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National Government

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The British coalition governments (1931–35). In August 1931 a financial crisis led to a split within the Labour government, nine ministers resigning rather than accepting cuts in unemployment benefits. The Liberal leader Herbert Samuel suggested that the Prime Minister, Ramsay MacDonald, create a `government of national salvation', by inviting Conservatives and Liberals to replace them, and the first National government was formed on 24 August. An emergency budget was introduced, which increased taxes and proposed to reduce both benefits and public sector salaries. Britain abandoned the gold standard and free trade, adopting a policy of protection. The Labour Party split, supporters of the government being regarded as traitors to socialism. In October MacDonald won a general election and formed a second National government, but its balance was now strongly towards the Conservative Party. The governments of Stanley Baldwin (1935–37) and Neville Chamberlain (1937–40) retained the term National, but they were effectively Conservative governments.

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