First MacDonald Ministry - Domestic Policy

Domestic Policy

The main achievement of the government was that it showed itself to be 'fit to govern'. Although this might not have meant much in terms of concrete policy-making, it at least did not alarm voters who may have feared that the party would dismantle the country and promulgate 'socialism'; although, in any case, its tenuous parliamentary position would have made radical moves near impossible. Hence, Labour policies such as nationalisation, the 'capital levy' taxation and public works programmes to alleviate unemployment were either played down or ignored altogether. However, to act 'respectably', as any other government would have, was a major component of the MacDonald electoral appeal and strategy. Indeed, some historians have seen in this time an electoral consensus that existed between MacDonald and his Conservative counterpart Baldwin to maintain the stability of the electoral system and preclude any radicalism that might have alienated voters or exacerbated crises such as unemployment. By 1929 voters felt able to trust Labour and thus they were voted back in again.

Despite lacking a parliamentary majority, the First Labour Government was able to introduce a number of measures which made life more tolerable for working people.The main achievement of the government was the 1924 Wheatley Housing Act, which MacDonald dubbed 'our most important legislative item'. This measure went some way towards rectifying the problem of the housing shortage caused by the disruption of the building trade during the First World War and the inability of working-class tenants to rent decent, affordable housing. Wheatley was able to provide public housing to council tenants, as against the previous government's commitment to privatisation. This landmark Act subsidised the construction of 521,700 rented homes at controlled rents by 1933, when the subsidy for encouraging local authority housing construction was abolished.

Various improvements were also made in benefits for pensioners and the unemployed. More generous provision for the unemployed was provided, with increases in both children’s allowances and in unemployment benefits for both men and women. Unemployment benefit payments were increased from 15 to 18 shillings a week for men, and from 12 to 15 shillings for women, while the children’s allowance was doubled to two shillings. A “genuinely seeking work” clause for claiming unemployment benefits was abolished, while the “gap” between periods of benefit under the unemployment insurance scheme was also abolished. In addition, eligibility for benefits was extended, while the household means test for the long-term unemployed was removed, more people were made eligible for unemployment benefits, and uncovenanted benefits (beyond those covered by insurance) were made a statutory right.

For pensioners, increases were made in both old-age pensions and the pensions of ex-servicemen and of their widows and children. Improvements were made in the condition of old-age pensioners by allowing small incomes from savings to be disregarded in calculating the pension due. As a result of this change, 60,000 elderly people whose meagre savings had previously reduced their pension entitlement received the full state pension. Eligibility for the state pension was also extended so that it covered 70% of the over-seventies, and 150,000 elderly people who had never received a pension before were now entitled to them. In addition, changes were made which allowed for pensions to be transferred to a surviving parent of a dependant who had a pension. An Old Age Pensions Act was also passed which guaranteed a weekly pension of 50p to people over the age of seventy who earned under 75p a week.

The government also endeavoured to extend educational opportunities. Local authorities were empowered, where they wished, to raise the school-leaving age to 15, the adult education grant was tripled, maintenance allowances for young people in secondary schools were increased, state scholarships (which had previously been in suspense) were restored, the proportion of free places in secondary schools was increased, approval was given to forty new secondary schools, a survey was carried out to provide for the replacement of as many of the more insanitary or obsolete schools as possible, and forty was set as the maximum class size in elementary school. Restrictions on education spending imposed by the previous government were removed, while local authorities were encouraged to increase the number of free secondary school places. In addition, an Education Act was passed which created an English secondary school system between the ages of 11-14.

The Agricultural Wages (Regulation) Act restored minimum wages for agricultural workers. County committees were established with the power to fix wages, together with a central wages board to supervise the county awards. The act helped bring about a substantial improvement over most of the country, with agricultural wages being quickly increased to 30 shillings a week (a higher level in certain counties) under the wage committees. Cuts in both direct and indirect taxation were made which were hailed as representing a victory for working people, with the chancellor Philip Snowden describing the programme as representing “the greatest step ever taken towards the Radical idea of the free breakfast table.”

Miner’s silicosis was included within the provisions for workmen’s compensation, under the Workmen's Compensation (Silicosis) Act of 1924 while the London Traffic Act 1924, which provided for the regulation of London traffic. The legislation regulated privately-owned public transport, setting timetables and safety standards.

A law was introduced which modified the right of a landlord to obtain possession of a house for his own family’s use, where unnecessary hardship would be caused to the tenant. The Protection from Eviction Act of 1924 provided some degree of protection to tenants “in the face of landlords seeking vacant possession and rent rises.” This legislation protected tenants from eviction by landlords who attempted to obtain “decontrolled” status for their properties in order to raise tents. In addition, government funds were allocated for the repair and modernisation of 60,000 government built houses.

A subsidy for sugar beet cultivation to support agriculture was introduced, while schemes for roads and bridges, land reclamation and drainage, and afforestation were developed and extended. Financial support was also provided to municipal works to reduce unemployment. Although relief schemes funded by the chancellor Philip Snowden had little impact on reducing unemployment, the registered rate of unemployment fell from 11.7% in 1923 to 10.3% in 1924.

The restrictions imposed by the previous government on spending by the Poplar Board of Guardians were removed, while the National Health Insurance (Cost of Medical Benefit) Bill revised the capitation fee paid to doctors. Restrictions introduced by the previous Coalition government on state grants to the principal public health grant earning services (including maternity and child welfare, tuberculosis, and venereal disease) were removed. This was followed by a circular issued to local authorities to this effect and enabling them “to carry out more effectively their public health powers under the law.” Child welfare and maternity services were extended, while ex-service patients who had been treated as "pauper lunatics" under former Governments were removed from being treated in that way. As a result of this change, they were now paid for out of public funds.

Entitlement to sickness allowances to war widows and orphans were extended, a national electrical policy and a national road policy was launched, and two additional treatment centres for those afflicted by venereal diseases were constructed. Various measures were also introduced to improve mine safety, as characterised by the application of new rules, attempts to enforce safety regulations, and the appointment of additional inspectors. Higher spending on education and health was carried out, while sickness grants (which had been abolished under a previous administration) were restored.

According to the Labour Party historian G.D.H. Cole, in summing up the record of the First Labour Government,

“What it could do and did achieve was to undo a good many of the administrative effects of the “Geddes Axe,” to pass several valuable measures of social reform, and to make a somewhat faint-hearted attempt at coping with the unemployment problem by the institution of public works".