The First Labour Government

The First Labour Government of the United Kingdom lasted from January to November 1924. The Labour Party, under Ramsay MacDonald, had failed to win the general election of December 1923, with 191 seats, although the combined Opposition tally exceeded that of the Conservative government creating a hung parliament. Stanley Baldwin remained in office until January 1924.

The Conservatives had won the previous general election held in 1922 shortly after the fall of the Lloyd George Coalition when along with their Unionist allies, they had won 344 seats. This seemed a significant enough majority to expect a full parliamentary term. Nevertheless, shortly after the election the Conservative leader Bonar Law died and was replaced by Baldwin, who reneged on his predecessor's electoral pledge not to introduce protective tariffs. Baldwin sought a fresh mandate from the electorate in 1923. The result was decisive, being against protectionism, and it was clear that the Conservatives had lost, despite remaining the largest party. Baldwin had little chance of remaining prime minister when the balance of power was held by the Liberal Party under H. H. Asquith, who had campaigned vigorously for free trade, to the point of healing the rift that existed between the Asquith and Lloyd George Liberal Party factions. Baldwin advised King George V to send for MacDonald, since the Labour Party held more seats in the Commons than the Liberals. MacDonald accepted the King's commission later that day, arriving with his Labour colleagues, to the amusement of many and dismay of others, in full court dress.

MacDonald and the cabinet

MacDonald had become Labour's first proper leader in 1922. As well as being Prime Minister, he became his own Foreign Secretary, a dual role which he performed well enough, but which alienated the second man in the party, Arthur Henderson, who became Home Secretary. Philip Snowden, the evangelical ex-member of the Independent Labour Party (ILP) became a rigidly orthodox Chancellor of the Exchequer, while the next two prominent members of the party, J. H. Thomas and J. R. Clynes, became Colonial Secretary and Lord Privy Seal respectively. The Fabian Sidney Webb, who had, along with Henderson, been instrumental in conceiving Labour's 1918 programme 'Labour and the New Social Order' which had committed the party to nationalisation (Clause IV), was appointed President of the Board of Trade; another Fabian, Lord Olivier, became Secretary of State for India. A former chairman of the parliamentary party, Willie Adamson, became Scottish Secretary, while left-wingers Fred Jowett and John Wheatley became, respectively, First Commissioner of Works and Minister of Health.

The Cabinet was characterised by a moderate trade union feel, although it also contained a few Liberals. Only three members had previously been ministers (two only briefly): Richard Haldane, 1st Viscount Haldane (ex-Liberal), Arthur Henderson and J. R. Clynes; though others had been under-secretaries.

Domestic policy

The main achievement of the government was that it showed itself to be 'fit to govern'. Although this might not have meant much in terms of concrete policy-making, it at least did not alarm voters who may have feared that the party would dismantle the country and promulgate 'socialism'; although, in any case, its tenuous parliamentary position would have made radical moves near impossible. Hence, Labour policies such as nationalisation, the 'capital levy' taxation and public works programmes to alleviate unemployment were either played down or ignored altogether. However, to act 'respectably', as any other government would have, was a major component of the MacDonald electoral appeal and strategy. Indeed, some historians have seen, in this time, an electoral consensus that existed between MacDonald and his Conservative counterpart Baldwin, to maintain the stability of the electoral system and preclude any radicalism that might have alienated voters or exacerbated crises such as unemployment. By 1929, voters felt able to trust Labour and thus they were voted back in again.

Despite lacking a parliamentary majority, the First Labour Government was able to introduce a number of measures which made life more tolerable for working people. The main achievement of the government was the 1924 Wheatley Housing Act, which MacDonald dubbed 'our most important legislative item'. This measure went some way towards rectifying the problem of the housing shortage, caused by the disruption of the building trade during the First World War and the inability of working-class tenants to rent decent, affordable housing. Wheatley was able to provide public housing to council tenants, as against the previous government's commitment to privatisation. This landmark Act subsidised the construction of 521,700 rented homes at controlled rents by 1933, when the subsidy for encouraging local authority housing construction was abolished.

Various improvements were also made in benefits for pensioners and the unemployed. More generous provision for the unemployed was provided, with increases in both children's allowances and in unemployment benefits for both men and women. Unemployment benefit payments were increased from 15 shillings (75p) to 18 shillings (90p) a week for men, and from 12 shillings (60p) to 15 shillings (75p) for women, while the children's allowance was doubled to two shillings. The "gap" between periods of benefit under the unemployment insurance scheme was also abolished. In addition, eligibility for benefits was extended, while the household means-test for the long-term unemployed was removed, more people were made eligible for unemployment benefits, uncovenanted benefits (beyond those covered by insurance) were made a statutory right, and the duration of unemployment benefits was extended from 26 to 41 weeks. However, a "genuinely seeking work" clause, by which applicants had to prove that they were actively seeking work, was introduced, a move that the government saw as a means of preventing abuse but drew criticism from within the Labour movement.

For pensioners, increases were made in both old-age pensions and the pensions of ex-servicemen and of their widows and children. Improvements were made in the condition of old-age pensioners by allowing small incomes from savings to be disregarded in calculating the pension due. As a result of this change, 60,000 elderly people, whose meagre savings had previously reduced their pension entitlement, received the full state pension. Eligibility for the state pension was also extended so that it covered 70% of the over-seventies, and 150,000 elderly people who had never received a pension before were now entitled to them. In addition, changes were made which allowed for pensions to be transferred to a surviving parent of a dependant who had a pension. An Old Age Pensions Act was also passed, which guaranteed a weekly pension of ten shillings (50p) to people over the age of seventy who earned under 15 shillings (75p) a week.

The government also endeavoured to extend educational opportunities. Local authorities were empowered, where they wished, to raise the school-leaving age to 15, the adult education grant was tripled, maintenance allowances for young people in secondary schools were increased, state scholarships (which had previously been in suspense) were restored, the proportion of free places in secondary schools was increased, approval was given to forty new secondary schools, a survey was carried out to provide for the replacement of as many of the more insanitary or obsolete schools as possible, and forty was set as the maximum class size in elementary school. Restrictions on education spending imposed by the previous government were removed, while local authorities were encouraged to increase the number of free secondary school places. In addition, an Education Act was passed which created an English secondary school system between the ages of 11–14. The restriction on maintenance allowances given by Local Authorities was removed, with the previous rule being that 20% of the expenditure was given as grant by the Board to the Local Authorities, but this was raised to 50%. In addition, restrictions on grants for providing meals for children were removed. Spending on adult education was increased, with the grant-in-aid increased from £20,600 to £30,500 pounds, while a small expansion of central and secondary schools took place.

The Agricultural Wages (Regulation) Act restored minimum wages for agricultural workers. County committees were established with the power to fix wages, together with a central wages board to supervise the county awards. The act helped bring about a substantial improvement over most of the country, with agricultural wages being quickly increased to 30 shillings a week (a higher level in certain counties) under the wage committees. In addition, a Conservative bill "to attenuate the powers of the Trade Boards" was dropped. Cuts in both direct and indirect taxation were also made which were hailed as representing a victory for working people, with the chancellor Philip Snowden describing the programme as representing "the greatest step ever taken towards the Radical idea of the free breakfast table."

Miner's silicosis was included within the provisions for workmen's compensation, under the Workmen's Compensation (Silicosis) Act of 1924 while the London Traffic Act 1924, which provided for the regulation of London traffic, regulated privately owned public transport; setting timetables and safety standards.

A law was introduced which modified the right of a landlord to obtain possession of a house for his own family's use, where unnecessary hardship would be caused to the tenant. The Protection from Eviction Act of 1924 provided some degree of protection to tenants "in the face of landlords seeking vacant possession and rent rises." This legislation protected tenants from eviction by landlords who attempted to obtain "decontrolled" status for their properties to raise rents. In addition, government funds were allocated for the repair and modernisation of 60,000 government built houses.

A subsidy for sugar beet cultivation to support agriculture was introduced, while schemes for roads and bridges, land reclamation and drainage, and afforestation were developed and extended. Financial support was also provided to municipal works to reduce unemployment. Although relief schemes funded by the chancellor Philip Snowden had little impact on reducing unemployment, the registered rate of unemployment fell from 11.7% in 1923 to 10.3% in 1924.

The restrictions imposed by the previous government on spending by the Popular Board of Guardians were removed, while the National Health Insurance (Cost of Medical Benefit) Bill revised the capitation fee paid to doctors. Restrictions introduced by the previous Coalition government on state grants to the principal public health grant earning services (including maternity and child welfare, tuberculosis, and venereal disease) were removed. This was followed by a circular issued to local authorities to this effect and enabling them "to carry out more effectively their public health powers under the law." Child welfare and maternity services were extended, while ex-service patients who had been treated as "pauper lunatics" under former Governments were removed from being treated in that way. As a result of this change, they were now paid for out of public funds.

The restrictions which prevented people from other countries, short-time workers, married women, and single persons residing with relatives from claiming uncovenanted benefit were abolished, while the "gaps" of 3 weeks which previous governments had made necessary after 12 weeks’ unemployment pay. In addition, a new Act was passed that extended the benefit period from 26 to 41 weeks. The rate of interest charged under the Agricultural Credits Act of 1923 passed by the previous Conservative government was reduced to 4%, while a 5% reduction on admissions to training colleges (imposed in 1923) was withdrawn. Improvements were also made in the pay of workers in the Army. For war pensioners, new pensions were provided "in deserving cases at the rate of over three hundred a week."

Various improvements were also made to public places. A scheme for beautifying St. James’ Park was carried out with a large measure of success, while additional areas of park land was allocated for games in Bushey Park, Richmond Park, and Regent's Park. Lawn-tennis courts were opened in Bushey Park, while two more playgrounds were provided for children in Regent's Park and one in Greenwich Park. F.O. Roberts, the Minister of Pensions, stopped the making of "final awards," by instructing boards that awards should be "given for a year and until further instructions," which meant that every man under such awards had the right of appeal for an increase of pension if he got worse. In addition, pensions could now be transferred to a surviving parent of a dependent who had a pension, while Need Pensions were raised, with the minimum rate increased from 4s.2d. to 5s. a week and the basis for these need pensions increased to 25 shillings (£1.25) a week for one individual and 35 shillings (£1.75) a week for a married couple. The result of this was that every parent or dependent in receipt of a need pension, received an immediate increase of between 2s.6d (12.5p) to 5s (25p) a week.

During its first 6 months in office, the First Labour Government issued a circular that removed restrictions on grants for health services, an action which led to the extension of welfare schemes for childhood and maternity. About 70 new infant welfare centres had been opened, more health visitors had been appointed, many more beds had been provided in homes for mothers and babies, and the milk supply was extended in 16 cases. As a result of the new circular, for TB, about 1,500 new beds had been arranged by the local authorities. In May 1924, a grant of £1 million was made from a Road Fund to assist the rural areas in England and Wales to improve their roads.

The Scottish Office introduced various measures to improve socio-economic conditions in Scotland. To alleviate unemployment and distress caused in the Outer Hebrides due to a depression in the fishing industry and the failure of crops, the Board inaugurated relief work schemes which had for their object the resurfacing of the roads in the regions affected. Financial assistance was allocated towards the execution of Land Drainage schemes to reduce unemployment in several areas while loans were granted to crofters to enable them to purchase the implements and seeds necessary for the cultivation of their holdings, and to take over stocks of sheep and other livestock. Wherever the rents of the holdings were considered to be too high they were reduced, a valuation having been undertaken by the Land Court in each case. Several hundreds of additional applicants were settled on the land, with the assistance of the funds of the Scottish Board. Structural additions were carried out at several agricultural colleges, and scholarships enabling them to receive instruction were granted to the sons and daughters of agricultural workers and others.

The Scottish Board of Health also withdrew the restrictions imposed under the previous Conservative government upon the expenditure to be incurred in the public health services, and consequently there were developments affecting port sanitation, Tuberculosis, the welfare of the blind, and maternity and child welfare. The Board also extended grants to local authorities for the purpose of slum clearance, while a limit was placed upon the number of two-apartment houses to be erected as a means of improving housing standards. The provisions under which Poor Law Relief was accorded to able-bodied unemployed and their dependents were extended for a further year, and were improved to permit of parish councils making grants in aid of emigration. A number of schemes for the extension of school premises were put into operation.

Entitlement to sickness allowances to war widows and orphans were extended, a national electrical policy and a national road policy was launched, and two additional treatment centres for those afflicted by venereal diseases were constructed. Various measures were also introduced to improve mine safety, as characterised by the application of new rules, attempts to enforce safety regulations, and the appointment of additional inspectors. The old regulations for working in Quarries and Metalliferous Mines were improved, while a medical man was appointed to inspect the First Aid equipment kept at mines. Higher spending on education and health was carried out, while sickness grants (which had been abolished under a previous administration) were restored.

In the 1929 general election, the Labour Party became the largest in the House of Commons for the first time, with 287 seats and 37.1% of the popular vote. However MacDonald was still reliant on Liberal support to form a minority government. MacDonald went on to appoint Britain's first woman cabinet minister; Margaret Bondfield, who was appointed Minister of Labour. MacDonald's second government was in a stronger parliamentary position than his first, and in 1930 Labour was able to pass legislation to raise unemployment pay, improve wages and conditions in the coal industry (i.e. the issues behind the General Strike) and pass a housing act which focused on slum clearances.

The government soon found itself engulfed in crisis as the Wall Street Crash of 1929 and eventual Great Depression occurred soon after the government came to power, and the slump in global trade hit Britain hard. By the end of 1930 unemployment had doubled to over two and a half million. The government had no effective answers to the deteriorating financial situation, and by 1931 there was much fear that the budget was unbalanced, which was born out by the independent May Report which triggered a confidence crisis and a run on the pound. The cabinet deadlocked over its response, with several influential members unwilling to support the budget cuts (in particular a cut in the rate of unemployment benefit) which were pressed by the civil service and opposition parties. Chancellor of the Exchequer Philip Snowden refused to consider deficit spending or tariffs as alternative solutions. When a final vote was taken, the Cabinet was split 11–9 with a minority, including many political heavyweights such as Arthur Henderson and George Lansbury, threatening to resign rather than agree to the cuts. The unworkable split, on 24 August 1931, made the government resign. MacDonald was encouraged by King George V to form an all-party National Government to deal with the immediate crisis.

The financial crisis grew worse, and decisive government action was needed, as the leaders of both the Conservative Party and the Liberal Party met with King George V and MacDonald, at first to discuss support for the spending cuts but later to discuss the shape of the next government. The king played the central role in demanding a National government be formed. On 24 August, MacDonald agreed to form a National Government composed of men from all parties with the specific aim of balancing the Budget and restoring confidence. The new cabinet had four Labourites (who formed a National Labour group) who stood with MacDonald, plus four Conservatives (led by Baldwin, Chamberlain) and two Liberals. MacDonald's moves aroused great anger among a large majority of Labour Party activists who felt betrayed. Labour unions were strongly opposed and the Labour Party officially repudiated the new National government. It expelled MacDonald and his supporters and made Henderson the leader of the main Labour party. Henderson led it into the general election on 27 October against the three-party National coalition. It was a disaster for Labour, which was reduced to a small minority of 52 seats. The Conservative-dominated National Government, led by MacDonald, won the largest landslide in British political history.

In 1931, Labour campaigned on opposition to public spending cuts, but found it difficult to defend the record of the party's former government and the fact that most of the cuts had been agreed before it fell. Historian Andrew Thorpe argues that Labour lost credibility by 1931 as unemployment soared, especially in coal, textiles, shipbuilding, and steel. The working class increasingly lost confidence in the ability of Labour to solve the most pressing problem. The 2.5 million Irish Catholics in England and Scotland were a major factor in the Labour base in many industrial areas. The Catholic Church had previously tolerated the Labour Party, and denied that it represented true socialism. However, the bishops by 1930 had grown increasingly alarmed at Labour's policies towards Communist Russia, toward birth control and especially toward funding Catholic schools. They warned its members. The Catholic shift against Labour and in favour of the National government played a major role in Labour's losses.

Labour in opposition (1931–1940)

Arthur Henderson, elected in 1931 to succeed MacDonald, lost his seat in the 1931 general election. The only former Labour cabinet member who had retained his seat, the pacifist George Lansbury, accordingly became party leader.

The party experienced another split in 1932 when the Independent Labour Party, which for some years had been increasingly at odds with the Labour leadership, opted to disaffiliate from the Labour Party and embarked on a long, drawn-out decline.

Lansbury resigned as leader in 1935 after public disagreements over foreign policy. As of 2021, he is the only Labour leader to stand down from the role without contesting a general election (excluding acting leaders). He was promptly replaced as leader by his deputy, Clement Attlee, who would lead the party for two decades. The party experienced a revival in the 1935 general election, winning 154 seats and 38% of the popular vote, the highest that Labour had achieved.

As the threat from Nazi Germany increased, in the late 1930s the Labour Party gradually abandoned its pacifist stance and came to support re-armament, largely due to the efforts of Ernest Bevin and Hugh Dalton, who by 1937 had also persuaded the party to oppose Neville Chamberlain's policy of appeasement.

Wartime coalition

The party returned to government in 1940 as part of the wartime coalition. When Neville Chamberlain resigned in the spring of 1940, incoming Prime Minister Winston Churchill decided to bring the other main parties into a coalition similar to that of the First World War. Clement Attlee was appointed Lord Privy Seal and a member of the war cabinet, eventually becoming the United Kingdom's first Deputy Prime Minister.

A number of other senior Labour figures also took up senior positions: the trade union leader Ernest Bevin, as Minister of Labour, directed Britain's wartime economy and allocation of manpower, the veteran Labour statesman Herbert Morrison became Home Secretary, Hugh Dalton was Minister of Economic Warfare and later President of the Board of Trade, while A. V. Alexander resumed the role he had held in the previous Labour Government as First Lord of the Admiralty.

Background photo: Churchill's ministers on 24 October 1941

At the end of the war in Europe, in May 1945, Labour resolved not to repeat the Liberals' error of 1918, promptly withdrawing from government, on trade union insistence, to contest the 1945 general election in opposition to Churchill's Conservatives. Surprising many observers, Labour won a landslide victory, winning just under 50% of the vote with a majority of 159 seats.

Attlee's government proved to be one of the most radical British governments of the 20th century, enacting Keynesian economic policies, presiding over a policy of nationalising major industries and utilities including the Bank of England, coal mining, the steel industry, electricity, gas, and inland transport (including railways, road haulage and canals). It developed and implemented the "cradle to grave" welfare state conceived by the economist William Beveridge. To this day, most people in the United Kingdom see the 1948 creation of Britain's National Health Service (NHS) under health minister Aneurin Bevan, which gave publicly funded medical treatment for all, as Labour's proudest achievement.

Attlee's government also began the process of dismantling the British Empire when it granted independence to India and Pakistan in 1947, followed by Burma (Myanmar) and Ceylon (Sri Lanka) the following year. At a secret meeting in January 1947, Attlee and six cabinet ministers, including Foreign Secretary Ernest Bevin, decided to proceed with the development of Britain's nuclear weapons programme, in opposition to the pacifist and anti-nuclear stances of a large element inside the Labour Party.

Labour went on to win the 1950 general election, but with a much-reduced majority of five seats. Soon afterwards, defence became a divisive issue within the party, especially defence spending (which reached a peak of 14% of GDP in 1951 during the Korean War), straining public finances and forcing savings elsewhere. The Chancellor of the Exchequer, Hugh Gaitskell, introduced charges for NHS dentures and spectacles, causing Bevan, along with Harold Wilson (then President of the Board of Trade), to resign over the dilution of the principle of free treatment on which the NHS had been established.

In the 1951 general election, Labour narrowly lost to Churchill's Conservatives, despite receiving the larger share of the popular vote – its highest ever vote numerically. Most of the changes introduced by the 1945–51 Labour government were accepted by the Conservatives and became part of the "post-war consensus" that lasted until the late 1970s. Food and clothing rationing, however, still in place since the war, were swiftly relaxed, then abandoned from about 1953.

Exercises:

1. Re-read the text, make up a list of necessary vocabulary and answer the following questions:
1) What was the policy of the First Labour Government?
2) Who was James Ramsay MacDonald?
3) What was the policy of the Second Labour Government?
4) How did Labour Party fare in opposition during the 1930s?
5) Did Labour Party remain the same during WW2?
6) What was the Attlee government known for?

2. Find in the text the following words and word combinations, find a Russian equivalent for them and add them to your working vocabulary:
a hung parliament; an electoral pledge; nationalisation; to promulgate; privatisation; uncovenanted benefits; to attenuate; welfare schemes; entitlement; slums; to be engulfed; to deadlock; to repudiate; dismantling.

3. Use the words from the Exercise 2 in your own sentences.


4. Write your summary of the text, emphasising in it:
a) its subject matter,
b) the facts discussed,
c) the author's point of view on these facts.