Baldwin and the Conservative Party 1924-1929

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Baldwin's Second Conservative Ministry 1924-29

  • Having lost the 1923 Election Baldwin's political career might well have ended there and then- but luck - or perhaps the forged Zinoviev letter saved him.
  • The fall of the First Labour Govt. within 10 months of the 1923 Election reunited the Conservative party and the Zinoviev letter scared enough voters to give the Tories an overall majority.
  • Baldwin formed his second govt. in 1924. It consisted of those Tories who served under LG - Austen Chamberlain as Foreign Secretary, Birkenhead as Secretary for India and Balfour, they also won over the former Liberal Churchill who became Chancellor of the Exchequer.
  • The appointemt of Churchill was a shrewd and cunning move by Baldwin though unpopular with many Tories. Baldwin deprived LG of his most talented supporter- giving Churchill office broke this connection with LG, whilst at the same time keeping Churchill out of mischief and guranteeing that there would be no return to Protectionism which had twice lost the Tories power in 1906 and 1923.
  • With Neville Chamberlian as Ministry of Health and Amery as the Colonial Office
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Domestic Policy- ECONOMIC POLICY.

  • Baldwin's Govt. adhered to orthodox economic policies- balancing the budget and trying to return to pre-1914 policies. A major decision was when Britain should go back in the GOLD STANDARD and at what rate of exchange.
  • Churchill decided that the £ should once be backed by the gold from 1925 and that the £ should be backed by gold and also that it should be valued at the pre-war exchange rate.
  • There were many arguments for this. It was hoped that returning to the Gold Standard would create greater currency stability and so restore world trade. In turn this would rebuild British exports especially in the staple industries which nearly accounted for a fifth of jobs. Politically it was seen as restoring British prestige and the status of the £ as a strong currency.
  • BUT- as the famous economist Keynes argued in his pamphlet 'The Economic Consequences of Mr Churchill'- it was not wise. The pre-War exchange rate was too high and artificially raised the costs of British exports by 10% so adding to unemployment and wage cuts. Indeed wage cuts in the coal mining industry as a result of the return to the Gold standard sparked off the worst event in British industrial history- The General Strike 1926.  Much of the Gold was foreign owned - so did nothing to solve the problem.
  • Some other policies were more helpful e.g. reducing the rates burden on industry. Measures to encourage single men to move from the depressed North and get jobs in the Midlands and South, even a few tariffs to protect 'infant industries', lowering taxes to raise demand. Churchill therefore succeeded in putting Britain back on the Gold but proved a foolish and unsustainable policy, led to the 1931 Financial Crisis and so had to then be abandoned.
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Domestic Policy - SOCIAL POLICY

  • Conservative government put social policy as their main agenda, this undermined Liberal support as they stole their ideas , winning votes away from Liberals.
  • In Social Policy the record of Baldwin's second ministry was better than in either the Economy or Industrial Relations largely due to Neville Chamberlain and Churchill.
  • Chamberalin was a first class administrator with a real interest in social policy and though he was no Radical or Socialist, did bring in some useful measures.
  • 1925 he extended Social Insurance to provide pensions for widows and orphans.
  • He brought down the age at which the Old Age Pension was made to 65. Although not everyone yet recieved a pension more did than before 1914 and thanks to Chamberlain the OAP covered 20m of the elderly by 1937.
  • BUT - to get the pension at 65 workers had to contribute which meant in effect higher taxes on them and the millions of unemployed were not able to keep up their contibutions and so might get nothing.
  • In 1927 the Unemplyment benefit was improved so that it continued beyond the original 15 weeks provided that a worker could prove he was genuinley seeking work. This helped prevent desperation among the long term unemployed.
  • The administration of the Poor Law was reformed which spread the cost of poor relief over a wider area but also gave the Govt. tighter control.
  • Perhaps Chamberlain's greatest reform was in Local Government. The rating system was modernised.  Local Govts given greater powers over roads etc.
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Extending the Franchise

  • Baldwins second ministry also completed Britain's move towards becoming a mass democracy.
  • In 1928 women were given the parliamentary vote on the same terms as men ( at 21).
  • The Conservatives probably believed that the female vote was favouring them rather than their opponents. Certainly other anomalies in the franchise remained e.g. businessmen and Oxbridge graduates could still have more than 1 vote.
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Public Corporations

  • Baldwin's Second Ministry also encouraged other new developments notably the invention of the Public Corporation - an important innovation in public administration .
  • Two were set up - The British Broadcasting Corporation 1925 and the Central Electricity Board 1926. The former had a monopoly on radio broadcasting, the latter on electricity generation and distribution.
  • The Public Corporation was a half-way house between Capitalist Private Ownership and Socialist State Ownership. The organisations were funded by the Govt. but run by a Board independent of the Govt.
  • Ironically when Labour did eventually come to nationalise private industries after 1945 it was the Public Corporations developed under Baldwin that it chose as its model.
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Summary of Domestic Policy

  • Baldwin's Goverment was quite innovative - Public Corporations, extending the votes to all women. In other areas like Social reform Baldwin's Govt. rounded off some polices begun by New Liberals before 1914. In these ways Baldwins Govt. was progressive rather than reactionary.
  • HOWEVER, it had two big failures. One was its inability to solve the unemployment problem or reverse the decline of the staple industries. The other was the legacy of bitterness which it left in the minds of the Trade Unionists and especially the General Strike.
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Foreign Policy

  • DEFENCE- Continued trend towards disarmament. Seemed sensible since Germany and Russia weak, Japan not yet a menace and war with USA unthinkable.
  • -In 1928 the 10 Year Rule became automatic i.e. Army and Navy size to be based on no war likely for the next 10 years. Result was rapid fall in defence spending and major reduction of the size of the Army, RAF and RN.
  • -Although reduction is size reasonable, big criticism was the neglect of new technology and methods of warfare- Army had only 1 armoured division by 1932, Navy no aircraft carriers.
  • RUSSIA- Under Baldwin relations with Soviet Russia worsened leading to a break in diplomatic relations by 1929. Understandable given the fears aroused by the General Strike and by Comintern activities in India , but soured Anglo-Russian relations which proved a disadvantage in the 1930's/
  • LOCARNO TREATY 1925- Hailed at the time as a great success. Germany and France settled the differences over their frontier which had caused mutual hatred since 1870. Also agreed to settle any future differnces by arbitration not war. Britain guranteed the settlement of Western Europe. But the British gurantee was not extended to Central and Eastern Europe, giving Germany the impression that the frontiers established there after 1919 were not fixed and could be changed. Also British gurantee was to the Locarno Treaty not France. This made her feel isolated and turned her to adopting  purely defensive military strategy - the Maginot Line - which later limited her ability to deter Hitler.
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Imperial Policy

  • Baldwin's Second Ministry also began to re-examine the position of the Dominions within the Empire
  • The 1926 Imperial Conference made clear that the Dominions governed themselves and were linked to Britain only through the Crown - Dominions were 'autonomous communities equal in status in no way subordinate and united only by a common allegiance to the Crown'. This paved the way for the Statue of Westminister 1931 whereby the British Empire began to transorm itself into the British Commonwealth of Nations.
  • At the same time closer economic links with the Dominions were forged through the Empire Marketing Board and the Colonial Development Act.
  • Baldwin also set up a commitee to examine the constitutional position of India and this again led to a greater measure self-government in the 1930's.
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