Lessons of the 1931 National Government
In August 1931, the Labour movement was reeling from the ravages of a world slump and the collapse of the second Labour government. After an intense campaign in the capitalist press, the Labour prime minister, Ramsay MacDonald, crossed the floor of the Commons with a handful of supporters to join with the Tories and Liberals in forming a National Government. This reactionary government unleashed an all-out assault on the conditions of the working class, and especially the unemployed. This event was considered one of the greatest betrayals in the history of the Labour Party. "The memory of Ramsay MacDonald's betrayal of the 1931 government", correctly noted the Financial Times, "is etched in blood on the party's memory." (23/4/96)
However, more than sixty-five years later, voices have once again been raised about the need for a radical realignment of British politics and the formation of some kind of coalition. The latest came last month from the main organ of British capitalism, the Financial Times, in an article speculating on the likelihood of the leader of the Liberal Democrats Paddy Ashdown becoming foreign secretary in a Blair government. "The idea is being increasingly discussed in Liberal Democrat circles", states the article, "and new evidence suggests the prime minister may not be averse to the idea." (5/5/98).
The "evidence" is the close working relationship Blair and other ministers have with Ashdown, especially over international questions. Ashdown, the FT claims, was a regular visitor to Number Ten during late January and early February, where he advised Blair over the Gulf Crisis.
These suggestions, coming on top of a stream of information about a future political realignment, are a serious warning to the Labour movement. "If Blair is the Ramsay MacDonald of the Nineties," warns the Observer, "he could be getting his National Government in early as well." (24/9/95). Tony Benn has also recently drawn parallells between today and the period of 1929-31 and the formation of the National Government. With the shift towards "coalition" or "consensus" politics over the past period by the rightwing leadership of the Labour movement, a new world slump - which is in the offing - could become the catalyst for an all-out campaign to split the Labour movement and for the establishment of a new coalition or National Government.
Is this simply alarmist or are there serious grounds for such a development? Given the massive shift to the right in the Labour leadership and their ever closer relations with the Liberals and even 'left' Tories, Socialist Appeal has consistently warned of the possibility of a future national government. The process now has gone much further than the Butskellism of the 1950s, where there was very little difference between the policy of either the Labour or Tory parties. The election of Tony Blair as leader of the Labour Party - with the full backing of the capitalist press - marked a further shift to the right. Blair stands on the extreme right of the party, which wants to turn the Labour Party into a capitalist party along the lines of Clinton's Democratic Party in America. To do so would mean not simply the abandonment of socialism but a complete break with the trade unions. "I want a situation more like the Democrats and the Republicans in the US", Blair said. "People don't even question for a single moment that the Democrats are a pro-business party. They should not be asking the question about New Labour" (Financial Times 16/1/97). In reality, there is no fundamental difference politically between Blair, the Liberal Democrats and the Clarke wing of the Tory party.
Around Blair there is a whole layer of ex-SDP advisers - the 'modernisers' - who jumped on the bandwagon to further their own political careers. As one MP correctly said, quoted in the Independent on Sunday, "Tony is surrounding himself with people who are clever, able, upper-middle-class and arrogant, and who do not respect the Labour Party." (17/9/95). In fact they have a deep seated contempt for the Labour party, its traditions and its trade union base.
Astonishingly, Blair's true feelings for the Labour Party were revealed at last year's Annual Conference when expressing admiration for Keynes, Beveridge and Lloyd George, he said: "Division among radicals almost 100 years ago resulted in a 20th century dominated by Conservatives. I want the 21st century to be the century of the radicals." In other words, the split of the trade unions from the Liberal Party and the establishment of an independent Party of Labour was a mistake! And he hopes to rectify this 'mistake' by bringing about a realignment of politics and the rebirth of the old Liberal Party. "His aim is to recreate the broad progressive alliance which sustained the reforms of the pre-First World War Liberal Government", stated the Times (22/9/97). Roy Jenkins, Lib Dem leader in the Lords, said of Tony Blair in the Observer: "One of his strongest desires is to heal the split on the centre-left which has existed since 1914..."
Before the general election, Blair was having secret discussions with Ashdown about the possibility of a coalition government. The Financial Times revealed that they met every two weeks or so before the election to consider the appointment of Lib Dem ministers in the Blair government. However, "after the landslide it was impossible to sell coalition to Labour's rank and file." But the FT revealed that Blair phoned Ashdown at 4am on May 2nd to tell him: "We are still on to sort something out between us. I will be in touch."
Of course, the rank and file were kept in the dark about these coalition discussions between Blair and Ashdown, but it shows how far the Labour leadership is prepared to go. For them, the "affairs of state" are above the narrow confines of party politics. With socialism off the agenda, "politics" comes down to how best to run the capitalist system. Class collaboration at the tops of the movement has been in full swing, and cross-party co-operation is its natural extension. Consequently, Blair has sent his two lieutenants, Frank Field and Alistair Darling, to the Lib Dem conference to address fringe meetings on the need for closer collaboration.
Blair has also made it clear how far right this so-called "centre-left" embraces. Margaret Thatcher, who presided over enormous suffering for working class people in Britain, for which she will never be forgiven, is openly admired by Blair. "She was a thoroughly determined person and that is an admirable quality. It is important in politics to have a clear sense of purpose and direction, to know what you want", he said. "I believe Mrs Thatcher's emphasis on enterprise was right" (Sunday Times 23/4/95). The problem for millions of Labour supporters was that Thatcher represented the cold calculated interests of big business, and carried these through with "a clear sense of purpose." Within days of Labour winning the general election, she was invited into Downing Street to offer Blair advice on Europe. At the same time, the trade unions were told to keep their distance.
Despite Labour winning a 179 seat majority, Blair has continued to court the Liberal Democrats. Soon after the election he set up a Cabinet Committee on constitutional reform involving the Liberal leaders, and there was discussion over how to broaden this cross party co-operation, to embrace Northern Ireland and Europe. PR was then proposed for the European elections and the elections for the Scottish and Welsh Assemblies. Lord Jenkins has said the two parties needed to work together in a coalition in Edinburgh to ensure a coherent majority. With the rise of the SNP, the Labour leaders will be looking eagerly at such a deal, which will be disastrous for Labour within a relatively short space of time.
Blair is constantly raising the distinction between 'new' and 'old' Labour as a means of shifting the party further to the right. Tuition fees, abolition of student grants, PFI, privatisation, cuts in welfare benefits, workfare, and the maintenance of Tory economic policy means a continuation of those policies overwhelmingly rejected by the electorate 12 months ago. The rigid spending limits still imposed on local authorities have resulted in swingeing cuts in front-line services - home helps, social welfare, libraries and leisure facilities.
The low turnout in the local elections is a reflection of the lack of enthusiasm for the Labour government. There is growing disillusionment amongst Labour supporters. In Scotland an opinion poll for the "Daily Record" in April showed that 28% feel things are a little, or a lot, better under Labour compared with the Tories, and 47% see no change. Their mood can be summed up as follows: "Why are we still waiting for the things we voted for?" In another opinion poll of voting intentions for the Scottish Parliament, which again reflects the same process, the SNP is ahead of the Labour Party. They feel let down on the big promise, not contained on the small pledge card, to undo the damage caused by 18 years of Thatcherism and Majorism.
Instead of that, Blair has chased after big business. "New Labour is pro-business, pro-enterprise... Our aim all the way through is to win another term. And the only way that will be done is by running for office as New Labour and governing as New Labour. That is the key to their business relationship" (FT, 16/1/97). That is why a whole range of business people have been drawn into the government.
Blair has announced that he wants to break down the ideological divide between Labour and the Tories. This approach has been echoed by Peter Mandelson, the great 'pragmatist,' "You don't have grand ideologies of either of the left or right in politics any longer. What you have is different approaches to managing issues.. Let me make the point on the record. There is nothing wrong with capitalism with a social conscience or a human face." Blair later summed this up with his phrase "the Third Way", neither socialism nor hard-faced Thatcherism, but something totally different.
But all this talk of a "third way" is mere camouflage for a policy that serves the aims and interests of big business. It is a justification of capitalism "with a social conscience." The Labour leadership attempts to straddle the classes through a policy of "social partnership", but this breaks down as soon as class interests come to the fore. Thus the need for Gordon Brown to be the 'Iron Chancellor', to stick within Tory spending limits and policies of sound finance. This is the language of all past Tory chancellors that imposed austerity policies on the working class. Such policies can never solve the crisis of British capitalism nor satisfy the aspirations of the working class.
A new world crisis would wreck the British economy, throw millions out of work and cause living standards to plummet. To continue with pro-capitalist policies would lead to huge opposition within the trade unions and the Labour Party. This would inevitably reflect itself in the Parliamentary Labour Party. The revolt in Parliament of 47 Labour MPs over the cut in lone parent benefits is symptomatic of what is to come. This was hinted at in the Guardian editorial just after the lone parent benefit revolt: "The cut to lone parents' benefit triggered not just Tony Blair's worst day in the Commons since taking office, but a hint of a bleak realignment of British politics. On show yesterday was not the centre-left alliance which so excites Roy Jenkins, but a Coalition of Conservatives and Labour. Yesterday's 457-107 vote looked a lot like the first act of a new National Unity Government of the right..." True, the Liberals opportunistically opposed the government's cut this time. But as Trotsky once commented, "scratch a Liberal and you will find a reactionary underneath." In the future, as the crisis deepens, they will do the capitalist's bidding for the sake of the "national interest" as they historically have always done.
We should recall that in 1966 Harold Wilson had a majority of 97 in Parliament, but was derailed by the introduction of pro-capitalist policies, which ultimately led to defeat in 1970. The only saving grace today is the malaise within the Tory Party. The resignation of Major and the election of Hague has not solved the Tories problems, but has tended to exacerbate their antagonisms, especially over Europe. There has already been a number of resignations, but the fight between the Eurosceptic majority and the Heseltine-Clarke wing threatens to split the Tory party apart. This has been further reinforced by the decision to 'grant' the rank and file of the Tory Party a greater say over policy and the leadership. The grass roots are far more reactionary than the leadership and can push the Tories even more to the right. As Julian Critchley pointed out: "Any observer who has attended a Conservative Party conference in whatever capacity can only have been alarmed by the prejudices shown by the bulk of the party activists who attend such jamborees. With a few exceptions, the 'floor' consists of rightwing Tories of the most unattractive kind: racists, floggers and hangers and passionate 'Eurosceptics'." (Times, 19/12/97). But these delegates are a true reflection of the grass roots of the Tory Party and would serve to increasingly alienate the likes of Heseltine and Clarke. They could easily split away and fit very comfortably in a National Government under Blair.
In Britain, after the defeat of the general strike in 1926, the bulk of workers looked to the political front to solve their problems. This resulted in the victory of the Labour Party in 1929. The Labour Party came to power with Ramsey MacDonald as prime minister, and a commitment to reduce the level of unemployment, which stood at over one million. It was a minority government, 38 seats short of a majority, and therefore reliant on the Liberals to get its legislation through.
With the Wall Street Crash in October and the world slump that followed, mass unemployment rose to record levels. In early 1931 the capitalist press, led by The Times, orchestrated a campaign for a National Government. The crisis, they said, was a time to drop party differences and for the best brains of all parties to come together for the national interest. By June 1931, unemployment has reached 2,700,000. To balance the budget, the Labour chancellor demanded orthodox deflationary policies encompassing deep cuts ("economies" ) in public expenditure. In February the 'May Committee' was established to look at economies and recommend a cuts package to the government. Under the pressure of big business, MacDonald and a majority of the Cabinet capitulated to the bankers and the City.
"Consultations" took place both with the TUC and the bankers. The TUC opposed the 'economies', but put forward no alternative. The bankers demanded more. The proposed cuts resulted in large-scale opposition within the trade unions and the ranks of the Labour Party. This opposition led the Fabian Sidney Webb, also a government minister, to complain that "the trade union leaders are pigs." In August the Cabinet reluctantly agreed to a package of cuts worth £56 million to balance the books. However, an additional £25-30 million were demanded by the bankers. This included measures to reduce unemployment benefit by 10%, and the wage bill of teachers, the services and the police. Under intense pressure from the Labour movement, a minority in the Cabinet came out against the extra cuts.
According to the historian Colin Bell, "for much of the year all three parties seemed to be breaking up.... These splits and disagreements reinforced the opinion that some new political arrangement was needed; there was a crisis, all three parties were divided among themselves, and all authoritative observers held that it was essential that the country rallied round and accepted a swingeing bout of public parsimony."
Soon after the Cabinet meeting, MacDonald wrote of those who opposed the extra cuts as taking "the easy path of irresponsibility". MacDonald immediately set off for Buckingham Palace to inform the King of the situation. There he urged the King to send for the leaders of the official opposition parties to discuss measures in the "national interest". The ruling class wanted a strong government to carry through the necessary attacks on the working class. The Labour government went so far, but given the pressure from below, proved unreliable from the point of view of big business.
The following day a National Government was formed with the Tories, a section of the Liberals, and a few Labour renegades with MacDonald as Prime Minister. In the subsequent general election, the Labour Party was dealt a severe blow. The number of Labour MPs fell from 289 in 1929 to a mere 46 in 1931 and its vote fell by two million. Although the National government was able to secure 70% of the vote in the subsequent election, by stampeding the middle class and the politically backward workers, the National Government proved no lasting solution. According to Malcolm Muggeridge, looking back on events: "Once the National Government had performed the surprising feat of coming into existence, its initiative was exhausted. The lamp had been rubbed, the jinn had appeared, but no instructions were forthcoming as to how its formidable powers should be exercised. The Conservative members of the Cabinet believed in tariffs, the Liberal members of the Cabinet in free trade, the Labour members of the Cabinet in continuing to be members of the Cabinet, and the Prime Minister in continuing to be Prime Minister."
Nevertheless, the vicious cuts doled out to the unemployed and other workers served to propel the Labour Party to the left. This was a real danger for the ruling class. "There is a third danger ahead", wrote the Times, "but it is a danger to the nation rather than to the Government. Broadly speaking, the whole of the Socialist Party will be reconsolidated in Opposition - with this enormous difference, that they will have lost the guidance of leaders few indeed in numbers but the ripest of all in practical experience of affairs... The Labour Party ... will now be definitely controlled by its more prejudiced and ignorant elements." (26th August 1931).
Today, the situation has marked differences with 1931. In particular, rather than a minority government, the present Labour government has a majority of 179. Will this serve to prevent a future coalition? Such a view is over optimistic. The majority of 179 is not only a source of strength for Blair, but also a source of great weakness. As The Economist explained: "Lots of Labour MPs who unexpectedly won their seats in May's landslide have little enough chance of winning next time. If little chance seems to be turning to no chance, they may be tempted to make a splash as parliamentary rebels. If they are going down, they may decide to take a few hundred of their colleagues with them." The article raises the idea of a split in the PLP at a certain stage. That is certainly Blair's fear, and the reason why he is bringing in rule changes to punish and deselect MPs who step out of line. That is the reason for cuddling up to the Liberals. But as the revolt over single parent benefits shows, events can transform the situation and open up a whole series of parliamentary rebellions. As in 1929-31, splits are inherent in the situation.
A deep slump in the world economy would have devastating consequences nationally and internationally. It would completely undermine any illusions in "the market", and serve to discredit the rightwing and their attempt to prop up capitalism. On the one hand, a crisis would see enormous pressure from the working class to change society, on the other there would be intense pressure from big business for the Blair government to launch an all-out assault on living standards. The parallells with 1929-31 are striking. Big opposition in the trade unions and constituency parties - which is inevitable - may therefore convince the rightwing that the party is not worth holding together. After all, Blair's model is the US Democrats. A revolt of the rank and file will bring into question the whole "New Labour" project. At a certain stage, unable to satisfy the aspirations of the party's rank and file, they may decide to cut their losses and hold out their arms to the Liberals and "left" Tories as in 1931. But given the strength of the working class as compared with then, a National Government will not be as long lasting. A leftward moving Labour Party would quickly recover.
Nevertheless, today we have a responsibility to warn of this danger. Labour and trade union activists must energetically counter the ideas of coalition and partnership politics. The Labour government must be forced to break with Tory policies. These policies of patching up capitalism are a disaster for the Labour movement and working people generally. They are leading to growing disillusionment. In the future, those voices in favour of coalition will receive the full backing of the capitalist media. Their aim will be to split the Labour Party and crush it electorally. We must demand the party clearly rejects coalition and coalition politics. The only alternative is a bold socialist programme, based on the old Clause Four. Only by taking over the commanding heights of the economy and planning industry in the interests of the majority can the ills of mass unemployment, poverty and homelessness be eradicated. On the basis of capitalism, the convulsions of the boom/slump cycle and the threat of a world depression can only mean untold misery for working people. No repeat of 1931! Reject coalition politics! For real socialist policies to answer the crisis and solve the problems faced by the working class!