The all-party coalitions of Herbert Henry Asquith & David Lloyd George in the First World War and of Winston Churchill in the Second World War were sometimes referred to as National Governments at the time, but are now more commonly called Coalition Governments. Churchill's brief 1945 'Caretaker Government' also called itself a National Government and in terms of party composition was very similar to the 1931-1940 entity.
In the 1929 general election the result was a hung parliament where neither the Conservatives nor Labour had an overall majority, and the Liberals held the balance of power. Labour formed a minority government under Ramsay MacDonald, but due to the parliamentary situation found it difficult to implement their legislation over the next two years.
Later in 1929 the Wall Street Crash heralded the global Great Depression and Britain was particularly badly hit. The government was trying to achieve several different, contradictory objectives: trying to maintain Britain's economic position by maintaining the pound on the gold standard, balancing the budget, and providing assistance and relief to tackle unemployment.
In 1931 the situation deteriorated and there was much fear that the budget was unbalanced, which was borne out by the independent May Report which triggered a confidence crisis and a run on the pound. The Labour government agreed to make changes in taxation and expenditure in order to balance the budget and restore confidence, but the Cabinet could not agree on the two options available: either introduce tariffs, or make 20% cuts in unemployment benefit. When a final vote was taken the Cabinet was split 12:9 with a minority - including many political heavyweights - threatening to resign rather than agree. Due to this unworkable split, on 24 August 1931 the government resigned.
The political crisis generated much concern and the leaders of both the Conservative and Liberal parties met with King George V and MacDonald, at first to discuss support for the measures to be taken but later to discuss the shape of the next government. On August 24 MacDonald agreed to form a National Government composed of "men from all parties" with the specific aim of balancing the Budget and restoring confidence. The government would then dissolve itself and a general election would be held on party lines. A small Cabinet of just ten Ministers was formed to take emergency decisions, with ministerial posts divided as proportionally as possible between the three parties, though relatively few Labour members joined the government.
Debate now broke out about further steps to tackle the economic problems, while at the same time the Labour Party officially expelled all of its members who supported the National Government, including MacDonald. Increasingly the majority of the Cabinet came to believe that a protective tariff was necessary to support British industry and provide revenue, and that a general election should be fought to secure a mandate for this but this was anathema to the Liberal Party. The Liberals' acting leader and Home Secretary Sir Herbert Samuel fought in Cabinet against an election but found the Liberal party dividing in several directions over the course of action. One group under Sir John Simon emerged as the Liberal Nationals who were prepared to accept the tariff and expressed willingness to take the place of the main Liberals in the government. The party's official leader, David Lloyd George was incapacitated at this time but called for the Liberals to abandon the government altogether and stand independently in defence of Free Trade but this call was heeded only by four other MPs, all related to him.
It was eventually agreed that the government as a whole would seek a "Doctor's Mandate" to take a free hand and that each party would issue its own manifesto. Supporters of MacDonald formed the National Labour Party and the parties agreed to allow their local organisations to agree whether or not to oppose each other. The government was opposed by the Labour Party, Lloyd George and his Liberals and the New Party of Sir Oswald Mosley, while within the parties there was particular conflict between the Conservatives and Liberals. The result of the 1931 general election was the greatest landslide ever, with the National Government winning a total of 556 seats and a Parliamentary majority of 500.
Although the Conservatives had a bare majority of 11 Conservatives to 9 non-Conservatives, they held comparatively few of the most important jobs. The two groups of Liberals were also disbalanced, with the official Liberals holding one more seat than the National Liberals, despite the Parliamentary position being reversed. This balance was to cause tensions, particularly as the Diehard wing of the Conservative party felt unrepresented (see below).
The government entered protracted wrangling over whether or not to introduce tariffs. Both the Liberals and Snowden found this particularly difficult to accept, but were in a heavy minority. However both MacDonald and Baldwin wished to maintain the multi-party nature of the Government. On the suggestion of Hailsham it was agreed to suspend the principle of Collective Responsibility and allow the Liberals to oppose the introduction of tariffs while remaining in government. This would hold for some months.
In 1932 Sir Donald Maclean died. MacDonald came under pressure not to merely appoint another Liberal, particularly as it was felt they would be overrepresented, and so instead appointed the Conservative Lord Irwin (later Lord Halifax). Further tensions emerged over the Ottawa Agreement which set up a series of tariff agreements within the British Empire and the remaining Liberals and Snowden resigned their ministerial posts, though continued to support the government from the backbenches for another year. MacDonald considered resigning as well and allowing a party government to take office but was persuaded to remain, even though his health was now in decline. In domestic politics he increasingly allowed Baldwin to give a lead, but in foreign affairs the main direction was determined by MacDonald and Simon.
The most prominent policy of the National Government in the early 1930s was the proposal to introduce Indian Home Rule, a measure that was fiercely opposed by the Diehard wing of the Conservative party, with Winston Churchill taking a lead amongst the opponents. The bill was fiercely opposed but eventually passed in 1935.
With MacDonald's health failing, he retired as Prime Minister in June 1935, to be succeeded by Baldwin. Increasingly foreign affairs were coming to dominate political discourse and in November Baldwin led the government to victory in the 1935 general election on a platform of support for the League of Nations and sanctions against Italy for invading Abyssinia.
The following month a massive storm developed when it emerged that the new Foreign Secretary, Sir Samuel Hoare, had negotiated the Hoare-Laval Pact which proposed to cede most of Abyssinia to Italy. Many were outraged, including many government MPs, and the agreement was dropped and Hoare sacked, though he later returned to government.
Baldwin's last years in office were seen as a period of drift, but in late 1936 he achieved a notable triumph in resolving the Abdication Crisis of Edward VIII without major repercussions. Baldwin took the opportunity of George VI's coronation as an opportune moment to retire.
Neville Chamberlain was seen by many as the only possible successor to Baldwin, and his appointment as Prime Minister was widely credited with bringing a new dynamism to the government. With a strong track record as a radical Minister of Health and competent Chancellor of the Exchequer many expected Chamberlain to provide a strong lead in domestic affairs and here the government had a number of successes, such as over the nationalisation of coal mining royalties, the curtailing of excess working hours by the Factory Act and much slum clearance. Further reforms were curtailed by the increased international tension which came to occupy most of his time.
In foreign affairs the government sought to increase Britain's armaments, while maintaining the unity of the British Empire and Dominions and preventing any one power from becoming dominant on the continent of Europe. These proved increasingly difficult to reconcile as many Dominions were reluctant to support Britain in the event of her going to war, and so military action risked splitting the Empire. Chamberlain took a strong personal lead in foreign affairs and sought to bring about peaceful revision of European frontiers in areas where many commentators had long acknowledged grievances. In this he received much popular support at the time, but the policy has been much attacked since. The most prominent point in the policy of appeasement came in September 1938 when the Munich Agreement was negotiated. Following the agreement, the government sped up the rearmament process in the hope of being ready for war when it came. At the same time it took a tougher line in foreign affairs, including making a guarantee to defend Poland against Germany.
On May 7 and 8, 1940, a two-day debate took place in Parliament, known to history as the Norway Debate. Initially a discussion of what had gone wrong in that field, it soon turned into a general debate on the conduct of the war with fierce criticism expressed by all sides of the House. The government won the debate, albeit with a reduced majority, but over the next two days it became increasingly clear that Labour and the Liberals would have to be brought into government and that Chamberlain was unable to achieve this. On May 10, 1940, Germany invaded the Low Countries and Chamberlain finally bowed to pressure and resigned, bringing the life of the National Government to a close. It was succeeded by an all-party coalition headed by Winston Churchill.