Gaitskell still favoured discrimination in favour of sterling trade and was opposed to sterling convertibility, but was now a lot more pro-American since his October 1950 visit to Washington. The son of a weaver, Snowden worked for the government as a clerk until he became crippled by a spinal disease. Gaitskell passionately condemned the eventual Anglo-French military intervention to secure the Suez Canal, supposedly launched to enforce international law and to separate the Egyptian and Israeli combatants; the Israeli attack had in fact been launched in collusion with the British and French to supply a pretext for the invasion. Chuter Ede described the leadership election as "the political funeral of two of the greatest publicity mongers I've ever known," adding that Gaitskell had never actively sought publicity. Gaitskell (diary 10 August 1951) stated that he and Morrison thought that Attlee had been too weak in dealing with Bevan.

Gaitskell soon emerged as the leader of the group, the others being Harold Wilson, President of the Board of Trade, and Douglas Jay, Economic Secretary to the Treasury. Gaitskell agreed to limit health charges to three years (subject to Parliament voting to extend them), made concessions on pensions to the Trade Union Group of MPs, and a diary entry suggests he was not happy about dividend constraints – yet he was not prepared to make significant concessions to Bevan. Labour had proved it could be a party of government, competent in office and achieving results for working people.He became the Chancellor with the shortest Parliamentary apprenticeship since Pitt the Younger in 1782. He attempted to resign in the summer but was dissuaded by Gaitskell and Plowden because of the outbreak of the Korean War. He was a man capable of maintaining the structure of Society while at the same time championing the interests of the masses. His Inland Revenue job was kept open for him for two years following the accident; however, owing to his condition, he decided to resign from the civil service.

At the Margate conference that autumn Gaitskell gave a stirring and well-received speech including an apparently unscripted passage stressing his own socialist credentials and arguing that nationalisation was still a "vital means" to achieving that end. Bondfield would later become the first female cabinet minister and the first woman to be a privy counsellor in the UK.

In 1927–28 Gaitskell lectured in economics for the Workers' Educational Association to miners in Nottinghamshire. Dalton was trying to score party points by claiming that he was reasserting political control over the City of London, a far-fetched claim as the Bank was already under political control.