Foreign Secretary Simon was not initially included in
Ramsay MacDonald's National Government, which was formed in August 1931. Simon offered to give up his seat at Spen Valley to MacDonald if the latter had trouble holding
Seaham (MacDonald held the seat in
1931 but lost it in
1935). On 5 November 1931, Simon was appointed
Foreign Secretary when the National Government was reconstituted. Thereafter, Simon was known as the "Man of
Manchukuo" and was compared unfavourably to the young
Anthony Eden, who was popular at Geneva. Simon was excellent in offering up an analysis of a problem in which he would lay out the advantages and disadvantages of each option, but he had much difficulty in choosing which to select, much to the vexation of Eden who complained "he expects the Cabinet to find his policy for him-Poor Simon is no fighter. Nothing will make him into one". Simon's inability to choose an option reflected his background as a lawyer where he would lay out all the possible options for his client, who would then choose which option to pursue. The British historian David Dutton wrote that some of the attacks on Simon's handling of the Japanese conquest of Manchuria were not fair in the sense that everything is put down to Simon's supposed personal weaknesses rather than to the so-called
Ten Year Rule instituted in 1919 by the War Secretary
Winston Churchill which stated that
British defence spending was to be based on the assumption that there would be no major war in the next ten years. As a result of the Ten Year Rule, Britain did not have sufficient military forces to face Japan, most notably as
Singapore Naval Base, begun in 1921, was still under construction. Simon's tendency to equivocate with regard to Manchuria and his suggestions that more research was needed to establish whether Japan had committed aggression or not was a way of covering up the fact that Britain was not capable of fighting a major war in 1931. In particular, Simon's equivocating was to cover up the fact that the much vaulted
Singapore strategy was a sham as the Singapore naval base would not be finished until 1938. Moreover, although the League of Nations' collective security doctrine should had required the other members of the League to respond to an act of aggression against China, there was little support in Britain in 1931 for going to war against Japan for the sake of a Chinese province of whose existence many people only learned when Japan seized it. Adding to the charge against Simon was the claim that the
administration of Herbert Hoover wanted to have the
United States act against Japan and that Simon spurred the American offer. The historian
A. L. Rowse, who belonged to the "guilty men" school of historiography and who tended to be very harsh in his writings towards Simon, conceded that this claim that Simon rejected American offers in 1931-1932 to take joint action against Japan was a myth, apparently invented by American historians to explain why the United States was not more forceful in responding to Japan's aggression. However, it is true that in January 1932 Simon rejected an offer by the American Secretary of State
Henry L. Stimson calling for a joint Anglo-American declaration stating that they would never establish diplomatic relations with the sham state of Manchukuo, which was viewed in Japan as a pro-Japanese gesture that reflected a quiet sympathy for Japan's actions. Japanese diplomats and generals believed that Britain could be persuaded to accept Manchukuo in exchange for a promise that Japan would support Britain in upholding its
extraterritorial rights in
China, and that there was no prospect of any British action against Japan as long as Simon remained Foreign Secretary. Japanese diplomats viewed Labour and the Liberals as the "
anti-Japanese" parties committed to the League of Nations while the Conservatives were viewed as the "pro-Japanese" imperialist party committed to
realpolitik in upholding the
British empire in
Asia. Though Simon was a Liberal, he was felt in Japan to be closer to the Conservatives in his views. The repeated demands by the Chinese for the abolition of all the extraterritorial rights in China held by foreign powers gained via the so-called "
unequal treaties" in the 19th century was felt in Japan to be the basis of a common Anglo-Japanese front against China that would ultimately lead to Britain recognising Manchukuo. At the same time,
Adolf Hitler was
coming to power in Germany in January 1933. Hitler immediately withdrew
Germany from the League of Nations and announced a programme of
rearmament, initially to give Germany armed forces commensurate with France and other powers. Simon did not foresee the sheer scale of Hitler's ambitions, but Dutton pointed out, the same was then true for many others. There was talk of Neville Chamberlain, who dominated the government's domestic policy, becoming Foreign Secretary, but that would have been intolerable to MacDonald, who took a keen interest in foreign affairs and wanted a leading non-Conservative in that role. In 1933 and late 1934, Simon was being criticised by both
Austen and Neville Chamberlain as well as by Eden, Lloyd George,
Nancy Astor,
David Margesson,
Vincent Massey, Runciman,
Jan Smuts and Churchill. – but thought that it might be a useful deterrent against territorial aggression by Hitler. The first stirrings of
Italian aggression towards Abyssinia (now
Ethiopia) were also then seen. During Simon's tenure of the Foreign Office, British defence strength was at its lowest point of the interwar period, which severely limited his freedom of action.
Leo Amery was a rare defender of Simon's record: in 1937, he recorded that Simon "really had been a sound foreign minister – and Stresa marked the nearest Europe has been to peace since 1914".
Home Secretary Simon served as Home Secretary (in
Stanley Baldwin's Third Government) from 7 June 1935 to 28 May 1937. That position was in Dutton's view better suited to his abilities than the Foreign Office. He also became Deputy
Leader of the House of Commons on the understanding that the latter position would be given to Neville Chamberlain after the
election (in the event, it was not). In 1936 Simon was the last Home Secretary to attend a royal birth (of
Princess Alexandra).
The Battle of Cable Street In 1936 – despite pressure from the former Labour leader and MP
George Lansbury, as well as from mayors of five East London Boroughs (
Hackney,
Shoreditch,
Stepney,
Bethnal Green and
Poplar) and a 100,000 signature-strong petition from local East Londoners (organised by the Jewish People's Council) – the then-home secretary Simon refused to ban a march organised by the
British Union of Fascists (BUF) through the then predominantly Jewish
East End of London. The BUF's announcement of this large-scale march was widely regarded "an act of provocation (...) aimed at (...)
Jews and
Communists". The ensuing events have since become known as the
Battle of Cable Street. Two days after the event, the Labour Party Annual Conference denounced Sir John Simon for not banning the march and articulated a need for legislation. While the ensuing
Public Order Act (1936) did successfully restrict politically extremist movements, it was nevertheless criticised for handing significant powers to the police to determine the routes of marches and processions. but records show that Simon did commend the bill to the house.
Other issues Simon also played a key role behind the scenes in the
1936 Abdication Crisis. He was one of the signatories to the
Anglo-Egyptian Treaty of 1936. He also introduced the
Factories Act 1937.
Chancellor of the Exchequer Peace In 1937,
Neville Chamberlain succeeded Baldwin as prime minister. Simon succeeded Chamberlain as
Chancellor of the Exchequer and was raised to
GCVO in 1937. As Chancellor, he tried to keep arms spending as low as possible in the belief that a strong
economy was the "fourth arm of defence". In 1938,
public expenditure passed the previously unthinkable level of £1,000m for the first time. In the spring 1938 budget, Simon raised the
income tax from 5s to 5s 6d and increased duties on tea and petrol. He retained the support of Chamberlain until around the middle of 1939. Chamberlain privately told colleagues that he found Simon "very much deteriorated". Simon's position weakened after Churchill rejoined the Cabinet on the outbreak of war and got on surprisingly well with Chamberlain, who toyed with the idea of replacing Simon with former Chancellor
Reginald McKenna (then aged 76) or
Lord Stamp, the chairman of the
LMS Railway who had a secret meeting at Downing Street about the position. Even
Captain Margesson, the
Chief Whip, fancied his chances for the position. ==Lord Chancellor==