May Report facts for kids

The May Report was an important document published in Britain on July 31, 1931. It was created by a special group called the "May Committee," led by Sir George May. This committee was asked to find ways for the government to spend less money. The report suggested big cuts to public services and even a reduction in money given to people who were unemployed. It also recommended higher taxes.

Why the May Report Was Needed

In 1931, a very difficult time called the Great Depression hit the UK. Many people lost their jobs, and the economy was struggling. Foreign investors started taking their money out of the Bank of England very quickly, about £2.5 million in gold every day! This made the country's money problems even worse.

The government, led by the Labour Party, needed to find a solution. They wanted to cut down on how much the government was spending. A politician named Sir Donald Maclean from the Liberal Party suggested forming a committee to look into government spending. The Labour government's finance minister, Philip Snowden, agreed and set up the May Committee in February 1931.

What the May Report Said

The May Report was mainly written by the committee members who had a lot of experience in finance. These included Sir Mark Jenkinson, Lord Plender, Sir Thomas Royden, and Cooper. However, two members from trade unions, Arthur Pugh and Charles Latham, disagreed with the main report and wrote their own ideas.

The report estimated that the government would have a huge money shortage of £120 million in 1932-1933. The committee believed that taxes were already too high. So, they thought the only way to fix the problem was to cut government spending. They felt that too much government spending was hurting businesses and jobs.

The report suggested cutting wages for police officers, teachers, and members of the armed forces who joined before 1925. Most of the suggested savings were in social services and public work projects. The report argued that if the country managed without these things a few years earlier, they "cannot be essential" now.

In total, they proposed saving £96.5 million. The biggest saving, £66.5 million, came from unemployment insurance. This included a 10% cut to the money given to people who were unemployed. The Labour government's cabinet voted to accept this cut on August 28, 1931.

The two Labour members who disagreed wrote their own report. They believed the economic problems were caused by policies that made money less valuable. They agreed to some wage cuts but thought it would be fairer to raise taxes on people who owned government bonds and other investments that paid a fixed interest.