Answer : The main reason this government fell was because of the withdrawal of charges in the Campbell case. Campbell was the editor of a communist newspaper and approved the publication of an article calling for mutiny of the troops. Following this publication he was indicted for incitement to muntiny. Due to pressure from labour MPs, the charges were dropped during MacDonald's ministry. [Precision : As the MacDonald ministry was a minority government, it needed the support of the liberals.] Following the withdrawal of charges, and accusations of communist activity, they decided to unite with the conservatives against MacDonald and passed a motion of non confidence.
Trivia : Despite its fall, this government proved labour was able to govern + one of the rare occasions on which a government fell following a vote of non confidence.Opening : 1923 elections & Zinoviev letter