Lord Diamond

Influential financial minister of the Wilson era
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The Independent Online

Jack Diamond attained increasing authority during the Labour government of 1964-70, and in the last three years of that government played a pivotal role which was quite disproportionate to his ranking in the Cabinet as Chief Secretary to the Treasury.

John Diamond, chartered accountant and politician: born Leeds 30 April 1907; MP (Labour) for Blackley, Manchester 1945-51, for Gloucester 1957-70; Chief Secretary to the Treasury 1964-70 (in the Cabinet 1968-70); PC 1965; created 1970 Baron Diamond; Chairman, Royal Commission on Distribution of Income and Wealth 1974-79; Leader of the SDP, House of Lords 1982-88; married 1932 Sadie Lyttleton (two sons, one daughter; marriage dissolved 1947), second 1948 Julie Malamuth (one daughter; marriage dissolved), third Barbara Kagan; died Little Chalfont, Buckinghamshire 3 April 2004.

Jack Diamond attained increasing authority during the Labour government of 1964-70, and in the last three years of that government played a pivotal role which was quite disproportionate to his ranking in the Cabinet as Chief Secretary to the Treasury.

Harold Wilson, in his 1971 book The Labour Government, 1964-1970, writes,

John Diamond, who for four years had fulfilled the exacting duties of Chief Secretary, was promoted to the Cabinet. This was not intended as a reward, but was designed, with the increased preoccupation with public expenditure, to enable him to deal on equal terms with the major spending ministers. I had been pressed by two successive Chancellors (James Callaghan and Roy Jenkins) to find him a seat at the cabinet table.

As the Parliamentary Private Secretary to Richard Crossman, the Secretary of State for Health and Social Security, one of those major spending ministers, I can report Crossman saying to me on several occasions, "Jack Diamond has become, after the Prime Minister and the Chancellor, the third most important member of this government." Other cabinet ministers did not disagree. What they all agreed about was that, by his courtesy, intelligence and firmness, Jack Diamond did a difficult job exceedingly well.

Diamond was born in 1907 into the Jewish community in Leeds, the son of a rabbi, Solomon Diamond. After an education for which throughout his life he expressed gratitude, at the rigorous Leeds Grammar School, he qualified in 1931 as a chartered accountant and practised in the firm John Diamond and Company.

Although he became deeply involved in the Fabian Society, influenced by the Webbs, he did not, he said, intend to become a professional politician. However, he was persuaded by his Fabian friends - among whom was Austin Albu, later to become MP for Edmonton, Middlesex, who had persuaded him to join the Labour Party - to go forward for the Manchester Blackley seat, which was thought to be unwinnable.

In the Labour landslide of 1945, Diamond was swept in to Parliament but did not become a minister, unlike his contemporaries Hugh Gaitskell, Harold Wilson and a number of trade-union MPs including James Callaghan. When he became Chancellor of the Exchequer in 1964, Callaghan plucked Diamond out from the back benches on account of the administrative and financial skills which he had brought to the service of the Labour Party. His friend Bill Rodgers, now Lord Rodgers of Quarry Bank, said,

Jack Diamond was on the Labour Party headquarters list of prospective candidates when he presented himself in Manchester to the Blackley Labour Party prior to the 1945 election. To his surprise, he was selected because, so he explained, Catholics would not vote

for a Protestant and Protestants would not vote for a Catholic, but both were happy to choose a Jew.

Competition for ministerial posts in the Attlee government was fierce and Diamond, apart from a few months as Parliamentary Private Secretary to the Ministry of Works, saw his role as being a solid committee member and indeed a chairman of parliamentary committees, where his incisive mind made him acceptable to colleagues of all parties. He was one of two chairmen of the committee stage of the Gas Bill, which was the longest and most contentious that parliament had known. He was mooted as a possible Deputy Speaker or indeed as the first Labour Speaker of the Commons.

That was not to be. Having held Blackley by a whisker in 1950, he succumbed to the Tory victory of 1951 and was unable to be selected for a seat (not that he tried all that hard), until an awkward by-election at Gloucester suggested that he would be an ideal candidate for a cathedral-city electorate.

Diamond's business life as a chartered accountant had been extremely successful and he was relied upon by Hugh Gaitskell after he became leader of the Labour Party in 1955 as a source of technical expertise and wise judgement. For 15 years from 1950, he was Treasurer of the Fabian Society and as a young Fabian, when we attended Fabian summer schools at Dorking and elsewhere, I remember very well in the 1950s how a generation of us were impressed by Diamond's command of an economic area in which we knew the Labour Party was weak.

I do not like the term "retread" for those who have lost a seat in Parliament and returned for another constituency. But on his return, with his added business experience, Diamond was an obvious choice for the Shadow Treasury team, where his knowledge and experience was of huge value in dealing with the Finance Bill. When Labour came into government in 1964 and I was a backbench and therefore pretty silent member of the committee stage of the Finance Bill, I marvelled at how very competent and convincing Diamond could be faced with the wrath of John Boyd-Carpenter and many other formidable Tories who had experience of both government and the City.

It was not only Labour members who were impressed. Political opponents respected him, in particular the formidable Iain Macleod, who was to be Chancellor of the Exchequer in 1970 and who had frequently debated with him. I remember, too, being told by the bullion broker and expert on the gold market Sir Henry D'Avigdor Goldsmith that he regarded Diamond as one of the best financial ministers in any government he had known. It was an indication of his good sense and tact that he retained the personal confidence of Harold Wilson, Jim Callaghan and George Brown, however irritated the latter could become with him. I am told that on more than one occasion he declined a department of his own, such as the important Ministry of Power, because he felt that he could do more good for the party in the Treasury.

In 1970 Diamond lost his Gloucester seat. The truth was that, although he was an excellent MP in personal cases of constituent need, he simply didn't have the time to look after what had become a very marginal seat. He told me that perhaps it was a blessing in disguise, since he would not have fancied opposition, being a wholly constructive person. He took the chairmanship of the Prime Minister's advisory committee on business appointments of Crown servants, which was perhaps the first attempt to tackle what comes under the generic title of "sleaze". But his most important work was as chairman of the Royal Commission on the Distribution of Income and Wealth. His book Public Expenditure in Practice (1975) was an important contribution to economic thinking.

Turmoil in the Labour Party distressed him greatly and in 1981 he joined his friends Roy Jenkins, Shirley Williams and Bill Rodgers in the foundation of the Social Democratic Party, becoming the leader of the SDP in the House of Lords from 1982 until 1988.

Tam Dalyell