1929-39 (DOMESTIC) Flashcards
Ramsey MacDonald [1929-31]
problems for Labour to deal with in 1929
• Unemployment is still an issue
• Due to being a minotity (Lib held balence of power) Gov they can’t pursuit Socialist agender or be too radical as cival service + press would object to it, this made some ministers sad
• WALL STREET CRASH so eco is very bad (Heavy industry in decline since post war), They are still however commited to free trade
• The fear of Socialism is still in the air so everyone is watching Labour closely
• Invisible exports (Services) profit dependent on £ being stable for it to help eco
• Due to minority gov, hard to pass coherant set of reforms without Libs butting in
• loans from USA same as Germany so have to pay back despite nobody can afford
• MacDonald is overall less radical anyway
• if eco continues to Decline a new Nat gov may be needed
Ramsey MacDonald [1929-31]
Housing Act 1930
Arthur Greenwood
House building + Slum Clearing schemes
700,000 homes produced :D
Ramsey MacDonald [1929-31]
Unemployment Insurance act 1930
Undoes the cuts to Unemployment benift that the torys made
Removed the “genuinly seeking work” clause in the criteria
However there was still a large rise in Unemployment
Ramsey MacDonald [1929-31]
Road Traffic Act 1930
Removed the 30mph speed limit (untill 1934) as everyone ignored it
Highway code introduced
Driving offences introduced: e.g. Drink Driving
Driving tests Introduced
Busses and Coaches are more regulated
Act extended in 1934
Ramsey MacDonald [1929-31]
London Transport Bill 1931
Trams, busses and Underground is now under 1 public authority
Ramsey MacDonald [1929-31]
Agraculture and Coal mines act 1930
Increaced state control over productions
extended in 1930s
Ramsey MacDonald [1929-31]
Trades disputes act 1927 [Failed]
(reversal?)
would make general strikes Illegal
was defeated by Libs and Torys in HoC
Ramsey MacDonald [1929-31]
Education Bill [Failed]
would have raised school leaving age to 15
Feb 1931 rejected by HoL
Ramsey MacDonald [1929-31]
Wall st Crash and Depression impact on Labour
Dec 1930 Unemployment = 2.5 million
Exports fall from £730 million in 1929 to £390 million in 1931
Further hurts Stapel industrys especialy ship building
World trade drops from $68,646 million to $26,600 million
Ramsey MacDonald [1929-31]
How did Snowden (Chancellor of the Exchequer) do to help eco in Depression and Wall st.?
3 options to help balence the buget and fix the economy:
• Nationalisation and Efficiancy measuring (To reduce overproduction)
• Public works (To create jobs)
• End free trade and sig increase Gov intervention
Ramsey MacDonald [1929-31]
Snowden trys to Help Eco
• reduce Overproduction
Coal mines act 1930
Nationalisation after gov subsides ended in 1926
National regulation of Production, suply and sale of Coal
Coaleries are divided between 21 districts that report to the National Central Council that Set Quotas and Minimum Prices
7 ½ Hour working Day
BUT
Gov fears more efficient industry would result in fewer workers and increase unemployment
Ramsey MacDonald [1929-31]
Snowden Trys to help Eco
• Reduce Overproduction
Agricultural Marketing act 1931
Any agricultural producer has the right to set up a marketing board
they are used to regulate prices and production
The aim of this was to create efficient farming and maintain prices
BUT
It was only ever used once by Hop marketing board in 1932
It raised hops paid by brewers by 70%
The Brewers refused to pay the prices and they went down by 1934
The policy can’t deal with unemployment and falling trade therefore it was not successful at fixing the economy
Ramsey MacDonald [1929-31]
Snowden tries to Help Eco
• Public works (to create jobs)
Development loan and Colonial loan act 1929
£42 million go to funding Public works at home and across the empire
e.g. fund council house building in slum clearance
BUT
The Chancellor of the exchecker Snowdon loved balancing the budget
but
refused to extend public borrowing for large scale schemes
Ramsey MacDonald [1929-31]
Snowden trys to help Eco
• Direct Gov intervention to eco
Moseley Memorandum Feb 1930
The Moseley memorandum 1930
This proposed public works (especially on roads) were to be paid for by accepting a deficit in public finances
Reorganise Gov
A special Department under the Pm
to take control of Eco Resorces
+ Industry protected by Tariff
Pensions at age 60 now, Cuts the Workforce and raises The School Leaving age
BUT
Very Mixed interms of Policy:
Tariffs - Very Conservitive ( + against Lab policy to keep food cheap)
State control of industry is socialist
Public works - very Lib and threatens £ and unbalences buget
Pensions - very Labour
Due to having so much stuff in this memorandum, it was too much for labour cabinet
The Moseley memorandum was therefore rejected by Snowden as he believed state control was dangerous
The pension minister J.H. Thomas who was also moseley’s boss said that it would cost too much
After being rejected moseley create a new party on the basis of British fascism as he very much liked Mussolini who was a fascist
Ramsey MacDonald [1929-31]
• European Banking Crisis 1931
In the spring of 1931 the major banks of Austria, Germany and Geneva crashed
Initially British and French Banks assisted with loans until July where they couldn’t lend any more as they couldn’t afford it
Ramsey MacDonald [1929-31]
• the May committee July 1931
In July 1931 the all-party may commission
(which had been created to investigate how to deal with the financial problems)
Stated that by April 1932 there would be a balance of payments deficit (debt) of £120 million
They recommended to balance this there should be significant cuts in public spending such as:
• teacher salaries to be cut by 20% saving £13 million
• police and armed forces salaries to be cut by 12.5% and 10% respectively saving £9 million
• cut the unemployment benefit by 20% which would save £66 million
benefits should be limited to 26 weeks in one year
and a means test introduced
Ramsey MacDonald [1929-31]
• The Reaction to The May Commitee being published in July 1931
Foreign and domestic Banks were concerned the British economy was going to go bankrupt and started to withdraw money
As Britain was still on the gold standard, investors ask for their money to be in gold
by the end of July 1931 almost ¼ of the bank of England’s Gold Reserve had been used
£33 million in gold was Paid out by the Bank in the last 2 weeks of July
To combat thid the government asked for loans to prevent a banking collapse
Investors only agreed to this if cuts were made to public spending
Ramsey MacDonald [1929-31]
Snowden and Labour’s Problems by Aug 1931
• Unemployment was almost 3 million, and due to the unemployment insurance act 1930, the cost of unemployment benefit had drastically increased
by April the debt of the unemployment insurance fund was at £90 million and increasing
• the cost of public work schemes had gone from £70 million to £140 million
• income tax had increased to 22.5%
• Snowdon wants loans from France in the USA to stabilise the economy however they only agree if they cut public spending (esspecialy Unemployment Benefit)
Labour things this policy is terrible as it would make the working class suffer who labour is meant to represent
The trade union leader Bevin believes that they should follow the ideas of John Maynard Keynes who thinks the government should make no cuts
but increase public spending and works to stimulate the economy
However everybody fought that Keynes was two radical and crazy so nobody paid attention to him
Keynes also thought they shouldn’t be on the gold standard
Ramsey MacDonald [1929-31]
Divisions and Fall of the Labour Party in 1931 August
• MacDonald Decided to Agree to Snowden’s Buget cuts to Get USA and France loans to help the Eco recover after Wall st. Crash and Depression, even if it would Alienate the Working Class who support them
• the cabinet agrees to cut back spending by £56 million not including a cut in unemployment benefit
• Snowden and MacDonald insisted on a cut of £78 million which would include the unemployment benefit in order to get the loans and remain on the gold standard
• Henderson believes that the government should resign rather than impose unemployment benefit cuts
• therefore Henderson and MacDonald were both convinced that the other was betraying important labour ideals
They were the two most senior figures in the party and neither of them liked the other
• on the 22nd of August 1931 a final vote was taken in the cabinet
11-9 in favour of the £78 million cut
• despite this on the 23rd of August 1931 MacDonald informed the king that his government was divided and could not agree to this cut of £78 million
Preparations were then made for a resignation of the government and the creation of a national government (due to being in crisis)
Ramsey MacDonald, Nat Gov [1931-35]
Was MacDonald a traitor?
On the 24th of August 1931
MacDonald went to Buckingham Palace and handed in his resignation of the Labour government to King George V
• he stepped out of Buckingham Palace as prime minister of a coalition government
• everybody fought that he had betrayed as party and his class by agreeing to remain as prime minister in the new government
• due to this only Snowden and Thomas agreed to serve in the new national government
• however MacDonald, Snowden and Thomas were all expelled from the labour party as traitors!