National Government Essay

National Government  is a concept referring to the coalition of the major political parties which were under Ramsay MacDonald,  Stanley Baldwin  and  Neville Chamberlain  they held office from 1931 until 1940. The  Wall Street Crash  was the start of Great Depression  and Britain was badly hit. The Government tried to achieve several different, contradictory objectives which where ones such as, trying to maintain Britain’s economic position by maintaining the  pound  on the  gold standard, balancing the  budget, and providing assistance and relief to tackle unemployment. In 1931 the situation worsened and there was fear that the budget was unbalanced, which was allowed by the independent  May Report  which triggered a confidence crisis. The  Labour Government  agreed to make changes in taxation and expenditure in order to balance the budget and restore confidence, but the  Cabinet  could not agree on the two options available which was either introduce  tariffs, or make 20% cuts in  unemployment benefit. A final vote was taken on the issue and the Cabinet was split 11:9 with a minority including many political heavyweights such as George Lansbury threatening to resign rather than agree. Due to this unworkable split, on 24 August 1931 the government resigned. Both the Conservative and Liberal parties met with  King George V  and MacDonald, first to discuss support for the measures taken but again to discuss the shape of the next government. On 24 August MacDonald agreed to form a National Government composed of â€Å"men from all parties† with the specific aim of balancing the Budget and restoring confidence. The Government was then meant to resolve once these aims had been met and a general election was to be held. The National Government had many problems during their time in office. One of the major problems they had was the impact of the depression was strong upon Britain. An economic problem they faced was that unemployment had risen to 3 million. During their time in office the unemployment level did drop but this was not due to the national Government it was due to new technology and industries, Rearmament started up in 1936 and there was a housing boom. The national government came up with many schemes such as closing competing factories i. e. cotton; shipbuilding this only increased the number of unemployed. The came up with the unemployment assistance act and the special areas act these worked to a certain extent as for certain areas it was too little too late for schemes like this. But it could not get rid of the intractable million who were people who came from staple industries such as coal, textiles, shipbuilding, iron and steel. These people where the ones who lived in places such as Jarrow where 1 in 10 men where in work. A social problem they faced was that as the impact of the Depression was hard on Britain, there was a large drop in living standards a cut in the amount of benefits people could collect and there was a means test to see if families where eligible for benefits. Which meant fewer families got the ‘dole’ and if they did get it they got a small amount which created the two nations in Britain. As places like Jarrow were one of the worst hit places while places like London and Bristol benefited from a lot of the changes such as they were the ones able to use the new technology and be hired into the new industries and they were one of the few who could afford to buy a new house in the housing boom. There were many hunger marches due to this; the most famous was the Jarrow crusade. This is where many unemployed marched all the way to London to speak to Baldwin about what he was going to do to help them but they were refused a seating which him all they arrived was tea and sympathy it is said. Another Problem faced by the National Government was the balancing of the budget. This was orthodox economics which means it is situation in financial planning where total revenues are equal to or greater than total expenses. This was successful to a limited extent as with all the cuts such as 20% off unemployment as well as having a means test allowing them to save enough money for them to get foreign loans. But only the south of England benefited from the money saved. Social problem occurred due to cuts in unemployment benefit was that there was a drop in benefits for unemployed which led to them having a lower standard of living. They came off the gold standard which made the exports (manufacturers goods) which where imports into other countries cheaper. They lowered interest rates, which helped small businesses, home owners and those in the south of England. Then public sector pay was cut by 10% but navy was not happy about this which caused trouble when the Invogadon navy mutinied. The National Government were successful to an extent but they were limited due to all the economic greatness helped those who were in the south of England and not those in the north which allowed the social deprivation to continue.