Home > Great Britain > The Second Labour Government 5th June 1929 – 24th August 1931

The Second Labour Government 5th June 1929 – 24th August 1931

In the general election of 30th May 1929 the Labour party won 287 seats with over 46% of the popular vote having gained 136 seats.  The Tories led by Stanley Baldwin won 260 seats and the Liberals led by Sir Herbert Samuel won 59 seats. 

The second Labour government under Prime Minister Ramsay Macdonald took office on 5th June 1929 and remained in office until 24 August 1931. Following the collapse of Baldwin’s Tory government (1924 -1929) It was faced from the beginning with economic issues. What follows a only brief guide to events.

Ramsey MacDonald

Ramsay MacDonald

MacDonald’s second Labour government did pass legislation to raise unemployment pay, raise coal miner’s wages and legislate for new housing but it would be confronted with an economic crisis of enormous preportions, the Great Depression following the Wall street crash; as a consequence of which the British economy slumped with falling values of the pound and the parity with the gold standard. The Bank of England in August 1931 under its boss Montagu Norman was in a panic. There was an almost religious belief in maintaining balanced budgets and linking the pound with the gold standard. Unemployment rose dramatically.

A committee, the May Committee, had been set up by Phillip Snowden to report on future measures, it advocated cuts in public sector pay; cuts in public spending (sounds familiar) and unemployment pay all measure to balance the budget. J. M. Keynes, the economist. advocated a policy that countered these proposals and favoured public works schemes but at the time he was ignored, he also opposed the pound’s link with the gold standard, which the National government abandoned in September 1931.

Thus during this crisis a panicky Ramsey Macdonald and several other Labour leader, Snowden, Chancellor of the Exchequer, and Jimmy Thomas, Secretary of State for the Colonies, damaged the Labour party in forming a National government (with the Tories) following a Cabinet split. MacDonald and his colleagues went on to form a National Labour party which did not attract much support.

The Tory leader, Stanley Baldwin, pressured MacDonald to call an general election in October 1931 which resulted in a victory for the National government with 554 seats (470 Tories, 13 National labour and 68 Liberals. The Labour party under Arthur Henderson’s leadership, which opposed the National government gained only 52 seats and David Lloyd George’s Liberals 4. The election was a serious set back for Labour which didn’t recover until the 1945 General Election. Ramsey MacDonald and his fellow travellers were regarded as traitors to the Labour party.

The lesson is that the Conservative party leadership of 2009 is fundamentally wrong in its approach to this current economic crisis; their policies as espoused by Cameron, Clarke and Osborne advocate basically job cuts and laissez faire economics there may well be talk of compassionate conservatism but in the end their philosophy of dog eat dog economics remains.


See: Sidney Webb’s comments on the 1929 – 1931 Labour government.
See also: BBC Bitesize on the Great Depression.

This post will be continue to be updated.

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