THE NATIONAL GOVERNMENT :THE NATIONAL GOVERNMENT # The Liberal Party is in decline after 1920. as Labour and Tories mop up the Liberal vote. # Britain is now a two party system – Cons and Labour 1. Political background from the 1920’s


Slide 2:# Labour is desperate to appear respectable and appeal to skilled W.C. and M.C. voters – * By showing that they can manage the U.K. economy properly – (i) Not putting taxes up and spending lots of cash (ii) Not putting the government in control of key industries Although a “socialist” party, the leadership know they have to put these ideas on the back burner


Slide 3:Britain is struggling after the war the CONSERVATIVES are the “natural party of government” and like to paint Labour as a wild revolutionary party to scare voters off. Led by STANLEY BALDWIN – a smart, crafty operator – great at judging the public mood and creating an image of soothing reassurance – the Tories dominate the 1920’s 2. Economic background from the 1920’s


Slide 4: THE RESULTS # 2.5 million unemployed by 1931. Really high in the north / Wales Scotland and their basic industries coal, steel, textiles, shipbuilding. In 1929 the Labour Party is elected But 4 months later…………………………….. THE RESULTS # Government spending on welfare soared THE RESULTS # Hunger marches / poverty and overcrowded slum housing for many


Slide 5:# Rising unemployment means that the government gets less money from taxes because only people with a job paid tax. At the same time the government had to pay out more in unemployment benefit. How can the government “balance their books” and NOT RUN OUT OF MONEY # Britain relied on food imports but since trade had collapsed between countries had collapsed we cannot pay for these with exports of manufactured goods. So BRITAIN STARTS TO RUN UP A TRADE DEFICIT # The Pound no longer seemed a strong currency and speculators started to sell their pounds for gold. Britain needed to BORROW MONEY SO THAT OUR GOLD RESERVES WOULD NOT BE ALL USED UP


Slide 6:# McDonald and the Cabinet asked Sir George May an industrialist to make recommendations on what to do next. ( The idea was to balance the budget not deficit spend like F.D.R. ) # THE GOVERNMENT SPLIT ON THE ISSUE OF THE 10% CUT Many Labour ministers thought it a betrayal of their core support May reported in July 1931 and said the government had to 1. Cut the wages of government employees by 10% ( for teachers – 15% ) 2. Cut unemployment benefit by 10% and only apply a MEANS TEST - unemployed people with any savings got less benefit McDonald


Slide 7:# THE GOVERNMENT SPLIT ON THE ISSUE OF THE 10% CUT Eventually it was 11 – 9 in in favour of the cuts programme. The Labour Cabinet was hopelessly split and could not continue McDonald offered his resignation to the King # But in August McDonald at King George V suggestion formed a NATIONAL GOVERNMENT with the Conservatives, Liberals and……… ABOUT HALF of the Labour M.P.’s # The rest remained as a RUMP Labour Party throughout the 1930’s , McDonald and the others who joined the National government were kicked out of the party


Slide 8: The National Government was VERY POPULAR among voters. The Labour party were lucky to win 100 M.P.’s in the 1930’s elections The Tories were top dogs in the N.G. and Baldwin took over as P.M. in 1935 then Chamberlain in 1937. So in one sense the N.G. was really a big Tory dominated coalition BUT WHAT DID THE N.G. DO TO TRY AND SOLVE THE ECONOMIC PROBLEMS OF BRITAIN AND WERE THEIR POLICIES ANY GOOD?


Slide 9:2. Import duties were increased to stop cheap foreign goods getting into Britain. – ( BACKFIRED as foreigners sold to other countries and put up their duties on British goods in retaliation, so affecting output and jobs in Britain ) 3. Britain abandoned the Gold Standard – making our exports cheaper 1. The ideas in the May Report were carried out. All government employees had a 10% wage cut and 15% for teachers


Slide 10:Specific National Government Action to Deal with the Depression Unlike F.D.R. in the U.S.A. Britain did not spend huge amounts of cash to create jobs. But some ideas were tried to keep jobs and create some new ones THE SPECIAL AREAS ACT - £2 million to attract industry to areas with highest unemployment ( North / Scotland / South Wales. LOANS TO INDUSTRY– Shipbuilders - Helped to build the Queen Mary in Glasgow. Steel Companies – To build new steel works IMPORT TARIFFS – A 10% tax to protect home industry. Farming benefited too from trade protection and the government promise to buy a range of produce at minimum prices if farmers could not sell the stuff off