ABSTRACT
The October manifesto was basically February’s with added emphasis on the Social Contract and Labour’s achievements. Curbing inflation was the first priority, otherwise a massive slump would result. Labour would not print money but would direct capital into productive industry and would sustain employment whilst protecting the most vulnerable from inflation. Whilst welcoming the Social Contract the NEC was concerned lest the Liaison Committee lead to its marginalisation. A menacing source of instability in the Social Contract was the confidence of foreign holders of sterling. The resolution of the first sterling crisis by public expenditure cuts and pay policy strained the government’s relationship with both the party and the unions. A major demon for the Labour Party is the Treasury: a succubus which tempts Labour Chancellors away from socialist righteousness and high public spending to the eternal damnation of financial orthodoxy and deflation.
