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.