National Government

National Government (UK) The term used to describe Britain's coalition government of 1931–40. It was formed in August 1931, when a financial crisis split the Labour government, with nine ministers resigning rather than cut unemployment benefits. To cope with the effects of the Great Depression, it was formed on 24 August 1931 and was supported by all parties, except the majority of the Labour Party. Led by MacDonald, it increased taxes and reduced benefits and public-sector salaries. This faced some public opposition, with some naval ratings staging the Invergordon Mutiny. This resulted in further financial panic, and sterling fell by 25 per cent. Britain then abandoned the Gold Standard and proposed a policy of protectionism. In October, the members of the coalition agreed to fight an election together, and won a massive total of 554 seats (473 were Conservative, thirteen Labour, thirty-five Liberal National, thirty-three Liberal) against Labour's fifty-two seats. MacDonald formed a second National Government, which implemented protection with a 10 per cent general duty on imports in the March 1932 Import Duties Act, and then concluded the Ottawa Agreements later in the same year. However, the government was increasingly dominated by the Conservatives. Samuel's Liberals resigned over the Ottawa Agreements, and MacDonald was replaced as Prime Minister by Baldwin in 1935. Baldwin won a general election in that year, and held office until 1937. He was replaced by Neville Chamberlain, who was Prime Minister until 1940. By 1935, the government had become Conservative in all but name, even though MacDonald himself remained a member (as Lord President of the Council) until 1937.