Assess the progress made by the Labour party between
1918 and 1931.
Key contextual information: (limitations of the Labour government)
§ Labour was a minority govt. Had a majority over Cons, but 59 Libs
held the balance of power. Thus, MacDonald could not have
introduced particularly radical policies.
§ Economic backdrop of the US stock market crash in 1929.
§ Unemployment at 1.2 million and concentrated in the regions
dominated by heavy industry.
§ Macdonald had moved away from distinctive socialist policies =
public works.
§ Labour committed to free trade > tariffs to protect industry.
o To gain confidence of the financial institutions. Maintaining
international confidence was important due to the earnings
from invisible exports were high.
§ Lack of governmental experience.
Labour were never going to introduce radical domestic change.
Domestic measures 1929-31
Housing Act 1930 = passed by Greenwood
§ Restored the Wheatley subsidies for local authorities that had been
reduced by the Conservatives.
§ Began subsidies for slum clearance.
§ Led to the clearance of more slums than at any time previously, and
the building of 700,000 new homes.
Unemployment Insurance Act 1930
§ Restored cuts made in unemployment provision by the Cons and
increased no. unemployed eligible for ‘transitional benefit’.
§ Used a surplus in the fund created by compulsory insurance premiums
paid in the 20s.
§ By 1931 due to rising unemployment and reduced insurance income =
deficit.
§ Gregory Commission recommended cuts to this.
§ Hadn’t anticipated such widescale unemployment, and cuts made by
the National Govt.
§ Only received 30s a week for a married couple with 2 children, thus
the 10% cut implemented was severe.
Road Traffic Act 1930
§ Road traffic accidents common – 5000 in 1926
o Royal commission on transport = most finding passed by
transport minister, Herbert Morrison in 1930
§ Drink driving offence introduced, third party insurance, Highway
Code.
§ Not radical or controversial but rather a reaction to public
concern.
,Labour’s intended proposals
§ Expansive electoral reforms proposed – Feb 1931
o Ended plural voting and the representation of Oxford and
Cambridge university in parliament = elitism + undemocratic.
o Rejected by the Lords
§ Introduce STV system – Liberals against
§ House of Lords rejected an education bill to up school leaving age
to 15 in the Feb of 1931.
§ The Liberals ensured that a Trade Disputes Bill to amend the Trade
Disputes Act 1927, making general strikes illegal and preventing
TUs contributing to political fund w/o their members opting in, was
defeated.
Conclusion
§ Disadvantaged as a minority govt, with limited previous experience,
and a very poor economic situation.
§ No surprise that legislation is limited
§ Unemployment and depression intensified = govt. attention drawn
away from reforming measures which may have been overtly socialist
§ Provided useful measures overall.
, “The Labour government of 1929-31 failed because it was
overwhelmed by Britain’s financial difficulties”. How far do
you agree?
Yes
The May committee
§ feared £120 million deficit unless increases in taxes, and
reductions in the salaries of public officials and the armed
services.
o unemployment pay needed to be cut by 20%.
By August 1931:
§ Rising unemployment with government measures having little effect
§ Fall in international trade, and British exports and in both
manufacturing and financial income.
§ Attempts to rationalise production started but made little
progress.
§ Public works were on too much of a small scale
§ Radical ideas on dealing with unemployment projected – Mosely
memorandum.
§ Banks were allowed to leave Britain short of reserves by lending on
a long-term basis and borrowing on a short-term basis.
§ Foreign investors and holders of sterling had lack of confidence
and withdrawn by sterling holdings regardless of the interest
rates.
The impact of this:
Labour govt. had abandoned key principles of socialist interventionism.
Financial implications of the 1931 crisis on Britain
March 1931 Credit Anstalt collapsed.
Britain lent bank £4.3 million and kept lending after the crisis spread
to Germany.
Foreign holders of sterling lacked confidence in security of holdings in
British banks.
British gold reserves fell to £133 million by August and govt. needed
loans from abroad to buy sterling and prevent bank collapse. Conditions
for loans = cuts in government expenditure.
1918 and 1931.
Key contextual information: (limitations of the Labour government)
§ Labour was a minority govt. Had a majority over Cons, but 59 Libs
held the balance of power. Thus, MacDonald could not have
introduced particularly radical policies.
§ Economic backdrop of the US stock market crash in 1929.
§ Unemployment at 1.2 million and concentrated in the regions
dominated by heavy industry.
§ Macdonald had moved away from distinctive socialist policies =
public works.
§ Labour committed to free trade > tariffs to protect industry.
o To gain confidence of the financial institutions. Maintaining
international confidence was important due to the earnings
from invisible exports were high.
§ Lack of governmental experience.
Labour were never going to introduce radical domestic change.
Domestic measures 1929-31
Housing Act 1930 = passed by Greenwood
§ Restored the Wheatley subsidies for local authorities that had been
reduced by the Conservatives.
§ Began subsidies for slum clearance.
§ Led to the clearance of more slums than at any time previously, and
the building of 700,000 new homes.
Unemployment Insurance Act 1930
§ Restored cuts made in unemployment provision by the Cons and
increased no. unemployed eligible for ‘transitional benefit’.
§ Used a surplus in the fund created by compulsory insurance premiums
paid in the 20s.
§ By 1931 due to rising unemployment and reduced insurance income =
deficit.
§ Gregory Commission recommended cuts to this.
§ Hadn’t anticipated such widescale unemployment, and cuts made by
the National Govt.
§ Only received 30s a week for a married couple with 2 children, thus
the 10% cut implemented was severe.
Road Traffic Act 1930
§ Road traffic accidents common – 5000 in 1926
o Royal commission on transport = most finding passed by
transport minister, Herbert Morrison in 1930
§ Drink driving offence introduced, third party insurance, Highway
Code.
§ Not radical or controversial but rather a reaction to public
concern.
,Labour’s intended proposals
§ Expansive electoral reforms proposed – Feb 1931
o Ended plural voting and the representation of Oxford and
Cambridge university in parliament = elitism + undemocratic.
o Rejected by the Lords
§ Introduce STV system – Liberals against
§ House of Lords rejected an education bill to up school leaving age
to 15 in the Feb of 1931.
§ The Liberals ensured that a Trade Disputes Bill to amend the Trade
Disputes Act 1927, making general strikes illegal and preventing
TUs contributing to political fund w/o their members opting in, was
defeated.
Conclusion
§ Disadvantaged as a minority govt, with limited previous experience,
and a very poor economic situation.
§ No surprise that legislation is limited
§ Unemployment and depression intensified = govt. attention drawn
away from reforming measures which may have been overtly socialist
§ Provided useful measures overall.
, “The Labour government of 1929-31 failed because it was
overwhelmed by Britain’s financial difficulties”. How far do
you agree?
Yes
The May committee
§ feared £120 million deficit unless increases in taxes, and
reductions in the salaries of public officials and the armed
services.
o unemployment pay needed to be cut by 20%.
By August 1931:
§ Rising unemployment with government measures having little effect
§ Fall in international trade, and British exports and in both
manufacturing and financial income.
§ Attempts to rationalise production started but made little
progress.
§ Public works were on too much of a small scale
§ Radical ideas on dealing with unemployment projected – Mosely
memorandum.
§ Banks were allowed to leave Britain short of reserves by lending on
a long-term basis and borrowing on a short-term basis.
§ Foreign investors and holders of sterling had lack of confidence
and withdrawn by sterling holdings regardless of the interest
rates.
The impact of this:
Labour govt. had abandoned key principles of socialist interventionism.
Financial implications of the 1931 crisis on Britain
March 1931 Credit Anstalt collapsed.
Britain lent bank £4.3 million and kept lending after the crisis spread
to Germany.
Foreign holders of sterling lacked confidence in security of holdings in
British banks.
British gold reserves fell to £133 million by August and govt. needed
loans from abroad to buy sterling and prevent bank collapse. Conditions
for loans = cuts in government expenditure.
