Max Beer, History of British Socialism, Vol. II

XVII
Problems of the Labour Party

1. – LABOUR POLITICS AND SOCIALISM

In the latter half of the nineteenth century the organised workers were overwhelmingly Liberal, though as trade unionists they were nominally neutral. They supported, from their funds, parliamentary representatives, as a rule Liberal Labour members; and they defrayed the expenses of the Trade Union Congress, which has always had a good deal to do with politics. In fact, the political neutrality of the trade unions was the result of the absence of any strong and definite opposition to Liberalism, the Conservative minorities of the trade unions forming a negligible quantity. With the exception of one or two Conservative trade union leaders, the officials of the Labour organisations belonged to the Liberal Party.

With the affiliation of an increasing number of trade unions to the L.R.C. or Labour Party, an examination into the principles on which political parties are based became inevitable. For, if the L.R.C. was Liberal, there was no need for it. Seeing, however, that it existed and flourished, it must needs have adopted principles different from those of Liberalism. What were they? These examinations, questions and discussions were taken in hand as soon as the L.R.C. came into being. They were carried on mainly by the members of the I.L.P. and the S.D.F.

The members of the S.D.F. advocated the prompt and immediate transformation of the L.R.C. into a social democratic party, and attempted to force upon it the recognition of the ultimate aim of socialism, with its method of class warfare, Even if this resulted in a split, nothing would be lost. What could a Labour Party accomplish without an ultimate aim? Nothing. On the other hand, much could be accomplished by a small social democratic party possessing a definite programme. At the conference, at which the L.R.C. was formed (1900), James Macdonald, the delegate of the S.D.F., moved: –

“That the representatives of the working class movement in the House of Commons shall form there a distinct party ... based upon a recognition of the class war, and having for its ultimate object the socialisation of the means of production, distribution, and exchange. The party shall formulate its own policy for promoting practical legislative measures in the interests of labour, and shall be prepared to co-operate with any party that will support such measures, or will assist in opposing measures of an opposite character”

A similar resolution was submitted a year later (1901) by Harry Quelch, editor of Justice. All the delegates of the trade unions and the I.L.P. spoke against binding the candidates to socialism. On the other hand, the conference adopted the resolution moved by Keir Hardie: –

“That this conference is in favour of establishing a distinct Labour Group in Parliament, who shall have their own Whips, and agree upon their policy, which must embrace a readiness to co-operate with any party which for the time being may be engaged in promoting legislation in the direct interest of labour’s and be equally ready to associate themselves with any party in opposing measures having an opposite tendency.”

This resolution outlined the policy of the party in Parliament-. It aimed at the formation in the House of Commons of a Labour Party having its own policy, its own Whips, and acting in all that concerned the welfare of the workers in a manner free and unhampered by entanglements with other parties. Each of the affiliated organisations would be left free to select its own candidates without let or hindrance, the one condition being that, when returned to Parliament, the candidate should agree to form one of the Labour Group there, and act in harmony with its decisions. In this way they would avoid the scandal, which in the past had pained earnest men on both sides, of seeing trade unionists opposing socialists, and vice versa.

As to the economic principles of the new party, the conference adopted the resolution which James Sexton, the delegate of the Liverpool dock labourers, moved on behalf of his union: –

“That this conference declares that in view of the combinations of capital and the federations of employers it is necessary for the trade unions of the country to use their political power to defend their existence and secure their demands, and white it deprecates the introduction of mere party politics into the trade union movement, it urges upon trade unionists the necessity of combining on an independent platform for the following purposes: (1) The defence of the legal rights of combination. (2) The passing of such laws as will put an end to a system under which the producer of wealth has to bear an enormous burden in the shape of rents and profits which go to maintain large classes of non-producers.”

The resolutions of Keir Hardie and James Sexton respectively contain essentially the same demands and principles as the resolutions of James Macdonald and Harry Quelch, but the former are free from dogmatic formula and were therefore more acceptable to the trade union delegates. Nevertheless, the S.D.F., at its annual conference in 1901, decided to withdraw from the L.R.C. A resolution to that effect was adopted by fifty-four to fourteen votes. The withdrawal of the S.D.F. delegation from the L.R.C. had two unfavourable effects. In the first place it gave rise to hostile recriminations between the organs of the S.D.F. and the I.L.P., and widened the gulf between the two socialist bodies whose co-operation was necessary for the success of socialism in Great Britain. Secondly, the two vacant places on the L.R.C. were filled by Liberal Labour trade unionists. The socialist influence was weakened and frittered away at a moment when the affiliation of trade unions to the L.R.C. was proceeding at a great rate – in 1902-3 the membership rose from 455,450 to 847,315. The new movement was filled with masses of recruits who needed training in independent Labour politics and social reform, while the S.D.F. members who could have undertaken that training made strenuous efforts not to let their doctrines pass into the hands of the heathen. The relatively small number of socialists on the L.R.C. were faced with the task of protecting the new organisation from being swamped with Liberal Labourism. We shall see presently how they attempted to solve the problem. In the meantime we may observe that, although the S.D.F. as a body was no longer in a position to send delegates to the conferences in an official capacity, several of its members attended them annually as delegate of trade unions affiliated to the L.R.C. Their exertions, however, suffered from the suspicion that they were attempting to smuggle in the ideas of an organisation which was not in sympathy with the L.R.C. They moved social democratic resolutions at the annual conferences of the L.R.C., which, when taken seriatim, were rejected, as the annual conferences were not inclined to pledge their parliamentary representatives to socialism. On the other hand, the social democratic resolutions were adopted, when they were meant merely as an invitation to socialists to act in concert with the British Labour movement. Both cases occurred at the eighth annual conference (1908), held at Hull. On the discussion of the amendments to the constitution of the Labour Party, William Atkinson, the delegate of the paper stainers and a member of the S.D.F., moved that it was the aim of the Labour Party –

“To organise and maintain a Parliamentary Party, with its own Whips, whose ultimate object shall be the obtaining for the workers the full results of their labour by the overthrow of the present competitive system of capitalism and the institution of a system of public ownership and control of all the means of life.”

In support of this amendment he declared that no Labour Party worth the name ought to be satisfied with a mere wage system. It was no use to hide the fact that most of them were already persuaded that the socialist position was the right position.

He thought that if the Labour Party desired to maintain an onward march, and make that march quickly, it was more likely to accomplish it by declaring to landlords and capitalists that it was not afraid of its convictions and that it intended to realise them at an early date.

Atkinson was supported by R. Davis, delegate of the society of ironfounders, then by V. Grayson, at that time member of Parliament, finally by Harry Quelch, the social democratic leader, who attended the conference as a delegate of the London Trades Council, and by J. Gribble (Boot and Shoe Operatives’ Union). The amendment was opposed by J. Bruce Glasier, delegate of the I.L.P., who wished to draw the attention of the conference to the important fact that the resolution did not simply consist in a declaration in favour of socialism, but it actually meant that if it was passed every trade unionist would be excluded from the party if he was not prepared to declare in favour of socialism. On behalf of the I.L.P. he declared that it-had no wish to impose socialism on those who were not prepared to accept it; he and his fellow delegates from the I.L.P. wished to say that they rejoiced to work with the trade unionists, as owing to that alliance the Labour Party had been so successful in Parliament. Glasier was followed by J. P. Clynes, M.P. (Oldham Trades Council), one of the most persuasive speakers of Labour, who declared that he believed in the public ownership and control of all the material things needed for the maintenance of life. But so far as they took part in politics they ought to be careful not to sharpen the weapons of the enemy. He believed that if they forced this declaration of objects upon the organised million represented in the party the effect would be harmful. The party subsisted at present on an alliance. The conditions of the alliance ought to be respected. The success of the alliance ought not to be ignored. He was more in favour of preaching to make converts to socialism in the country than of seeking in the conference to fasten the socialist label upon the large mass of organised workers who were not socialists at all. They were not out, as a matter of fact, for ultimate objects; they were out for Old Age pensions; they were out for immediate industrial legislation; they were out for some kind of effective and helpful legislation on the subject of unemployment; and at the same time they were out in the country preaching ideals to the people.

A.H. Gill, M.P., said that as one of the old type of trade unionists he wished to oppose the amendment. It was because he was anxious to maintain the alliance as it at present existed that he opposed the amendment. They wanted to get something done at the present time and they could not afford to wait to realise the whole of the programme that the extreme men or advanced men were going in for. Trade unionists were not all socialists yet, and until they became all socialists they would not be prepared to pay their levies for the purpose of supporting a socialist party. There was no difficulty at the present time in the House of Commons in the two wings of the party working together. He thought for the next twenty years those two sections could work hand in hand and they could have useful work done. If it had not been for the alliance between the trade unionists and the Socialists in the House of Commons they would not have had a Trades Disputes Act passed; they would not have had the Compensation Act passed in the way it was. Instead of trying to find points of difference the policy should be to find points of agreement, and there were many points about which they were all agreed, although some were not prepared to go the whole hog. He ventured to say that if the amendment were carried the trade unions would be forced out of the party and thus wreck it.

Pete Curran, M.P. (gasworkers), said that nine years ago the socialist trade unionist and what might be called the old-timer trade unionist joined hands in an open and honourable alliance, in accordance with the resolution passed at the Plymouth Trade Union Congress. They joined hands for political purposes on strictly independent lines, and at that time the S.D.F. came in. But then the younger and more turbulent spirits, the men who did all the shouting and little work, forced the Federation out of the alliance, and now members of the Federation attended the Labour Party conferences representing other organisations, It was grieving to those who left the party to find that it was successful even in their absence. In the House of Common Mr. Gill and the other men who represented the more moderate side of the trade union movement on all questions since he had been there had been as loyal and as independent as any socialist could be. The carrying of the amendment would do more in help the London Express and the London Daily Mail in disrupting the movement than anything else that could be done. They had the trade unionists to-day working under conditions that they refused to work under twelve, thirteen, and fourteen years ago. They were willing to admit that at that time they did not see the wisdom of independent political action, and what had brought them to see it was the force of circumstances, legal tyranny, and the educational propaganda of the socialists in the trade union movement. They wanted to work with them openly and honourably, and he believed that with the process of evolution they would come right along as far as desired, but they should not be driven nor forced.

The amendment was then put up and the vote was as follows: – for the amendment 91,000, against 951,000.

The same conference, however, carried, two days later, a socialist resolution, because it was understood that it was proposed for the purpose of eliciting an expression of opinion. J.J. Stephenson (Engineers) moved: –

“That in the opinion of this Conference the time has arrived when the Labour Party should have as a definite object the socialisation of the means of production, distribution, and exchange, to be controlled by a democratic State in the interest of the entire community; and the complete emancipation of Labour from the domination of capitalism and landlordism, with the establishment of social and economic equality between the sexes.”

He said he was going to attempt to speak to this resolution from the experience of a trade unionist. The organisation responsible for the motion came into existence fifty-six years ago to protect the interests of those under its jurisdiction. But had their aspirations been realised? We had unemployed to-day in the engineering community and we had a standard of living far short of that which our forefathers desired. He wanted to say that it was not the purpose of the Engineers’ Society to drive away any members in the coalition which formed the party. When they had carried our remedial legislation as far as it was possible they would still be confronted by inequalities that could only be removed by the commonwealth having charge of all the forces of the commonwealth and owning them. Consider the scenes that were presented in the large cities: Piccadilly in London at midnight, the East End at midday, the unemployed at Tower Hill and on the Embankment; in Hull, Carr Lane from six in the evening, and the dock gates from six in the morning. To what were these spectacles due but to the private ownership of the means of life? Take another illustration with which they are familiar. The latest triumphs of shipbuilding and engineering were the “Lusitania” and the “Mauretania.” Go down for an hour into the stokeholds and see how men earned their bread. Here was the distribution of wealth exemplified. For every penny the coal-trimmers get as wages for their hard work, the landlord receives 35s. royalty rent on the coal. Landlords and employers when they had control of the Legislature passed the laws in their own behalf. The founders of his organisation fifty-six years ago put the memorable words in the preface of the Rule Book that they hoped the interests of the workers would be promoted by their trade unions until some more general principle of co-operation should be acknowledged in society, guaranteeing to every man the full enjoyment of his labour. He was one of those who believed that they must have an ideal in their politics; that ideal being in this case the absolute removal from their midst of all that makes crime and vice rampant.

Only two delegates took part in the discussion, one speaking for, the other against the resolution, which was then put and carried by 514,000 votes to 469,000.

The results of the discussions of socialist resolutions at the Hull conference were unmistakable. The Labour Party stood for social reform – for a socialistic reorganisation of society by gradual steps, but it was not social revolutionary; it had no final goal, but immediate aims; it did not occupy itself with theories, but with practical measures.

2. – LABOUR’s DECLARATION OF INDEPENDENCE

The growth of the L.R.C. in 1902-3, the swamping of the organisation with Liberal Labour men, and the attempt on the part of some Labour leaders, like Richard Bell, John Ward, and the old trade union officials to beat a hasty retreat to the Liberal camp, induced the I.L.P. members of the L.R.C. to define, in unambiguous terms, the conception of Labour independence, and to cause the L.R.C. to embody it in an authorative declaration. At the third annual conference (Newcastle, 1903) Pete Curran, in accordance with the recommendation of the Standing Orders Committee, moved the following resolution: –

“In view of the fact that the L.R.C. is recruiting adherents from all outside political forces, and also, taking into consideration the basis upon which the committee was inaugurated, this conference regards it as being absolutely necessary that the members of the Executive Committee and officials of affiliated organisations should strictly abstain from identifying themselves with, or promoting the interests of, any section of the Liberal or Conservative parties, inasmuch as if we are to secure the social and economic requirements of the industrial classes Labour representatives in and out of Parliament will have to shape their own policy and act upon it regardless of other sections in the political world; and that the Executive Committee report to the affiliated association or bodies any such official acting contrary to the spirit of the constitution as hereby amended.”

Curran declared that the delegates would remember the resolution brought forward at the Trade Union Congress at Plymouth (1899) by the Society of Railway Servants declaring that the time was ripe for a parliamentary Labour group to act independently. That resolution was passed by the Congress, and the following January a special conference met in London to form this representation committee. The constitution, as then drafted, was admittedly weak because of the infancy of the movement that they were then inaugurating. To-day the movement had grown even beyond the anticipations of the most sanguine. They were to-day in Newcastle, historical so far as programmes were concerned, representing nearly a million organised workers throughout the length and breadth of this country. The newspapers every morning were telling them to be good boys, informing them that they should go on the path of political virtue and righteousness; in fact the papers were condescending to tell them that the possibility was that they (the press) might see their way to help. He made bold to say that the time had arrived when the working class -movement could stand politically upon its own legs; that there were enough people represented at this conference to form a movement – not necessarily antagonistic to other parties, but outside and independent – to formulate their own policy and carry it into the House of Commons, and try to obtain there for it due support. He said that if this line were not adopted the movement had no mission. Why did they call it into existence if they could find redemption through either party? But most men at this conference were convinced in their heart of hearts, that no political party in the State to-day outside their movement would grapple with those deep-rooted evils which we desired to see eradicated. It was because they were convinced of this that they were there to strengthen and solidify their movement. Calling upon the responsible officials of affiliated organisations to abstain from identifying themselves with other parties was only the necessary and logical sequence of the meeting there that afternoon, if they were going to have a movement, solid, acting together in and out of the House of Commons. They were only weakening themselves if they strengthened other parties. He wanted to say that they had lessons in history why they should act on the lines suggested. Over half a century ago the old Chartist movement originated among the hills of Durham. Yet the Chartist movement became weak enough to be absorbed in one of the political parties and so became useless. The Labour Electoral Association existed in this country, and had within its ranks some of the best trade unionists that could be found, and many of them were present. It attached itself to the tail end of one of the parties, and was to-day extinct. Let them take a lesson, and let them strengthen their constitution in a way that would not tie down the trade unionist to socialism, nor the socialist to trade unionism, but both to Labour. By so doing they would keep the best men in the ranks, and be able to accomplish those valuable reforms that they aspired to accomplish at the earliest possible moment.

John Hodge, M.P. (Steel Smelters), seconded the resolution. After an exhaustive discussion, in which Bell, Ward, and other opponents of independence had spoken and endeavoured to show that independence was tantamount to isolation and destruction of the movement, Keir Hardie rose to argue that the opponents of independence really meant to bring Labour back to a policy of weak and unprincipled opportunism. In reality there was but one weapon which would stand the test of time and prove effective: adhesion to an honest principle. Any departure from that would ruin their Labour movement. They all, Liberal, Tory, and socialist alike, rejoiced at the magnificent conference got together in that hall. What was the principle that enabled them all to come together and discuss this matter? Independence. If they, the socialists, had insisted that all should be socialists, there would be no such gathering. Had the Liberals insisted that all should be Liberals, they would have had the like result. They had fixed upon a common denominator that, when acting in the House of Commons, they should be neither socialists, Liberals, nor Tories, but a Labour party. They were seeking by the resolution to prevent individuals from disrupting the movement. What the resolution said was that the officials of this conference should not, on their own initiative, and because of certain political predilections of their own, give this movement a bias which would affect it to its foundations. The Parnell movement was organised on an independent basis. Every Irish. branch was a strictly non-political organisation, holding its force in reserve to use in any way the council told it. They desired their forces to be used in the same way. If some stood as Liberals, and others as Tories, and others as socialists, the divisions that now rent Labour would be continued. When a man who represented a trade union, who was being paid by a trade union, passed over the Trades Council and the organised trade unions of a constituency, in order to have himself selected by a Liberal or Tory organisation, he was not playing the game straight. Let them beware lest they surrender themselves to Liberalism, which would shackle them, gag them, and leave them a helpless, discredited, and impotent mass. Let them have done with Liberalism and Toryism and every other “ism” that was not Labourism, and let them give the rank and file a straight and honest lead, and if that were done the rank and file would support them.

Hardie’s speech, in which the term “Labourism” was coined, was followed by speeches from Ben Tillett and Curran, who clinched the argument for independence. The resolution was then put and carried by a card vote of 659,000 to 154,000. It was embodied in the constitution of the L.R.C. and formed the so-called “pledge” of the Labour Members of Parliament to abide by the decisions of the Party. The revised constitution, or the “Newcastle Programme” of the Labour Party, ran as follows: –

I.

The Labour Representation Committee is a federation of trade unions, trades councils, the Independent Labour Party, and the Fabian Society. Co-operative societies are also eligible for membership.

II – OBJECT

To secure, by united action, the election to Parliament of candidates promoted, in the first instance, by an affiliated society or societies in the constituency, who undertake to form or join a distinct group in Parliament, with its own Whips and its own policy on Labour questions, to abstain strictly from identifying themselves with or promoting the interests of any section of the Liberal or Conservative parties, and not to oppose any other candidate recognised by this Committee. All such candidates shall pledge themselves to accept this constitution, to abide by the decisions of the group in carrying out the aims of this constitution or resign, and to appear before their constituencies under the title of Labour candidates only.

III – THE EXECUTIVE

The Executive shall consist of thirteen members, nine representing the trade unions, one the trades councils, one the Fabian Society, and two the Independent Labour Party. The members shall be elected by their respective organisations at the Annual Conference.

IV. – DUTIES OF THE EXECUTIVE

The Executive Committee shall appoint a chairman, vice-chairman, and treasurer; shall transact the affairs of the Committee, and make proper arrangements for the payment of permanent officers when necessary.

It shall keep in touch with trade unions and other organisations, local and national, which are running Labour candidates, and on the approach of a general election it shall prepare a list of candidates run in accordance with the constitution, shall publish this list, and shall recommend these candidates for the support of the working class electors. The members shall strictly abstain from identifying themselves with or promoting the interests of any section of the Liberal or Conservative parties.

It shall report to affiliated organisations if the chief officials of any affiliated body publicly oppose the approved candidates of the Committee, or if any member of this Executive, Member of Parliament or candidate, who has been endorsed by the Committee, act contrary to the spirit of this constitution.

The revised constitution worked fairly well up to the end of 1908. The pledge was not too strictly applied, the Labour members having been left free to vote, in matters of conscience, as they thought right, but on the whole the party showed a united and unbroken front. From 1909 onwards the constitution has been weakened from the following causes: In the first place, the miners’ federation, the largest British alliance of unions, numbering over a half a million, joined the Labour Party and brought with them a strong minority of Liberal Labour men and fourteen Liberal Labour members of Parliament. The infusion of so many Liberal elements into the party acted necessarily as a solvent on the mental cohesion and discipline of the new movement. Secondly, the growing national crisis caused by the Liberal Finance Bills and the conflict between the Commons and the Lords could not fail to induce the Labour Party to support the Liberals and to restrain its criticism of the Government. It was simply impossible for the Labour members to maintain their independence and to attack a Government which was engaged in a battle for democratic and social reform progress. Finally, in addition to those disturbing factors, the action of W.V. Osborne v. the Amalgamated Society of Railway Servants threatened the financial resources of the party and for a time all but paralysed its activities.

3. – THE OSBORNE DECISION

The penal laws, actions, and law court decisions against organised working men up to 1906 had for their aim either the destruction of the trade unions or the restraining of their activities and methods. It was the economic combination and procedure of the wage earners which were regarded as illegal, The Trade Disputes Act, 1906, closed the period of trade union disabilities and rendered the collective economic action of the working classes perfectly legal. At the very moment of their decisive victory the trade unions were confronted with a new legal problem. The rise of the Labour Party meant the conversion of the economic organisations of Labour into a vast political confederation. The economic class had grown into a political class – economics as its basis, politics as its superstructure. The Trade Union Acts, 1871, 1875, 1876, and 1906, had undoubtedly economic objects in view, and only these were legalised. The entrance of the unions as such into politics produced a series of new facts, for which no legal regulations existed. The British Labour Party was not at that time an organised collection of individuals having similar political views, but a confederation of trade societies which by virtue of a majority vote were supposed to act politically in concert. The party, according to its constitution, pursued an independent Labour policy with the view of acquiring political power or obtaining a majority in Parliament over the Liberals and Conservatives, The manner in which affiliation took place necessarily left a number of Liberal and Conservative minorities which were, none the less, pledged to make financial contributions towards the upkeep of a party which is opposed both to the Liberals and Conservatives. Hence the opposition of Liberal working men to the compulsory levies and to the use of trade union funds for political purposes. They argued somewhat in the following manner:

It was indeed true that in purely trade union questions they submitted to the decisions of the majority, but they could not be expected to do violence to their conscience and pay contributions for socialist objects or for a policy directed against the Liberals. To these objections the party replied: The object of trade unionism was to promote the interests of the workers; for nearly half a century the trade unions had been acting on the generally accepted view that these interests were to be promoted not only by economic methods, but also by parliamentary action; until 1900 they believed that the furtherance of the interests of Labour could, politically, be best attained by acting as auxiliaries of the Liberal Party. Gradually, however, the conviction had been borne in upon them that a separate Labour Party was necessary for this purpose; the levies which they were now demanding were therefore destined for trade union objects. Were they to permit minorities to take up an independent position directly opposed to that of the party as a whole, then no organisation whatever would be possible and each member of the working class would suffer in consequence. It had been happening often enough that trade unionist minorities went into a strike, though they could not, conscientiously, approve of it. Human arrangements were never perfect; and so long as anarchism was an impossibility, the least defective mode of organisation was democracy or the submission of the minority to the majority.

The first conflict of this kind arose in 1905, when the plumbers’ union in Canning Town asked for the return of their contributions paid for political purposes. The disagreement was settled amicably. Still, the leaders of the Labour Party, foreseeing future difficulties that might arise from the opposition of militant minorities, took the opinion of the two eminent lawyers, Sir Robert Reid (now Lord Loreburn) and Sir Edward Clarke. Both of them gave it as their opinion that the Trade Union Acts were no obstacle to political action. The leaders of the Labour Party then approached the Chief Registrar of Friendly Societies, who gave a decision on this point in favour of the trade union majorities, but urged that appropriate alterations should be made in their rules in order that the trade unionists should be made acquainted with the political purposes of their organisations. The matter was then thought to have been finally settled.

In 1908 the whole question was brought up again by a Liberal railway servant, W.V. Osborne (Walthamstow), and taken to the law courts: In his plea he stated that compulsory levies by trade unions for political purposes were ultra vires. In the first instance, Justice Neville dismissed the application. The case was carried to the higher courts, and the Master of the Rolls and finally the Law Lords delivered judgment to the effect that a trade union, as defined by the Trade Union Acts, acted ultra vires in raising compulsory levies for political purposes. One of the judges also pointed out that the “pledge” was unconstitutional.

At one stroke the financial resources of the Labour Party, or of the political action of the trade unions, appeared to have been cut off. It was even doubtful whether it was legal for trade unions to finance municipal elections, or to defray the expenses of the Trade Union Congress or of their deputations to the various Secretaries of State. The Liberal and Conservative minorities were not slow in taking advantage of the new legal situation. They applied to the law courts for injunctions against the levying of political contributions, and, as a rule, obtained them. The party suffered financially in 1909 and 1910 – at a time of great national excitement which was caused by the Lloyd George Budget and the constitutional crisis, when two general elections took place within twelve months. It must, however, be remarked that the Osborne judgment raised comparatively little indignation in the ranks of Labour. It came at moment of political disillusionment among the most active elements of the organised workers, who were fast turning to economic action and even to a modified syndicalism, while the revolutionary socialists thought the Osborne judgment to be favourable to their cause, since it might induce the party to shed Labourism and make the adherence to socialist principles the test of membership. Still, there remained a good many trade unionists and socialists, among them being the Parliamentary Labour Party, who sincerely desired a reversal of the Osborne judgment and the legalisation of the political activities of the trade unions. They brought as much pressure to bear upon the Liberal Government as they could, and they succeeded in exacting from it, first; payment of members of Parliament by the State; secondly, the Trade Union Act, 1913, which represents a fair compromise between the contending parties. A trade union may henceforth use its funds for political objects, provided a majority of members voting on the question so decide. It does not matter how small the number may be who vote; the majority of even a minority of members is sufficient. The Act further safeguards the liberties of the dissenting minorities by giving them the right of exemption from political contributions if they give notice that they object to contribute; they may ask, and the trade union is under the obligation to return to them, pro rata, the monies spent for political objects. Above all, the Act practically obviates all possibilities of law court actions in this matter by setting up the Chief Registrar as umpire between the contending majority and minority. The Act was the work of Sir Rufus Isaacs (now Lord Reading), who was at that time Attorney-General.

On the other hand, the party, at the end of September, 1910, decided to abandon the “pledge” in order to remove the objections which had been raised against it on constitutional grounds. A resolution to that effect was carried by the Labour Party conference in 1911.

In pursuance of this Act the trade unions had to take ballots on the question of using trade union funds for political action. Up to the end of May, 1914, sixty-three unions took a ballot of their members as to political objects. In the aggregate they showed 678,063 votes in favour of such objects and 407,356 against. Only three small unions had each a majority of votes against. Many other unions were carrying out the procedure under this Act, but the results were not made public, since the War diverted the attention of Labour from party affairs.

Owing to the outbreak of the War, the matter was not further pursued. Armageddon pushed all such questions into the background, and changed, in its course, also the complexion and constitution of the Party. These changes will be dealt with in the concluding chapters.

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