He was re-elected for Stirling and Clackmannan Western at the 1929 general election, when he was appointed Under-Secretary of State for Scotland by Prime Minister Ramsay MacDonald. This troubled administration was relatively short-lived; only a handful of Labour ministers supported MacDonald's proposal of a coalition government, with Johnston and other Red Clydesiders among the strong opponents. Long a member of the Independent Labour Party, he opposed its disaffiliation from the Labour Party. He lost his seat at the 1931 general election, and failed to be returned at a by-election in Dunbartonshire in 1932, but he joined the new Scottish Socialist Party, which affiliated to Labour, and he returned (representing Stirling and Clackmannan West) to the House of Commons at the 1935 general election and remained an MP until retiring in the 1945 general election.