22 January 1924: Ramsay MacDonald becomes prime minister

Ramsay MacDonald was one of the founder members of the Labour party, which he took to power on this day in 1924.

Ramsay MacDonald was born in 1866 and moved from Lossiemouth in Scotland to London at the age of 20. In 1900 he became one of the founder members of the Labour Representation Committee, the forerunner of the Labour party. He was elected Labour leader after the 1906 general election, but his opposition to World War I cost him the leadership, membership of the local golf club and eventually his seat (in the 1918 election).

The Conservatives regained power on the back of the scandal that engulfed MacDonald when the letter was published in the Daily Mail (the letter is now known to have been a forgery). Labour lost the resulting election in 1924. Five years later MacDonald was returned to high office, this time as head of the largest party, but was soon overwhelmed by the crisis of the Great Depression. Huge public spending cuts were needed to preserve the Gold Standard, and the issue split the party.

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He invited the Conservatives to form a National Government, for which he was expelled from Labour, and he ended up as the figurehead of a de facto Conservative government in 1931. He lost his seat in the 1935 election, and died two years later.

Dr Matthew Partridge
MoneyWeek Shares editor