On 21 July Gaitskell, Jay and Wilson met the Prime Minister to tell him that devaluation was inevitable as reserves were still dropping. Men were sacrificed and left to rot under the Treasury doctrine that the way to deal with unemployment caused by chronic deficiency of demand was to add to that deficiency by cruel retrenchment. Bevan stood against Gaitskell for Party Treasurer, knowing he would likely lose but hoping to discredit union bosses Arthur Deakin and Tom Williamson in the eyes of rank-and-file trade union members. In September 1950, with Britain's balance of payments now in surplus, Gaitskell negotiated British membership of the European Payments Union, meaning that instead of bilateral clearing, European currencies were to be convertible against one another even if not against the US dollar.

In February 1952 Bevan led a rebellion of 56 other Labour MPs to vote against the Conservatives' defence spending plans (the official Labour position was to abstain).Gaitskell, unusually, supported the strikers and acted as a driver for people like his Oxford contemporary Evan Durbin and Cole's wife Margaret, who made speeches and delivered the trade union newspaper British Worker.

In 1927–28 Gaitskell lectured in economics for the Workers' Educational Association to miners in Nottinghamshire. Snowden later wrote in his autobiography: "I was brought up in this Radical atmosphere, and it was then that I imbibed the political and social principles which I have held fundamentally ever since". On his appointment, Gaitskell told William Armstrong, his Principal Private Secretary, that the main job over next few years would be the redistribution of wealth. Gaitskell made himself very unpopular by abolishing the basic petrol ration for private motorists, but encouraged the building of oil refineries, a move little-noticed at the time which would have important repercussions for the future.

Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply. over previous three years, ended officially on 1 January 1951, although in practice it ended six weeks earlier. In March 1960 the NEC agreed a new statement of Labour's aims as an addition to Clause IV rather than a replacement. In the late 1950s, in the teeth of opposition from the major trade unions, he attempted in vain to remove Clause IV of the Labour Party Constitution, which committed Labour to nationalisation of all the means of production. He was not a pacifist; however, he did not support recruiting for the armed forces, and he campaigned against conscription.

He claimed that Labour was threatened by "mob rule" got up by "frustrated journalists" (a number of Bevanites, including Michael Foot and Tom Driberg, were journalists).Bevan gave a speech to the Tribune party at the conference, declaring that the Labour Leader needed to be a "desiccated calculating machine". While convalescing he became convinced of the value of socialism and started making rousing anti-capitalist speeches. Dalton and Gaitskell were often referred to as "Big Hugh and Little Hugh" over the next fifteen years. Continuing as chancellor of the Exchequer in MacDonald’s coalition National Government, Snowden carried through an emergency budget in September 1931 and secured Great Britain’s abandonment of the gold standard that same month. In practice, in the 1940s and '50s, the unions, whose block votes dominated conference, had been broadly supportive of the PLP, but this was now beginning to change.

Although the first Labour government only lasted nine months, it achieved much, including the Wheatley Housing Act that saw half a million council homes built over the next decade. While he was convalescing at his mother's house at Cowling he began to study socialist theory and history. The Conservatives not only attacked Gaitskell as unpatriotic for failing to support British troops in action, but also tried to exploit perceived differences between Gaitskell and Bevan, who had rejoined the Shadow Cabinet earlier in the year and who had now been promoted to Shadow Foreign Secretary. Following his defeat in the 1918 General Election, Philip Snowden remained as the Parliamentary Candidate although the Independent Labour Party were keen to secure a safer seat for him at the 1922 General Election.Harold Wilson, speech at a luncheon in the House of Commons to commemorate the centenary of Ramsay MacDonald's birth (12 October 1966), quoted in The Times (13 October 1966), p. By 1951 inflation was beginning to increase, the government budget surplus had disappeared, and in another sign of an overheating economy unemployment was down to 1945 levels.