“What About the Rentiers?”: The Formation of the National Government (1931), Part 2

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Many had expected that a Conservative-Liberal Coalition would become the next Government, a thought that MacDonald shared. (1) However, this was not the case. Only a few hours after MacDonald tendered his Government’s resignation to King George V, the King called him back to form a “National Government.” (2) An emergency Cabinet of ten was formed consisting of four Labour Ministers (including MacDonald as Prime Minister and Snowden as Chancellor of the Exchequer), four Conservatives (including Baldwin and Chamberlain), and two Liberals, to solve the national “emergency,” and restore confidence in the economy. No one conceived at the time that it would remain in office well beyond the immediate crisis of August 1931.

In fact, MacDonald expected to return to Labour Party leadership as soon as the crisis was resolved. The day after the National Government’s formation, he met with non-Cabinet members of the Labour Government. According to Clement Attlee, who as Postmaster General:

“The Prime Minister told us that he had hoped merely to tell us that our salaries were to be cut, but now he must ask for our resignation. He made a long and insincere speech in which he begged us to remain with the Party out of regard for our careers, but really because he had all the appointments fixed up and any adhesions would have gravely embarrassed him. Except for a question by [Dr. Hugh] Dalton and one by me, we received his speech in silence and left without a word.” (3)

The question that Attlee asked (which demonstrated his anger, as well as that of many others, at MacDonald’s “betrayal”) was: “What would be done to the rentiers (recipients of unearned income)?” MacDonald meekly replied that he could not answer the question before a Budget statement: “apparently cutting unemployment benefits came in a different category.” (4)

It was at this moment that Attlee began to believe that MacDonald had betrayed his Party. Most of the Party shared the same sentiments. As the National Government pushed the May Report through Parliament in September, the National Executive Committee (N.E.C.) of the Labour Party formally expelled MacDonald and every Labour Party member who participated in the National Government. (5) The feeling that MacDonald had committed “the greatest betrayal in British political history” (6) was further confirmed for many by the National Government’s decision in early October to hold an immediate General Election.

In the campaign, which the Manchester Guardian called “the most fraudulent… of modern times,” (7) Snowden went around attacking the Labour platform [not much different from the one he had co-authored in 1929] as “Bolshevism run mad,” and MacDonald brandished German million-mark notes from the hyper-inflation of 1923 to demonstrate what the Labour Party would do to the economy. (8) These attacks had a particular efficacy. The Labour Party could not convincingly attack the National Government for implemented the May Report when it had been supported by 11 members of the Labour Cabinet. Nor could it escape the accusation that it had run away from the crisis. As a result, Labour was already predestined to lose the election.

With the marked increase in two-candidate races from 102 in 1929 to 409 in 1931 (made possible by the removal of many Liberal candidates), (9) Labour’s preordained defeat became a landslide of dramatic proportions. Although its share of the popular vote fell only six percent, Labour suffered an annihilation in Parliament, going from 287 MPs in 1929 to only 46. The National Government had a total of 556 MPs, with an unprecedented majority of 497. It was the largest disparity between the Government and the Opposition in Parliament in the modern political era. (10)

Footnotes:

  1. (1) A.J.P. Taylor, English History, 1914-45, (NY: Oxford University Press, 1965), p. 292.
  2. (2) The monarch can call whomever he wants to form a Government. Almost always, it is the leader of the largest Party in the House of Commons.
  3. (3) Kenneth Harris, Attlee, (London: Weidenfeld and Nicolson, 1982), pp. 95-96.
  4. (4) Trevor Burridge, Clement Attlee: A Political Biography, (London: Jonathan Cape, 1985), p. 77.
  5. (5) Carl F. Brand, The British Labour Party, (Stanford, CA: Hoover Institution Press, 1974), p. 158.
  6. (6) Ibid., p. 159, quoting Clement Attlee, As It Happened, (NY: The Viking Press, 1954), p. 107.
  7. (7) Charles Loch Mowat, Britain Between the Wars, 1918-1940, (Chicago: The University of Chicago Press, 1955), p. 411.
  8. (8) Taylor, p. 325.
  9. (9) Ibid., pp. 324-25.
  10. (10) John F. Naylor, Labour’s International Policy: The Labour Party in the 1930s, (London: Weidenfeld and Nicolson, 1969), p. 20, quoting Roy Jenkins, Pursuit of Progress, (London, 1953), p. 60.