May Report
Encyclopedia
The May Report was the publication on 31 July 1931 of the views of the Committee on National Expenditure ("May Committee") chaired by Sir George May
.
Chancellor of the Exchequer
Philip Snowden, who set up the Committee in February 1931.
and Cooper, all with experience in finance. The two Labour nominees, trade unionists Arthur Pugh
and Charles Latham
, dissented from the Report.
The Report calculated that the deficit for 1932-3 would be £120 million. They believed that taxation already consumed "an unduly large proportion of the national income" and therefore the deficit could only be cured by retrenchment in public expenditure, because such expenditure which was "definitely restrictive of industrial enterprise and employment". They put forward wage cuts for the police, teachers and pre-1925 entrants to the armed forces. Most economies were recommended to be made in the social services and public work schemes because, the Report argued, if the country survived without them a few years previously then they "cannot be essential". The total economies they proposed amounted to £96.5 million, with the largest economy being unemployment insurance at £66.5 million.
The Labour nominees wrote their own Report which blamed the economic difficulties on deflationary policies and accepted limited wage cuts but believed that the "equitable" solution would be to raise taxes on holders of National Debt and other investments with fixed interests.
Ramsay MacDonald
, Snowden, Foreign Secretary
Arthur Henderson
, Lord Privy Seal
James Henry Thomas
and President of the Board of Trade William Graham as its members. Although the first meeting of this committee was due to meet on 25 August, MacDonald's holiday was interrupted on 11 August by a message from bankers that there was a run on the pound. The whole Cabinet discussed what to do from 20 August until on 24 August they could not reach a consensus on whether to cut unemployment benefits to ensure a balanced budget. Nine Cabinet members would resign if this was carried through, with the rest (11) not dissenting. The acting leader of the Liberals, Herbert Samuel
, suggested a National Coalition Government headed by MacDonald, with Conservative leader Stanley Baldwin
agreeing. Therefore on 24 August a National Government headed by MacDonald came into being, a consequence of which was to split the Labour Party.
George May, 1st Baron May
George Ernest May, 1st Baron May KBE , known as Sir George May, 1st Baronet, from 1931 to 1945, was a British financial expert and public servant....
.
Background
The Committee was appointed under a House of Commons resolution proposed by the Liberal MP Sir Donald Maclean. This was accepted by the LabourLabour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
Chancellor of the Exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
Philip Snowden, who set up the Committee in February 1931.
Report
The Report was the conclusions of the majority of the Committee, the Liberal nominees Sir Mark Jenkinson and Lord Plender, and the Conservatives' nominees Sir Thomas RoydenThomas Royden, 1st Baron Royden
Thomas Royden, 1st Baron Royden was an English businessman and Conservative Party politician.He was the son of Sir Thomas Royden, 1st Baronet , a Conservative politician and head of the Thomas Royden & Sons shipping company...
and Cooper, all with experience in finance. The two Labour nominees, trade unionists Arthur Pugh
Arthur Pugh
Arthur Pugh was a British trade unionist.Born in Ross-on-Wye, Pugh was apprenticed to a farmer who also worked as a butcher, but soon moved to Neath to work in the steel industry, where he became active in the British Steel Smelters' Association...
and Charles Latham
Charles Latham
Sir Charles Latham was an Australian politician born in Hythe, Kent in England.- Biography :Latham became an orphan in early childhood when his parents Thomas Latham and Isabella died before the age of 8...
, dissented from the Report.
The Report calculated that the deficit for 1932-3 would be £120 million. They believed that taxation already consumed "an unduly large proportion of the national income" and therefore the deficit could only be cured by retrenchment in public expenditure, because such expenditure which was "definitely restrictive of industrial enterprise and employment". They put forward wage cuts for the police, teachers and pre-1925 entrants to the armed forces. Most economies were recommended to be made in the social services and public work schemes because, the Report argued, if the country survived without them a few years previously then they "cannot be essential". The total economies they proposed amounted to £96.5 million, with the largest economy being unemployment insurance at £66.5 million.
The Labour nominees wrote their own Report which blamed the economic difficulties on deflationary policies and accepted limited wage cuts but believed that the "equitable" solution would be to raise taxes on holders of National Debt and other investments with fixed interests.
Response
In response to the Report the Cabinet appointed an economy committee with the Prime MinisterPrime Minister of the United Kingdom
The Prime Minister of the United Kingdom of Great Britain and Northern Ireland is the Head of Her Majesty's Government in the United Kingdom. The Prime Minister and Cabinet are collectively accountable for their policies and actions to the Sovereign, to Parliament, to their political party and...
Ramsay MacDonald
Ramsay MacDonald
James Ramsay MacDonald, PC, FRS was a British politician who was the first ever Labour Prime Minister, leading a minority government for two terms....
, Snowden, Foreign Secretary
Secretary of State for Foreign and Commonwealth Affairs
The Secretary of State for Foreign and Commonwealth Affairs, commonly referred to as the Foreign Secretary, is a senior member of Her Majesty's Government heading the Foreign and Commonwealth Office and regarded as one of the Great Offices of State...
Arthur Henderson
Arthur Henderson
Arthur Henderson was a British iron moulder and Labour politician. He was the 1934 Nobel Peace Prize Laureate and he served three short terms as the Leader of the Labour Party from 1908–1910, 1914–1917 and 1931-1932....
, Lord Privy Seal
Lord Privy Seal
The Lord Privy Seal is the fifth of the Great Officers of State in the United Kingdom, ranking beneath the Lord President of the Council and above the Lord Great Chamberlain. The office is one of the traditional sinecure offices of state...
James Henry Thomas
James Henry Thomas
James Henry "Jimmy" Thomas was a British trade unionist and Labour politician. He was involved in a political scandal involving budget leaks.-Early career and Trade Union activities:...
and President of the Board of Trade William Graham as its members. Although the first meeting of this committee was due to meet on 25 August, MacDonald's holiday was interrupted on 11 August by a message from bankers that there was a run on the pound. The whole Cabinet discussed what to do from 20 August until on 24 August they could not reach a consensus on whether to cut unemployment benefits to ensure a balanced budget. Nine Cabinet members would resign if this was carried through, with the rest (11) not dissenting. The acting leader of the Liberals, Herbert Samuel
Herbert Samuel, 1st Viscount Samuel
Herbert Louis Samuel, 1st Viscount Samuel GCB OM GBE PC was a British politician and diplomat.-Early years:...
, suggested a National Coalition Government headed by MacDonald, with Conservative leader Stanley Baldwin
Stanley Baldwin
Stanley Baldwin, 1st Earl Baldwin of Bewdley, KG, PC was a British Conservative politician, who dominated the government in his country between the two world wars...
agreeing. Therefore on 24 August a National Government headed by MacDonald came into being, a consequence of which was to split the Labour Party.