Gladstone: A Biography

by Roy Jenkins

  How was the triumph secured, and what made a budget which had received such a battering in the Cabinet so acclaimed in the House of Commons, and hence, when the crunch was over, the subject of so much enthusiastic congratulation by his hitherto querulous colleagues? Primarily, it was the sense of command over both circumstances and his material which he conveyed, and in particular the tour de force, at once masterly and impudently bold, with which he dealt with the vexing and central subject of the income tax. Gladstone’s essential dilemma was that nearly everybody, including himself, had pronounced themselves against this unpopular tax, but that there was no way in which he could attain his main objectives of prudent finance and a further simplification and reduction of indirect taxes (in the conviction that such reduction would in the medium term increase both national prosperity and the tax yields) without relying on the income tax for at any rate some years to come.

  The history of this tax was that it had been first introduced by Pitt in 1799 after six years of improvident financing of the French War, was allowed to lapse in 1802 with the Peace of Amiens, but was reintroduced in 1806 in a stronger form and was retained until after the victory of 1815. When in operation it transformed the basis of war finance and enabled most of the cost to be covered by current revenue. Nevertheless the overhang of debt from previous borrowing in the years of poor trade and unrigorous finance between Waterloo and Peel’s coming to power in 1841 was formidable in relation to the small resources available to successive Chancellors. In the quinquennium from 1836 to 1840 debt charges accounted for 58 per cent of central public expenditure, leaving 25 per cent for defence and only 10 per cent for the whole business of civil government.40

  Peel in 1842, when he wished both to replace Whig deficits with Conservative rigour and to lead an attack on the labyrinth of indirect taxes, reintroduced Pitt’s income tax, and did so at the same rate of sevenpence in the pound (or 3 per cent) which had applied from 1806 to 1816. He did it upon a three-year basis, which meant that, with two reluctant renewals, it survived until 1851. Then Stanley brought the Tories strongly out against the tax, and Russell’s dying Whig government succeeded in getting it extended, for one year not three, only by accepting a select committee to improve the methods by which it was assessed and collected. Gladstone wisely refused to serve on that committee, which searched for a method of differentiating between realized and precarious incomes, or unearned and earned ones as they would be called today, but ended by finding this as impracticable as it was desirable. Disraeli, however, first jettisoned the declaration of Stanley (by then both Derby and Prime Minister) by renewing the tax for another year in his 1852 spring budget, and then attempted differentiation (which implied permanence) in his ill-fated December one. An attack on the illogicality which flowed from this ill-thought-out attempt was one of the principal arguments on which Gladstone had led the Peelites and the Whigs into the lobby to defeat that budget.

  This was the unpromising background against which Gladstone had to square the circle of justifying his dependence on an excoriated tax and, if he was to transcend the short-term improvisations of both Whig and Disraelian finance, escape from the constriction of a year-to-year renewal. He did so with a strategic daring worthy of Alexander the Great and a thundering eloquence worthy of Demosthenes. By admitting its disadvantages he touched the base that most of those who had to provide his majority were committed against the tax:

  there are circumstances attending its operation which make it difficult, perhaps impossible, at any rate in our opinion not desirable, to maintain it as a portion of the permanent and ordinary finances of this country: The public feeling of its inequality is a fact most important in itself. The inquisition it entails is a most serious disadvantage; and the frauds to which it leads are an evil which it is not possible to characterize in terms too strong.

  At the same time he built the tax up as a most formidable instrument of public policy, giving it the same brooding strength which Stonehenge had imprinted on his mind eighteen days before – ‘an engine of gigantic power for great national purposes’ were his exact words. He reviewed the history of the tax in terms which, while inevitably tendentious, were at once sonorous and relevant. We can almost feel him holding the House in the hollow of his hand as he describes how this tax changed the financing of the Napoleonic Wars from a debauch to a model of probity. The words and the terms he employs capture a sense of what may be called historic actuality which is alien to the House of Commons today: ‘Now the scene shifts. In 1798 Mr Pitt first initiates the income tax, and immediately a change begins.’ Then he moves on to its revival by Peel, but hardly in the flat prose of normal bureaucratic fiscalese:

  Sir Robert Peel, in 1842, called forth from repose this giant, who had once shielded us in war, to come and assist our industrious toils in peace; and if the first income tax produced enduring and memorable results, so, I am free to say, at less expenditure by far in money, and without those painful accompaniments of havoc, war and bloodshed, has the second income tax. The second income tax has been the instrument by which you have introduced, and by which I hope ere long you may perfect, the reform, the effective reform, of your commercial and fiscal system; and I for one am bold enough to hope – nay, to expect and believe – that, in reforming your own fiscal and commercial system, you have laid the foundations of similar reforms – slow perhaps, but certain in their progress – through every country of the civilized world.’15 41

  This was a classical passage, illustrating nearly all the facets of Gladstone’s middle-phase oratory. There was the initial grandiloquence, almost but not quite over the hill. There were the archaisms, as they appear today and were even then on the edge, of ‘ere long’ and ‘nay’, there were the platitudes of ‘I, for one, am bold enough to hope’, there was the profusion of subordinate clauses, there was the argumentative use of the second person plural, ‘you have introduced’, ‘you may perfect’, and there was the utopian international optimism of mid-century England, the hope of freedom seeping down from the centre to the lesser limbs. There was, above all, the compulsive persuasiveness, the almost anaesthetizing quality of the eloquence.

  Such a touch of chloroform was indeed necessary, for the next stage of the argument was breathtaking enough to inflict a considerable trauma upon any non-prepared mind. He announced a seven-year prolongation of the tax, more than twice what Pitt or Peel had ever ventured, seven times the hesitant fumbling of 1851 and 1852. He also extended the tax to Ireland and reduced the exemption limit from £150 of annual income to £100. But he did it in a way which, while fiscally responsible, made it extraordinarily difficult for the opponents of the income tax to engage with him. The tax was to be at sevenpence in the pound from 1853 to 1855, at sixpence from 1855 to 1857, and at fivepence for three years from then. ‘Under this proposal,’ he concluded the passage, ‘on the 5th of April, 1860 the income tax will by law expire.’

  He had pre-empted the decade, harnessed the income tax to his immediate need for room to reduce indirect imposts while enticing its opponents by what appeared to be a realistic programme for its abolition, and also put them on good behaviour to support the Chancellor in his rigorous control of public expenditure in order that his and their objective might be achieved. He appeared to have reconciled imagination with rigour. (He did not of course foresee the Crimean War, but in this he was no more and no less prescient than his listeners.) And in the slipstream he was able to carry much further the central Peelite policy of getting rid of protective, discriminating and labyrinthine customs duties: 123 articles were entirely removed from the tariff in the 1853 budget, and the duties on another 135 were significantly reduced. The excise duty on soap also went completely. Lansdowne, Graham and Wood had tried to retain half of it, but Gladstone resisted this, and brought cleanliness twice as near to godliness as their compromise would have done.

  From the moment that he sat down (after a final sentence of 344 words) Gladstone’s triumph began to reverberate throughout the po
litical world. Russell, as leader of the House, wrote to the Queen that the budget statement was ‘one of the most powerful financial speeches ever made. Mr Pitt, in the days of his glory, might have been more imposing, but he could not have been more persuasive.’16 Aberdeen both passed on the Queen’s expression of delight ‘at the great success of Mr Gladstone’s speech last night’ and added his own congratulations, which were made much more than formal by his concluding ‘if the existence of my government shall be prolonged, it will be your work’.17 Clarendon, the Foreign Secretary (who had changed jobs with Russell a few weeks earlier), wrote that it was ‘the most perfect financial statement ever heard within the walls of Parlt. for such it is allowed to be by friend and foe’.18 Charles Greville, clerk to the Privy Council and most sensitive appraiser of the market value of political reputations, recorded that the budget ‘had raised Gladstone to a great political elevation, and what is of far greater consequence than the measure itself, has given the country assurance of a man equal to great political necessities and fit to lead parties and direct governments’.19 Prince Albert said that he would ‘certainly have cheered had [he] a seat in the House’; and at the French imperial court they appeared to discuss little else except ‘the boldness and comprehensiveness’ of the British budget.

  This acclaim was more than sufficient to carry Gladstone over a misjudgement which might in other circumstances have been damaging. He attempted a major conversion operation designed to reduce the rate of interest on a portion of the national debt to 2½ per cent, but got a take-up at the reduced rate of only a couple of million pounds, whereas he had hoped for twenty or thirty million. He attributed the failure partly to Disraeli’s ‘malignant opposition’, which crucially (and improperly, he alleged) delayed the date of the offer past a major turning-point in the sentiment of the market. But in a long-distance (1897) retrospect he also blamed himself for ‘an incessant course of sailing near the wind’, which habit of ‘daring navigation’ he attributed to his Oak Farm and Hawarden estate experience, where he had learnt to choose this course because ‘there was really no other hope’.20

  Despite the setback, the wave of success on which he emerged from the budget and its aftermath was such as to make hubris a more likely danger than dismay. There was however remarkably little indication of even the most extravagant praise going to his head. Gladstone, like de Gaulle, was conceited rather than vain. He had great certainty about his intellectual positions, frequently although they could change (but not under pressure from others), and this meant that he was both undismayed in adversity and unflattered in success. He did not greatly need the approval of his peers, although in later life, again like de Gaulle, he became addicted to bains de foule (immersions in enthusiastic crowds). He could castigate himself for moral weakness, but that was a matter between himself and his God. On matters of intellectual and oratorical performance he knew his strength and did not much need others to tell him of it. Like all human beings he did not reject praise, but he did not wallow in it. In his diaries he took it all in his stride, and in his summing up of the year, eight months later, he did not mention his spring triumph. ‘The singular blessing of this year’, he wrote, ‘has been health. Without this among them I do not know how I could have gone through its labours. It has not I grieve to say been a year of advance towards purity, taken as a whole.’21

  The 1853 budget marked not only an enhancement of the office of Chancellor and of the importance of his spring festival, but also a major strengthening of Gladstone’s personal position among his colleagues. After 18 April he would have had much less difficulty in getting his proposals through the Cabinet than he experienced in the ten days before it. The truth of the adage about success having a thousand (or, in the case of this Cabinet, fifteen) parents, while failure was an orphan, has rarely been better illustrated.

  A short time later Gladstone drew attention to the composition of the fifteen and to his position among them. ‘No Cabinet could have been more aristocratically composed than that over which Lord Aberdeen presided,’ he said. ‘I myself was the only one of fifteen noblemen and gentlemen who composed it, who could not fairly be said to belong to that class.’22 While it may be doubted whether Gladstone’s social origin was markedly different from that of Molesworth, there was nonetheless general validity in the point, which he no doubt made with as much pride as humbleness, even though he always had a certain deference for rank. There could be no question, after April 1853, of his being employed as a professional to roll the pitch as well as to score the runs. Aberdeen was right. Gladstone had given the government such hold on life as it possessed, and he was more pivotal to it than the Foreign Secretary (Clarendon), the leader of the House of Commons (Russell), perhaps even than the Prime Minister (Aberdeen).

  His only political equal was Palmerston, temporarily languishing in the Home Office, and contention between them (and indeed almost total difference of political outlook) ran through the next twelve years of Gladstone’s career. It was more an incompatibility than a rivalry – the twenty-five-year difference in age was too wide for the latter, and Disraeli was already ensconced as the rival en titre. But Palmerston and Gladstone were to spend eight years of the next twelve within the same Cabinets, whereas Disraeli and Gladstone were never colleagues, although the margin by which they missed being so was at times narrow. And, as is well known, personal tensions within parties are mostly greater than those across parties. However that may be, there was no doubt after the spring of 1853 that Gladstone, with Palmerston and Disraeli, was one of the trio of stars of British politics, although one who could shoot down as well as up. It took him a couple of decades more to outshine both the others, but that he eventually and assuredly did.

  THE DECLINE AND FALL OF THE ABERDEEN COALITION

  DESPITE THE PERSONAL TRIUMPH Gladstone had achieved with the budget of 1853, he at that stage was essentially an isolated figure, even though one of great individual power. He wished to work neither with Palmerston nor with Disraeli. In addition, although he did not exactly disapprove of him as he did of the other two, he and Russell were instinctively quarrelsome with each other. This three-directional repugnance on Gladstone’s part meant that he was out of office (even though no one else was very stably in) for three-quarters of the 1850s.

  The Peelites gradually subsided around him. The five most prominent other than himself, Aberdeen, Sidney Herbert, Goulburn, Graham and Newcastle (Lincoln), all died between 1857 and 1864, and only Herbert and Newcastle held office after 1855. Gladstone’s passage into the full embrace of Liberalism was solitary and hazardous. At times his political prospects looked at least as bleak as after his perverse resignation from the Board of Trade in 1845. In 1856 Aberdeen wrote to him with avuncular concern: ‘With an admitted superiority of character and intellectual power above any other member, I fear that you do not really possess the sympathy of the House at large. . . .’1 And two years later, when his acceptance of a bizarre mission to the Ionian Isles took him out of British politics for a whole winter, he looked like a man who was marginalizing himself before he was fifty. Yet within three months of the not very successful conclusion of that mission, Gladstone boxed all compasses by first voting to keep Disraeli (and Derby) in office and then, when that vote had proved ineffective, accepting a return to the Treasury under Palmerston and remaining Chancellor, in contentious but continuing partnership with him, for longer than anyone had done since the unmemorable Vansittart in the first decade of the Liverpool government. This 1859 return was the beginning of the second and much more governmental phase of his political life. The first phase, from his election for Newark, had covered twenty-seven years, of which he had been in office for only six and a half. The second was to extend over thirty-five years, with nineteen of them in office. This nevertheless meant that, during the sixty-two and a half years between his first entry into the House of Commons and his leaving it for the last time in 1895, he was for thirty-seven of them a private member. His ration of office was
substantial, but by no means such as to make him essentially a Treasury-bench politician, one who was out of his natural element when he could not put his feet upon the Commons table from the government side, as had been the case with Pitt and Palmerston and was to be so with Asquith and Baldwin.

  In the spring of 1853, however, and on his ‘great political elevation’, Gladstone had nearly another two years of his first term as Chancellor to go until the collapse of the Aberdeen government, and his unwillingness to continue in the Palmerston one which followed it, sent him on his second excursion into the political wilderness. Broadly speaking the first of these two years was highly productive and the second vexatious. Essentially the Crimean War was the cause of the degression. It was a war with which Gladstone was always ill at ease. He did not oppose it at the outset. Indeed in one notable and maybe decisive conversation with his Prime Minister he took a markedly more pro-war line than did Aberdeen.42 But he never had his heart in it, brought no urgency to its winning, financed it only reluctantly and became an early advocate of peace without victory. As a result, rather like R. A. Butler at the time of Suez, he got the worst of both worlds and offended all parties, including himself, becoming guilt-ridden for his initial attitude. He liked issues on which he could fulminate with moral certainty. The Crimean War was the reverse of that, and he accordingly tried to circumnavigate it. The war was not fatal to him, as it was to 18,000 British soldiers and to the premiership of Aberdeen, but it was damaging, and was a substantial cause of his quinquennium of political setback which began in the mid-1850s. Contemplating these years, it is difficult not to be struck by Gladstone’s luck in being able to fit his whole career into the long years of mostly unbroken peace which followed Waterloo and without having to engage with the Boer War, let alone 1914–18 and the slaughter on the Somme. He was not made for war, not from want of courage or of patriotism, but because the martial arts stirred in him a sense more of waste than of excitement or admiration.