Letter from Labour MP John Baker to Prime Minister Ramsay MacDonald on the creation of the National Government, 26th August 1931 (PRO 30/69/1315)
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76-78 SWINTON STREET
GRAYS INN ROAD
26th August, 1931.
The Rt. Hon. J. Ramsay MacDonald,
10, Downing Street,London,
Dear Mr. MacDonald,
I have to thank you for your letter of the 25th August. I am not the least embarrassed by the situation created by the appointment of a Co-operative Government, and my feelings of affection and admiration for yourself, have not been the least effected by the action you have taken.
I believe that you have sincerely and with the best intentions followed your conscience, at the same time, I do not think your action is the wisest either in the interest of the work people or in the interest of the Nation. We differ on this matter as we did during the war. You went out into the wilderness, I did war work, but it was a never ending sorrow to me to see you being abused, black balled, and almost outcast at that time, but I ever believed, as I do now, that as a political leader, you were our best man.
I too have had to make my mind up as to what to do, and it has been just as difficult for me to shoulder your present burden.
As it turns out, it would appear that I am to have a greater number of companions than you yourself are likely to get in the House from the rank of Labour.
I have been fighting for better wages and against reductions of wages for over forty years for other people, and I must confess that I cannot discard the habit.
In the steel trade in 1920 the average wage was £5 a week, it is now less than £3 a week. During that time our men have increased output in almost branch of the trade, but in smelting and rolling they have increased output by 74%. During that period the cry has been, wages are too high, they must be reduced. It is still the cry.
I had the pleasure of listening to your broadcast last night. The arguments which you adduced for a reduction in unemployment pay are equally sound for a reduction in the interest paid on Government stocks. If the unemployed can now buy more with same amount of money, so can the bond holder, and if the bond holder had given us a gesture by helping Snowden to get his Conversion Loan, I would have been encouraged to go into the wilderness with you and ask other people to make sacrifices.
The Inland Revenue return tells me that the National Income is higher to-day than it was in 1922-23. I know that wages are lower. The income from the ownership of houses, profits from the occupation of lands, from British and Foreign Government Securities Business Professions, etc., coming under review totalled to £2,150,000,000; in 1929-30, but in1922-23 they were £1,978,338258, an increase during the period of £171,661,742, whereas salaries of Government Corporations and Public Government Offices were £790,000,000 in 1929-30. They were £653,108,028 in 1922-23, an increase of £136,891,972 per annum. But the weekly wages coming under review in 1922-23 were £388,154,777, they had dropped to £330,000,000 in 1929-1930 a fall of £58,154,777 per annum.
This in my judgement is largely consequent upon the mismanagement of the Nation's finances by the Nation's Financiers, and now, when they have got into a mess, they come shrieking to you demanding that our policy of the improvement of the Social conditions of the working class should cease and that reductions in expenditure should immediately take place.
The plea of urgency does not appeal to me, because it is now eleven years old. The Bankers knew when they met at Brussels in 1920 that the policy which they were going to pursue would involve an unemployed army of over two millions, yet they went on with their policy. We know the results. They are still pursuing the same policy.
From this you will see that you and I have arrived, by a process of reasoning, at different conclusions. I sincerely hope that this difference of opinion is not going to interfere with our mutual respect and with our life long friendship.