The Edwardians

by Roy Hattersley

  It is difficult to judge from Dangerfield’s elaborate prose what he believed the government’s motives to be. He described the budget as ‘a wonderful trap to catch the House of Lords in’, reminded his readers that many of the Cabinet were ‘allied by birth and friendship with the rich whom it assaulted’ and added that ‘to humble the House of Lords was the devout vindictive wish of all good Liberals’.15 To humble is not the same as to destroy. The budget, which Lloyd George proposed on its merits and Asquith supported out of conviction, was, as a by-product of its more contentious clauses, expected to convince the Lords that, in the modern world of the twentieth century, they could never frustrate the will of the elected House of Parliament, no matter how strong their objection to what the Commons proposed. Lloyd George believed in his budget and did not want to see it destroyed. He assumed that the House of Lords, obsessed with precedent and bound by convention, would accept its own constitutional limitations and not stand in the way of a money bill.

  There were hotheads on both sides of the argument. Churchill – a recent convert to radicalism and spoiling for a fight on behalf of the government – announced over dinner, ‘We shall send them up such a budget in June as shall terrify them. They have started a class war. They had better be careful.’16 Joseph Chamberlain (who had crossed the floor of the House of Commons in the other direction from Churchill) was determined that the Unionists should use the occasion as an opportunity, no matter how slight, to bring the government down. Lloyd George, to Chamberlain’s fury, had found a way of financing both a social and a naval building programme which did not rely for its finance on a general tariff moderated by ‘imperial preference’. He knew that for him, at the age of seventy-three, time was fast running out. Both Balfour and Lansdowne – Leaders of the Opposition in the Commons and Lords – remained cautious. It was against both their instincts and their philosophy to precipitate what traditionalists regarded as a conflict with the constitution. But influential voices sounded a more reckless note. Lord Ridley, landowner and chairman of the Tariff Reform League, offered timid Conservatives a justification for defying the Commons. To reject the budget of 1909 might well amount to the defence of, rather than an assault on, parliamentary democracy.

  He did not think that any member of the House of Lords ought to say what he thought the House of Lords would do with a measure which had not yet come before it. But he was clearly of the opinion that they had not only a perfect constitutional right to throw it out, but … a perfect constitutional right to amend it, and that circumstances might arise in which it would be desirable to assert that right.

  He then moved on from unsubstantiated assertion to a mixture of dubious constitutional theory and undoubtedly genuine abuse. But the importance of his speech lay in neither the language nor the logic. Ridley was inventing a spurious justification for the Lords’ veto.

  The mistaken impression of many people that the House of Lords could not touch finance was founded on a resolution of the House of Commons passed centuries ago. The Lords had hitherto acquiesced to decisions of the House of Commons because government had been conducted by sane men, but there was now a House of Commons controlled by madmen and they had to take a different view.17

  The official Tory leadership quickly took up, and significantly extended, the theory that the House of Lords had a duty to frustrate policies which would lead to national ruination. At a dinner of the Liberal Union Club on 3 May, Lansdowne promised only that Balfour would fight Lloyd George’s ‘reckless financial policies’. But Bonar Law, a tough Scottish-Canadian who, in 1911, was to succeed Balfour as leader of the Tory Party, thought it possible to go a step further. He called the decision to ignore the judgement of the Lords ‘a revolution in itself’ and said that, if the government’s will prevailed, the Upper House would ‘simply exist as a debating chamber’.18 It was not long before Rosebery – by then totally disenchanted with the party which he had once led, endorsed the notion that, were the Lords to defy the Commons and reject the budget, they would be defending the rule of law. The Finance Bill would, he said, ‘be carried over the heads of the people … without the slightest attempt to ascertain the views of the people on the vast changes projected. The British citizen will have no more control over them than if they were Tartars or Lapps.’ And, developing Bonar Law’s theme, he gave the Lloyd George enemies a slogan which they were to repeat time after time and blazon across the platforms of their protest meetings. ‘Not a budget, but a revolution.’19

  The procedure by which ‘supply’ was examined in the Edwardian Parliament imposed a particularly heavy burden on Treasury ministers. In 1909 the budget resolutions were debated for thirteen days before the Finance Bill had its First Reading on 26 May. In June, the Second Reading debate occupied four days. The Committee Stage began on the twenty-first of that month and lasted for forty-two parliamentary days – half of them all-night sittings.20 Lloyd George possessed both stamina and energy, but it is doubtful if even he could have stood the strain had he not resolved a personal crisis six weeks before Budget Day on 29 April. On 12 March the Chancellor of the Exchequer appeared in court and swore on oath that there was no truth to the allegation – made indirectly in the People newspaper – that he had avoided being cited as a co-respondent in a lurid divorce case only by paying the plaintiff £20,000 of ‘hush money’.

  The People’s implication of adultery was the second threat of scandal to face Lloyd George since his promotion to the Treasury. A year earlier, the Bystander had reported that the new Chancellor had ‘been overloaded with flattery … especially from the fair sex which is always difficult for a “man of temperament” to resist”. The result was the ‘rumour of an embarrassment’. That case was settled out of court with an apology and a payment by the Bystander of £300 to the Caernarvon Cottage Hospital. The People case ended in a much greater flourish. Rufus Isaacs, Raymond Asquith and F. E. Smith represented Lloyd George. Sir Edward Carson acted for the newspaper. Both cases turned on letters – written by a Mrs Gardner in the Bystander case and a Mrs Griffiths as quoted in the People. They were undoubtedly affectionate, though not obviously amorous. The Chancellor of the Exchequer survived. As the House of Lords grew more aggressive, Lloyd George became increasingly determined that his budget should do the same.

  The Cabinet rallied round. Naturally enough it was Churchill – always the enthusiast – who accepted the Presidency of the Budget League, an organisation founded to counteract the publicity campaign which had been mounted by Lloyd George’s critics. The Chancellor addressed the inaugural lunch and cheerfully dismissed the assaults upon him as ‘the same old drivel … Lord Rothschild … said that the Budget was socialism and collectivism. Now I wonder if he knows what socialism means … I suppose it would be too much to ask a financier, ruined by the Budget, to spend any money on political literature. Somebody should present him with a sixpenny handbook …’21 Meanwhile Lord Onslow warned his workers that many of them could be sacked if the budget became law. Lord Selborne announced that he would have to reduce expenditure on the upkeep of his estate and Ben Tillett, the dockers’ leader, complained that to call the budget socialist was a libel on socialism.22

  Lansdowne (despite his intransigence, in many ways still more a diplomat than a politician) told the National Union of Conservative Associations, ‘I do not think that you will find the House of Lords is at all likely to proclaim that it has no responsibility for the Bill and that, because it is mixed up with the nation’s financial affairs, we are obliged to swallow it whole and without hesitation.’23 Everybody assumed that he was signalling the peers’ reluctance to reject the Bill outright – everybody except Winston Churchill. He could not resist replying with a threat. ‘Unless Lord Lansdowne and his landlordly friends choose to eat their own mince again, Parliament will be dissolved and we shall come to you in a moment of high consequence for every cause for which Liberalism had ever fought.’24 The reference to ‘mince’ was a tortuous extension of Lansdowne’s analysis of the for
m of budget which he could ‘swallow’.

  At the Cabinet meeting of 21 July, Churchill was formally rebuked for threatening a dissolution; but he continued, with the true zeal of a convert, to make out the ideological case for a budget that took from the rich and gave to the poor. J. A. Hobson described the speeches which he made during 1909 as ‘the clearest, the most eloquent and the most convincing exposition of New Liberalism’.25 The paradox of Churchill’s position was illustrated by Lloyd George’s fear that, deep inside, he was ‘Blenheim minded’26 and therefore, in his heart, on the side of the landowners. But once Churchill had recognised his duty to campaign for the Cabinet, he carried out the task with unrestrained gusto. The result, whether he knew it or not, was speeches which might have appeared in a manual on how to conduct the class war. At Leicester in September he mounted a frontal assault on the idle rich.

  We do not only ask today ‘How much have you got?’ We also ask ‘How did you get it?’ Did you earn it yourself or has it just been left to you by others? Was it gained by processes which are themselves beneficial to the community in general or was it gained by processes which have done no good to anyone, only harm? … Was it gained by supplying the capital that industry needs, or by denying, except at an extortionate price, the land which industry requires?27

  Having demolished, to his own satisfaction, the rentiers who would pay ‘supertax’, he moved on. At Balls Mill, Abernethy, on 16 October he attacked the generality of the budget’s critics.

  While the working class have borne the extra taxation upon their tobacco and whisky in manly silence, rage and fury is poured upon the Government by the owners of this ever-increasing fund of wealth and we are denounced as Jacobins, as Anarchists and Communists and all the rest of the half-understood vocabulary of irritated ignorance.28

  Later in the same day he told the Scottish Liberals that ‘the security of property depends upon the wide definition among great numbers and all classes of the population’.29

  The substance of Churchill’s speeches was so close to an exposition of the socialism which the Tories feared that it now seems extraordinary that the Opposition made so little of them. Perhaps they were deflected from pursuit of the President of the Board of Trade by the irresistible temptation to chase a bigger quarry. On 30 July 1909, the Chancellor of the Exchequer had addressed a meeting of the Budget League in the Edinburgh Castle – a public house turned temperance hall – in the East End of London. ‘The Limehouse Speech’ made a head-on conflict between government and peers inevitable.

  It began by comparing the public spirit of the classes. The national interest demanded that ‘Dreadnoughts’ be laid down to increase the fire-power of the British Navy. ‘We wanted money to pay for the building. So we sent the hat round. We sent it round among workmen … They all dropped in their coppers. We went round Belgravia and there has been such a howl ever since that it has well nigh deafened us.’ The budget’s social aims were ‘provision for the aging and deserving poor’. That required extra revenue. ‘There are many in this country blessed by Providence with great wealth. If there are amongst them men who grudge out of their riches a fair contribution towards their less fortunate fellow countrymen, they are very shabby rich men.’ Having caused deep offence by setting out the general principles, Lloyd George went on to provoke outrage by illustrating his argument with examples. Owners of what had been marshland in the Lea and Thames Valleys had, through no effort of their own, suddenly become landlords of a ‘golden swamp’. Values had risen from three to three thousand pounds an acre because of increased trade in the Port of London. Why should the landlord be the sole beneficiary of the whole community’s enterprise?

  The general assault on the rights of property was, in itself, a heresy against the beliefs of the Edwardian Establishment. Lloyd George went on to particularise. The Duke of Northumberland had exploited a local council which needed ‘a small plot of land as a site for a school to train children who, in due course, would labour upon his property’. The Duke of Westminster, on the discovery that Gorringe’s store had become a great commercial success, had increased the property’s ground rent from ‘a few hundred a year to four thousand pounds’. Finally he turned on the coal owners, whose sins he recalled when ‘the other day’ he ‘sank down into a pit half a mile deep’ and met miners who daily risked ‘mutilation and death’.

  When the Prime Minister and I knock on the door of these great landlords and say to them, ‘Here, you know these poor fellows who have been digging up royalties at the risk of their lives, some of them are old, they have survived the perils of their trade, they are broken, they can earn no more, won’t you give something towards keeping them out of the workhouse?’ they scowl at us. We say, ‘Only a halfpenny, just a copper.’ They retort, ‘You thieves!’

  After the emotion there came what sounded remarkably like an ultimatum. ‘If this is an indication of the view taken by these great landlords, of their responsibility to the people who, at the risk of life, create their wealth, then I say that the day of reckoning is at hand.’

  The Limehouse Speech was meant to stake out the battleground which divided peers from people. So it was necessary to end with a statement of how David would deal with Goliath. ‘They have threatened like this before. But in good time they have seen that it is not in their interests to carry out their futile menaces.’ That hardly amounted to a declaration of war. The speech did, however, contain a number of passages which were calculated to enrage the enemy. The rhetorical question, ‘Who ordained that a few should have the land of Britain as a perquisite?’ offended the idea of inalienable rights to property and inheritance. But it was the insults, not the philosophy, which drove their Lordships to fury ‘The question will be asked whether five hundred men, ordinary men chosen accidentally from the unemployed, should override the judgement – the deliberate judgement – of millions of people who are engaged in the industry which makes the wealth of this country.’

  That was an insult for which the Lords could not forgive him and more provocation was to follow. At the Limehouse overflow meeting held nearby, Lloyd George was carried away by the passion of his convictions. After a brilliant impromptu aside which described ‘bombastic commonplaces’ as Lord Curzon’s ‘stock in trade’, he reached his inflammatory peroration. ‘I say to you, without you we can do nothing. With your help, we can brush the Lords like chaff before us.’

  The Limehouse Speech produced ‘a state of great agitation and annoyance’ in the King.30 For almost a year he had convinced himself that nothing would come of Asquith’s determination ‘to treat the veto of the House of Lords as the dominating issue in politics’. But when, in the summer of 1909, sovereign and subject met at Cowes, there were complaints about the Chancellor’s ‘inappropriate language’. Lloyd George wrote to the King excusing himself on the grounds that he had been subject to ‘criticism, the virulence of which … is without parallel’. Edward was not placated, not least because he was surrounded by what Asquith called ‘an atmosphere full of hostility to the [budget] proposals’.31 However, the hostility was being overlaid (though not honestly moderated) by fear. Reports reaching the Opposition confirmed the budget’s popularity. Lord Northcliffe, the proprietor of the Observer, Times and Daily Mail, began to wonder how long his editorials could remain in conflict with his readers’ opinions. J. L. Garvin, the editor of the Observer, persuaded him to hold firm. Capitulation would encourage further excesses. The battle was on.

  The Tories, although determined to fight, were at first undecided how the enemy should be engaged. By August, Balfour (and Acland Hood, the Opposition Chief Whip) were both firmly in favour of outright rejection. Lansdowne preferred, and argued for, a series of incapacitating amendments. By September the Tory leader in the Lords was persuaded that the veto, desirable or not, was unavoidable. However, the Cabinet, despite having no doubt about the Opposition’s intentions, decided ‘not to determine any definite cause of action’32 until the Opposition declared its hand. So the
manoeuvring began.

  The King – who, like everyone else of influence, knew what Balfour intended – attempted to persuade the Unionists not to put the constitution in jeopardy. He suggested to Asquith that the government should offer to hold a general election before the budget was implemented on the understanding that, after a victory which amounted to a clear mandate from the people, the Lords would not obstruct the Finance Bill. Asquith rejected what at Court was thought of as a compromise, but was recognised in Downing Street as the concession that the Lords could insist on a dissolution before accepting the will of the Commons. Asquith decided instead to draft a Finance (No. 2) Bill which, since it included only the uncontroversial taxes, was unlikely to be obstructed and would at least allow the collection of revenue while the budget battle raged on. The Clerk to the House of Commons persuaded him that the bill would be just another admission that the Lords were entitled to reject tax proposals. It was then that Asquith and his ministers formally accepted what they had long known to be true. On 19 November 1909, the Cabinet agreed that, if the Lords rejected the budget, there would be an immediate general election.