In the 1923 General Election, the Labour Party won 191 seats. David Marquand has pointed out that: "The new parliamentary Labour Party was a very different body from the old one. In 1918, 48 Labour M.P.s had been sponsored by trade unions, and only three by the ILP. Now about 100 members belonged to the ILP, while 32 had actually been sponsored by it, as against 85 who had been sponsored by trade unions.... In Parliament, it could present itself for the first time as the movement of opinion rather than of class." (1)
Although the Conservative Party had 258 seats, Herbert Asquith announced that the Liberal Party would not keep the Tories in office. If a Labour Government were ever to be tried in Britain, he declared, "it could hardly be tried under safer conditions". The Daily Mail warned about the dangers of a Labour government and the Daily Herald commented on the "Rothermere press as a frantic attempt to induce Mr Asquith to combine with the Tories to prevent a Labour Government assuming office". (2) John R. Clynes, the former leader of the Labour Party, argued: "Our enemies are not afraid we shall fail in relation to them. They are afraid that we shall succeed." (3)
On 22nd January, 1924 Stanley Baldwin resigned. At midday, the 57 year-old, Ramsay MacDonald went to Buckingham Palace to be appointed prime minister. He later recalled how George V complained about the singing of the Red Flag and the La Marseilles, at the Labour Party meeting in the Albert Hall a few days before. MacDonald apologized but claimed that there would have been a riot if he had tried to stop it. (4)
Robert Smillie, the Labour MP for Morpeth, believed that MacDonald had made a serious mistake in forming a government. "At last we had a Labour Government! I have to tell you that I did not share in that jubilation. In fact, had I had a voice in the matter which, as a mere back-bencher I did not, I would have strongly advised MacDonald not to touch the seals of office with the proverbial bargepole. Indeed, I was very doubtful indeed about the wisdom of forming a Government. Given the arithmetic of the situation, we could not possibly embark on a proper Socialist programme." (5)
G.D.H. Cole pointed out that MacDonald was in a difficult position. If he refused to form a government "it would have been widely misrepresented as showing Labour's fears of its own capacity, and it would have meant leaving the unemployed to their plight and - what weighed even more with many socialists - doing nothing to improve the state of international relations or to further European reconstruction and recovery." Left-wing members of the Labour Party suggested that MacDonald should accept office and invite defeat by putting forward a Socialist programme. The problem with that argument was the party could not financially afford another election, nor would they have been likely to win any more seats in the House of Commons. (6)
MacDonald agreed to head a minority government, and therefore became the first member of the party to become prime minister. He had the problem of forming a Cabinet with colleagues who had little, or no administrative experience. MacDonald's appointments included Philip Snowden (Chancellor of the Exchequer), Arthur Henderson (Home Secretary), John R. Clynes (Lord Privy Seal), Sidney Webb (Board of Trade) and Arthur Greenwood (Health), Charles Trevelyan (Education), John Wheatley (Housing), Fred Jowett (Commissioner of Works), William Adamson (Secretary for Scotland), Tom Shaw (Minister of Labour), Harry Gosling (Paymaster General), Vernon Hartshorn (Postmaster General), Emanuel Shinwell (Mines), Noel Buxton (Agriculture and Fisheries), Stephen Walsh (Secretary of State for War), Jimmy Thomas (Secretary of State for the Colonies), Ben Spoor (Chief Whip) and Sydney Olivier (Secretary of State for India).
John R. Clynes wrote in his Memoirs (1937): "An engine-driver rose to the rank of Colonial Secretary, a starveling clerk became Great Britain's Premier, a foundry-hand was charged to Foreign Secretary, the son of a Keighley weaver was created Chancellor of the Exchequer, one miner became Secretary for War and another Secretary of State for Scotland." (7)
However, others claimed that the Labour Party had changed dramatically since before the First World War and had been taken over by middle-class elements. The German journalist, Egon Ranshofen-Wertheimer, pointed out: "The party which before the war had been a definite proletarian organisation in spite of intellectual leadership, became overrun by ex-Liberals, young-men-just-down-from-Oxford guiltless of any socialist tradition, ideologists and typical monomaniacs full of their own projects." (8)
The Labour government was not represented in the House of Lords. However, Herbrand Sackville, the 23 year-old, the 9th Earl De La Warr, who had expressed socialist beliefs while at Eton, told MacDonald that he was not a wholehearted supporter of any party "but my sympathies are all with yours... I fully realise... that the Labour Party will need support in the next Parliament, and I shall gladly help, by constant attendance and vote whenever possible." (9)
MacDonald felt he was unable to appoint such a young man to a government post, and caused great controversy when he gave Cabinet jobs to Charles Cripps, 1st Baron Parmoor (Lord President of the Council) and Frederic Thesiger, 1st Viscount Chelmsford (First Lord of the Admiralty), two men who had previously supported the Conservative Party. (10) Chelmsford was asked why he had accepted this post from a political arrival. He replied: "I enquired, naturally, when the offer was made, as to what the Labour policy was likely to be in the immediate future... I had to satisfy myself that that policy, so far as disclosed to me, was such as I could reasonably help to promote." (11)
The Parliamentary Labour Party had a meeting to debate the motion that it was "contrary to the best interests of the Movement to have in a Labour cabinet to the best interests of the Movement to have in a Labour cabinet two peers whose policies have always been identified with the Tory Party, and requests the Prime Minister to ask Lords Parmoor and Chelmsford to resign from the cabinet." This idea was rejected by MacDonald and they remained in the Cabinet. (12)
Jimmy Thomas was impressed with the help he received from the civil servants. (13) John R. Clynes also claimed that he always "found the permanent officials extraordinary helpful and kind". He saw nothing sinister in the fact that: "They were always beside me, advising, coaching and checking; and in a short time I gained a measure of knowledge necessary in matters where, perhaps, national safety or the spending of millions of money was concerned." (14)
Ramsay MacDonald well understood the power of the unelected official over the minister. He rejected a Labour Party suggestion that the government should appoint its own advisors. He argued that "a Civil Service told quite frankly that we have no confidence in it would never work at all." (15) According to one of his leading critics: "In answer to the question - 'who captured whom?' - the answer was quite clear. The state had captured the Labour Party. A new relationship between the Labour Party, the ruling class and the workers was about to emerge." (16)
MacDonald also took the post of foreign secretary but he had the capable Arthur Ponsonby as his deputy in the department. Both men had been strong opponents of the First World War. Ponsonby wrote to MacDonald: "The incredible seems about to happen. We are actually to be allowed by an extraordinary combination of circumstances to have control of the Foreign Office and to begin to carry out some of the things we have been urging and preaching for years." MacDonald used Ponsonby to carry out negotiations with the Bolshevik government in Russia. (17)
George Lansbury was not offered a post in his Cabinet. MacDonald had not been fully supportive of the Poplar Councillors in their dispute with Stanley Baldwin and the London County Council since he thought that "public doles, Popularism, strikes for increased wages, limitation of output, not only are not Socialism but may mislead the spirit and policy of the Socialist movement." Apparently, King George V also opposed his appointment as he "recalled Lansbury's sympathy for the Bolshevik regime". (18)
John Wheatley, the new Minister of Health, had been a supporter of the Poplar Councillors. Edgar Lansbury wrote in The Labour Leader that he was sure that Wheatley would "understand and sympathise with them in this horrible problem of poverty, misery and distress which faces them." Lansbury's assessment was correct and as Janine Booth, the author of Guilty and Proud of It! Poplar's Rebel Councillors and Guardians 1919-25 (2009), has pointed out: "Wheatley agreed to rescind the Poplar order. It was a massive victory for Poplar, whose guardians had lived with the threat of legal action for two years and were finally vindicated." (19)
MacDonald had great doubts about appointing Wheatley because of his strong socialist views and has been described as the Cabinet's "solitary left-winger" and was the only one who attempted to introduce radical legislation. (20) MacDonald wrote in his diary that it was necessary to have one representative of the left but feared that he might not "play straight". (21) As one historian commented: "So grudging a view of, arguably, his most able and successful minister was an indication of his poor judgement. His choices had been made for their political utility rather than for executive competence." (22)
Wheatley was determined to introduce socialist measures to deal with the housing crisis. "This had three distinct aspects - the provision of more houses for letting at rents within the means of ordinary working-class tenants, the prevention of unduly high costs of construction, and the more effective control of rents for existing houses... Wheatley successfully negotiated a treaty with the building operatives' Trade Unions, allowing for special entry and training in the building crafts in order to ensure an adequate supply of labour." (23)
Wheatley's Housing Act became law in August 1924, and involved developing a partnership between political parties, local authorities and specially appointed committees of building employees and employers. The plan was to build 190,000 new council houses at modest rents in 1925, and that this figure would gradually increase until it reached 450,000 a year. He told the House of Commons: "I am the defender of private enterprise and one of its best friends. I am completely frank and honest about it... It requires Labour proposals, Socialist proposals if you like, in order that private enterprise can get going again." (24)
As Ian S. Wood has pointed out: "Wheatley's Housing (Financial Provisions) Act was the only major legislative achievement of the 1924 Labour government. Until its subsidy provisions were repealed by the National Government in 1934, a substantial proportion of all rented local authority housing in Britain was built under its terms and sixty years later there were still people in Scotland who spoke of Wheatley houses. The act was a complex one, bringing together trade unions, building firms, and local authorities in a scheme to tackle a housing shortage which was guaranteed central government funding provided that building standards set by the act were adhered to. The act did little for actual slum clearance but it hugely enhanced Wheatley's reputation despite the loss of a companion measure, the Building Materials Bill, which would have given central government a wide range of controls over supplies of building materials to local councils operating the Housing Act." (25)
Charles Trevelyan was also a success at the Board of Education. He told his wife that "I no longer have six children - I have six million." (26) Trevelyan argued for a reduction in educational inequalities. "During his term of office, approval was given to forty new secondary schools; a survey was instituted in order to provide for the replacement of as many as possible of the more unsanitary or obsolete elementary schools; the proportion of free places in secondary schools was increased; state scholarships, which had been in suspense, were restored, and maintenance allowances for young people in secondary schools were increased; the adult education grant was tripled; and local authorities were empowered, where they wished, to raise the school-leaving age to fifteen." (27)
According to his biographer, Trevelyan was "a sound administrator, he was not overawed, as were many of his colleagues, by his civil servants... his performances at the dispatch box won back his father's approval." (28) Trevelyan's main objective was to provide "the children of of the workers to have the same opportunities as those of the wealthy". He proposed to do so by expanding secondary education and raising the school-leaving age. He reversed the cuts in education spending imposed in 1922, increased the number of free places at grammar schools, and encouraged (but could not require) local authorities to raise the school leaving age to fifteen. He also declared that there would be a break between primary and secondary education at the age of 11. (29)
Ramsay MacDonald received a salary as prime minister of £5,000 a year. At this time the prime minister was not given an entertainment allowance and had to pay out of own pocket for such items of household equipment as linen and china. To save coal, the MacDonald family ate their meals not in their private quarters but in the official banqueting-rooms which were centrally heated at the Government's expense. (30)
MacDonald was told that he had to wear a special uniform of black evening dress and knee breeches when he appeared before King George V. The cost of this was £30 from Moss Brothers. He was informed that if any of his cabinet ministers refused to wear this uniform they would not be allowed to attend official functions. "When the parliamentary party discussed whether members should accept invitations to Windsor and the palace, members voted thirty-eight to thirty-seven in favour of acceptance." (31)
Some members of the government complained about the demand to wear special clothes but MacDonald found the request acceptable: "These braids and uniforms are but part of an official pageantry and as my conscience is not on my back, a gold coat means nothing to me but a form of dress to be worn or rejected as a hat would be in relation to the rest of one's clothes. Nor do I care a fig for the argument that it is part of a pageantry of class, or royalty or flunkeyism... The King has never seen me as a Minister without making me feel that he was also seeing me as a friend." (32)
George Lansbury feared this kind of compromise would undermine its radicalism and doubted whether "the Labour Party fulfils its mission by proving how adaptable we are and how nicely we can dress and behave when we are in official, royal or upper-class circles." (33) Robert C. Morrison, the Tottenham North MP, complained that to attend court functions without buying a complete set for £57 "including nine guineas for the regulation sword". He added: "If I had known that such gorgeous dresses would be worn I would have gone to Tottenham Fire Brigade and borrowed a helmet and tunic for the occasion." (34)
The Labour government received constant criticism from the newspapers that were controlled by a group of wealthy individuals who strongly supported the Conservative Party. In return they had been given titles and places in the House of Lords. This included Alfred Harmsworth, Lord Northcliffe (The Daily Mail and The Times), Harold Harmsworth, Lord Rothermere (The Daily Mirror), Harry Levy-Lawson, Lord Burnham (The Daily Telegraph) and William Maxwell Aitken, Lord Beaverbrook (The Daily Express). (35)
The most hostile response to the new Labour government was Lord Northcliffe, the owner of several Conservative Party supporting newspapers. The Daily Mail claimed during the election campaign that it was under the control of the Bolshevik government in the Soviet Union: "The British Labour Party, as it impudently calls itself, is not British at all. It has no right whatever to its name. By its humble acceptance of the domination of the Sozialistische Arbeiter Internationale's authority at Hamburg in May it has become a mere wing of the Bolshevist and Communist organisation on the Continent. It cannot act or think for itself." (36)
According to the historian, Gill Bennett, the "intelligence community" in the form of MI5 and MI6, and the entire ruling elite was appalled by the idea of a Prime Minister who was a socialist. "It was not just the intelligence community, but more precisely the community of an elite - senior officials in government departments, men in 'the City', men in politics, men who controlled the Press - which was narrow, interconnected (sometimes intermarried) and mutually supportive. Many of these men... had been to the same schools and universities, and belonged to the same clubs. Feeling themselves part of a special and closed community, they exchanged confidences secure in the knowledge, as they thought, that they were protected by that community from indiscretion." (37)
Two days after forming the first Labour government Ramsay MacDonald received a note from General Borlass Childs of Special Branch that said "in accordance with custom" a copy was enclosed of his weekly report on revolutionary movements in Britain. MacDonald wrote back that the weekly report would be more useful if it also contained details of the "political activities... of the Fascist movement in this country". Childs wrote back that he had never thought it right to investigate movements which wished to achieve their aims peacefully. In reality, MI5 was already working very closely with the British Fascisti, that had been established in 1923. (38)
Maxwell Knight was the organization's Director of Intelligence. In this role he had responsibility for compiling intelligence dossiers on its enemies; for planning counter-espionage and for establishing and supervising fascist cells operating in the trade union movement. This information was then passed onto Vernon Kell, Director of the Home Section of the Secret Service Bureau (MI5). Later Maxwell Knight was placed in charge of B5b, a unit that conducted the monitoring of political subversion. (39)
It soon became clear that the intelligence community was working very closely with the press barons to undermine the Labour government. In April 1924, MacDonald recommended Alexander Grant, the managing director of McVitie and Price, for a baronetcy. This was a surprise as Grant was a lifelong supporter of the Conservative Party. On 11th September, 1924, the Daily Mail reported that Grant had given MacDonald a Daimler car and was the holder of £30,000 worth of shares in McVitie and Price. (40) MacDonald replied that the shares simply covered the running of the car. This was hardly convincing and the story caused considerable embarrassment to the Labour government. He eventually agreed to give the car back to the company. (41)
On 25th July 1925, the Worker's Weekly, a newspaper controlled by the Communist Party of Great Britain, published an "Open Letter to the Fighting Forces" that had been written anonymously by Harry Pollitt. The article called on soldiers to "let it be known that, neither in the class war nor in a military war, will you turn your guns on your fellow workers, but instead will line up with your fellow workers in an attack upon the exploiters and capitalists and will use your arms on the side of your own class." (42)
After consultations with the Director of Public Prosecutions and the Attorney General, Sir Patrick Hastings, it was decided to arrest and charge, John Ross Campbell, the editor of the newspaper, with incitement to mutiny. The following day, Hastings had to answer questions in the House of Commons on the case. However, after investigating Campbell in more detail he discovered that he was only acting editor at the time the article was published, he began to have doubts about the success of a prosecution. (43)
The matter was further complicated when James Maxton informed Hastings about Campbell's war record.
In 1914, Campbell was posted to the Clydeside section of the Royal Naval division and served throughout the war. Wounded at Gallipoli, he was permanently disabled at the battle of the Somme, where he was awarded the Military Medal for conspicuous bravery. Hastings was warned about the possible reaction to the idea of a war hero being prosecuted for an article published in a small circulation newspaper. (44)
At a meeting on the morning of the 6th August, Hastings told MacDonald that he thought that "the whole matter could be dropped". MacDonald replied that prosecutions, once entered into, should not be dropped under political pressure". At a Cabinet meeting that evening Hastings revealed that he had a letter from Campbell confirming his temporary editorship. Hastings also added that the case should be withdrawn on the grounds that the article merely commented on the use of troops in industrial disputes. MacDonald agreed with this assessment and agreed the prosecution should be dropped. (45)
On 13th August, 1924, the case was withdrawn. This created a great deal of controversy and MacDonald was accused of being soft on communism. MacDonald, who had a long record of being a strong anti-communist, told King George V: "Nothing would have pleased me better than to have appeared in the witness box, when I might have said some things that might have added a month or two to the sentence." (46)
On 10th October 1924, MI5 received a copy of a letter, dated 15th September, sent by Grigory Zinoviev, chairman of the Comintern in the Soviet Union, to Arthur McManus, the British representative on the committee. In the letter British communists were asked to take all possible action to ensure the ratification of the Anglo-Soviet Treaties. It then went on to advocate preparation for military insurrection in working-class areas of Britain and for subverting the allegiance in the army and navy. (47)
Hugh Sinclair, head of MI6, provided "five very good reasons" why he believed the letter was genuine. However, one of these reasons, that the letter came "direct from an agent in Moscow for a long time in our service, and of proved reliability" was incorrect. (48) Vernon Kell, the head of MI5 and Sir Basil Thomson the head of Special Branch, were also convinced that the Zinoviev Letter was genuine. Desmond Morton, who worked for MI6, told Sir Eyre Crowe, at the Foreign Office, that an agent, Jim Finney, who worked for George Makgill, the head of the Industrial Intelligence Bureau (IIB), had penetrated Comintern and the Communist Party of Great Britain. Morton told Crowe that Finney "had reported that a recent meeting of the Party Central Committee had considered a letter from Moscow whose instructions corresponded to those in the Zinoviev letter". However, Christopher Andrew, who examined all the files concerning the matter, claims that Finney's report of the meeting does not include this information. (49)
Kell showed the letter to Ramsay MacDonald, the Labour Prime Minister. It was agreed that the letter should be kept secret until it was discovered to be genuine. (50) Thomas Marlowe, who worked for the press baron, Alfred Harmsworth, Lord Rothermere, had a good relationship with Reginald Hall, the Conservative Party MP, for Liverpool West Derby. During the First World War he was director of Naval Intelligence Division of the Royal Navy (NID) and he leaked the letter to Marlowe, in an effort to bring an end to the Labour government. (51)
The newspaper now contacted the Foreign Office and asked if it was a forgery. Without reference to MacDonald, a senior official told Marlowe it was genuine. The newspaper also received a copy of the letter of protest sent by the British government to the Russian ambassador, denouncing it as a "flagrant breach of undertakings given by the Soviet Government in the course of the negotiations for the Anglo-Soviet Treaties". It was decided not to use this information until closer to the election. (52)
David Lloyd George signed a trade agreement with Russia in 1921, but never recognised the Soviet government. On taking office the Labour government entered into talks with Russian officials and eventually recognised the Soviet Union as the de jure government of Russia, in return for the promise that Britain would get payment of money that Tsar Nicholas II had borrowed when he had been in power. (53)
A conference was held in London to discuss these matters. Most newspapers reacted with hostility to these negotiations and warned of the danger of dealing with what they considered to be an "evil regime". in August 1924 a wide-ranging series of treaties was agreed between Britain and Russia. "The most-favoured-nation status was given to the Soviet Union in exchange for concessions to British holders of Czarist bonds, and Britain agreed to recommend a loan to the Soviet government." (54)
Stanley Baldwin, the leader of the Conservative Party, and H. H. Asquith, the leader of the Liberal Party, decided to being the Labour government down over the issue of its relationship with the Soviet Union. On 30th September, the Liberals condemned the recently agreed trade deal. They claimed, unjustly, that Britain had given the Russians what they wanted without resolving the claims of British bondholders who had suffered in the revolution. "MacDonald reacted peevishly to this, accusing them of being unscrupulous and dishonest." (55)
The following day, Conservatives put down a censure motion on the decision to drop the case against John Ross Campbell. The debate took place on 8th October. MacDonald lost the vote by 364 votes to 198. "Labour was brought down, on the Campbell case, by the combined ranks of Conservatives and Liberals... The Labour government had lasted 259 days. On six occasions the Conservatives had saved MacDonald from defeat in the 1923 parliament, but it was the Liberals who pulled the political rung from under him." (56)
The Daily Mail published the Zinoviev Letter on 25th October 1924, just four days before the 1924 General Election. Under the headline "Civil War Plot by Socialists Masters" it argued: "Moscow issues orders to the British Communists... the British Communists in turn give orders to the Socialist Government, which it tamely and humbly obeys... Now we can see why Mr MacDonald has done obeisance throughout the campaign to the Red Flag with its associations of murder and crime. He is a stalking horse for the Reds as Kerensky was... Everything is to be made ready for a great outbreak of the abominable class war which is civil war of the most savage kind." (57)
Dora Russell, whose husband, Bertrand Russell, was standing for the Labour Party in Chelsea, commented: "The Daily Mail carried the story of the Zinoviev letter. The whole thing was neatly timed to catch the Sunday papers and with polling day following hard on the weekend there was no chance of an effective rebuttal, unless some word came from MacDonald himself, and he was down in his constituency in Wales. Without hesitation I went on the platform and denounced the whole thing as a forgery, deliberately planted on, or by, the Foreign Office to discredit the Prime Minister." (58)
Ramsay MacDonald suggested he was a victim of a political conspiracy: "I am also informed that the Conservative Headquarters had been spreading abroad for some days that... a mine was going to be sprung under our feet, and that the name of Zinoviev was to be associated with mine. Another Guy Fawkes - a new Gunpowder Plot... The letter might have originated anywhere. The staff of the Foreign Office up to the end of the week thought it was authentic... I have not seen the evidence yet. All I say is this, that it is a most suspicious circumstance that a certain newspaper and the headquarters of the Conservative Association seem to have had copies of it at the same time as the Foreign Office, and if that is true how can I avoid the suspicion - I will not say the conclusion - that the whole thing is a political plot?" (59)
The rest of the Tory owned newspapers ran the story of what became known as the Zinoviev Letter over the next few days and it was no surprise when the election was a disaster for the Labour Party. The Conservatives won 412 seats and formed the next government. Lord Beaverbrook, the owner of the Daily Express and Evening Standard, told Lord Rothermere, the owner of The Daily Mail and The Times, that the "Red Letter" campaign had won the election for the Conservatives. Rothermere replied that it was probably worth a hundred seats. (60)
David Low was a Labour Party supporter who was appalled by the tactics used by the Tory press in the 1924 General Election: "Elections have never been completely free from chicanery, of course, but this one was exceptional. There were issues - unemployment, for instance, and trade. There were legitimate secondary issues - whether or not Russia should be afforded an export loan to stimulate trade. In the event these issues were distorted, pulped, and attached as appendix to a mysterious document subsequently held by many creditable persons to be a forgery, and the election was fought on 'red panic' (The Zinoviev Letter)". (61)
After the election it was claimed that two of MI5's agents, Sidney Reilly and Arthur Maundy Gregory, had forged the letter. It later became clear that Major George Joseph Ball, a MI5 officer, played an important role in leaking it to the press. In 1927 Ball went to work for the Conservative Central Office where he pioneered the idea of spin-doctoring. Christopher Andrew, MI5's official historian, points out: "Ball's subsequent lack of scruples in using intelligence for party political advantage while at Central Office in the late 1920s strongly suggests... that he was willing to do so during the election campaign of October 1924." (62)
Stanley Baldwin, the head of the new Conservative Party government, set up a Cabinet committee to look into the Zinoviev Letter. On 19th November, 1924, the Foreign Secretary, Austin Chamberlain, reported that members of the committee were "unanimously of opinion that there was no doubt as to the authenticity of the Letter". This judgement was based on a report written by Desmond Morton. Morton came up with "five very good reasons" why he thought the letter was genuine. These were: its source, an agent in Moscow "of proved reliability"; "direct independent confirmation" from CPGB and ARCOS sources in London; "subsidiary confirmation" in the form of supposed "frantic activity" in Moscow; because the possibility of SIS being taken in by White Russians was "entirely excluded"; and because the subject matter of the Letter was "entirely consistent with all that the Communists have been enunciating and putting into effect". Gill Bennett, who has studied the subject in great depth claims: "All five of these reasons can be shown to be misleading, if not downright false." (63) Eight days later, Morton admitted in a letter to MI5 that "we are firmly convinced this actual thing (the Zinoviev letter) is a forgery." (64)
A settlement of relations between the two countries will assist in the revolutionizing of the international and British proletariat not less than a successful rising in any of the working districts of England, as the establishment of close contact between the British and Russian proletariat, the exchange of delegations and workers, etc. will make it possible for us to extend and develop the propaganda of ideas of Leninism in England and the Colonies.
Moscow issues orders to the British Communists... the British Communists in turn give orders to the Socialist Government, which it tamely and humbly obeys... Now we can see why Mr MacDonald has done obeisance throughout the campaign to the Red Flag with its associations of murder and crime. He is a stalking horse for the Reds as Kerensky was... Everything is to be made ready for a great outbreak of the abominable class war which is civil war of the most savage kind.
The Socialist minority Government have forced a rush election upon the country not upon any great issue of principle, such as was submitted to you a year ago, but on the plea that it was incompatible with their dignity to tolerate any inquiry into their conduct in connection with the withdrawal of the Campbell prosecution.
THE CAMPBELL CASE
The admissions already extorted from Ministers in Parliament are sufficient to convince any reasonable person that it was as a result of undue political pressure that the Attorney-General withdrew a prosecution instituted on the grave charge of inciting the troops to sedition and mutiny. The refusal to allow any inquiry inevitably suggests that the result of such investigation would only have been to emphasise the conclusion that the course of justice had been deflected by partisan considerations and to increase the public anxiety.
THE RUSSIAN TREATY
There are, however, other considerations which may well have influenced the Government in their decision to precipitate an election. Under pressure from the same extremist section which reversed the considered action of the Attorney-General in the Campbell caseand, indeed, at the same moment-the Government, going back upon its own better judgment and upon the assurances given by the Prime Minister in Parliament, hurriedly patched up a makeshift Treaty with the Soviets which they now realize to be no less indefensible and no less incapable of standing close scrutiny. Under that Treaty the rightful claims of British subjects are whittled down to an undefined extent, and Parliament is to be asked to commit itself in the eyes of Russia and of the world, to the principle of guaranteeing that the British taxpayer shall repay a Bolshevik loan, if the Bolsheviks, in accordance with their principles and their practice, should fail to repay that loan.
By dissolving Parliament the Government are, no doubt, also hoping to obscure their utter failure to deal with unemployment, or to make good the boast that they possessed the only positive remedy for that most serious of all the problems of the day. The unemployment situation is as grave, if not graver, than it was a year ago, and more than justifies the warning I then gave of the necessity of looking ahead. Ever since the economic policy of the present Government, as distinguished from the measures initiated by ourselves and carried on by our successors, has had time to take effect, unemployment has steadily increased. At the end of September the unemployment figure was 180,000 higher than at the end of June, and is, I fear, still rising. In this disquieting situation the Government have no remedy whatsoever to propose, beyond mere palliatives or an increase of doles.
The folly committed by the Government of choosing such a time in order to abolish the McKenna duties and Part 2 of the Safeguarding of Industries Act, under which certain industries were rapidly expanding and giving increasing employment, and the even greater folly of wrecking the hopes of the rapid expansion of Imperial trade which would have followed on the adoption of the proposals of the Imperial Economic Conference, are now only too clearly evident.
The Labour Government, defeated in the House of Commons by a partisan combination of Liberals and Tories, appeals to the People.
ITS WORK FOR PEACE
The supreme need of this country, as of the whole world, is peace among the nations, and the restoration of industry and commerce. For this the Labour Government has continuously worked; and it has already achieved much. It has insisted on maintaining, in the spirit as in the letter, the honourable binding Treaty with the Irish Free State, no less than the agreement with the Northern Province. It has maintained, and even strengthened the ties of sentiment with the Dominions upon which, rather than upon either force or any Imperialism, the very existence of the British Commonwealth of Nations depends. The embittered relations between France and Germany left by the disastrous tangles of preceding Governments have been improved, and cordial relations established between this country and France. Important steps have been taken at Geneva towards arbitration, security and general disarmament.
The Labour Government has refused to exclude from this general pacification the Russian people, with whom it is essential to resume our trade in the interests of our unemployed and the country as a whole.
The Treaties with Russia, now awaiting ratification, open up for our fishing industry thousands of square miles of additional fishing ground, and provide for new outlets for our manufactures and our coal. When compensation has been secured to British subjects for their losses in Russia, a third Treaty will be negotiated providing for the raising (from private financiers) by Russia of a loan the interest and sinking fund charges on which shall be guaranteed by Great Britain. It is laid down in Article 12 of the General Treaty that "the amount, terms and conditions of the said loan, and the purposesto which it shall be applied," shall be defined in the future Treaty referred to; and this Treaty "will not come into force until the necessary Parliamentary authority for the guarantee of the said loan has been given."
Will you allow this work for peace and prosperity to be stopped?
ITS WORK FOR HOUSING
In the face of much opposition, the Labour Government has passed into law the Great Housing Charter, the statute that enabled the Local Authorities and the Building Industry to engage in a fifteen years' uninterrupted building programme, with such generous financial assistance as will provide: (1) Houses to let at low rents; (2) A separate dwelling for every family in the land; (3) A continuous policy of slum clearance and an ending of overcrowding.
Meanwhile, the Rent Restriction Acts (which practically expire next year) have to be continued and amended; and the Bill to prevent profiteering in building materials has still to be passed.
It depends on the result of the Election whether this great Housing Policy will be carried out.
THE FIRST LABOUR BUDGET
In Finance, the Labour Government has achieved a marked success. Whilst subjecting to the most competent examination its own and all other schemes for dealing with the War Debt, and the terrible burden upon industry of a tribute of £1,000,000 per day, the Labour Government has swept away no less than £30,000,000 a year of taxes on the people's food (just six times as much in eight months as the Liberal Government did in eight years). The Labour Government has abolished the irritating Inhabited House Duty, which no other Government had dared to do, and has taken the first step towards the Abolition of the Entertainment Tax. It has found means to change the whole spirit of the administration of the War Pensions Ministry, to increase in many thousands of cases the pittance that the preceding Governments had allotted to those Ex-Service Men who had suffered in the War, and to the parents and dependants of those who have fallen. Above all, the Labour Government has found means to stop the contemptible deduction from the weekly ten shillings of many thousands of Old-Age Pensioners, which the Liberal Government instituted, and the Unionist Government persisted in maintaining; whilst nearly 200,000 more old people, to whom the pension has been hitherto denied, have been admitted to the pension roll. Is it not because the Liberals and Unionists fear the Second Labour Budget that an excuse has been found for giving the Labour Government no further chance?
WHAT IT HAS DONE FOR EDUCATION
Labour's intention to "give every child equality of opportunity in education" has begun to be fulfilled in the drastic change of the policy of the preceding Government. The Labour Government has been insisting on smaller classes, an increase in the number of fully qualified teachers, new schools, maintenance for the poorer children, more free places in Secondary Schools and Scholarships to the University: all practical steps towards the ideal of securing to all children the same chance of advanced education as the children of the rich. The Labour Government has been steadily working towards progressively higher qualifications for teachers; and, consequently, of no niggardly treatment of teachers' salaries. Shall this policy now be reversed?
The country has been plunged into a General Election for the third time in two years. This election has been forced on us by the Labour Prime Minister and his Government for two reasons.
First, they were not prepared to face an impartial enquiry into the circumstances which led to the withdrawal of a prosecution against a Communist writer for inciting to mutiny in the Navy and Army. Next, they wished to evade Parliamentary discussion of a reckless proposal to guarantee, at the risk of the British taxpayer, a loan to the Communist Government of Russia.
LIBERALISM IN THE LAST PARLIAMENT
The Liberal Party in Parliament, whilst they have rejected crude schemes of "Nationalisation" promoted by the Labour Party, have assisted the Government in every move made by it towards sound social reform, and they regret that the efforts of the Ministry in that direction have been so halting, ineffective and unimaginative.
They have pressed the Government week by week to fulfil its pledges to provide work for the unemployed by schemes of National Development, in order that we might be adequately equipped to meet the competition of our trade rivals. They have urged that the credit of the nation should be used in permanently improving and developing the Home
Country and the Empire, such as Power Supply, Afforestation, Reclamation and Drainage of Land, Overseas Settlement under the British flag and development of the Empire's resources. The Government has taken no definite or effective action in these matters.
They have pressed the Government repeatedly to fulfil their election promises to the Ex-Service men, the War fighters in the Civil Service, the ex-ranker Officers and others; again without result.
The Liberal Party are in full sympathy with all efforts for mutual disarmament and for the promotion of international peace. But they have been unable to prevent the Government increasing Military Estimates by twelve millions over the expenditure of last year, or starting a naval race in the building of new cruisers.
THE RUSSIAN BLUNDER
The Liberal Party is in favour of re-establishing economic and commercial relations with the Russian people. But at a time when every nerve should be strained to re-establish British credit and equip British industry for the recovery of foreign trade, the Labour Ministry has undertaken to recommend Parliament to ratify a Treaty which contemplates that the British taxpayer should guarantee a loan to a Government whose principles deny the obligations which civilised nations regard as binding between borrower and lender. This was done shortly after the Prime Minister had declared in the House of Commons that only credulous people would believe that he would countenance such a procedure.
THE GOVERNMENT AND UNEMPLOYMENT
In "Labour's Appeal to the Nation", the manifesto on which the Labour Party fought the last Election, the confident assertion was made that the Labour Party alone had a positive remedy for unemployment. The country has waited in vain for this remedy to be produced, let alone applied. Unemployment is more serious now than when the Government came into power. At that time the number of unemployed persons was 1,153,600. The most recent Return, that of September 29th this year, shows that the number of unemployed has swollen to 1,198,800, and it is still increasing. The Government's policy on this vital question has been one of drift and indecision. Nothing new and effective has been done, and their profuse electoral promises remain to this day unredeemed.
It has long been obvious that the solution of the Housing Problem depends mainly on a sufficiency of skilled building labour being made available. Mr. Wheatley's Housing Act professed to deal, specifically with this part of the problem. But no effective measures have been taken to train young apprentices, or otherwise to increase the number of building craftsmen. Instead of its being possible to say that under the Wheatley Act progress in house building has been made, the fact is that fewer houses are now being begun than when the Government came into office. The Liberal policy on housing is to insist that the reserve of unemployed labour should be utilised to build houses for the people.
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