Labour's second period of office shattered the illusion of the ‘inevitability of gradualness’, and ended an inglorious era of Party history in which electoral success had outpaced ability and effectiveness. The 1929 general election nearly doubled Labour's parliamentary representation, bringing the Party close to an overall majority for the first time. Yet with scarcely any exceptions, MacDonald's senior ministers – men in their fifties and sixties, few of whom had as much as a year of governmental experience behind them – lacked the imagination and confidence which the economic crisis required. Long before the collapse of August 1931, a demoralisation and sense of purposelessness had permeated all levels of the Party.

It is hard to exaggerate the importance of this episode of failure for the future development of the Labour Party. Even now, the memory and the legend remain as a sombre warning and powerful constraint. At the time, the lessons seemed all pervading, and dominated the events and debates described later in this book. The defections of Mosley, of the ‘National’ leaders and finally of the ILP, created in the end a more cohesive and more manageable party. But the most significant effect was the sharpening and redefinition of some old political traditions.

As the slump worsened, the view that the crisis of capitalism had arrived gained strength. This was accompanied by a belief that Labour's impotence derived both from sabotage by financial and class interests, and from a lack of socialist determination which could only be cured by a moral as well as political regeneration.