wage cuts and large cuts in public spending, notably in payments to the unemployed, to avoid a budget deficit. National government (1931–1935) Formation of the National Government Although there was a narrow majority in the Cabinet for drastic reductions in spending, the minority included senior ministers such as Arthur Henderson who made it clear they would resign rather than acquiesce in the cuts. With this unworkable split, on 24 August 1931, MacDonald submitted his resignation and then agreed, on the urging of King George V, to form a National Government with the Conservatives and Liberals. With Henderson taking the lead, MacDonald, Snowden, and Thomas were quickly expelled from the Labour Party. They responded by forming a new National Labour Organisation, which provided a nominal party base for the expelled MPs, but received little support in the country or the unions. Great anger in the labour movement greeted MacDonald's move. Riots took place in protest in Glasgow and Manchester. Many in the Labour Party viewed this as a cynical move by MacDonald to rescue his career, and accused him of 'betrayal'. MacDonald, however, argued that the sacrifice was for the common good. 1931 general election In the 1931 general election, the National Government won 554 seats, comprising 473 Conservatives, 13 National Labour, 68 Liberals (Liberal National and Liberal) and various others, while Labour, now led by Arthur Henderson won only 52 and the Lloyd George Liberals four. Henderson and his deputy J. R. Clynes both lost their seats in Labour's worst-ever rout. Labour's disastrous performance at the 1931 election greatly increased the bitterness felt by MacDonald's former colleagues towards him. MacDonald was genuinely upset to see the Labour Party so badly defeated at the election. He had regarded the National Government as a temporary measure, and had hoped to return to the Labour Party. Premiership of the National Government (1931–1935) The National Government's huge majority left MacDonald with the largest mandate ever won by a British Prime Minister at a democratic election, but MacDonald had only a small following of National Labour men in Parliament. He was ageing rapidly, and was increasingly a figurehead. In control of domestic policy were Conservatives Stanley Baldwin as Lord President and Neville Chamberlain the chancellor of the exchequer, together with National Liberal Walter Runciman at the Board of Trade. MacDonald, Chamberlain and Runciman devised a compromise tariff policy, which stopped short of protectionism while ending