There's nothing wrong with your gauge, they all do it. This type of gauge was used on many other British cars of the era.
You can switch to a later style gauge that uses a voltage stabilizer. These run smoothly and register fuel level very slowly when you turn the ignition on and off. For it to read accurately however, you will most likely need to also change the sending unit in the tank to one that matches the gauge. I'm certain that others here will correct me if I have this wrong, and I welcome that
If you'd like to consider a later gauge, I have one available out of a '73 Midget and also have the voltage stabilizer to go with it. I however, do not have the matching sending unit to go with it.