by Pete Goddard and Atul Hatwal
After the initial shock of Ramsay Macdonald’s government leaving the gold standard wore off, a tide of anger started to rise across the Labour party.
Just a few weeks earlier, amid cataclysmic warnings from the economists, the Labour government had torn itself apart in its efforts to pass the severe cuts demanded by the markets. All this to prevent Britain coming off the gold standard.
Now the replacement national government had passed the cuts and then come off gold anyway. And the economic sky hadn’t fallen in.
The economists coughed and looked at their shoes. The only sound was Keynes’ gently banging his head against his desk, muttering, ‘I bloody told them’.
‘Was that it?’ wondered the people of Labour, ‘Was that what we sacrificed our government for?’
Someone had to pay.
First on the list, oddly, was new Labour leader Arthur Henderson.
His crime? He had spoken in a conciliatory way in parliament in the debate on whether to come off the gold standard. And he supported the government’s eminently sensible decision. The fool.
What Labour MPs expected of Henderson was unclear. Rushing across the floor to bludgeon Macdonald with the parliamentary mace might have been understandable, but it wouldn’t have made great politics.
At a 22nd September meeting of the parliamentary party the day after Britain left the gold standard, Arthur Henderson was savaged by the more left-wing elements of his party.
He responded with grace and dignity. “Screw you guys, I’m going home,” he said, and offered up his resignation, demanding a meeting of the parliamentary executive to decide whether he should continue as leader.
At the executive meeting later that day, Henderson was persuaded James Brown-like to withdraw his offer of resignation and stick around as leader.
However, Henderson now wondered whether some form of rapprochement with Macdonald might not be the best option. At the very least, it would give the angry left someone else to shout at.
Now the gold standard problem wasn’t what it once was, maybe a reconciliation could be arranged.
The ILP would not stand for it for sure. But then they’d just finished chucking rotten veg at poor old Arthur, so what did he care if they buggered off?
The bulk of the Labour members might well follow Henderson’s lead, particularly if Macdonald were to show some act of contrition.
What’s more, the alternative to reconciliation was bleak. A Labour schism offered a future as empty as a Nick Clegg pledge.
If there was an election, with Labour fighting a national government of Tories, Liberals and Labour defectors, it was obvious that **spoiler alert** the party would be absolutely hammered.
Meanwhile, on the other side of the fence, departure from the gold standard had also changed the political calculation for Ramsay Macdonald.
The national government had been brought into existence for one task: to save Britain by remaining on the gold standard. Now that was done with, everything was different.
The need for the Tories to stick by Macdonald and sustain the government was over. Sure, most Tories thought it would be easier to win an election with a pet socialist at the head of Tory-dominated national government, but Macdonald was only a nice-to-have.
So maybe, just maybe, Macdonald could be enticed back to join up with his former friends.
On the 28th September, Labour selected their emissaries, apparently by picking the backbenchers who sounded the most like Bond villains. Cecil l’Estrange Malone and Herbert Dunnico were sent to Macdonald with tidings that Henderson and the centrists were ready to act if Macdonald made the first move.
Even Will Thorne, the founder of the gasworkers union and grand old man of the Labour party, would row in behind a new reconstituted Labour party that would leave the wild men of the ILP out on their own.
If Macdonald made the first move.
The split was on the brink of being healed. The result could be a very different Labour party, one without the angry left, closer to Macdonald’s centrist, gradualist dream party than ever before.
If Macdonald made the first move.
Macdonald listened to Dunnico and Malone as they danced around their handbags tossing flirtatious glances his way. And he did not move.
As was increasingly common for Macdonald his tendency to sulking and gloom overwhelmed any sense of opportunity. He wrote in his diary,
“I was not forthcoming. I said I was hoping to end parliamentary life very soon, reflected sadly on the Party as I see it now. Was ill and went home to bed at 9pm.”
Later that evening, news emerged that the NEC had expelled from the Labour party Macdonald and all those who had followed him into the national government,
Not that Macdonald noticed, because he was at home, locked in his room, listening to The Cure, wondering why no one understood him.
And with that the last chance for Labour unity was lost. The die was now cast and electoral doom beckoned.
Pete and Atul are not historians