Douglas became a Labour Member of Parliament at the 1969 general election. He showed his interest in economic policy in his maiden speech, in which he argued against foreign investment in the domestic economy. His case for external protection of the domestic economy and government involvement in investment was characteristic of the Labour Party of the time. From 1972 to 1975, Douglas was a junior minister in the Third Labour Government, where he won a reputation for his capacity for innovation. This government followed a broadly Keynesian approach to economic management.