In 1928 Churchill, as Chancellor of the Exchequer, successfully urged the Cabinet to make the rule self-perpetuating and hence it was in force unless specifically countermanded. In 1931 the Prime Minister Ramsay MacDonald wanted to abolish the Ten Year Rule because he thought it unjustified based on the international situation. This was bitterly opposed by the Foreign Secretary Arthur Henderson who succeeded in keeping the rule.
There were cuts in defence spending as a result of this rule, with defence spending going down from £766 million in 1919–20, to £189 million in 1921–22, to £102 million in 1932. In April 1931 the First Sea Lord, Sir Frederick Field, claimed in a report to the Committee of Imperial Defence that the Royal Navy had declined not only in relative strength compared to other Great Powers but "owing to the operation of the "ten-year-decision" and the clamant need for economy, our absolute strength also has… been so diminished as to render the fleet incapable, in the event of war, of efficiently affording protection to our trade". Field also claimed that the navy was below the standard required for keeping open Britain's sea communications during wartime and that if the navy moved to the East to protect the Empire there would not be enough ships to protect the British Isles and its trade from attack and that no port in the entire British Empire was "adequately defended".
The Ten Year Rule was abandoned by the Cabinet on March 23 1932 but this was countered with: "…this must not be taken to justify an expanding expenditure by the Defence Services without regard to the very serious financial and economic situation" which the country was in.