The Labour Cabinet was taken horribly by surprise. Only three of them chose to follow MacDonald into the new government. Labour was out but MacDonald was not. He became the new PM of a new National Government resting on the support of the Conservatives and some Liberals. Many Labour supporters never got over what they felt was an underhand move by MacDonald and a betrayal of the whole Labour movement. The events of August 1931 led to great bitterness in the Labour Party at the time and to controversy ever since.
After the events of 1931, many Labour MPs, party members and trade unionists accused MacDonald of treachery in abandoning the cause of the working man and only thinking of his own career ambitions in accepting leadership of a National Government. The later Labour leader, Clement Attlee, said MacDonald’s action was ‘the greatest betrayal in the political history of this country’ and to this day there is a view current among left-wing thinkers that MacDonald gave in to capitalism, and placed the demands of the banking establishment above the deepest held beliefs of the Labour movement.
For years after 1931, such accusations against MacDonald made him a scapegoat for all the difficulties of the Labour Party – but historians and even a few of MacDonald’s former colleagues have put forward arguments in his defence, which need to be researched.
There is no evidence that MacDonald had been planning to become leader of a National Government before August 1931 and it was probably not his suggestion even then. According to a biography of MacDonald, the formation of the National Government was not what he really wanted. To him, showing ‘responsibility’ and acting in the ‘national interest’ was essential, while those who denounced him thought his primary loyalty should have been to the Labour movement. MacDonald was a major figure in the history of the Labour Party, the man who led it through its formative years and headed the first Labour governments. Without the traumatic events and fateful decisions of 1931, he would be remembered as the Great Leader. As it is, his reputation boils down to just one thing – that he was the ‘traitor’ of 1931, though this is not entirely fair.
It is probable that neither MacDonald, who found himself leading a National Government dominated by Conservatives, nor Henderson, who led the bulk of the Labour Party into opposition, fully appreciated the long-term significance of what they did. MacDonald’s new cabinet consisted of 4 Conservatives, 2 Liberals and 3 Labour. He had the support of around a dozen Labour backbenchers but he found himself rejected by the rest. A few weeks later, Macdonald was formally expelled from membership of the party. Although Snowden, who became Chancellor, was able to gain parliamentary approval for the proposed spending cuts – with Conservative support – and the loans which the bank had so desperately wanted were received in September, for all the political upheaval Britain’s currency was not saved. On 21 September, the Gold Standard was abandoned. After all this trauma, MacDonald felt the need to call a general election to restore confidence and appeal to the electorate for a ‘Doctor’s Mandate’ for the National Government’s programme.
The 1931 lection was disastrous for Labour as a party. From 288 seats in 1929, the Labour Party was reduced to only 52 seats. Among those who lost their seats were many senior figures including Henderson himself. This crushing defeat provoked further anger towards MacDonald and those who had followed him into the National Government. MacDonald himself became the ‘prisoner’ of the Conservatives while the leadership of the Labour movement passed out of the hands of the parliamentary party, now led by Lansbury, and into the hands of the trade unions, where Bevin was an important influence.
The events of 1931 were disastrous for the Labour Party and seemed to wipe out all the advances made in the previous decade. However, the party did recover in the 1930s, perhaps to a greater extent than was realised at the time. Individual membership figures went up. Labour won most of the by-elections held between 1931 and 1935 and won control of the London County Council in 1934. Although the Conservative-dominated National Government decisively won the 1935 general election, Labour gained 154 seats – a gain of 102 seats from 1931. Labour’s share of the total votes was 38%, the highest level Labour had ever achieved in any general election, even in 1929. It is worth noting that Labour’s total vote in 1931 was actually 30% - the collapse to only 52 seats was more to do with the peculiarities of Britain’s ‘first past the post’ system than with a huge collapse in Labour support.
The gradual Labour recovery continued after 1935. Between 1935 and 1940, Labour won a further 13 by-elections. Because of the Second World War there was no general election for 10 years, but some historians believe that Labour would have done even better had there been an election in 1939-40, although they probably would not have won power.
Various factors explain the recovery in Labour’s political strength, through perhaps the most important factor of all is that it went relatively unnoticed. Most people thought Labour was still lost in the political wilderness when the political facts were very different.
Some factors were due to circumstances. There was no serious alternative to Labour as the main opposition party. The Liberal Party had also split over the formation of a National Government in 1931, and did so again in 1932 when the government moved away from Free Trade. The 1935 election was a disaster for the Liberals who were no more than a minor party by the end of the decade. Neither the Communist Party nor the British Union of Fascists did well in elections. The Communists won one seat in 1935, the Fascists none and Labour’s leaders rejected all attempts to link up with the Communists in a ‘Popular Front’ against fascism. This meant Labour’s position as the main opposition party was never successfully challenged.
National government policies produced disillusionment among some workers who had not supported Labour in 1931 but went back to Labour in 1935. Under the National Government, unemployment rose to almost 3 million in 1932 and high levels of long-term unemployment existed in many parts of Britain throughout the 1930s. Cuts in unemployment benefit, the hated means test and various ‘hunger marches’ helped to maintain working-class loyalty to Labour.
There were also ways in which the Labour Party took positive steps to foster recovery. Reforms in party organisation put more influence into the hands of moderate trade union leaders such as Ernest Bevin. Changes in leadership also helped. The seniority and moral standing of Henderson and Lansbury were helpful in stabilising the party immediately after 1931, but Lansbury was replaced as leader by Clement Attlee in 1935. Although Attlee lacked charisma, his quiet efficiency and determination enabled him to rebuild the party. A membership drive proved successful and policies were more clearly thought out. In 1934, Labour published its most thorough programme since 1928 and after 1935 it slowly moved away from pacifism, firstly in favour of armed support for the League of Nations and by 1939 to full resistance to Nazi Germany. Partly as a result, Labour began to get more support in the press. The Daily Mirror became pro-Labour in 1939 whilst Labour’s newspapers became almost as popular as traditional Conservative ones.
One key factor in the Labour Party in the 1930s was its firm commitment to moderate, ‘respectable’ policies. There was no lurch to the left. It might seem surprising that the Labour Party did not evolve as a more radical party after the split of 1931. After all, the moderates who followed MacDonald had been in the minority then and many had called for a more anti-capitalist stance and the advance of true socialism to combat the alleged failures of capitalist society. Elements of the Labour movement expressed their admiration for the socialist society they thought was being constructed in Stalin’s Russia. A breakaway movement, the Socialist League, was formed. Sir Stafford Cripps was regarded as the ‘champion of the left’.
The vast majority of the Labour movement remained committed to moderation and parliamentary democracy. Attlee’s leadership contributed to this, so did the influence of the unions, who played a big part in the ‘National Council of Labour’ set up in 1934. Ernest Bevin, the boss of the Transport Worker’s Union, was fiercely anti-communist and did a lot to prevent the growth of communist influence. The Socialist League eventually dissolved itself in 1937. Sir Stafford Cripps was expelled from the party in 1939 after he tried to organise a broad alliance – including socialists, communists and disgruntled Conservatives and Liberals – in opposition to Chamberlain’s appeasement policies. Mainstream Labour opinion refused to tolerate any deal which involved communists and did all it could to avoid the taint of ‘radicalism’.
The party used the years in opposition to clarify its ideas and to develop a coherent policy programme. The Labour leadership accepted Keynes’ ideas about the need for government to manage the economy. In 1937, ‘Labour’s Immediate Programme’ set out a plan for the nationalisation of British industries.
However, despite this improvement, Labour remained out of government in the 1930s and the Conservative-dominated National Government continued to have a large overall majority. Labour’s support strengthened in London and in areas in the north of England and Scotland where there had been only limited recovery from the Depression. It did less well in the more prosperous areas and amongst the middle class. Recovery was therefore limited and largely consisted of winning back lost seats and votes rather than power. By 1940, Labour was ready for government, but it had to wait for the experience of war to affect the electorate sufficiently to persuade it that a Labour government was worth electing.