I — Denmark's Political Development 1964—66

Following the parliamentary elections on September 22, 1964 (see Scandinavian Political Studies I (1966), pp. 231—236) the Socialdemocratic-Radical government resigned and after a series of negotiations, a Socialdemocratic minority government was formed. This government soon faced a series of economic-political problems and in the late spring of 1965 the situation became tense. For various reasons (desire for a surplus budget, anticipated larger state expenditures in connection with the biannual collective bargaining in the labour market, increased support to agriculture, etc.) the government wanted a series of excise taxes passed. In February-March (1965) the Minister of Finance therefore presented bills to the Folketing for additional excise taxes. In the course of the spring a series of long and difficult negotiations took place about these excise bills. Finally the Conservative party as well as the Liberal party declared that they did not wish to take part in any compromise with the government on the bills. Meanwhile, there was a split in the Liberal party on just this question. Two members of the party's parliamentary group declared that they would vote in favour of the contemplated excise taxes. Since the Radical (Social-Liberal) party also was in favour of the bills, there was now a clear majority for the bills, and they were passed in a slightly changed form.

The fact that the two dissenting members of the Liberal party had contacted the government without having previously informed their party aroused indignation among the Liberals. They had to leave the party, and continued for a time in parliament as independents. In the autumn they registered a new party in parliament, the "Liberal Center Party".

In May trouble again arose in the Liberal party. The party leader for many years, Erik Eriksen, resigned his post as chairman of the party's parliamentary group. He was followed by Poul Hartling. At the annual congress of the Liberal party in September, Erik Eriksen also turned over the post as national chairman to Poul Hartling.

A lively debate about the possible reasons for the shift was carried on in connection with this change of chairman. The debate also took place under the influence of an opinion poll which showed that a large part of the voters supporting the Liberal and the Conservative parties were in favour of a merger of these two large opposition parties. In the public opinion Erik Eriksen was an exponent of the line within the Liberal party wanting the closest possible cooperation between the two parties, whereas others in the Liberal party were in favour of the party's distancing itself somewhat more from the Conservatives.

Should the change of chairman be interpreted as something of a victory for these forces? Was the party on the way out of its former rather intimate cooperation with the Conservatives? (For a brief orientation about Danish party politics, see Scandinavian Political Studies, I, pp. 232—233).

In a multy-party democracy like the Danish interparty relations will naturally make up a large part of the political debate. The debate concerning the relations between the two big opposition parties was stimulated when a series of discussions took place between the Liberal party and the Radical party during the late summer and autumn of 1965. Was the Liberal party now moving away from cooperation with the Conservatives? Or did they just want to draw the Radical party into the "non-socialist" camp? The Radicals had been a government

partner to the Socialdemocrats 1960—1964. As mentioned above the Radical party after the 1964 election had ceased this partnership with the Socialdemocratic party. The question was now. was the Radical party moving even further away from the Socialdemocratic party? And were they perhaps preparing a future Liberal (or possibly Liberal-Radical) minority government?

At the end of the year 1965 a tense situation again arose in Danish politics. In December, the government once again proposed an increase in excise taxes. These bills got a cool reception in the Folketing and a series of longlasting political negotiations began. First, those negotiations took place in two parliamentary committees, but when the discussion were resumed after Christmas vacation, they took place within a narrow circle of top politicians from the four "old parties" (i.e. the Socialdemocratic party, the Liberal party, the Conservative party, and the Radical party). The housing question was now drawn into the discussions too.

The housing question had ior long been a major problem in Danish politics. Since 1939 a rent stop had been effective but had by far not kept pace with the general rise in prices and inr.omes since 1939. The consequense of this was ar increasing discrepancy in renl levels in old and new housing. The need for a rent adjustment therefore gradually was accentuated. Termination of rent control would also give the housing market more flexibility. However, there were large problems connected with such a discontinuation of the regulation. The tenants — and voters! — who lived in the older apartments had accustomed themselves to the low rents and a strong reaction against a sudden rise in rent could be predicted. Furthermore, a sudden increase in rent in all the older buildings could easily have an unintended effect on the economy as a whole. Finally: Who should profit from the possible rent rise?

Negotiations on these problems were extremely difficult and several times it was believed that they would break down and the situation be solved by a parliamentary election. On January 17 (1966) a housing compromise was reached by the four old parties. According to this agreement over the course of an eight year period rents in the old housing should be raised up to an "assesed rent value". 25 °_/0 of this rise should be given to the house owners immediately, 50% should be paid into a special loan institution for a number of years and then given to the owners, and finally, the last 25 % should be appropriated to maintenance of the buildings. In addition, a special "housing guarantee arrangement" should be instituted so that through state grants, every family is guarant<3d an "equitable relationship" between income and rent. The arrangement contained a series of other provisions. At the time of this writing, only a part of the settlement has been converted into practical legislation.

The housing agreement was not the only important settlement reached in January 1966. On January 21, still another agreement was reached; it was concluded by the Socialdemocrats, the Radicals, and the Liberals, and mainly concerned various amendements to the tax legislation. The most significant thing about this last agreement was not its content but the fact that in this case the Liberal party had reached a settlement with the government while the Conservative party stood aside. During the following parliamentary debate there was at times a bitter exchange of opinions between the two parties. Was the Liberal support of the settlement the logical continuation of a new policy, a policy which had been started with the change of chairman and negotiations with the Radicals in 1965?

Another important political event took place in January 1966: on the 20th a
"timetable" for further negotiations concerning the tax reform was agreed upon
by the four old parties.

Municipal elections were held on March 8. The elections resulted in a large gain for the Socialist Peoples Party, a considerable loss for the Socialdemokratic party, and a small gain for the Conservative party. The Liberal party and the Radical party about held their positions.

An important issue in Danish politics in the spring of 1966 was the tax reform negotiations. In May 1965 the government had submitted a proposal for a value added tax. A committee was established to discuss the bill and at the beginning of the parliamentary year in October the government reintroduced the bill. Meanwhile, the Conservatives, the Liberals, and the Peoples' Socialists had each put forward their "rough sketches" for a tax reform. The two central problems in the discussion were: 1) an introduction of a general sales tax, and 2) a reform of the personal tax system.

After the housing question had found its temporary solution in the housing settlement, the four parties to the settlement agreed as mentioned, on a "timetable" for the further negotiations of a tax reform. According to that plan, the parties were to decide before a certain date which kind of sales tax they would prefer: a value added tax, a retail tax, or whole sales tax.

Also several interest groups were to give their opinions about this question. It appeared that most of the interest organizations questioned seemed to prefer a value added tax, and as far as the parties were concerned, all of the four old parties preferred this form as well. The Socialist Peoples party was in principle opposed to any alteration of taxation from direct to indirect taxes, but they would eventually accept a value added tax in exchange for the abolishment of the right to deduct paid income taxes. It thus appeared that there was wide agreement on the kind of sales tax to be introduced. But there was great disagreement on many other points, for example the question of the possible abolition of the tax deduction rule, the question of "pay-as-you-earn" taxation, and others.

After confidential talks between the Liberals and the Conservatives these two parties demanded that the principles of taxation should remain unchanged during the period of change-over. Among other things, this would mean that the government was to pledge not to put pay-as-you-earn- taxation into effect during this period. Likewise the deduction rule was to be sacrosanct. The government refused whereafter negoatiations broke down.

During the summer, the government and the Socialdemocratic party worked out a new draft for an overall tax reform. The demand for pay-as-you-earn taxation was now given greater priority. Moreover the party sharpened its demand for an abolition of the tax deduction rule.

The government, however, still left the door open for a compromise with the Liberals and the Conservatives. It declared the demand for pay-as-you-earn taxation to be the primary one and when it introduced its revised taxation bill at the beginning of the parliamentary year in October, it was at least a formal retention of the tax deduction rule.

Then suddenly the Prime Minister announced on November 2 that he would issue
writs for a parliamentary election November 22.

University of Aarhus

Curt Sørensen

II - THE Danish Parliamentary Election of 1966

The Folketing election of November, 22, 1966, is a demarcation line in Danish politics. A socialist majority was returned to parliament for the first time. The conditions were thereby created for a political course other than the far-reaching co-operation between social democracy and the bourgeois parties that has characterized Danish politics this century to a far greater extent than it has in Norway and Sweden.

The 1966 parliamentary election is remarkable also in other respects. The date set for the election came as & surprise to everybody outside the government circle. The election campaign, scarce three weeks in length but unusually intensive, was characterized for once by very sharp differences of opinion between the socialist parties and all the bourgeois parties. The voting turnout was the highest ever in peacetime. It was in all respects a leftist election. The leftist parties were remarkably successful both in the socialist and in the bourgeois camps. The party of the extreme right, the Independent Party, lost all its seats in parliament.

V

Tendencies towards an orientation to the center had been apparent within the Conservative Party during 19(56. At the beginning of autumn 1966, even Conservative statements indicated a desire to draw closer to the Social Democratic Party. At that time it was no longer possible to speak of a bloc made up of the Liberal Party and the Conservative Party (the so-called VK parties). Dissension within the bourgeois camp was greater than it had been for many years.

This certainly must have been an important motive in the surprising decision to call an election. Incidentally, the initial situation was not particularly favorable for the social democrats. Throughout 1965 the government had had to struggle with declining popularity counts in conjunction with rising prices and a deficit in the balance of trade. The agreement on rents weakened the position of the social democrats even further in the electorate. The fact that in the municipal election of March 1966 every fourth voter in Copenhagen cast his vote for the Socialist People's Party (SF) is an indication of a turn in the tide towards the left that had occurred among the socialist electorate.

Although the situation in November, 1966, was hardly conducive to social democratic optimism, their prospects were no brighter for the mere two years that remained of the electoral period. The rent increases would have begun to make themselves felt. Collective bargaining in 1967 might have led to the social democratic government's being forced to propose legislative action to prevent a general conflict. All this might have meant a further strengthening of the position of the leftist socialists among the electorate.

The official reason for the; decision to appeal to the country was, however, exclusively the difficulties in reaching agreement in parliament on a tax reform. When this question was taken up in parliament in the autumn of 1966, prospects of a compromise solution existed, between the social democrats and the parties closest to them on the right ard the left. Premier Jens Otto Krag, however, chose to break off negotiations at an early stage. Parliament was dissolved on the grounds that it was impossible to agree on this important issue.

Opinion polls had shown that a pay-as-you-earn tax reform was popular among wage earners. It was evident that the social democrats wished primarily to make the election a plebiscite on the pay-as-you-earn tax reform. A vote for the Social Democratic Party would be tantamount to a vote for a change-over to pay-as youearn

taxation. Social democratic tactics were consequently aimed at making the
tax reform the predominant issue of the campaign so far as was possible.

The tactics adopted by the bourgeois parties were the reverse. It was for them a matter of introducing other issues in the debate. The bourgeois campaign was initially dominated by economic policy and inflation problems. However, owing to measures taken by the Social Democrats, the campaign was to assume a different character.

Before the 1964 election Premier Krag had stated unequivocally that the social democrats would not put through any reform with the sole aid of SF votes even if a sociatist majority were returned. This time the premier refused to make any such declaration. Instead, it became evident during the campaign that the social democrats were now prepared to co-operate with the SF in the new parliament — if necessary, against all the bourgeois parties. Also statements by social democratic ministers indicated a radicalization of the policies of the social democrats in certain sectors.

This was the starting signal for an anti-socialist campaign, chiefly conducted by the two large bourgeois parties, which was violent for Scandinavian conditions. The concept of a popular front occurred frequently during the debate. The right of private ownership was said to be in danger. A vote for the SF or for the Social Democratic Party would mean the introduction of class struggle and socialism in Denmark.

The great opportunities that existed for a more radical policy after the election also were emphasised by the social democrats' competitors on their left. The unpopular agreement on rents also was a rewarding basis for agitation by the SF. In conjunction with this, real-estate profiteering and the violent rise in real-estate prices were used as examples of social problems that called for extended public control.

Certain questions were dealt with in a particularly thorough manner by the leftist parties both in the bourgeois and in the socialist camps. The rents agreement was consequently subjected to the criticism of the Liberal Center Party, which like the SF had stood outside these negotiations. Matters of taxation other than that of tax-collection itself played a prominent role in the agitation of all the opposition parties, but in a specially high degree in the SF and center parties. The Radical Party's proposition on a tax reform attracted particular attention.

The SF and the Radical Party differed from the other parliamentary parties by introducing issues of foreign policy and defense policy into the debate. In contrast, the Social Democratic Party and the two large bourgeois parties avoided, as far as possible, discussion of these matters. The SF and the Radical Party also previously had come out as critics of the government's foreign and defense policies. In the campaign these parties took up such questions as Danish membership of NATO and the EEC, defense costs and the government's attitude toward United States policy on Vietnam. The NATO question, for example, played a smaller role in SF agitation this time than it had previously.

As appears in Table 1, the three socialist parties1 gained a total of more than
100,000 new voters. The socialist parties' proportion of the enfranchised population

---

1 The Social Democratic Party, the SF and the Communist Party.

1 The Social Democratic Party, the SF and the Communist Party.

increased by 2.5 %. But the five bourgeois parties2 in parliament altogether, had
almost as great successes in the vote. Their proportion of the electorate rose by
2.0 o/o.

Three small parties from the 1964 election were absent from the ballot this time. This partly explains why both the above groupings were concurrently able to record voting successes. But the most important reason was the greatly increased voting turnout.

During the three parliamentary elections from 1943 to 1947, the turnout percentage
was between 85 and 90. These elections, however, took place in rather special
circumstances. In the 1930s and the early 1950s the turnout was about 80 %.

Since that time an almost continous increase in voting turnout has occurred. In 1957 the voting percentage lose to almost 84. Three years later a new increase of 2 % was recorded. The November election of 1966 shows another increase, this time to 89 %. This figure has no parallel in other Scandinavian countries. The high voting turnout is all the n:ore remarkable because the franchise age (21 years) was lower in the two last elections than it had been previously. In the parliamentary elections of 1966, the turnout must have been relatively high among younger voters. This may be related to the great successes of the SF.

Many factors suggest that t tie SF has achieved a strong position, especially among the younger voters. This is an important circumstance when an attempt is made to explain the development toward a socialist majority that has taken place during a period when the socialist majority position was lost in the Norwegian parliament and is severely threatened in Sweden.

---

2 The Radical Party, the Liberal Center Party, the Liberal Party, the Conservative Party and the Independent Parly.

2 The Radical Party, the Liberal Center Party, the Liberal Party, the Conservative Party and the Independent Parly.

Thus, in contrast to Sweden and Norway, no socialist majority exists yet in the Danish electorate (Table 2). But in the Norwegian parliamentary election of 1965, a great proportion of the socialist votes was lost and did not produce seats. In Denmark in 1966 only the few votes cast for the Communist Party could be regarded as wasted in this respect. This time more bourgeois votes fell victim to the limitation rules on the distribution of seats. The Independent Party received ten thousand votes too few to be able to retain any representation in parliament. There were, then, no great shifts in the vote between the bourgeoisie and the socialists in 1966. Nevertheless, the tendencies toward radicalization were manifest in the successes of the leftist parties of both the bourgeoisie and the socialists. The Radical Party and the Liberal Center Party gained a total of seven seats, and the SF ten. The other bourgeois parties lost a total of ten seats, and the Socialdemocratic Party seven.

As appears from Table 3, during the last ten years a change of structure has occurred within the socialist camp. That nearly a fourth of the socialist votes should go to a party to the left of the Social Democrats is something that has not occurred in any of the three Scandinavian countries of Denmark, Norway or Sweden since 1945. The shift to the left in the bourgeois camp is not equally striking, especially when considering that groups corresponding to the Liberal Center Party have previously been active within the Liberal Party.

#

Above all, it was in the large towns that great changes took place in the strength
relations of the parties (see Table 4). In the region of the capital there were

shifts that, by Scandinavian standards, may be described as being close to
landslides.

Great fluidity among the voters in the region of the capital was also characteristic of the 1965 Norwegian parliamentary elections and the 1966 Swedish municipal elections. In all three countries this brought about a weakening in the position of the Social Democrats in the region and successes for parties to the right and to the left of the Social Democrats. These regions have high migration figures and a considerable element of young voters. There is much suggesting that traditional party loyalties have become weaker in these groups of voters with high geographic and social mobility. The likely trend is toward an increased party-political mobility in Scandinavia along with the advance of urbanization.

The Venstre Party registered considerable successes in the Oslo region in 1965. The parties is Denmark most similar to it — the Radical Party and the Liberal Center Party — scored similar successes in the region of the capital. The gains of the Radical Party were remarkable. A retrogression of many years duration was stopped thereby. The radical following is still greatest outside the large towns, but the party has now regained something of their once strong position in Copenhagen. That the Radical Party, for the first time for several years, was able to enter an election campaign without being directly responsible for the policies of the government was naturally a great tactical advantage.

The Liberal Center Party is a party of the densely populated areas to a much higher degree than the Radical Party. The successes of the Liberal Center Party are strongly related to the losses of the Liberal Party in the large towns. They probably partly explain also the conservative losses in these constituencies.

Regardless of the type of commune, the SF succeeded in most cases in doubling its proportion of the vote. In the working-class districts of Copenhagen, the party has become a threat to the position of the social democrats as largest party. With the exception of the election oi 1945, it has not previously been possible to question the leading position of the social democrats in these constituencies for half a

century. Although the younger voters presumably supplied the SF with an important increment of votes, it is nevertheless clear that there also has been a more general shift to the SF from the Social Democratic Party. In the same manner as the SF agitation against NATO was interpreted to explain the first electoral breakthrough of the party, the campaign against the agreement on rents generally has now been taken to explain the recent successes of the SF. But the causes of the leftist-socialist advance certainly lie deeper than this.

Developments in recent years have shown that even in Welfare Scandinavia there is fertile soil for a democratic party that offers a markedly socialist alternative to the more pragmatic social democracy. The Danish Social Democrats' policy of co-operation with bourgeois parties must in reason have consequencies sooner or later. That the SF during the campaign, was treated by the Social Democrats as a democratic and respectable party also may have facilitated the switch of party among those radical social democrats who previously shied away from the communist label that the social democrats attempted to affix on the SF.

This time the Social Democratic Party must have appeared to the voters as being more radical than it had for many years. Yet the party suffered no net losses to the right. It seems, thus, that the anti-socialist campaign did not have any decisive effect. The pay-as-you-earn taxation proposition of the social democrats must have contributed to the fact that many marginal voters remained within the socialist camp.

The bourgeois dissension also contributed toward making the bourgeois alternative less attractive. Besides, it is hardly possible to speak of a bourgeois alternative — there were many. It never became clear before the election day which of the bourgeois parties was prepared to enter into a non-socialist government or who could think of himself as supporting whom. It thus became impossible to point out any particular challenger to Krag for the premiership.

The conservative decline was certainly not alarming, but it had generally been reckoned that the successes recorded by the conservatives over a number of years would continue. That they now suffered a repulse in a region so expansive as the suburbs of Copenhagen must also be disquieting. The Liberal Party's loss of votes was, however, easier to predict. It was difficult for them to avoid a decline in the large towns in view of the emergence of the Liberal Center Party. The voting losses of the Liberal Party proved, incidentally, to be smaller than the gains of the Liberal Center Party.

Despite the big bourgeois parties' orientation toward the center, no peeling-off of voters toward the right occurred. Instead, the party on the extreme wing, the Independents, suffered a loss of votes that proved fatal. In the large towns the vote for this party was halved.

The two small parties, the Communist Party and the Retsforbundet, failed for
the third time in a row to exceed the limit that would entitle them to a share
of the seats. Their vote, already insignificant, shrank even further.

Despite its large loss of seats, the Krag government did not resign. A widening of the parliamentary basis, however, was declared to be desirable. An invitation to negotiations was consequently sent, in the first round, to the two parties of the middle and to the SF.

The Radical Party and the Liberal Center Party took a negative attitude toward the invitation to negotiations. Despite the increase in the number of seats, their parliamentary position had deteriorated. The representatives of the middle parties together with those of the social democrats no longer made up a majority in

parliament. The SF, however, was willing to enter reality negotiations with the Social Democratic Party in forming a coalition government. This was the final phase in a development that has led the SF from an isolated position on the fringe to the position of a par ,y that is accepted and significant in the parliamentary game.

The intensive negotiations between the leaders of the two socialist parties did not lead to the entry of the SF into government. Among other things, SF leaders considered that the Social Democratic Party had not made sufficient concessions in foreign and defense policy. But the deliberations contributed toward the removal of the traces of the cold war that had been waged for so long between the two parties.

Despite the outcome, the position of the social democratic minority government is stronger since the November election than it had been previously. Before the election the bourgeois parties were able to force the Social Democrat Party to far reaching concessions. Now the situation is reversed. If the bourgeois parties wish to have a direct influence on decisions, they will have to go a long way to meet the Social Democrats. If not, .he government can address itself toward co-operation on the left. The SF leadership also has declared that it does not directly demand any extensive policy of socialization for an establishment of co-operation between the two socialist parties in internal affairs.

The socialist endeavors to co-operate were soon put to the test when negotiations on taxation were resumed without much delay after the election. Representatives of the Social Democratic Party, the SF, the Radical Party and the Conservatives participated in the intensive ir.formal final deliberations. The Liberal Party remained outside. But powerful forces within both the SF and the Social Democratic Party evidently wished to demonstrate and to strengthen the tendencies toward co-operation between the socialists. In March, 1967, the SF and the Social Democratic Party entered on their own into an agreement that embraced the farthest-going tax reform in Denmark for more than fifty years. This would bring such things as a switch to pay-as-you-earn laxation, the scrapping of the taxdeduction rule, and the introduction of a surplus-value tax. The continued socialist co-operation would be under continual discussion in a common negotiating committee.

*

In December, 1966, elections were held in Greenland and the Faeroes. No changes in mandates took place. The social democratic parliamentary group received the reinforcement of one representative from the Faeroes. The other Faeroes mandate was occupied by the Folkeflokken, which has no organizational links with the parties of the Danish mainland. The two representatives elected in Greenland stand outside the Parties.

The situation in parliament was consequently: 90 socialist representatives (70 of
whom are Social Democrats), 86 bourgeois, and 3 members outside the party groups.