In 1929 Labour formed a government under Ramsay MacDonald. This coincided with the arrival of the greatest economic crisis the world had ever seen. Unemployment rose to terrifying levels, especially in areas where most workers traditionally worked in the heavy industries like shipbuilding, iron and steel or coal. This two-page extract shows the Labour government assessing the scale of the problems and how to explain its decisions and measures to its critics in parliament.
A general discussion took place on the subject of Unemployment Policy, which was in effect a continuation of the discussion at the Cabinet on the previous evening.
The Prime Minister reported that he had summoned a meeting of the Panel of Ministers on Unemployment to take place at noon on the following day, and that he had also arranged a meeting of the Economic Advisory Council early next month.
There was general agreement that it would be a mistake for the Government to pretend that it was possible, by means of relief works, and so forth, to make much impression on the unemployment figures at the rate at which they are mounting up in consequence of the world depression now prevailing. The present crisis was probably due to the faulty system under which the whole world was working, and no Government could be expected to bring any marked alleviation within 12 or 18 months.
The Government spokesmen in Debate should make it clear that the unemployed would be kept from starvation, and that in the meanwhile the constructive work of the Government towards the permanent reduction of unemployment was continuing.
It was felt that the point on which it was necessary to concentrate was the speeding up of approved schemes.
The President of the Board of Trade informed his colleagues that a scheme had been prepared by certain individuals for the re-organisation of the whole Iron and Steel Industry on the lines indicated in the Report of the Sub-Committee of the Economic Advisory Council (C.P.-189 (30)). He hoped to receive a copy of this scheme in the near future, with permission to circulate it to the Cabinet. He warned the Cabinet that the question might arise as to obtaining powers to compel some small proportion of the industry, that might stand out, to enter this scheme.
It was suggested that one matter that deserved looking into was the effect on industry of international agreements and cartels allocating markets or regulating freight charges, and so forth.
Comment was made on the very serious effect on the unemployment figures of the present restriction of emigration to the dominions, which, it was stated, might add 200,000 a year to the unemployed in this country.
Attention was also drawn to the large unsatisfied demand in domestic service, and the Minister of Labour stated that the numbers of persons available for this form of employment was being increased every week.