The British mining industry suffered an economic crisis in 1925. This was largely caused by the fall in prices resulting from the import of free coal from Germany as reparations in the aftermath of World War I. Mine owners therefore announced their intention to reduce the wages. The TUC responded to this news by promising to support the miners in their dispute. The Conservative government, under Stanley Baldwin decided to intervene. The Government declared that they would provide a nine month subsidy to maintain the miners' wages and a Royal Commission under the chairmanship of Sir Herbert Samuel, would look into the problems of the Mining Industry. This decision became known as Red Friday because it was seen as a victory for working class solidarity. In practice, the subsidy gave the mine owners and the Government time to prepare for a major labour dispute.
The Samuel Commission published its report in March 1926. It recognised that the industry needed to be reorganised but rejected the suggestion of nationalization. The report also recommended that the Government subsidy should be withdrawn and that the miners' wages should be reduced in order to save the industry's profitability.
Following publication of the report, the mine owners then published new terms of employment for all miners. These included an extension of the seven-hour working day, district wage-agreements, and a reduction in the wages. Depending on a number of factors, the wages would be cut by between 10% and 25%. The mine owners declared that if the miners did not accept the new terms then from the first day of May they would be locked out of the pits.
A Conference of the TUC met on the 1st of May 1926, and subsequently announced that a general strike "in defence of miners' wages and hours" was to begin on the 3rd of May. The leaders of the Labour Party were terrified by the revolutionary elements within the union movement and were unhappy about the proposed General Strike. During the next two days frantic efforts were made to reach an agreement with the Government and the mine owners. However these efforts failed.
The TUC feared that an all out general strike would bring revolutionary elements to the fore. They decided to bring out workers only in the key industries, such as railwaymen, transport workers, printers, dockers and iron and steel workers.
The Government had prepared for the strike and did whatever it could to keep the country moving. It rallied support by emphasising the revolutionary nature of the strikers. The armed forces and volunteer workers helped maintain basic services.
On the 7th of May the TUC met with Sir Herbert Samuel and worked out a set of proposals designed to end the dispute. The Miners Federation rejected the proposals. On the 12th of May the TUC General Council visited 10 Downing Street to announce their decision to call off the strike, provided that the proposals worked out by the Samuel commission were adhered to and that the Government offered a guarantee that there would be no victimization of strikers. The government stated that it had "no power to compel employers to take back every man who had been on strike." Thus the TUC agreed to end the dispute without such an agreement.
For several months the miners continued to hold out, but by October 1926 hardship forced many men back. By the end of November most miners were back at work. However, many were victimized and remained unemployed for many years. Those that were employed were forced to accept longer hours, lower wages and district wage agreement.
In 1927 the British Government passed the Trade Disputes and Trade Union Act. This act made all sympathetic strikes illegal, and ensured that trade union members had to voluntarily 'contract in' to pay the political levy. It also forbade Civil Service unions from affiliating with the TUC, and made mass picketing illegal.