll published tion. The Labour proportion of the in the Daily Telegraph on the January Did the colour question play any poll dropped by 7.9 per cent, the Con­ 18, showed Labour with a lead over role in the Leyton by-election? Gor­ servative proportion increased by 9.4 the Conservatives of 8 per cent, 6.25 don Walker himself has said that this per Writ and that of the Liberal candi­ per cent greater than Labour's lead on was not important, but there is little date dropped by 2.3 per cent. Com­ General Election day. It is true that doubt that in the minds of many of 167

THE ECONOMIC WEEKLY ANNUAL NUMBER FEBRUARY 1965 the Leyton electorate, Patrick Gordon with his majority reduced to three, Wilson acted with great promptness, Walker's defeat at carried Wilson will now trim his policies in and having accepted .Gordon Walker's with it undertones of the racial issue order to maintain his shaky majority, inevitable resignation (since no Labour which prejudiced some of them. As or whether he will seek some arrange­ Government could, with any face a leader in pointed out, ment with the Liberals to ensure the accept a in the one of the factors responsible for continuance of his Government. On after the protest they Gordon Walker's defeat was immigra­ all present indications it seems unlike­ made when Lord Home, as he than tion issue on which the professions of ly that the Government will change its was, occupied this role in the Con­ the Labour leadership, symbolised in policies, despite the warning from the servative Government), has appointed Gordon Walker, are at variance with leader of the Liberal Party who said ; Michael Stewart as Britain's new the prejudices of most of their SJP 'The results of the Leyton and Nunea­ Foreign Secretary. Although little porters. Moreover, the unruly element ton by-elections do, of course, make known outside the country, Michael introduced by 's incursions nonsense now of the Labour Party's Stewart has made a remarkable fnto the electoral campaign hi led the proposal to nationalise steel If Wilson reputation for himself within the voters with disgust wants to stay in office, he really must Labour Party and in the Parliament, start doing things which appeal to a and his handling of the Rachman Other reasons which have been wider public than the hard core of affair is still remembered. Although advanced are the bad weather which the Left-Wing socialist voters". not especially concerned with foreign kept a number of Labour supporters affairs in the past, his drive and at home and, of course, the (act that Wilson's Strategy aptitude should soon make him traditionally by-elections are the occa­ Wilson's plans appear to be that ho familiar with the major problems at sions for protest. These in themselves will carry on as before and push issue, and there is every reason to do not, however, entirely account for through the legislation he has in mind, believe that he will soon make his the rebuff that the Government has including the nationalisation of steel mark in this new post. suffered as a result on the damaging and other controversial measures. In defeat of a senior Cabinet Minister in the meantime, he hopes that the Naturally one of the major subjects what was supposed to be a safe seat. positive measures taken by the Gov­ for speculation now is when Wilson ernment will begin to show seme will go to the country. The chances Impact of Unpopular Measures? dividends. Already the index of are that the eventual General Election industrial production and the Decem­ The Labour leaders claim that ine will not be held until Wilson is con­ ber trade figures provide a certain unpopular measures taken by them to fident that the positive impact of amount of comfort put the economy on a sound basis has Labour policies has been felt in the lost them votes. There is no doubt After Gordon Walker's defeat country. that the increase in the rate of home loans and in the price of groceries lost the Labour Party more votes than The Sterling's Cross other wider issues, although the vot­ ing can also be looked upon as a from an address by Pierre-Paul censure of some of the more tight­ "Nevertheless, measures to underpin Schweitzer, Managing Director of the wing policies of the Government. It. the future strength of sterling should International Monetary fund, to the Is true that the Government has had in all prudence take account not only Overseas Bankers' Club, London: a series of setbacks and many of their of the likely developments in the United "The status of sterling as a major promises remain to be fulfilled, but Kingdom's own balance of payments, but the failure of the Government has reserve currency is one of the factors also of the possible impact on the U K been in the face of obvious adversity which gives the international com­ reserves of sharp changes in sterling in an inherited situation of serious munity a vital interest in its health balances. I may perhaps recall that threat to the economy. and strength. Interesting observa­ the protection of the U K reserves tions are often made nowadays about against an outflow of short-term capital The main problem, the economic the alleged benefits or the alleged was the primary purpose of two pre­ one, was inherited and the situation drawbacks to a country of being a re vious U K transactions with the Fund had deteriorated so much as to be serve centre. However that may be, — in 1936 and in 1961. On both occa­ almost hopeless as a result of the it is clear that during the past year sions reductions in sterling balances Conservative Party's decision to post­ the difficulties which the United King­ were largely offset by increases in the pone the General Election to the last dom has faced arose from its own pay­ Fund's holdings of sterling. In effect, possible moment. It is, therefore, a ments position. In fact, the financing sterling was — temporarily — shifted little unfair to blame the Labour Gov­ of the balance of payments deficit was from other holders to the Fund, There ernment for the painful measures for several months eased by the can be no doubt that the Fund will which it was forced to take and which favourable position of the overseas continue to lend its strength to ensure have disillusioned the electors. Na­ sterling area. It is also worth reme­ the strength of the reserve currency turally, there is jubilation in the Con­ mbering that countries, whose cur­ system. The Fund's latest Annual He- servative Party, and has rency- is not held by others as a re­ port empnasised that this system had gone on record as saying that in view serve asset nor used widely in inter­ brought substantial benefits and had of the Labour Party's defeat after national trade, are also subject from also helped to avoid certain perils. To Wilson's 100 days of Government, he time to time to very large and sharp support; strengthen and supplement will spend the next 100 days chuck­ movements of short-term funds; the that system would appear to me a more ing. experience of Italy in 1963 and early promising approach than to abolish and Speculation is rife as to whether, in 1964 provides an example. try to replace it," 169