PAP Member of Parliament C. V. Devan Nair was appointed the third President of Singapore on 23 October 1981, vacating the Anson seat for a by-election for the third time in the constituency's history. Several SDP leaders such as Chiam See Tong, Fok Tai Loy and Soon Kia Seng turned up at the nomination centre. One of them was the prospective candidate although his identity was never revealed, as SDP decided not to proceed after a discussion with WP leader J. B. Jeyaretnam. However, UPF leader Harbans Singh threw his hat into the ring. PAP fielded the nephew of Minister Lim Kim San despite the reservations of Lim, as Pang Kim Hin had a wealthy disposition. Many employees of Port of Singapore Authority, where Lim was chairman, lived in the constituency and faced housing relocation challenges. This was the main reason for Jeyaretnam emerging victorious, which ended the 15-year monopoly of PAP in Parliament since Barisan's boycott in 1966 and also marked WP's return to the legislature after 20 years since 1961 in the very same seat David Marshall, then WP chairman, clinched. Within Singapore's post-independence period, PAP's first loss also set the record for the largest vote swing. This was especially bruising for PAP rising star Goh Chok Tong, who headed the campaign. Pang remains the only first-time PAP candidate who did not return to politics after one defeat.

Writ of election: 14 October 1981 [Wed]
Nomination day: 21 October 1981 [Wed]
Polling day: 31 October 1981 [Sat]
Member swearing-in: 22 December 1981 [Tue]

Eligible voters: 14,512
Voter turnout: 13,746 (94.7%)

Election deposit: $1,500


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