The failure of the ILP to convince a Labour opposition, and then a Labour government after 1929, to abandon its view that banking and politics were quite separate fields of activity is well-known. Politicians were not bankers: it was as simple as that. Ramsay MacDonald, though not averse to political programmes as such, was certainly suspicious of “unauthorised” programmes. In a veiled but unmistakable reference to ILP policy statements, he told the 1927 Labour Party conference that“authorised programmes might have a certain number of inconveniences, but unauthorised programmes had many more inconveniences, and he was not at all sure that during the last twelve months or two years the Labour Party had not suffered more from unauthorised programmes and statements than it had suffered from the issue of well-considered and well-thought-out documents and pronouncements.”Philip Snowden was much more explicit. Unlike Sir Montagu Norman, Governor of the Bank of England, Snowden did recognise a causal relationship between changes in the availability of credit and changes in the levels of production and employment, but thought that this was a relationship which politicians should not interfere with. Control of credit held within it the possibility of inflation. “It might be highly dangerous”, Snowden warned the 1928 Labour Party conference, “in the hands of a Government that wanted to use this means in order to serve some purpose, or to gain popular support.” One might achieve temporary benefits, such as the reduction of unemployment from one and a quarter million to a quarter of a million in nine months, but there would be a terrible price to pay later – all the more terrible because unspecified.
The Independent Labour Party and Planning, 1920–26
