1.4 National Government, politics of 1931-1936 and the Abdication crisis
The all-party Coalition, with MacDonald, in 1935 replaced by Baldwin, as Prime Minister, was formed on 24 August 1931. The main tasks were to balance the budget, through cuts in the amount of £70 million and increased taxation; and to save the currency. They achieved the first, but failed in the second task. Once the budget was balanced they could ask for a loan from abroad. Nevertheless, Britain was forced to abandon the Gold Standard in September 1931.
A new election in October 1931 was won by the National Government. The main aim of the National Government in the period 1931-1935 was to improve economy and solve the unemployment.
In 1932 the Import Duties Act was passed introducing general tariff of 10 per cent on all imported goods except foodstuff and raw materials. Due to this tariff British goods became competitive and the market was no longer dominated by foreign products. These government decisions were from political point of view probably the ones that saved the Britain from the growing influence of fascistic ideology. Mosley, when starting the BUF, counted on Britain being in crisis and British people therefore turning towards the party that promised the best way out of the crisis. However, Mosley miscalculated the incapability and inability of the National Government and the crisis slowly started to decline, the economy was slowly, but steadily, recovering and unemployment rate started to fall very slowly too.
As far as the foreign politics of this period are concerned there were several important events. As noted by Clarke (185): "To an extent unparalleled in twentieth-century history, what British politics were about in these years [1935-1939] was foreign policy." The first event concerned the national movement for self-government in India, led by Ghandi, resulted in the Government of India Act, passed in 1935, giving Indians self-government in provinces. Nevertheless, the central government was still controlled by the Viceroy of India.
However, more worrying news was coming from the European Continent, where Germany collapsed economically in 1933 and Adolf Hitler came to power. He immediately withdrew Germany from the League of Nations and from the world disarmament conference. It was when Hitler introduced conscription in 1935 that Britain realized the threat he could represent and started a moderate rearmament programme.
The election in 1935 won again the National Government. By this time the economy had become quite stable and unemployment was decreasing. Domestic politics were focused mainly on the maintenance of economic growth and improvement of social conditions.
Yet a new problem was arising on the horizon in the form of the new King Edward VIII. The abdication crisis, as it became known, was caused by the King’s wish to marry an American divorcee, Mrs. Simpson. The government considered the marriage as impossible for a number of reasons, the main being that Mrs Simpson was a commoner, American, and already twice divorced. Baldwin, the then Prime Minister, made it clear that he was talking not only for the government, but also for the public, when he informed the King that should he marry Mrs Simpson the government would resign. However, the King was supported by some radical parties – the most noticeable being Mosley’s British Union of Fascists - as he had showed sympathy towards Nazi Germany. Some politicians also supported the King – for example Winston Churchill, who had even considered forming a pro-king coalition and parliament with Mosley and other important politicians. Nevertheless, when Baldwin told the King that he had to choose between Mrs Simpson and the throne, he chose Mrs Simpson and in December 1936 he abdicated. King Edward VIII was succeeded by his brother, who became King George VI.
Hitler was the main issue on the international politics. In 1936 he sent troops to the Rhineland, although he had promised to keep it demilitarised. The policy of "the appeasement of Europe as a whole" (Clarke, 186) meant that Great Britain did not do anything at this stage, even though by this act Hitler violated the Versailles Treaty.
1.5 On the road to war and appeasement politics
In 1937 Baldwin was succeeded by Neville Chamberlain, who continued Baldwin’s politics. In 1937 the Factory Act was passed, raising the minimum standard of safety at workplace. Furthermore, the scope of old-age and widow’s pensions were increased and slump clearance continued.
However, the main attention was paid to foreign affairs – especially to Hitler, who was threatening the world peace. Britain adopted the appeasement policy and kept it even after Germany annexed Austria. Hitler said that he wanted to unite all Germans, including those living in Czechoslovakia and Poland. When Hitler began to protest against the position of the German minority in the Sudetenland of Czechoslovakia Chamberlain sided with Czechoslovakia and warned Hitler that if he took an action against Czechoslovakia, Britain would not stand aside. However, it soon became clear that Hitler was willing to risk a war in what he saw as a rescue of his fellow citizens, and yet Chamberlain adopted the role of peacemaker.
The BUF headed by Oswald Mosley promoted the Anglo-German friendship and many politicians saw it as necessary to keep the appeasement policies. However, Hitler’s aggressive invasion into Germany's neighbouring countries scared the British people and negatively influenced any further pro-fascistic movements in Britain.
In September 1938, a deal was reached in Munich among France, Britain, Germany and Italy, later known as the Munich agreement, giving Hitler the Sudetenland, despite the fact that the area was of the utmost importance for Czechoslovakia’s defence. When Chamberlain returned home he was mostly celebrated as a hero who diverted a war. However, six months later Hitler invaded the rest of Czechoslovakia and thus violated the Munich agreement. This time Hitler was seen for what he really was – an unstoppable aggressor. It was clear that Poland was his next target. Chamberlain tried to discourage him by letting him know that he stood behind Poland, however, at the same time he tried to force Poland into offering some concession to Germany. But on 1 September 1939 Hitler invaded Poland regardless of Chamberlain’s threats and 2 days later Britain declared war on Germany.