AH Challenge: No National Government in the UK in 1931

So how could the formation of the National Government in August 1931 be avoided. The POD is after 31 December 1930.

It seems that the train of events which led to the formation of the National Government was set in motion by the Labour government's acceptance of a Liberal amendment to the Conservative vote of censure on its public expenditure policy, which was debated in the House of Commons on 11 February 1931. The amendment called for the appointment of a special commission to review government expenditure and recommend economies. The Chancellor of the Exchequer, Philip Snowden, appointed a Committee on National Expenditure under the chairmanship of Sir George May.
 
Have Ramsay MacDonald and his cabinet agree to introduce Tariffs instead of a reduction in unemployment benefit. The cabinet can unite behind that policy, and thus the threat by Henderson to resign from the cabinet isn't there, and the Labour government is still workable. Of course, the economy would in all probability continue to worsen, and come the next general election, Labour would be wiped out and the Tories and Liberals would in all probability enter into some sort of national coalition administration themselves to deal with the economic situation.
 
The Labour government was dependent on Liberal support. If most Liberal MPs voted for the government on votes of confidence then it could stay in office until 1933 or even the spring of 1934. Labour could avoid by-elections if MacDonald didn't appoint Labour MPs to offices which required their resignation from the House of Commons.

The next general election would be a Conservative landslide but not a Labour wipeout on the scale of 1931. Depending on the state of the economy I would guess that they would be reduced to somewhere in the region of 120 to 170 seats. The Liberals would lose to the Conservatives but might gain from Labour, but would still have a net loss, perhaps down to around 30 seats.

Lansbury would not become Labour leader. I expect Ramsay MacDonald would resign as leader in 1935. He might be succeeded by Arthur Greenwood.

With the Conservatives having a large majority I don't see them forming a coalition with the Liberals, though Liberal Nationals such as Runciman and Simon could be in the cabinet. The Conservatives were a protectionist party while most Liberals continued to believe in free trade.

If Baldwin becomes Prime Minister following a Conservative general election victory in 1933, and Mussolini invades Abyssinia in October 1935, then Baldwin would not likely call a general election for the following month as he did in OTL, having been in power for less than three years. Thus there might not be an election until spring 1938.
 
As Yellow Army said Labour didn't have a majority which meant they couldn't introduce tariffs or raise taxes to close the deficit as neither the Liberals nor the Tories would support them.
 
The last two by-elections before the formation of the National Government were Manchester Ardwick on 22 June 1931 and Liverpool Wavertree on 23 June. The percentage vote for each party was as follows [1929 general election]:
Ardwick: Labour: 50.5 [60.3]
Conservative: 49.5 [39.7]
Swing Lab to Con: 9.8%

Wavertree: Conservative: 65.0 [40.0]
Labour: 35.0 [32.2]
Liberal: [27.8]
Swing Lab to Con: 11.1%

Ardwick and Wavertree went Conservative in the 1931 general election. The Liberals had won Wavertree in the 1923 general election.
 
As Yellow Army said Labour didn't have a majority which meant they couldn't introduce tariffs or raise taxes to close the deficit as neither the Liberals nor the Tories would support them.

Would not the Tories support the Labour government on the introduction of tariffs as that was their policy?
 
Ramsay MacDonald was already sceptical of the idea of a national government: in OTL he was gently pushed into the idea by the King, Baldwin and Samuel. It seems to be that it would have been perfectly plausible for the following events to play out:
- The May Report splits the Cabinet, and they agree on resignation
- MacDonald meets with Baldwin and Samuel at the Palace, they try to persuade him of the merits of a national government, but he is not convinced and resigns
- Baldwin is commissioned as prime minister, either leading a minority Conservative government or a Conservative-Liberal coalition and resolves to call a general election as soon as possible
- Given the sheer scale of the popular vote margins in OTL's 1931, I don't see how Baldwin can fail to get a majority, albeit a 'normal' sized one compared to the colossus that was the national government.

Overall, the effect is that Stanley Baldwin ends up leading essentially the post-1931 government of OTL (which was heavilly Conservative anyway), but with a stronger Labour opposition. Job done.

It's worth pointing out that Baldwin was also skeptical of a National Government but was convinced by the King and Chamberlain.
 
Here are extracts from the book Baldwin: A Biography by Keith Middlemas and John Barnes, London: Weidenfeld and Nicolson, 1969.
The Cabinet Committee had met twice more, on 17 and 18 August [1931] and had eventually agreed to submit a tentative list of economies totalling £78 and a half million for consideration by the full Cabinet. Deliberately, the controversial issues of a 10% cut in unemployment benefit and of a revenue tariff were excluded from this report, for while only Thomas would vote for the tariff as such, the entire Committee, except Snowden, agreed that it was preferable to a cut in benefit. A marathon Cabinet meeting on the 19th, lasting from eleven in the morning until 10.25 at night, with brief intervals for lunch and dinner, eventually agreed on economies totalling £56 and a quarter million; the question of transitional benefit, on which the May Committee had estimated that £20 might be saved, was referred to a Committee, and the proposal for a revenue tariff was revived by Henderson and pressed to a vote. No less than fifteen members of the Cabinet voted for it, while Snowden headed the passionate opposition of the remaining five. This vote was taken on a revenue tariff on manufactured and semi-manufactured imports. When W. Graham sought to apply a tariff on all imports (i.e. foodstuffs as well), the position was exactly reversed.

So far, none of the suggested cuts in unemployment benefit had been achieved; the revenue tariff was an unpalatable but obvious alternative.

Meanwhile Baldwin was returning from holiday in Provence. On 21 August he was staying at the Ritz in Paris.
Cabinet Ministers were summoned back from the country and met at 9.30 a.m. on Saturday 22 August. [...] Twice during the discussion the question of a National Government was raised; and twice dropped, after hostile comment. [...] Although they had already voted against it, the Cabinet agreed by a majority to sound out the Opposition parties, without commitment. Snowden and MacDonald were to ask for a reaction to cuts totalling £76 millions.

Meanwhile Baldwin had left Paris and reached Victoria station at 7.30 p.m. the same day. The next day King George V consulted the Opposition leaders. He met Sir Herbert Samuel [the leader of the Liberal party] at noon, who told him
that the best solution would be for MacDonald, either with his existing or a reconstructed Cabinet, to impose the necessary economies. If he failed, then the best alternative would be a national Government, drawn from all three parties, preferably with MacDonald as |Premier. It would be formed 'for the single purpose of overcoming the financial crisis'. Samuel deprecated a purely Conservative Government on the grounds that it would have great difficulty in securing popular support for the necessary measures. His lucid advice finally coinvinced the King of the need for a National Government.

How different this outcome might have been, if Baldwin had seen the King first, is mere speculation. According to Samuel, by 3 p.m. Baldwin's advice was the same as his own.

The Cabinet met a 7 p.m. that evening. MacDonald asked his colleagues to agree to a 10% cut in unemployment benefit.
Henderson and several senior Ministers refused their consent. [...] Twelve, including the Prime Minister, were in favour, but it was obvious that the Government could not carry on. [....] Henderson appears to have suggested that the three party leaders face the crisis together. MacDonald then said that he would tell the King immediately what had happened and that he would advise him to summon a conference between Baldwin, Samuel and himself on the following morning. The Cabinet agreed and MacDonald asked them to place their resignations in his hands. [...]

Whatever the later charges that the National Government was formed that evening, Baldwin did not countenance them. Silent spectator of Chamberlain's manipulations, he fully expected MacDonald to resign. 'Last night,' he wrote to his wife 'it looked as if I should have to form a Government. The PM said he couldn't join me.' Chamberlain, too, was certain that Baldwin would be asked to form a government of some sort, hut still hoped that his attempt to persuade MacDonald had not been in vain. The next day his close friend, Cunliffe-Lister, wrote: 'Last night MacDonald said he must resign; and that it was doubtful even whether he would come into a Government formed by Baldwin.'

On Monday 24 August, the leaders of the three Parties met for a conference in Buckingham Palace.
At the very outset of the conference in Buckingham Palace, the King laid down that before the three leaders left the Palace a communique must be issued which would no longer keep the country and the world in suspense. MacDonald said that he had the resignation of the Cabinet in his pocket and the King replied that 'he trusted there was no question of the Prime Minister's resignation: the leaders of the three Parties must get together and come to some arrangement. His Majesty hoped,' according to the record, 'that the Prime Minister, with the colleagues who remained faithful to him, would help in the formation of a National Government, which the King was sure would be supported by the Conservatives and the Liberals. The King assured the Prime Minister that, remaining at his post, his position and reputation would be much more enhanced than if he surrendered the Government of the country at such a crisis.

There seems little doubt that this appeal decided the outcome. Baldwin and Samuel at once undertook to serve under MacDonald in a National Emergency Government until Parliament had passed the bill or bills necessary to restore British credit. [...]

That night Baldwin explained the Conservative decision: the emergency required prompt measures, but a dissolution would be disastrous; the only way to meet the situation was by close cooperation between the Parties. The Conservatives had therefore joined a National Government for a limited period of time and for the express purpose of carrying through the necessary measures - 'there is no question of any permanent Coalition.' On completion of the task, Parliament would be dissolved and the parties would go to the country as separate entities.
 
Would not the Tories support the Labour government on the introduction of tariffs as that was their policy?

Maybe but despite Tory support for the principle of tariffs I think you'll find political expediency will lead them to vote against Labour tariffs.
 
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