Three-party politics

CONTENTS
            THREE-PARTY POLITICS, 1922-5…………………………………………………    2
               THE PRIME MINISTER………………..……………………………………………  2
               THYE LABOR PARTY………………………………………………………………     3
                  REMSAY MACDONALD…………………………………………………………… 4
               DEBTS AND REPARATIONS………………………………………………………   5
                  BALDWIN……………………………………………………………………………    6
               BALDWIN AND PROTECTION……………………………………………………   6
               FIRST LABOR GOVERNMENT….…………………………………………………  7
               EDUCATIONAL REFORMS…………………………………………………………    8
                  UNEMNPLOYMENT…………………………………………………………………  9



                       THREE-PARTY  POLITICS,   1922-5

Politics after the fall of Lloyd George seemed far from the tranquillity
which Law had promised. There were three general elections in less than two
years (^November 1922; 6 December 1923; 29 October 1924), and the terrible
portent of a Labor government. The turmoil was largely technical. Though
Labor had emerged as the predominant party of the Left, the Liberal party
refused to die; and the British electoral system, mainly of one-member
constituencies, was ill adapted to cope with three parties. The general
elections of 1931 and 1935 were the only ones in which a single party (the
Conservatives) received a majority of the votes cast.1 Otherwise a
parliamentary majority was achieved more or less by accident, if at all.
However, there was no profound cleavage between the parties, despite much
synthetic bitterness. They offered old policies which had been their stock-
in-trade before the war. Labor offered social reform; the Conservatives
offered Protection. The victors in the twenties were the Liberals, in
policy though not in votes. The old Liberal cause of Free Trade had its
last years of triumph. If Sir William Harcourt had still been alive, he
could have said: 'We are all Liberals nowadays.' By 1925 England was back,
for a brief period, in the happy days of Gladstone.
The government which Law formed was strikingly Conservative, even
obscurantist, in composition. There had been nothing like it since Derby's
'Who? Who? ' ministry of 1852. The great figures of the party—Austen
Chamberlain, Balfour, Birkenhead—sulkily repudiated the decision at the
Carlton Club: 'The meeting today rejected our advice. Other men who have
given other counsels must inherit our burdens.' The only minister of
established reputation, apart from Law himself, was Curzon, who deserted
Lloyd George as successfully as he had deserted Asquith and, considering
the humiliating way in which Lloyd George treated him, with more
justification;2 he remained foreign secretary. Law tried to enlist McKenna
as chancellor of the exchequer—an odd choice for a Protectionist prime
minister to make, but at least McKenna, though a Free Trader, hated Lloyd
George. McKenna doubted whether the government would last and refused to
leave the comfortable security of the Midland Bank. Law then pushed Baldwin
into the vacant place, not without misgiving. Otherwise he had to make do
with junior ministers from Lloyd George's government and with holders of
historic names. His cabinet was the most aristocratic of the period,1 and
the only one to contain a duke (the duke of Devonshire) . Churchill called
it 'a government of the second eleven'; Birkenhead, more contemptuously, of
second-class intellects.
The general election of 1918 had been a plebiscite in favour of Lloyd
George. The general election of 1922 was a plebiscite against him. Law's
election manifesto sturdily promised negations. 'The nation's first need',
it declared, 'is, in every walk of life, to get on with its own work, with
the minimum of interference at home and of disturbance abroad.' There would
be drastic economies and a foreign policy of non-interference. The prime
minister would no longer meddle in the affairs of other ministers. Law
returned the conduct of foreign affairs to Curzon. He refused to meet a
deputation of the unemployed—that was a job for the ministry of labor. In
the first flush of reaction, Law announced his intention of undoing all
Lloyd George's innovations in government, including the cabinet
secretariat. He soon thought better of this, and, though he dismantled
Lloyd George's body of private advisers, 'the garden suburb', he kept
Hankey and the secretariat. The cabinet continued to perform its work in a
businesslike way with prepared agenda, a record of its" decisions, and some
control on how they were carried out.

                             THE PRIME MINISTER

This preservation of the cabinet secretariat was Law's contribution as
prime minister to British history. The contribution was important, though
how important cannot be gauged until the cabinet records are opened. The
cabinet became a more formal, perhaps a more efficient body. Maybe also
there was an increasing tendency for a few senior ministers to settle
things between themselves and then to present the cabinet with a virtual
fait accompli, as MacDonald did with J. H. Thomas and Snowden or Neville
Chamberlain with Halifax, Hoare, and Simon. But this practice had always
existed. A cabinet of equals, discussing every question fully, was a legend
from some imaginary Golden Age. On the other hand, the power and authority
of the prime minister certainly increased in this period, and no doubt his
control of the cabinet secretariat was one of the causes for this. It was
not the only one. Every prime minister after Lloyd George controlled a
mighty party machine. The prime minister alone determined the dissolution
of parliament after 1931, and the circumstances of 1931 were peculiar.
Above all, the loaves and fishes of office, which the prime minister
distributed, had a greater lure than in an aristocratic age when many of
the men in politics already possessed great wealth and titles. At any rate,
Law, willingly or not, helped to put the prime minister above his
colleagues.
Gloomy as ever, Law doubted whether the Conservatives would win the
election and even thought he might lose his own seat at Glasgow. When
pressed by Free Trade Conservatives such as Lord Derby, he repudiated
Protection, much to Beaver-brook's dismay, and gave a pledge that there
would be no fundamental change in the fiscal system without a second
general election. The other parties were equally negative. Labor had a
specific proposal, the capital levy, as well as its general programme of
1918; but, deciding half-way through the campaign that the capital levy was
an embarrassment, dropped it, just as Law had dropped Protection. The
independent Liberals, led by Asquith, merely claimed, with truth, that they
had never supported Lloyd George. The Coalition, now called National
Liberals, hoped to scrape back with Conservative votes. Beaver-brook spoilt
their game by promoting, and in some cases financing, Conservative
candidates against them; fifty-four, out of the fifty-six National Liberals
thus challenged, were defeated. The voting was as negative as the parties.
Five and a half million voted Conservative; just over 4 million voted
Liberal (Asquithians 2-5 million, National i-6 million); 4-2 million voted
Labor. The result was, however, decisive, owing to the odd working of three-
 or often four-cornered contests. The Conservatives held almost precisely
their numbers at the dissolution: with 345 seats they had a majority of 77
over the other parties combined. Labor won 142 seats; the Liberals, with
almost exactly the same vote (but about 70 more candidates), only 117. All
the National Liberal leaders were defeated except Lloyd George in his
pocket borough at Caernarvon. Churchill, who had just lost his appendix,
also lost his seat at Dundee, a two-member constituency, to a
Prohibitionist and to E. D. Morel, secretary of the Union of Democratic
Control. This was a striking reversal of fortunes.

                               THE LABOR PARTY

  The Conservatives and Liberals were much the same people as before, with a
drop of twenty or so in the number of company directors—mainly due no doubt
to the reduction of National Liberals by half. Labor was so changed  as  to
be almost a different party. In the previous parliament the  Labor  members
had all been union nominees, as near as makes no odds (all but one in 1918,
all but three at the dissolution); all were of  working-class  origin.  Now
the trade unionists were little more than half (80 out of 142), and middle-
class, even upper-class, men sat on the Labor benches for the first  time.3
In composition Labor was thus more of a national party than before and less
an interest group. In outlook it was less national, or  at  any  rate  more
hostile to the existing order in economics and in nearly  everything  else.
The old Labor M.P.s had not much to distinguish them except their class, as
they showed during the war by their support for Lloyd George. The  new  men
repudiated both capitalism and traditional foreign policy.
  There were combative working-class socialists of the I.L.P.,  particularly
from Glasgow. These Clydesiders, as they were called, won twenty-one out of
twenty-eight seats in their region. They imagined that they were  about  to
launch the social revolution. One of them, David Kirkwood, a  shop  steward
who ended in the house of lords, shouted to the  crowd  who  saw  him  off:
'When we come back, this station, this railway, will belong to the people!'
The men from the middle and upper classes  had  usually  joined  the  Labor
party because of their opposition to the foreign  policy  which,  in  their
opinion, had caused and prolonged the war. Often, going  further  than  the
U.D.C. and its condemnation of secret diplomacy, they  believed  that  wars
were  caused  by  the  capitalist  system.  Clement  Attlee,1  who  entered
parliament at this election, denned their attitude when he said:  'So  long
as  they  had  capitalist  governments  they  could  not  trust  them  with
armaments.'2
  The cleavage between old Labor and new was not absolute. Not all the trade
unionists were moderate men, and the moderates  had  turned  against  Lloyd
George after the war, even to the extent of promoting a general  strike  to
prevent intervention against Russia. All of them, thanks to Henderson,  had
accepted a foreign policy which was almost indistinguishable from  that  of
the U.D.C.3 On the other hand, not all the I.L.P. members were  extremists:
both MacDonald and Snowden, for example, were still  I.L.P.  nominees.  The
new men understood the need for trade union money and appreciated that they
had been returned mainly by working-class votes. For, while Labor  had  now
some middle-class adherents at the top, it  had  few  middle-class  voters;
almost any middle-class man who joined the  Labor  party  found  himself  a
parliamentary candidate in no  time.  Moreover,  even  the  most  assertive
socialists had little in the way  of  a  coherent  socialist  policy.  They
tended to think that social reform, if pushed hard enough, would turn  into
socialism of itself, and therefore differed  from  the  moderates  only  in
pushing harder. Most  Labor  M.P.s  had  considerable  experience  as  shop
stewards or in local government, and they had changed things  there  simply
by administering the existing machine in a different spirit. The  Red  Flag
flew on the Clyde, in Poplar, in South Wales. Socialists expected that  all
would be well when it flew also at Westminster.
  Nevertheless, the advance of Labor and its new spirit raised an  alarm  of
'Bolshevism'   particularly   when   two   Communists   now   appeared   in
parliament—both elected with the assistance of Labor votes.1 The alarm  was
unfounded. The two M.P.s represented the peak of Communist achievement. The
Labor party repeatedly refused the application of the Communist  party  for
affiliation and gradually excluded individual Communists by a  system  more
elaborate than anything known since the repeal of the Test Acts.2 Certainly
there was throughout the Labor movement much interest in Soviet Russia, and
even some admiration. Russia was 'the workers'  state';  she  was  building
socialism.  The  terror  and  dictatorship,   though   almost   universally
condemned, were excused as having been  forced  on  Russia  by  the  Allied
intervention and the civil war. English socialists drew the consoling moral
that such ruthlessness would be unnecessary in a democratic country.
  Democracy—the belief that the will of the majority should  prevail—was  in
their blood. They were confident that the majority would soon be  on  their
side. Evolution was now the universal pattern of  thought:  the  idea  that
things were on the move, and always upwards. Men assumed that the curve  of
a graph could be proj  ected  indefinitely  in  the  same  direction:  that
national wealth, for example, would go on increasing automatically or  that
the birth rate, having fallen from 30 per thousand to 17 in  thirty  years,
would in the next thirty fall to 7 or even o. Similarly,  since  the  Labor
vote had gone up steadily, it would continue to rise at the same  rate.  In
1923 Sidney Webb solemnly told the Labor annual conference that  'from  the
rising curve of Labor votes it might  be  computed  that  the  party  would
obtain a clear majority . . . somewhere about 1926'.' Hence Labor had  only
to wait, and the revolution would come of itself. Such, again according  to
Webb, was 'the inevitability of gradualness'.

                              RAMSAY MACDONALD

  When parliament met, the Labor M.P.s elected  Ramsay  MacDonald  as  their
leader. The election was a close-run thing: a majority of  five,  according
to Clynes, the defeated candidate; of two, according to the later,  perhaps
jaundiced, account by Philip  Snowden.  The  Clydesiders  voted  solid  for
MacDonald to their subsequent regret. The narrow majority  was  misleading:
it reflected mainly the jealousy of those  who  had  sat  in  the  previous
parliament against the newcomers.  MacDonald  was  indeed  the  predestined
leader of Labor. He had largely created the party in its  first  years;  he
had already led the party before the war; and  Arthur  Henderson  had  been
assiduously preparing his restoration.2 He had, in some undefined way,  the
national stature which other Labor men lacked. He was  maybe  vain,  moody,
solitary; yet, as Shinwell has said, in presence a prince among men. He was
the last beautiful speaker of the Gladstone school, with a ravishing  voice
and turn of phrase.  His  rhetoric,  though  it  defied  analysis,  exactly
reflected the emotions  of  the  Labor  movement,  and  he  dominated  that
movement as long as he led it.
  There were practical gifts behind the cloud of phrases. He  was  a  first-
rate chairman of the cabinet, a skilful and successful negotiator,  and  he
had a unique grasp of foreign affairs, as Lord Eustace Percy, by no means a
sympathetic judge, recognized as late as 1935.3 With all his faults, he was
the greatest leader Labor has had, and his name would stand high if he  had
not outlived his abilities. MacDonald's election in 1922 was a  portent  in
another way. The Labor M.P.s were no longer electing merely their  chairman
for the coming session. They were electing the leader of a  national  party
and, implicitly therefore, a future prime minister. The party never changed
its leader again from session to session as it had done even  between  1918
and 1922. Henceforth the leader was re-elected each year until old age or a
major upheaval over policy ended his tenure.
  Ramsay MacDonald set his stamp on the inter-war years. He did not have  to
wait long to be joined by the man who set a stamp along with  him:  Stanley
Baldwin. Law doubted his own physical capacity when he took office and  did
not intend to remain more than a few months. It seemed obvious at first who
would succeed him: Marquis Gurzon,1 foreign secretary,  former  viceroy  of
India, and sole survivor in office  (apart  from  Law)  of  the  great  war
cabinet. Moreover,  in  the  brief  period  of  Law's  premiership,  Curzon
enhanced his reputation. Baldwin, the only  possible  rival,  injured  what
reputation he had. Curzon went off to make peace  with  the  Turks  at  the
conference of Lausanne. He fought a lone battle, almost  without  resources
and quite without backing from home, in the style of Castle-reagh;  and  he
carried the day. Though the  Turks  recovered  Constantinople  and  eastern
Thrace, the zone of the Straits remained neutralized, and the Straits  were
to be open to warships in time of peace—a reversal of  traditional  British
policy and an implied threat to Soviet Russia, though one  never  operated.
Moreover, the Turks were bewitched by Curzon's seeming moderation and  laid
aside the resentment which Lloyd George had provoked. More important still,
Curzon carried off the rich oil wells of Mosul,  to  the  great  profit  of
British oil companies and of Mr. Calouste Gulbenkian,  who  drew  therefrom
his fabulous 5 per cent.

                            DEBTS AND REPARATIONS

  Baldwin, also in search of tranquillity, went off to Washington to  settle
Great Britain's debt to the United States. Law held firmly to the principle
of the Balfour note that Great Britain should pay  her  debt  only  to  the
extent that she received what was owed to her by others. Anything else,  he
believed, 'would reduce the standard  of  living  in  this  country  for  a
generation'. Baldwin was instructed  to  settle  only  on  this  basis.  In
Washington he  lost  his  nerve,  perhaps  pushed  into  surrender  by  his
companion, Montagu Norman, governor of the bank  of  England,  who  had  an
incurable zest for financial orthodoxy. Without securing the permission  of
the cabinet, Baldwin agreed to an unconditional settlement on harsh  terms2
and, to make matters worse, announced the terms publicly on his return. Law
wished to reject the  settlement:  'I  should  be  the  most  cursed  Prime
Minister that ever held office in England if I accepted those  terms.'  His
opposition was sustained by the two independent experts whom he  consulted,
McKenna and Keynes. The cabinet, however, was  for  acceptance.  Law  found
himself alone. He wished to resign and was persuaded  to  stay  on  by  the
pleas of his colleagues. He  satisfied  his  conscience  by  publishing  an
anonymous attack on the policy of his own government in the columns of  The
Times.
  As things worked out, Great Britain was not ruined by  the  settlement  of
the American debt, though it was no doubt irksome  that  France  and  Italy
later settled their debt on  easier  terms.  Throughout  the  twenties  the
British collected  a  balancing  amount  from  their  own  debtors  and  in
reparations. The real harm lay  elsewhere.  While  the  settlement  perhaps
improved relations with the United States,  it  compelled  the  British  to
collect their  own  debts  and  therefore  to  insist  on  the  payment  of
reparations by Germany both to others and to themselves. This  was  already
clear in 1923. Poincare, now  French  premier,  attempted  to  enforce  the
payment of reparations by occupying the Ruhr. The Germans took  up  passive
resistance, the mark tumbled to nothing, the  finances  of  central  Europe
were again in chaos.  The  British  government  protested  and  acquiesced.
French troops were allowed to pass through the British zone  of  occupation
in the Rhineland. While the British condemned Poincare's method, they could
no longer dispute his aim: they were tied to the French claim at  the  same
time as they opposed it.
  The debt settlement might have been expected to turn Law against  Baldwin.
There were powerful factors on the other side. Law  knew  that  Curzon  was
unpopular in the Conservative party—disliked both for his pompous arrogance
and his weakness. Curzon lacked resolution, despite his  rigid  appearance.
He was one of nature's rats. He ran  away  over  the  Parliament  bill;  he
succumbed to women's suffrage. He promised to stand  by  Asquith  and  then
abandoned him. He did the same with Lloyd George.  Beaverbrook  has  called
him 'a political jumping jack'. Law regarded the impending  choice  between
Curzon and Baldwin with more than his usual gloom. He tried to escape  from
it by inviting Austen Chamberlain to join the government with the  prospect
of being his successor in the  autumn.  Chamberlain  appreciated  that  his
standing in the Conservative party had been for ever shaken by the vote  at
the Carlton club, and refused.
  The end came abruptly. In May Law was found to have  incurable  cancer  of
the throat. He resigned at once. Consoled by the  misleading  precedent  of
what happened when Gladstone resigned in 1894, he made no recommendation as
to his successor. He expected this to be Curzon, and was glad that it would
be none of his doing.  However,  the  king  was  led  to  believe,  whether
correctly or not, that Law favoured Baldwin, and he duly followed  what  he
supposed to be the advice of his retiring prime minister as the monarch has
done on all other occasions since 1894.3 Law lingered on until 30  October.
He was buried in Westminster  Abbey—the  first  prime  minister  to  follow
Gladstone  there  and  with  Neville  Chamberlain,  so  far,  as  his  only
successor. The reason for this distinction is obscure. Was  it  because  he
had reunited the Conservative party? or because  he  had  overthrown  Lloyd
George?

                                   BALDWIN

  Baldwin did not follow Law's example of waiting to accept office until he
 had been elected leader of the Conservative party. He became prime minister
 on 21 May, was elected leader on 28 May. Curzon proposed the election with
 phrases adequately fulsome. Privately he is reputed to have called Baldwin
 'a man of the utmost insignificance'. This was Baldwin's strength. He
 seemed, though he was not, an ordinary man. He presented himself as a
 simple country gentleman, interested only in pigs. He was in fact a wealthy
 ironmaster, with distinguished literary connexions.2 His simple exterior
 concealed a skilful political operator. Lloyd George, after bitter
 experience, called him 'the most formidable antagonist whom I ever
 encountered'—no mean tribute. Baldwin played politics by ear.  He read few
 official documents, the newspapers not at all. He sat on the treasury bench
 day after day, sniffing the order-paper, cracking his fingers, and studying
 the house of commons in its every mood. He had in his mind a picture, no
 doubt imaginary, of the patriarchal relations between masters and men at
 his father's steel  works,  and   aspired   to  establish  these
 relations   with Labor on a national scale. This spirit met a response from
 the other side. MacDonald said of him as early as 1923: 'In all essentials,
 his outlook is very close to ours.' It is hard to decide whether Baldwin or
 MacDonald did more to fit Labor into constitutional life.
  Baldwin did not set the Conservative pattern alone. He  acquired,  almost
by  accident,  an  associate  from  whom  he  was  never  parted:   Neville
Chamberlain.3  The  two  were  yoke-fellows  rather  than  partners,  bound
together by dislike of Lloyd George and by little  else.   Chamberlain  was
harsher than Baldwin, more impatient with criticism  and  with  events.  He
antagonized where Baldwin conciliated. He was also more practical and eager
to get things done. He had a zest for administrative reform. Nearly all the
domestic achievements of Conservative governments between the wars stand to
his credit, and most of  the  troubles  also.  Active  Conservatives  often
strove to get rid of Baldwin and to put Chamberlain in his place. They  did
not succeed. Chamberlain sinned against Napoleon's rule: he was a man of No
Luck. The cards always ran against him. He was humiliated by  Lloyd  George
at the beginning of his political career, and cheated by Hitler at the end.
Baldwin kept him in the second place, almost without trying.
  Chamberlain's Housing Act (introduced in April, enacted in July)  was  the
one solid work of this dull government. It  was  provoked  by  the  complete
stop  in  house  building  when  Addison's  programme   ended.   Chamberlain
believed, like most people, that  Addison's  unlimited  subsidies  were  the
main cause  of  high  building  costs.  He  was  also  anxious,  as  a  good
Conservative, to show that private enterprise could  do  better  than  local
authorities. His limited subsidy (Ј6  a  year  for  twenty  years)  went  to
private and public builders alike, with a preference  for  the  former;  and
they built houses only for sale. Mean houses  ('non-parlour  type'  was  the
technical phrase) were built for those  who  could  afford  nothing  better.
Predominantly, the Chamberlain act benefited the  lower  middle  class,  not
the  industrial  workers.  This   financial   discrimination   caused   much
bitterness. Chamberlain was marked  as  the  enemy  of  the  poor,  and  his
housing act lost the Conservatives more votes than it gained.

                           BALDWIN AND PROTECTION

  Still, there seemed no reason why the government should not  jog  on.  Its
majority was solid; economic conditions were  not  markedly  deteriorating.
Without warning, Baldwin raised the ghost which Law had exorcized in  1922.
On 25 October he announced that he could fight unemployment only if he  had
a free hand to introduce Protection. His motives for this  sudden  decision
remain obscure. Protection had been for many years at once the  inspiration
and the bane of the Conservative party. There  would  hardly  have  been  a
lively mind or a creative personality on the Conservative  benches  without
it. On the other  hand,  it  had  repeatedly  brought  party  disunion  and
electoral defeat. Hence Balfour had sworn off it in 1910, and Law in  1922.
There seemed little reason to revive  this  terrible  controversy  now.  An
imperial conference was indeed in session, principally to  ensure  that  no
British government would ever take such an initiative as Chanak again.  The
conference expressed the usual pious wish  for  Imperial  Preference.  This
meant in practice British tariffs on foreign food,  while  foodstuffs  from
the Dominions came in free. There would be Dominion preferences for British
manufactures only in the sense that Dominion tariffs,  which  were  already
prohibitively high, would go up further against the foreigner. This was not
an attractive proposition to put before the British electorate, and Baldwin
did not attempt it. He pledged himself against 'stomach taxes'. There would
be 'no tax on wheat or meat'. Imperial Preference was thus ruled out.
  Later, when Protection had brought defeat for the  Conservatives,  Baldwin
excused himself on grounds of political tactics. Lloyd George, he  alleged,
was returning from a triumphal tour  of  North  America  with  a  grandiose
programme of empire  development.  Baldwin  'had  to  get  in  quick'.  His
championing  of  Protection  'dished  the  Goat'  [Lloyd  George].1  Austen
Chamberlain and other Conservatives who had adhered to Lloyd  George  swung
back on to Baldwin's side. This story seems to have been devised after  the
event. Chamberlain and the rest were already swinging back;  there  was  no
serious sign that Lloyd George was inclining  towards  Protection.  Perhaps
Baldwin, a man still little known, wished to establish his reputation  with
the Conservative rank and file. Perhaps he wished  to  show  that  he,  not
Beaverbrook, was Law's heir. The simplest explanation is probably the  true
one. Baldwin, like most manufacturers of steel, thought only  of  the  home
market. He did not grasp the problem of exports and hoped merely that there
would be more sale for British steel if foreign supplies were reduced.  For
once, he took the initiative and learnt from his failure  not  to  take  it
again.
  Protection involved a general election in order to shake off Law's  pledge
of a year before.  The  cry  of  Protection  certainly  brought  the  former
associates of Lloyd George back to Baldwin. This was  more  than  offset  by
the resentment of Free  Trade  Conservatives,  particularly  in  Lancashire.
Defence of Free Trade at last reunited the  Liberal  party,  much  to  Lloyd
George's discomfiture—though this was  hardly  Baldwin's  doing.  With  Free
Trade the  dominant  issue,  Lloyd  George  was  shackled  to  the  orthodox
Asquithian remnant. Asquith was once more undisputed leader;  Lloyd  George,
the man who won the war, merely  his  unwilling  lieutenant.  It  was  small
consolation that the Asquithians  had  their  expenses  paid  by  the  Lloyd
George Fund.
  The election of December 1923 was as negative  as  its  predecessor.  This
time negation went against Protection, and doing nothing favoured the once-
radical cause of Free Trade. Though the  overall  vote  remained  much  the
same— the Conservatives received about 100,000 less,3 the Liberals 200,000,
and  Labor  100,000  more—the  results  were  startlingly  different.   The
Conservatives lost over ninety seats, the Liberals gained forty, and  Labor
fifty.4 The dominant groups of 1918 were further  depleted,  relatively  in
one case, absolutely in the other. The trade unionists, once  all-powerful,
were now a bare majority in the Labor party (98 out of 191).  The  National
(Lloyd George) Liberals, already halved in 1922,  were  now  halved  again,
despite the Liberal gains. There were only twenty-six of them. Their former
seats nearly all went to Labor, evidence that they had formed  the  Liberal
Left wing. The outcome was a tangle: no single party with a  majority,  yet
the Liberals barred from coalition by their dislike of  Protection  on  the
one side, of socialism on the other.

                           FIRST LABOR GOVERNMENT

  It was obvious that the government would be defeated when parliament met.
Then, according to constitutional precedent, the king would  send  for  the
leader of the next largest party,  Ramsay  MacDonald.  Harebrained  schemes
were  aired  for  averting  this  terrible  outcome.  Balfour,  or   Austen
Chamberlain, should take Baldwin's place as Conservative  premier;  Asquith
should head a Liberal-Conservative coalition; McKenna should  form  a  non-
parliamentary government of 'national trustees'. None of these schemes came
to anything. Asquith was clear that Labor should be put in, though he  also
assumed that he would himself become prime minister when, as was  bound  to
happen soon, they were put out. In any case, George V took  his  own  line:
Labor must be given  'a  fair  chance'.  On  21  January  the  Conservative
government was  defeated  by  seventy-two  votes.1  On  the  following  day
MacDonald became prime minister, having  first  been  sworn  of  the  privy
council—the only prime minister to need this preliminary. George V wrote in
his diary: 'Today 23 years ago dear Grandmama died. I wonder what she would
have thought of a Labor Government!'; and a few weeks later to his  mother:
'They [the new Ministers] have different ideas to  ours  as  they  are  all
socialists, but they ought to be given a  chance  &  ought  to  be  treated
fairly.'2
  MacDonald was a man of considerable executive ability, despite his lack of
ministerial experience; he had  also  many  years'  training  in  balancing
between the different groups and factions in the Labor  movement.  On  some
points he consulted Haldane, who became  lord  chancellor,  principally  in
order to look after the revived committee  of  imperial  defence.  Snowden,
MacDonald's longtime associate and rival in the I.L.P.,  became  chancellor
of the exchequer. MacDonald himself took the foreign office, his  consuming
interest; besides, he was the only name big enough to keep out E. D. Morel.
The revolutionary Left was almost passed over.  Lansbury,  its  outstanding
English figure, was left out, partly  to  please  George  V,  who  disliked
Lansbury's threat to treat him as Cromwell treated Charles I. Wheatley,  a.
Roman Catholic businessman who became minister  of  health,  was  the  only
Clydesider in the government; to everyone's surprise he turned out its most
successful member. Broadly the cabinet combined trade unionists and members
of the U.D.C. It marked a social revolution despite its moderation: working
men in a majority, the  great  public  schools  and  the  old  universities
eclipsed for the first time.
   The Labor government recognized  that  they  could  make  no  fundamental
changes, even if they knew what to make: they were 'in office, but  not  in
power'. Their object vas to show that Labor could govern, maybe  also  that
it could administer in a more warm-hearted way. The" Left did not like this
tame outlook and set up a committee  of  backbench  M.P.s  to  control  the
government; it did not have much effect. The Labor ministers hardly  needed
the king's exhortation to 'prudence and sagacity'.1 All,  except  Wheatley,
were moderate men, anxious to show their respectability. They were  willing
to hire court dress (though not knee-breeches) from Moss  Bros.  It  was  a
more serious difficulty that they lacked experience in government  routine.
Only two (Haldane and Henderson) had previously sat in a  cabinet.  Fifteen
out of the twenty had never occupied any ministerial post. Inevitably  they
relied on the civil  servan:s  in  their  departments,  and  these,  though
personally sympathetic, were  not  running  over  with  enthusiasm  for  an
extensive socialist programme.

                             EDUCATIONAL REFORM

  Wheatley was the only minister with a  creative  aggressive  outlook.  His
Housing Act was the more surprising in that it had no background  in  party
discussion  or  programme,  other  than  Labor's  dislike  of  bad  housing
conditions, Unlike Neville Chamberlain or even Addison, Wheatley recognized
that the housing  shortage  was  a  long-term  problem.  He  increased  the
subsidy;2 put the main responsibility back on the  local  authorities;  and
insisted that the houses must be built to rent. More  important  still,  he
secured an expansion of the building industry by promising that the  scheme
would operate steadily  for  fifteen  years.  This  was  almost  the  first
cooperation between government and industry in peacetime; it was  also  the
first peacetime demonstration of the virtues of planning. Though  the  full
Wheatley programme was broken off short in 1932 at the time of the economic
crisis, housing  shortage,  in  the  narrowest  sense,  had  by  then  been
virtually overcome. Wheatley's Act did not, of course, do anything  to  get
rid of the slums. It benefited the more prosperous and  secure  section  of
the working class, and slum-dwellers were lucky to find  old  houses  which
the council tenants had vacated. The bill had a passage  of  hard  argument
through the house of commons. Hardly anyone opposed its principle outright.
Men of all parties  were  thus  imperceptibly  coming  to  agree  that  the
provision of houses was a social duty, though they differed over the method
and the speed with which this should be done.
  One other landmark was set  up  by  the  Labor  government,  again  almost
unnoticed. Trevelyan, at the board of education,  was  armed  with  a  firm
statement of Labor policy, Secondary Education  for  All,  drafted  by  the
historian R. H. Tawney, who provided much  of  the  moral  inspiration  for
Labor in these years. Trevelyan largely undid the  economies  in  secondary
education which had been made by the Geddes axe, though he also  discovered
that  Labor  would  be  effective  in  educational  matters  only  when  it
controlled the local authorities as well as the  central  government.  More
than this, he instructed the consultative committee of the board, under Sir
Henry Hadow, to work out how Labor's full policy could be applied,  and  he
deserves most of the credit for what followed even though the committee did
not report until 1926.  The  Hadow  report  set  the  pattern  for  English
publicly maintained education to the present day. Its ultimate ideal was to
raise the school-leaving age to 15. Failing this (and it did not come until
after the second World war), there should be  an  immediate  and  permanent
innovation: a break between primary and secondary education  at  n.1  Hence
the pupils at elementary schools, who previously stayed on to 14,  had  now
to be provided for elsewhere or, at the  very  least,  in  special  'senior
classes'. Here was a great achievement, at any rate in principle:  a  clear
recognition, again imperceptibly accepted by men of all parties,  that  the
entire population, and not merely a privileged minority, were  entitled  to
some education beyond 'the three R's'. It was less fortunate that  the  new
system of a break at 'eleven plus' increased  the  divergence  between  the
publicly maintained schools and the  private  schools  for  the  fee-paying
minority where the break came at 13.
  The  reforms  instituted  by  Wheatley  and  by  Trevelyan  both  had  the
advantage  that,  while  they  involved  considerable  expenditure  over  a
period of years, they did not call for much money in the immediate  future.
This alone  enabled  them  to  survive  the  scrutiny  of  Philip  Snowden,
chancellor of the exchequer. Snowden had spent his  life  preaching  social
reforms; but he also believed that a balanced budget and  rigorous  economy
were the only foundation for such reforms, and he  soon  convinced  himself
that the reforms would have to wait until the foundation had been well  and
truly laid. His  budget  would  have  delighted  the  heart  of  Gladstone:
expenditure down, and taxes also, the 'free breakfast table' on the way  to
being  restored,1  and  the  McKenna  Duties—pathetic  remnant  of  wartime
Protection —abolished. No doubt a 'Liberal' budget was  inevitable  in  the
circumstances of minority government; but it caused no stir of  protest  in
the Labor movement. Most Labor men  assumed  that  finance  was  a  neutral
subject, which had nothing to do with politics. Snowden  himself  wrote  of
Montagu Norman: 'I know nothing at all about his politics. I do not know if
has he any.' Far from welcoming any increase in public spending, let  alone
advocating it, Labor had inherited the radical view that money spent by the
state was likely to be money spent incompetently and  corruptly:  it  would
provide outdoor relief for the aristocracy or, as in Lloyd  George's  time,
undeserved wealth  for  profiteers.  The  social  reforms  in  which  Labor
believed were advocated despite the fact that they cost money, not  because
of it, and Snowden had an easy time checking these reforms as  soon  as  he
pointed to their cost.

                                UNEMPLOYMENT

  The Labor government were peculiarly helpless when faced with the  problem
of unemployment—the unemployed remained  at  well  over  a  million.  Labor
theorists had no prepared answer and failed to evolve one. The  traditional
evil of capitalism had been poverty: this gave Labor its moral  force  just
as  it  gave  Marxists  the  confidence  that,  with  increasing   poverty,
capitalism would 'burst asunder'. No socialist, Marxist or  otherwise,  had
ever doubted that poverty could be ended by means  of  the  rich  resources
which capitalism provided.  Mass  unemployment  was  a  puzzling  accident,
perhaps even a mean trick which the capitalists were playing on  the  Labor
government; it was not regarded as an inevitable outcome  of  the  existing
economic system, at any rate  for  some  time.  Vaguely,  Labor  held  that
socialism would get rid of unemployment as it would get rid  of  all  other
evils inherent in the capitalist system. There would be  ample  demand  for
goods, and therefore full employment, once  this  demand  ceased  to  be  a
matter of 'pounds, shillings, and pence'.  The  socialist  economic  system
would work of itself, as capitalism was doing. This automatic operation  of
capitalism was a view held by nearly all  economists,  and  Labor  accepted
their teaching. Keynes was moving towards the idea that unemployment  could
be conquered, or at any rate alleviated, by means of public works.  He  was
practically alone among  professional  economists  in  this.  Hugh  Dalton,
himself a teacher of economics, and soon to be  a  Labor  M.P.,1  dismissed
Keynes's idea as 'mere Lloyd George  finance'—a  damning  verdict.  Such  a
policy was worse than useless; it was immoral.
  Economic difficulties arose for the Labor government in a  more  immediate
way. Industrial disputes did not come to an end merely because Labor was in
office. Ramsay MacDonald had hardly kissed hands before there was a  strike
of engine drivers—a strike fortunately settled by an  intervention  of  the
T.U.C.  general  council.  Strikes  first  of  dockers,  then   of   London
tramwaymen, were not dealt with so easily. The government  planned  to  use
against these strikes the Emergency Powers Act, which Labor  had  denounced
so fiercely when introduced by Lloyd George. It was  particularly  ironical
that the proposed dictator, or  chief  civil  commissioner,  was  Wedgwood,
chancellor of the duchy of Lancaster, who was generally held to be more  an
anarchist than a socialist. Here was fine trouble in the making. The unions
provided most of the money for the Labor party, yet Labor in office had  to
show that it was fit to govern. Both sides backed away. The government  did
not actually run armed lorries through the streets of London,2  and  Ernest
Bevin, the men's leader, ended the strikes, though indignant at ‘having  to
listen to appeal of our own people. The dispute  left  an  ugly  memory.  A
joint committee of the T.U.C. general council and the Labor party executive
condemned the government’s proposed action. MacDonald replied that  ‘public
doles, Poplarism, strikes for increased wages, limitations of  output,  not
only are not Socialism, but may  mislead  the  spirit  and  policy  of  the
Socialist movement.