1924, 1929-31 Labour; 1931 National Government (under Ramsay MacDonald)
Like so many of those in Labour’s first governments (see the blog post below), Snowden came from a humble background: the son of a weaver, his intellectual and political framework was borne of the liberal tradition (though he had never been a Liberal) and Wesleyan Methodism. As a boy, he received an education at local schools, and read widely: Ruskin and Carlyle were to influence him profoundly.
He was working for the Inland Revenue when illness struck, and he was discharged as unfit. Once recovered, he began to establish connections with the new Independent Labour Party, becoming a well-established and popular speaker and pamphleteer, For Snowden, socialism was rooted in the English radical tradition and Christianity. His first widely-read early pamphlet, The Christ To Be, was notably influential. The adoption of Christian ideas and idioms provided a bridge to socialism from non-conformist Christianity for many, like Snowden (and Henderson) especially. By the time the Labour Representation Committee was created in 1900, he was a national figure in the ILP and the LRC. Elected in 1906, he became Labour’s de facto economics expert, seeking to carve out a position distinct from the government’s over issues such as the People’s Budget or national insurance. This lead to conflicts with Ramsay MacDonald that would recur through the rest of his career.
Snowden was not a pacifist, but was a critic of the war. Like most of those critics, he lost his seat in 1918, but kept his radical reputation. What he did lack was popularity among his colleagues. He was seen as aloof; though, his wife Ethel enjoyed high society, and he found such society congenial.
He is often depicted as a Gladstonian Liberal, but his economic thought was, in fact, very different. He was no Marxist, either. For Snowden, the solution to capitalism’s evils was the rationalisation and modernisation of industry, and social ownership. His socialism was evolutionary: capitalism created monopolies, social ownership would be the natural response to the creation of those monopolies.
Having returned to parliament in Labour’s breakthrough year of 1922, Snowden was a logical choice for the Treasury when Labour took office in 1924. His fiscal rectitude owed more to his determination to show Labour’s fitness to govern. Legend has it that he was wedded to orthodox liberal Treasury economics and nothing else: he did cut import duties and cut spending, true. AJP Taylor said his budget ‘would have gladdened the heart of Gladstone’; Churchill wrote ‘with what joy Mr Snowden was welcomed at the Treasury by the permanent officials … The Treasury mind and the Snowden mind embraced each other with the fervour of two long-separated lizards’. However, that is an oversimplification. He found the money for Wheatley’s Housing Act. He planned a land tax. He looked to the rationalisation of industry, the modernisation of the electricity industry and the introduction of land taxes (lack of time and Labour’s minority did for them). Most of all, like MacDonald, he wanted show Labour’s fitness to govern.
Not that relations with MacDonald were good. In private, Snowden was disdainful. In age of shifting political identities, his ties to Labour were also loosening in the late ‘twenties: he left the ILP. The Snowdens became close to Lloyd George, socially and politically (Lloyd George favoured a land tax). However, Snowden was opposed to the nascent Keynesianism Llloyd George adopted. He also became an open and ardent critic of his leader. Snowden may have seen himself as a contender for the leadership, though few others did.
Ernie Bevin famously quipped that ‘Gladstone was at the Treasury until 1930’. The caricature of Snowden as the apostle of orthodox finance came from the Labour left. It stuck, but was unfair. His 1929 budget made taxation more progressive buy increasing taxes on wealthy and raising thresholds (taking 750,000 people out of the income tax net). He found money for road building and relaxed restrictions on unemployment benefit. Relations with MacDonald were strained, though. Snowden was only reappointed in 1929, perhaps, for want of an alternative. MacDonald did look to rein him in: he appointed the Macmillan Commission to examine future economic policy and put Jimmy Thomas in charge of trying to deal with unemployment, for example. In March 1931, MacDonald wanted to boot Snowden upstairs to the Lords and introduce tariffs: Snowden bitterly resisted them, and those arguments informed his increasingly staunch Treasury orthodoxy, both in rejecting the proto-Keynesianism of the Mosley Memorandum and in the 1931 crisis. Not for the last time, a Labour prime minister had failed in an effort to weaken or rein in the Treasury.
However, it cannot be denied that in the face of the Great Depression, Snowden did little to counter its effects or causes. By the summer of 1931, there was a run on the pound which, if left unchecked, would see sterling come off the gold standard. The Macmillan Report had said the pound should stay on the gold standard. Shortly after, the May Report projected a budget deficit of £120m and called for cuts. Snowden was persuaded that the only way to keep the pound on the gold standard was to impose those cuts. Snowden knew the May Committee had got its sums wrong, but wanted to use it as lever to force the issue, and save the pound. In short, he ended up doing too much, too late. And, the pound was forced off the gold standard anyway. By that time the Labour government had collapsed and a National Government established. He stayed on as chancellor, but didn’t stand in the 1931 election, going to the Lords and serving as lord privy seal until resigning (characteristically) over the imposition of tariffs in 1932. He recommended voting Liberal in the 1935 general election.
History has not been kind to Snowden. Yet, he was one of only three chancellors since 1900 to have held the office twice, and the only one to do so that wasn’t a Chamberlain. More importantly, he was a major figure in the first generation of the Labour Party. If, in the end, his two spells as chancellor were not successful, that owed as much to a lack of time, a lack of a majority, a lack of leadership from MacDonald and the ‘economic blizzard’. His ‘ethical socialism’, however, remained in the Labour marrow long after he did, and he is worth a more exalted place in its pantheon than he is often accorded.
There is an article about early Labour here: