Why Mosley Left the Labour Government

Extracts from Oswald Mosley’s 1930 speech on his resignation from the MacDonald government, published as a British Union pamphlet

Mosley_Punch_CartoonThe text I have transcribed below is taken from a British Union pamphlet titled Why Mosley Left the Labour Government, published sometime around 1938 (the actual pamphlet is undated, but an advert in it for Mosley’s Tomorrow We Live provides some hint as to the time of origin). The pamphlet actually consists of extracts of the speech Sir Oswald gave on 28 May, 1930, explaining his decision to resign from the MacDonald Labour government over the way his efforts to deliver policy recommendations on resolving the unemployment crisis (something he had been given responsibility for, as a Minister without portfolio) had been frustrated by his superiors and scuppered by the hesitancy of his own government. I debated with myself over whether to post the entire speech or just the truncated version in the pamphlet (the speech can be read in full on Hansard); in most circumstances I prefer to post the entirety of an article or speech where possible, as I dislike having content filtered for me by someone else’s conception of which parts they consider “important”. In this instance, however, because the entire speech can already be read for free if one has the energy to navigate the Hansard website, I decided that just posting the pamphlet version was enough. For one thing, it shows which sections of the speech British Union still found relevant enough to reproduce 8+ years after the event, something that is interesting in itself (Mosley’s worldview from Tory to Fabian to Fascist to Pan-European remained remarkably consistent). The speech when first delivered was met by wild cheering from the House of Commons, was hailed by newspapers as a “triumph”, and made Mosley a hero not only among the Labour backbenchers but with the younger generation even in the Liberal and Conservative parties. Under the circumstances it is perhaps understandable why Mosley tried to use the momentum of this growing notoriety as the springboard for a new political movement and career – his New Party (later to evolve into the BUF) would be founded in February 1931, with a reworked version of the memorandum Mosley had produced while in government as its programme.  

on Relinquishing his Office in the Labour GovernmentLion_Unicorn

These extracts from Mosley’s famous speech contain the whole of his economic proposals. As all these suggestions are embodied in British Union policy to-day, this document entirely refutes the widely circulated charge of inconsistency against him. Administrative and financial details alone have been omitted, as these are now largely out of date, owing to changed circumstances. 

The complete text can be read in Hansard, Vol. 239, cols. 1348 to 1372

House of Commons, May 28th, 1930

Sir OSWALD MOSLEY: In the earlier stages of this debate to-day, to which I will return with the leave of the Committee, we have had from the Prime Minister an exposition of Government policy, and also some of the customary exchanges of debate from two great masters of that art. I do not propose to indulge in any form of dialectics, because I believe the purpose which this Committee desires can best be served if, as directly as possible, I proceed to the actual facts of the great administrative and economic issues which are involved.

The Prime Minister, in his speech, pointed out that a fact which none can deny, that world conditions have been vastly aggravated since the arrival in power of the present Government, and that no one can suggest that the Government are responsible for those conditions. None can deny that fact, but this I do submit, that the more serious the situation the greater the necessity for action by Government.

We must, above all, beware, as the world situation degenerates, that we do not make that situation an excuse for doing less rather than a spur for doing more. That is the only comment on the general situation that I would permit myself before coming to the actual issues involved.

General surveys of unemployment I have always distrusted, because they are liable to degenerate into generalities which lead us nowhere. If we are to discuss this matter with any relation to realities, we must master the actual, hard details of the administrative problem, and to that problem I desire immediately to proceed.

The first issue between the Government and myself arises in the purely administrative sphere of the machinery to be employed in dealing with the problem. I submit to the Committee that, if anyone starts in any business or enterprise, his first consideration must be the creation of a machine by which that business can be conducted; and, when a Government comes into power to deal with unemployment, its first business is the creation of an efficient and effective machine. That machine in my view, does not to-day exist, and I will say why.


The actual central administrative machine is now as follows. An interdepartmental committee composed of the permanent chiefs of all Departments meet at irregular intervals under the chairmanship of the Lord Privy Seal. That is the main machine to secure co-ordination and liaison in the whole great attack upon unemployment, and i suggest that a machine of that nature could not possibly grapple with the problem.

What was the result? The result was that all initiative tended to come from the Department, instead of from Ministers. I am not here to attack, and I certainly should not dream of making any attack upon, the Civil Service. My admiration for the Civil Service has vastly increased since I have been in office. But to achieve a policy of this nature it is absolutely necessary that the whole initiative and drive should rest in the hands of the Government themselves.

The machine which I suggested was a central organisation armed with an adequate research and economic advisory department on the one hand, linked to an executive machine composed of some 12 higher officials on the other, operating under the direct control of the Prime Minister and the head of the Civil Service himself, and driving out from that central organisation the energy and initiative of the Government through every Department which had to deal with the problem. It is impossible really to expound such a scheme to the House in detail unless it is seen in the graph form in which I submitted it. 

It is admittedly a complex organisation. I was told that to carry such an organisation into effect would mean a revolution in the machinery of government. My only comment is this. The machinery which I suggested may be right or may be wrong – after a very short administrative experience, it was probably wrong – but this I do suggest, that to grapple with this problem it is necessary to have a revolution in the machinery of government.


That is all I have to say for the moment upon machinery. May I now proceed to the nature of the problem which confronts us? I have always tried in the House, when speaking from the Treasury Bench, to divide the problem into two essential parts, the long-term re-construction of the industries of this country, and the short-term programme to bridge the gulf before the fruition of the long-term programme.

I will come later to the short-term programme; but first of all may I address myself to the fundamental problem – the long-term problem – in the solution of which the Government and this House must decide the permanent economic basis of this country in the immediate future.


The Government throughout have pinned their hopes to rationalisation. For my part, I have always made it perfectly clear that, in my view, rationalisation was necessary and inevitable. It has to come in the modern world. Industries which do not rationalise simply go under. It is agreed among most people that rationalisation is necessary, but do not let us proceed, from our view that rationalisation is necessary, to the easy belief that rationalisation in itself will cure the unemployment problem.

I have been at some pains to examine the facts in trades which have at any rate partially rationalised, and I think we can take, as a criterion of a rationalised trade, those trades which, in a relatively short space of time, have greatly increased their production for a profitable market. I applied this criterion to trades of that character – four big groups of trades – and I found, between 1924 and 1929, an average increase in production of over 20 per cent., but an average decline in the insured workers in those trades of over 4 per cent.

Over five years you have that immense increase in production – a very great achievement – and over the same long period a steady decline in the employment in those trades, which were ever increasing their efficiency and expanding their markets. It would appear, therefore, on the evidence which exists, that rationalisation in itself is at any rate no short and easy cut to the solution of the unemployment problem. 


There is a further point. The whole emphasis in this matter of rationalisation is thrown by the Government on the export trade. I do not know if that fact will be challenged. The Lord Privy Seal (J.H. Thomas) put it very well on the 25th February, when he said:

“The problem, difficult in some respects, is boiled down to the simple proposition, how can the Government help our export trade?”

I submit that this hope of recovering our position through an expansion of our export trade is an illusion, and a dangerous illusion; and the sooner the fallacy is realised, the quicker can we devote ourselves to a search of the real remedy. There are innumberable factors militating against any increase of our export trade to that extent. 

There is the industrialisation of other countries for their own home markets; there is the industrialisation of countries which had no industries at all a few years ago. The intensified competition all over the world is making more and more illusory the belief that we can again build up in the world that unique position which we occupied many years ago.


I believe, and have always urged, that it is to the home market that we must look for the solution of our troubles. 

If our export trade on its pre-War basis is really no longer possible, we have to turn to the home market. We must always, of course, export sufficient to buy our essential foodstuffs and raw materials, but we need not export enough to build up a favourable trade balance for foreign investment of £100,000,000 a year, or to pay for the import of the so many manufactured luxury articles as to-day come into the country. We have to get away from the belief that the only criterion of British prosperity is how many goods we can send abroad for foreigners to consume. 

But whatever may be said for or against the recovery of the swollen export trade that we had before the War, the fact remains that it is most exceedingly difficult ever to restore that condition again, and facts have to be faced if we are to find any outlet for our present production. How can the home market be developed?

Hon. Members opposite reply “Tariffs”. They remind us, rightly, that Mr. Cobden is dead, but it is very often forgotten that the opponents of Mr. Cobden are dead as well.1 I believe both laissez faire and Protection are utterly irrelevant to the modern world. After all, what are the facts we have to face?

We have to face fluctuations in the price level of basic commodities greater than we dreamt of before the War, for a variety of reasons, partly monetary, but still more, the mergence of great producers’ organisations which have turned the struggle into a battle of giants in place of the day-to-day struggles of small merchants before the War. We have the struggle of these great organisations and in the event of the collapse of one of these great organisations in the struggle you have an upward rush in prices which would frustrate and baffle any tariff wall that the wit of man could devise. Tariffs lead to the same fluctuations at higher price levels, while the organised and subsidised dumping that we are likely to meet in the not distant future can go over, or under, if the nation doing it so desires, or if the producers’ organisations desire, any tariff barrier that was ever invented. 


I do not want to-night to re-open that old controversy. I believe we can leave it to the ghosts of Cobden and his opponents to continue the discussions of long ago in whatever Elysian fields they frequent. We should get down to thrashing out the merits of the problem to meet the facts of the age in which they live.

I have been driven more and more to the conclusion that the system of an import control board is the only means by which the facts of the modern situation can be met. 

If we are to build up a home market, it must be agreed that this nation must to some extent be insulated from the electric shocks of present world conditions. You cannot build a higher civilisation and a standard of life which can absorb the great force of modern production if you are subject to price fluctations from the rest of the world which dislocate your industry at every turn, and to the sport of competition from virtually slave conditions in other countries. What prospects have we, except the home market, of absorbing modern production?


A great scientist said to me only a few months ago, “In the last 30 years the scientific and industrial capacity of the world has increased more than it did in the previous 300 years,” and rather unkindly he went on to add, “The only minds that have not registered that change are those of the politicians.” We have in some respects to plead guilty to that charge, because many still believe that gradual automatic processes, as before the War, are going to absorb the great flood of goods which the modern scientific and industrial machine is throwing on to the markets of the world.

The attempt to deal with unemployment by an intensification of the export trade is doomed to failure, and the belief that it can be done is a dangerous delusion which diverts the mind of the country from the problems which should be really considered and the things that really matter. But there is no machine of Government to-day thinking out and analysing these things. I had the advantage of very able and devoted civil servants preparing figures and facts for me but I have only been one Minister with a very small staff.


These things should be the subject of consideration and research by the most powerful economic machine that the country can devise. That is the point of my request at the beginning of my speech for a Government machine for governmental thinking. We have all done our thinking in our various political parties. Governments, officially at any rate, have never done any thinking. It is very difficult to analyse and get at the facts of the modern situation unless you have at your disposal the information and the research which Government Departments alone can supply. That is why it is so essential to have at the centre of things machinery that can undertake that work. 

What machine to-day is undertaking the great work of reorganising industry? Not the Government at all, but the banks. It is the Governor of the Bank of England who is doing this work. I admit at once that, in any effort of the Government in present conditions, the co-operation of the banks is very necessary and that efforts should be made to secure it, as the Lord Privy Seal has tried to do, but co-operation between the Government and the banks is a very different thing from abdication by the Government in favour of the banks, and we are perilously near that point. 

Have we not to be very careful that this new banking enterprise is not an effort to salvage existing commitments rather than to reorganise the industrial life of the country? In all these facts there is a case for the Government taking a more effective control of the situation.

The first duty of the Government is, after all, to govern. The worst thing that can happen to a Government is to assume responsibility without control. 

After all, the impression has been created in the country that in some way or other the Government is promoting the system and is responsible for the activity of these banking efforts, but effective control is absolutely lacking. Liaison and co-ordination do not exist except in the person of the Lord Privy Seal, and ceaseless as his activities are and hard as he works, no one man can in his own person act in co-ordination between all these diverse and great activites.

When you are setting out on an enterprise which means nothing less than the reorganisation of the whole basis of the industrial life of the country, you must have a system. You must, in a word, have a machine, and that machine has not even been created.


I must now pass from the long-term side of the programme to the short-term side. May I proceed to advance very briefly the proposals which I submitted to the Government in their broad outline. I claimed that a programme could be adopted at a very small cost, as a budgetary charge, which would in a relatively short space of time provide work for at least 700,000 to 800,000 people.

It was made up in the following way. The emergency retirement pensions plan would provide normal employment for some 280,000; the School Bill, which I am happy to know the Government are carrying through (they dropped it later), should result in providing employment for some 150,000; while in constructive works, which I will later describe, I proposed the employment of some 300,000 per annum.

The retirement pensions plan was an emergency measure offering to industrial workers at present over the age 60 £1 a week pension, and 10s. a week for the wife, if the man is married, on the condition that within a specified and short time they retire finally from industry. The whole proposal was a budgetary charge of £10,000,000, a £10,000,000 programme by which I believe some 700,000 to 800,000 people could be set to work on emergency measures. 

That is a modest and a limited programme devised for the situation with which we are met. Fantastic rumours were circulated as to its cost, but it is a very limited and moderate programme designed to meet the actual facts of the situation with which we are faced. Of course, everybody must admit that the limits of taxation are very easily reached after several years of deflation. We all know that with such a situation the limits of taxation are easily reached, and that when you reach a certain point flight from the pound and disaster may ensue, but if that £10,000,000 programme had to be set against other charges which we have incurred, and are incurring, and if the number thereby had to be set to work exceed 700,000, who would choose between that programme and the other charges?

As long ago as September I begged the Cabinet to make up its mind how much it was prepared to spend on unemployment, how much money it could find, and then allocate the money available according to the best objects which we could discover. As it is, no such system has ever been adopted.

Departments have come crowding along, jostling each other with their schemes, and, like bookmakers on the race course, the man who can push the hardest, make the most noise and get through the turnstile first, gets away with the money. It is absolutely necessary to make up our minds in advance in any national reconstruction, what our resources are and how they are to be allocated.


Now I come to the actual administrative machinery of these big work plans. I have made the claim that £200,000,000 could be spent, and usefully spent, in Unemployment Grants Committee work, and roads alone, leaving for the moment slums and land drainage. To arrive at an understanding of the administrative machinery which I suggested, it is necessary for me briefly to analyse the relative breakdown of the present machine.

We have greatly increased the output of the Unemployment Grants Committee’s scheme by the modification of transferred conditions, and practically by that alone. I believe that the present Unemployment Grants Committee schemes could be trebled if we did away with transfer altogether.

With regard to transfer, we want, if we can, to draw men from the depressed area to other parts of the country if and when useful jobs can be found for them and not to draw them away just to put men out of jobs in those areas. The only way to secure the transfer of labour is by national schemes, in which the State either does the work itself or puts up such a large proportion of money that it can impose its own terms. 

There are only three ways in which that can be done – slum clearance, land drainage, and the roads. On slum clearance and land drainage I made this submission. They were right outside my Department, but I asked the Government whether they would consider a more direct intervention on the part of the State, with a view to short-circuiting the local delays.

I believe that in such schemes something approximating to a Mobile Labour Corps, under decent conditions of labour and wages, of course, could have been employed to deal with that problem. 

I make that submission for what it is worth, and proceed to the roads.


Our central difficulty in building roads quickly is the relationship of the State and the local authorities. On the one hand, you cannot ride rough-shod and no one wants to ride rough-shod over the local authorities. On the other hand, the work has to be done.

I am one of those who believe that the great main roads of this country should be national concerns (carried through seven years later), and that it is as much an anachronism to leave these roads in local hands as it would be to leave the railways in local hands. 

I admit that that raises a large controversy, but I try always to face reality and a practical situation, and I believe you can get round that difficulty and get agreement quickly in this way – leave the question of the nationalised roads until you settle the major question later, when you have to face the whole transport equilibrium of this country, as we have not begun to do. What matters in the building of roads quickly in relation to this problem is not the construction of the roads but the maintenance of the roads.

Let the State construct and hand over to the local authority for subsequent maintenance. The local authorities would be something more than human or less than human if they objected very strongly to having their work done for them. This principle has been employed before, and in many cases the local authorities would do the work for you if your grant was anything approaching 100 per cent., or of such generous terms as to make a really tempting offer.


If you made it clear that this machinery was emergency machinery and formed no part of the permanent relationship between the State and the local authorities, then I believe that, without upsetting the existing relationship, you would get through that emergency programme on the basis of the State constructing and the local authority maintaining, until your whole system was decided upon. But before you launch out on any such programme you have to make up your mind, in broad outline, what the permanent transport equilibrium of this country is to be.

On every turn when we want to build roads we are told that it will damage the railways. What is to be the relationship between railway, road, and canal in the future? No research, no thinking beyond the Commission – which has been sitting for long, and is to report later – is going on in this country; no examination by Government; not faced up to by Government, and so at every turn your road programme and your immediate unemployment programme is thwarted because it is said any great development of the roads will injure the railways. That matter has to be decided. 


I am coming now to my conclusion. I am sorry to have detained the Committee for so long, but it is amazingly difficult to cover such a vast field as this in a short time. We have to face up to this fact, that if men are to be employed on any large scale that employment has to be paid for either by the State or by local authorities.

There is a tremendous struggle, an incessant struggle, going on in every Government department to put every penny they can off the taxpayer and on to the ratepayer. What holds up these plans for months is the struggle for these pennies, these minor details. What does it matter? What is the use of shifting the burden from the taxpayer to the ratepayer? What is the use of lifting the burden from the right shoulder to the left?

It is the same man who has to carry it, and the economic fact is this, as the Colwyn and every other authoritative enquiry upon the economic side has said,2 that the burden on the ratepayer is more onerous upon industry than the burden upon the taxpayer. If this burden has to be carried, need we struggle and waste time in deciding whether it is to be carried by the taxpayer or by the ratepayer?


Further, it must be remembered that to set many men working for a year costs a great deal of money. It costs £1,000,000 to employ 4,000 men at work for a year, and £100,000,000 to employ 400,000 men for a year. Therefore, if you are going to do this work on any large scale large sums of money you will have to be raised by the State or local authorities to carry it out. How is it to be raised, out of revenue or out of loan? £100,000,000 out of revenue! Who will suggest it in the present situation? It is 2. on the Income Tax.

It must be raised by loan. If the principle of a big loan is turned down then this kind of work must come to an end. It has been suggested that I advocated the raising of large loans and spending the money afterwards on any programme we could find. Nobody would be so mad as to suggest anything of the kind. This money, under a three years programme, would be raised as and when required to pay for that programme over a period of three years. It is not a question of raising £100,000,000 right away. It would be spread over at last three years, or even longer as there is always a big lag between the work and payment.

If this loan cannot be raised then unemployment, as an emergency and immediate problem, cannot be dealt with. If we are told that we cannot have the money let us confess defeat honourably and honestly; let us run up the white flag of surrender if we cannot have the money to pay for unemployment. 

If we are to deal with unemployment then the money, by revenue or by loan, has to be found. I advocate the method of a loan, and in my programme the amount which would fall upon the Exchequer would be the small charge of £10,000,000 a year.

I have no doubt that we shall hear from the right hon. Member for Epping (Mr. Churchill) in answer to this latter part of my case, what he has so often described as the Treasury view: the view that any money loans raised by the Government must be taken from other industrial activities and will put out of employment as many men as are put in employment. The right hon. Gentlemen in powerful expositions has often put forward that case.


How far is that case supported by the present Government? I should like to have the views of the Chancellor of the Exchequer (Mr. Snowden) for every argument with which I have been met seems to support that case. I admit that there is some force in that view in a period of acute deflation. If you are pursuing a deflation policy, restricting the whole basis of credit, there is some force in what is known as the Treasury view, that it is difficult to raise large loans for such purposes as this. The “Financial Times” on 14th April said:

“The policy of deflation is apparently proceeding apace.”
and it went on to observe that it was no use having a low bank rate if the whole basis of credit was restricted and charged the Chancellor of the Exchequer in his action in regard to Treasury Bills with a large share of the responsibility. I am not going into that subject on this occasion because there will be other opportunities for doing so, but I agree that if you are pursuing a policy of deflation you are lending force to the Treasury view.

Given, however, a financial policy of stabilisation, that Treasury point of view cannot hold water. It would mean that every single new enterprise is going to put as many men out of employment as it will employ. That is a complete absurdity if you pursue that argument to its logical conclusion. If it is true it means that nothing can ever be done by the Government or by Parliament. It means that no Government has any function or any purpose; it is a policy of complete surrender. It has been said rather curiously, in view of the modesty of my programme, that it is the policy of the “red flag”. 

I might reply that what is known as the treasury view is the policy of the “white” flag. It is a policy of surrender, of negation, by which any policy can be frustrated and blocked in this country.


Hanging all over that policy is the great conception of conversion. There are two ways of achieving conversion. One through the inherent financial strength of your position, leading to a strengthening of Government credit. The other is by the simple process of deflation to make all industrial investments unprofitable, and drive your investor into Government Securities because he has no other profitable outlet.

But there may be another effect of that policy; that the money goes abroad, and then you get the local effect of that policy suggested by the President of the Board of Trade as the only means of solving our industrial problems, when he said on the 14th May:

“During the past fortnight alone £16,000,000 of new capital has been authorised or raised for overseas investment, and so I trust the process will continue.”

Why? Why is it so right and proper and desirable that capital should go overseas to equip factories to compete against us, to build roads and railways in the Argentine or in Timbuctoo, to provide employment for people in those countries while it is supposed to shake the whole basis of our financial strength if anyone dares to suggest the raising of money by the Government of this country to provide employment for the people of this country? 

If those views are passed without examination or challenge, the position of this country is serious indeed. In conclusion let me say that the situation which faces us is, of course, very serious. Everybody knows that; and perhaps those who have been in office for a short time know it even better. It is not, I confidently believe, irreparable, but I feel this from the depths of my being, that the days of muddling through are over, that this time we cannot muddle through.


The nation has to be mobilised and rallied for tremendous effort, and who can do that except the Government of the day? If that effort is not made we may soon come to crisis, to real crisis:

I do not feat that so much, for this reason, that in a crisis this nation is always at its best. This people knows how to handle a crisis, it cools their heads and steels their nerves. What I fear much more than a sudden crisis is a long, slow, crumbling through the years until we sink tot he level of a Spain, a gradual paralysis beneath which all the vigour and energy of this country will succumb. That is a far more dangerous thing, and far more likely to happen unless some effort is made. If the effort is made how relatively easily can disaster be averted.

You have in this country resources, skilled craftsmen among the workers, design and technique among the technicians, unknown and unequalled in any other country in the world. What a fantastic assumption it is that a nation which within the lifetime of every one has put forth efforts of energy and vigour unequalled in the history of the world, should succumb before an economic situation such as the present. 

If the situation if to be overcome, if the great powers of this country are to be rallied and mobilised for a great national effort, then the Government and Parliament must give a lead. I beg the Government to-night to give the vital forces of this country the chance that they await. I beg Parliament to give that lead. 



1. A reference to Richard Cobden (b.1804 – d.1865), a prominent manufacturer and Liberal politician whose advocacy of free trade and strong public attacks against protectionist legislation are partly credited with the repeal of the UK’s Corn Laws in 1846.

2. The name “Colwyn” is a reference to Sir Frederick Smith (b.1859 – d.1946), the first Baron Colwyn. Lord Colwyn was a British business leader and Liberal politician who chaired a number of parliamentary committees examining financial matters, such as bank amalgamations and finances in Northern Ireland. Mosley here is likely referring to the findings published in the 1927 ‘Colwyn Report on National Debt and Taxation’.


Transcribed from Oswald Mosley’s Why Mosley Left the Labour Government: His Resignation Speech on Unemployment  (undated), Greater Britain Publications.


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