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=== Splits over the National Government === {{Main|National Liberal Party (UK, 1931)|National Government (United Kingdom)}} [[File:Gws samuel 01.jpg|thumb|upright=0.65|[[Herbert Samuel]]]] A group of Liberal MPs led by [[Sir John Simon]] opposed the Liberal Party's support for the minority Labour government. They preferred to reach an accommodation with the Conservatives. In 1931 MacDonald's Labour government fell apart in response to the [[Great Depression in the United Kingdom|Great Depression]]. Macdonald agreed to lead a [[National Government (United Kingdom)|National Government]] of all parties, which passed a budget to deal with the financial crisis. When few Labour MPs backed the National government, it became clear that the Conservatives had the clear majority of government supporters. They then forced MacDonald to call a [[1931 United Kingdom general election|general election]]. Lloyd George called for the party to leave the National Government but [[Independent Liberals (UK, 1931)|only a few MPs and candidates followed]]. The majority, led by [[Sir Herbert Samuel]], decided to contest the elections as part of the government. The bulk of Liberal MPs supported the government, β the [[National Liberal Party (UK, 1931)|Liberal Nationals]] (officially the "National Liberals" after 1947) led by Simon, also known as "Simonites", and the "Samuelites" or "official Liberals", led by Samuel who remained as the official party. Both groups secured about 34 MPs but proceeded to diverge even further after the election, with the Liberal Nationals remaining supporters of the government throughout its life. There were to be a succession of discussions about them rejoining the Liberals, but these usually foundered on the issues of free trade and continued support for the National Government. The one significant reunification came in 1946 when the Liberal and Liberal National party organisations in London merged. The National Liberals, as they were called by then, were gradually absorbed into the Conservative Party, finally merging in 1968. The official Liberals found themselves a tiny minority within a government committed to [[protectionism]]. Slowly they found this issue to be one they could not support. In early 1932 it was agreed to suspend the principle of [[Cabinet collective responsibility|collective responsibility]] to allow the Liberals to oppose the introduction of tariffs. Later in 1932 the Liberals resigned their ministerial posts over the introduction of the [[Ottawa Conference|Ottawa Agreement]] on [[Imperial Preference]]. However, they remained sitting on the government benches supporting it in Parliament, though in the country local Liberal activists bitterly opposed the government. Finally in late 1933 the Liberals crossed the floor of the House of Commons and went into complete opposition. By this point their number of MPs was severely depleted. In the [[1935 United Kingdom general election|1935 general election]], just 17 Liberal MPs were elected, along with Lloyd George and three followers as [[Independent Liberals (UK, 1931)|independent Liberals]]. Immediately after the election the two groups reunited, though Lloyd George declined to play much of a formal role in his old party. Over the next ten years there would be further defections as MPs deserted to either the Liberal Nationals or Labour. Yet there were a few recruits, such as [[Clement Davies]], who had deserted to the National Liberals in 1931 but now returned to the party during [[World War II]] and who would lead it after the war.
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