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3.7 Governments, yhxyrc7b5ey9xx2gcyutfj8gpjub3f.jpeg.gallery, 1931 BUDGET…
3.7 Governments
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Ramsay Mcdonald was the prime minister from 1929-1931 (LABOUR). Initially unemployment fell and it seemed as though things were getting better.
They managed to find cut backs of 53 The Labour Government were divided 11-9 ti the cutting of employment benefit as it went against the labour ideals. Therefore, in 1931 Ramsay Mcdonald handed in resignation.
As a result of this a New Co-alition, national government was formed. With Labour, Conservatives and the liberal party.
FIRST ACT FROM NATIONAL GOVERNMENT:
-Teachers pay was to be reduced by 15%
-Pay of armed forces, judges and MPs reduced by 10%
-Police pay reduced by 5%
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The government was in a major budget deficit due to the withdrawal of 33 Million in Gold and 33 Million in foreign exchange. As these foreign investors were withdrawing it increased the budget deficit,
Balancing the budget was proving to be impossible as due to the high levels of unemployment benefits had to be paid out and less money was coming in through taxation.
The Chancellor of the Exchequer : Phillip Snowden set up a comittee that advised on what to do headed by George May. It was driven by accountants.
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The May report concluded that 120 million was needed to balance the budget 27 million from increased taxation and 93 million from spending cuts.
They recommended that unemployment benefit should be cut by 10% and teacher and police should take a pay cut. This was opposed
John-Maynard-Keynes suggested that Britain should leave the gold standard decreasing the value of the pound making exports cheaper.
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1934 UNEMPLOYMENT ACT: This set up a assistance board that standardised a "MEANS TEST". This was resented and even caused the 1932 Hunger March.
1932 The National Government backed Iron and steel federation to destroy unprofitable works and make new ones, creating jobs.
1934 : Special areas Act: This targeted areas like South Wales and Tyneside and southern Scotland. The Government financed projects in these areas to create new jobs.
1935- Shipbuilding scheme, this allowed shipbuilding firms to apply for loans to scrap old ships and buy new ones.
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