In 1918 Labour had become the second largest party in Parliament, replacing
the Liberals as the main opposition. Within six years it was to be in
government. After just over twenty years of existence it had changed the face of
British politics, which was no longer a ‘gentlemanly’ affair between the
Liberals and Tories.
In 1911 Labour received 400,000 votes. By 1923 this had jumped to four and a
half million. This was because of the class roots of the Labour Party. There
have been many other attempts by parties of all political colours to break the
two-party system in Britain this century, but they have failed because in the
end they had no firm basis in a particular class in society. Look at the words
of one of the most radical and foresighted representatives of the ruling class
in the 1920s -Lloyd George who had led the wartime coalition government:
"The new danger was known as socialism in Germany, Bolshevism in
Russia. In Britain it is the Labour Party which strives for the collective
ownership of the means of production. For the Liberals this is unacceptable in
principle, as the Liberals are for private property. Civilisation is in
jeopardy, the Liberals and the Tories must unite." He added "…in
France the population is agricultural and you have a solid body of opinion which
does not move rapidly and which is not easily excited by revolutionary
movements. That is not the case here. This country is more top heavy than any
other country in the world and if it begins to rock, the crash here for that
reason will be greater than in any other land."
The Labour Party had adopted in 1918 its programme ‘Labour and the Nation’
which expressed the aspirations of the rank and file of the
party. It called for a minimum wage, a 48 hour week, a million new houses within
two years, with capital supplied free of interest from the
government, a public owned and integrated transport system’ public ownership of
key industries and land, a wealth tax, and a vast increase in public services.
It called above all for full employment which could be achieved by public works
carried out by local authorities. Labour stated that its aims were fundamentally
different to the two capitalist parties.
Assumption
However the assumption behind its programme was that these were social
reforms which were in the interests of the community and could be supported by
any foresighted person. But not by the British ruling class. Once the
capitalists and financiers had consolidated their power in the aftermath of war,
all wartime controls were abandoned, prices went up and employers demanded
longer hours and lower wages. It was back to all-out class war as usual. The
leadership of the labour movement having lost its advantageous position in 1918
was put on to the defensive and all the main sections of the working class
suffered defeats and cuts by 1921. The Triple Alliance forged to support the
miners, dockers and transport workers collapsed on Black Friday in 1921 when it
failed to support the miners who were faced with pay cuts.
At the end of 1923 an election was called which did not give Labour an
overall majority. The vote was 5,500,000 votes for the Tories, 4,350,000 for
Labour and 4,300,000 for the Liberals. The Tory leader, Baldwin tried to form a
government at the instigation of the King was brought down by the combined
Labour and Liberal vote.
The King then sent for Ramsay MacDonald to form the first minority Labour
government. In this situation the Monarchy was of key political importance, not
just a source of revenue from tourism or entertaining divorce sex scandals. The
Privy Council advised the King that Labour should be given a chance. Individuals
like Ram say MacDonald and Philip Snowdon were seen as trustworthy statesmen.
Their failure to implement their programme would suit- ably demoralise the
labour movement and teach the workers a lesson. Such was the confident arrogance
of the British ruling class at the time. They knew that the leaders of the
Labour Party would not use their spell in office to appeal for support for their
programme. The programme would be abandoned on the basis that there was no
overall majority for Labour. Members of opposition parties were invited to take
part in the Cabinet of Ram say MacDonald. He had more faith in representatives
of the Liberals than he did in his own Party. The only left-winger to be
appointed to the Labour Cabinet was John Wheatley, a Clydeside MP and member of
the Independent Labour Party. In fact as Minister for Health he was responsible
for the only success story of the first Labour Government, a programme of public
housing.
This first minority Labour Government faced the trickery and deceit of the
ruling class. MacDonald’s attempts to recognise Soviet Russia and open trade
negotiations {a rational step in the interests of the capitalists themselves)
provoked cartoons depicting him selling the country to the Bolsheviks! The Labour Government
was actually brought down by the Campbell prosecution. The Labour attorney
general decided to prosecute the Communist J.R. Campbell for a class appeal
which he had made to the troops. not to fire on strikers. The charge of sedition
was dropped for the reason that there was no evidence- and so was the Labour
Government. The campaign was sealed with the infamous Zinoviev letter forgery
which the ruling class used to ‘prove’ Labour was in the pay of the
Communists! Incredibly this piece of fiction was used by the Tory press to
conduct a campaign against the Labour Party on the grounds that it was
controlled by Bolsheviks. Parliamentary politics was not as some of the Labour
leaders imagined. a game of cricket where each side played by the rules.
MacDonald might have imagined himself to be a ‘gentleman’ but his opponents were not.
It is almost 18 years since we had a Labour Government in office and it is
hard to remember just how vitriolic the Tory Press is capable of being. Blair is
even less prepared for this than Ram say MacDonald was in 1924.
The Labour Party today is more vulnerable not only having learned nothing
from history but also being more dependent on the mass media than ever before.
Labour can only combat the power of the Tory media by being able to appeal over
its head to the working class movement. Blair believes that the movement counts
for nothing and the press everything. This will leave a Labour Government
vulnerable to every whim of the Tory editors of the press.
So the first Labour Government was cast off by the British ruling class in
the fine traditions of democracy! But the labour movement had not been
destroyed. In fact the Labour vote increased by a million votes at the general
election. But the Tories under Baldwin used the period of Labour Government to
rebuild their position and to forge ahead with the vicious anti-working class
policies which were to lead to the General Strike of 1926.
In the aftermath of the defeat of the defeat of the General Strike the Tories
made attacks on the rights of trade unionists and the funds of the Labour Party
itself. Affiliated trade unionists now had to opt in to pay the political levy
to the Labour Party rather than opting out. Secondary industrial action was made
illegal. Defeat on the industrial field led the working class to look to the
election again of a Labour Government. The defeat of the General Strike had led
to the complete severance of any links between the Labour Party and the
Communist Party, as the Left- Wing Movement, a movement of constituency parties
sympathetic to the CP was effectively proscribed and constituency parties
disaffiliated. However opposition within the Labour Party to the leadership of
Ramsay MacDonald came from the Independent Labour Party which still had an
independent existence and how became a focal point for the left of the party.
The Cook-Maxton manifesto -‘Socialism in our time’ embraced the strategy
of the ‘the living wage’ as a way of overcoming unemployment. This was an
alternative to the Government’s policy of cutting wages and increasing hours as
a solution to the crisis of British capitalism.
Manifesto
Many points from the Maxton-Cook Manifesto were taken on board by the
official Labour policy document, published in 1927 entitled Labour and the Nation. It asserted that "The Labour
Party unlike other parties is not concerned with patching the rents in the a bad
system but with transforming capitalism into socialism." It was a
50-page document covering public ownership, unemployment pay, working hours, the
break up of the poor laws and surtax on incomes of over £500 per year. Labour’s
philosophy was that socialism was inevitable because it was more just, more
rational and more progressive than capital- ism. Its members were fully
committed to transforming society. For many, socialism was like a religion.
Their whole lives evolved around the Labour Party. They not only attended
political discussions and open air meetings on a weekly basis, but they may have
been involved in socialist choirs, drama groups, rambling and cycling clubs.
Their children attended socialist Sunday Schools and in some areas there were
even ‘socialist naming ceremonies’ to replace christening ceremonies for
children! This was how the movement prepared for the ‘new Jerusalem,’ which
would inevitably arrive because capitalism was doomed.
However the experience of the Labour leadership in government was to face up
to a crisis of capitalism which it was to be called upon to deaf with in an
orthodox way. It was not pre- pared to use the crisis to implement socialism,
using its minority position as an excuse. Labour had a political programme but
when in government resorted to economic orthodoxy. The socialist aspirations of
the rank and file of the movement were completely discarded.
On May 30th 1929 the second minority government was elected to office. Labour
won over 8 million votes and 288 seats, and was the largest party in the House.
However the Tory and Liberal votes combined were over 13 million, 319 seats.
Again Labour was dependent upon the goodwill of the Liberals. This minority
government was questioned by left- wingers who said that Labour should not have
taken office in those conditions. John Wheatley predicted the humiliation of the
Labour Party if it carried out cuts in wages and the incomes of the unemployed.
But the government was dominated by Ram say MacDonald and his Chancellor of the
Exchequer, the orthodox Philip Snowdon.
Churchill had this to say of the Labour
Government: "I am glad to see old Parliamentarians whom I have known for
a quarter of a century, and who have played so distinguished a part in our
proceedings, having at least their share in the responsibilities of government
and testing what are called by those who have not long experienced them ‘the
sweets of office. ‘ I look forward to having the Financial Secretary to
the Treasury deliver us a clear exposition of the gold standard and the solid
advantages which it will counter upon the country, and generally ‘to defend
orthodox financial matters. No doubt the Financial Secretary will be able to do
this when his education by Treasury Officials, the Bank of England and the high
financial authorities of the City of London have been completed."
Disruption
Macdonald was determined that the government was to be controlled by the big
five – Macdonald, Snowdon, Henderson, Thomas and Clynes. There would be no early
general election as the country could not face further disruption. Wheatley was
left out of the Cabinet this time. He was given a job in the Ministry of Works
where, according to Snowdon "he could do a good many small things
without the opportunity for squandering money."
The Labour Government of 1929-31 carried out a few reforms -a contributory
pension scheme was started, slum clearance started, agricultural marketing
boards set up, and public regulation introduced for road transport. Not very
much of Labour and the Nation in any of this! The repeal of the Trades Union Act
of 1927, and the raising of the school leaving age to 15 were measures destroyed
by the House of Lords. Employers continued with their offensive to cut wages.
The rest of the life of the government was to be dominated by the Wall Street
Crash of 1929.
The Wall Street Crash of 1929 was the prelude to the greatest slump in
history. By 1931 a quarter of the American work- force was unemployed. Seven
million were unemployed in Germany. Unemployment in Britain doubled under the
1929-1931 Labour Government. The government endorsed the employers’ efforts to
reduce living standards and even introduced an Anomalies Bill which meant that
300,000 of the unemployed would have their benefits cut. But this was not enough
for the bankers and in the summer of 1931 a commit- tee was set up to
deal with ‘the unemployment problem.’ Called the May Committee (it was headed by
Sir George May, former head of the Prudential Insurance Company it com- prised
five industrialists and two trade unionists. It reported in July 1931,
recommending cuts in government expenditure including a 15% cut in teachers pay,
25% in service pay and a 20% reduction in unemployment benefit. The trade
unionists dissented but were largely ignored. The May Committee pointed out that
there would be a budget deficit of £140 million and recommended that £67 mil-
lion of cuts be made. The bulk of these cuts were to fall on the unemployed.
MacDonald and Snowdon as supporters of financial orthodoxy called for the budget
to be balanced.
The deficit itself had been caused by rising unemployment as a
result of the Wall Street crash. Balancing the budget meant that the workers,
and particularly the unemployed were to be made to pay for the crisis of
capitalism. Alternatives to this policy were discussed by radical economists,
Keynesianists at the time but were disregarded by Snowdon who wholly upheld the
position of the Bank of England.
Pound
The report of the May Committee coincided with a run on the pound. Gold was
being lost at the rate of £2.5 million a day. Again the Labour Government did
not challenge the wisdom of Britain remaining on the gold standard, which
committed the government to a fixed exchange rate, rather like the ERM. The
crisis came to a head in August 1931 with demands from the Bank of England that
the government take action to satisfy international financiers. The right wing
dominated Labour Cabinet met and agreed substantial cuts. However when it became
clear that these would be opposed by the TUC, some MPs such as Henderson and
Clynes began to have doubts. Nevertheless cuts of £56 million were agreed
unanimously by the Cabinet including £36 million off the dole. When the TUC
expressed its opposition, they were described as ‘pigs’ by Beatrice Webb.
But these cuts were not enough for the bankers and the Tories and Liberals who
demanded a further £25 million cuts. A loan from the New York Reserve Bank
would only be forthcoming if there was confidence that the government was
carrying out cuts. Further cuts were agreed by the Cabinet, but only by 11 to 9.
There was significant opposition from some Ministers and from the TUC.
Seeing that government support for these cuts would not be forthcoming,
Macdonald then asked for the resignation of his ministers and went to the King.
It was there and at a secret meeting with opposition leaders that he was ‘advised’
not to resign but to form a National Government. He returned to an
astonished Labour Cabinet to tell them that they were sacked and that he would
be leading a government in which the leader of the Tory Party , Baldwin would be
the deputy. Only three Labour ministers, including Snowdon agreed to follow him.
This act of trickery ended the second Labour government. It was a coup, British
style, again illustrating the complete arrogance of the British ruling class in
its attitude towards democracy. A Labour Government had its programme dictated
to by the bankers and the leaders of the capitalist par- ties. When it seemed to
be incapable of carrying out the programme the Monarchy was called upon to
remove it from office. MacDonald has gone down in the history of the labour
movement, as a traitor, who allowed a Labour Government to be brought down by a
bankers’ conspiracy.
In reflection however we might ask why the tactic of a National Government
was used when the Labour Cabinet had been prepared to carry out most of the
cuts. The National Government was only to make a further £20 million cuts when
it drew up its budget and the gold standard was subsequently abandoned.
Financial orthodoxy was gradually to become a thing of the past for all
governments in the 1930s as the idea that ‘you could spend your way out of a
recession’ became acceptable, and made theoretically respectable by Keynes. This
was championed in the USA by the politics of the New Deal and by an incoming
Social Democratic government in Sweden. But the British ruling class was
exceptionally reactionary.
It can be argued that at least part of the motive for the split- ting of the
Labour Party and the setting up of a National Government was political. It was a
devise to demoralise the labour movement and to set it back for a decade. As
Ramsay MacDonald boasted that ‘every duchess in London will be wanting to
kiss me,‘ the Labour Party expressed defiance and credibility was returned
to right-wingers such as Henderson who stayed with the Party. The National
Government immediately called an election in which it won an overall victory,
554 seats (14,532,519 votes) to Labour’s 52 seats (6,649,639 votes). It was an
hysterical election campaign with Macdonald claiming that Labour was a
sectional, not a national party, and former Cabinet colleagues such as Henderson
were ‘Bolsheviks run mad. ‘ Middle class voters were told that Labour
would use their post office savings to give more money to those on the dole.
Defeat
Although the election was a defeat for Labour, the National Government taking
70% of the vote, and Labour was decimated in Parliament, its vote from the high
point of 1929 only fell from 8.3 million to 6.6 million. The Tories and Liberals
combined for electoral purposes to defeat Labour. Working class voters stayed
with the Labour Party. The small proportion of Labour MPs meant that the
position of the trade unions within the Party was strengthened, with unions like
the Miners’ Federation sponsoring a high percentage of MPs. Labour had now been
defeated on the industrial and political front. But it fought back in a ‘Call
to Action’ campaign calling 2,000 local demonstrations and issuing 3 million
leaflets against the ‘Bankers conspiracy. , Labour was not to be elected
to government for over ten years in the ‘lost decade’ of the 1930s,
characterised by mass unemployment, hunger marches and the threat of fascism
both at home and abroad. The labour movement must learn the lessons of the
1929-1931 Labour Government. They show who really holds power, the bankers and
industrialists who control the economy, backed up by institutions such as the
Monarchy. In the 1930s the Tories believed that they alone had the right to
govern. Why this was the case will be looked at in the next article on Labour in
the1930s.
