Asquith (34 page)

1
_{Unless the kissing of hands was treated as a sacramental ceremony before which food could not be taken, Asquith appears here to have used the word “ breakfast ” as a translation of “
dejeuner
” in a way that was quite common in the nineteenth century. In 1881, for example, Sir Charles Dilke gave a “ breakfast ” at the
Moulin Rouge
restaurant in Paris for the Prince of Wales and Gambetta, but the meal lasted well into the afternoon. According to
The Times,
Asquith’s Biarritz audience was at 10 o’clock, and was followed, after an interval, by his lunching with the King.}

2
_{He had telegraphed earlier asking that Grey should be invited.}

3
_{“If the Prime Minister cannot find a better Governor-General he supposes he must approve of the appointment but that he thinks it a very bad one,” was the comment that the King asked Knollys to pass on.
(Asquith Papers
, Box 1, f. 206). At this stage, however, the King was concerned not so much with his dislike of Gladstone, as with the belief that his name would carry unfortunate associations with the “ Majuba Hill Policy.” Asquith countered by pointing out that Joseph Chamberlain, as a member of the Cabinet in 1882, was a good deal more responsible for that policy than was Herbert Gladstone.}

The life of the Government, in the early months of 1909, was dominated by a fresh outbreak of the naval controversy and by preparations for the Budget. The Admiralty, acting in response to the acceleration of German building, put forward a programme of six capital ships for the fmancial year 1909-10. This was strongly resisted by the so-called “economists"
¹
in the Cabinet, who thought that four were quite enough. This group was composed of Lloyd George, Churchill, Harcourt, Bums and Morley, although the last three, Asquith recorded, were somewhat disinclined on personal grounds to make common cause with the first two. But on the merits they were all agreed.

¹
_{So-called because they were reluctant to spend money on armaments and not because of their knowledge of the “ dismal science.”}

On February 2nd, Churchill circulated a printed Cabinet paper expressing his scepticism about the danger of the German challenge. On the same day Lloyd George, who was never a natural letter-writer, took the unusual course of sending the Prime Minister thirteen pages in his own hand. “ The discussion of Naval Estimates threatens to re-open all the old controversies which rent the party for years and brought it to impotence and contempt,” he began. “You alone can save us from this prospect of sterile and squalid disruption.” A little later he stressed the depressing effect which the larger programme would have on “ millions of earnest Liberals in the country.” It would cause them to “ break into open sedition ” and bring “ the usefulness of this Parliament to an end.”
^a
The letter also contained a hint, but not more than a hint, of resignation. However it offered something more than blank opposition to the Admiralty demands. Indeed it attacked them not so much for being excessive as for being stupid. If, as he thought likely, the fears about German construction were exaggerated, the Admiralty was asking for too much. But if, as was
possible, the fear proved well-founded, they were not asking for enough. The answer was a flexible long-term British building programme, the speed of which could be varied according to what the Germans did. It was a typical Lloyd George argument, ingenious and persuasive.

But it did not settle the Cabinet crisis. This was partly because of the stubborn departmentalism of McKenna, the First Lord, who clung rigidly to the original Admiralty proposal. There were a series of wrangling and inconclusive Cabinets. After the February 15th meeting Asquith took the unusual step of reporting the line-up to the King. Churchill, Harcourt, Burns and Morley, he said were on one side and Grey, Runciman, Crewe and Buxton on the other. The Chancellor of the Exchequer was reported as putting forward his compromise, which was then favourably received by Asquith, Crewe and Grey. A Cabinet committee was set up to go into it. But this did not make much progress, and on February 20th Asquith wrote to his wife complaining, without undue agitation, about Lloyd George and Churchill, who “by their combined machinations have got the bulk of the Liberal press into (their) camp.” “ There are moments,” he said, “ when I am disposed summarily to cashier them both. E. Grey is a great stand-by, always, sound, temperate, and strong.”
^b

Then, at the Cabinet of February 24th, Asquith himself, having previously allowed others to make the running, felt able to take the lead and propound an acceptable solution. “ A sudden curve developed itself of which I took immediate advantage,” he characteristically put it, “ with the result that strangely enough we came to a conclusion which satisfied McKenna and Grey and also LL.G. and Winston.”
^c
Four ships should be laid down immediately, and another four if and when the need was proved. It was a variant of the original Lloyd George proposal, but it was more acceptable because of the quarter from which it came. By the summer, as Asquith had confidently expected at the time of the “ compromise,” the need was considered to have been proved, and at the Cabinet of July 24th the additional four were accepted without much further demur. The “ economists ” had waged an extraordinarily ineffective battle.

The decision to undertake this unpopular expenditure made it even more necessary, from a party point of view, that the Budget should be strongly radical. Much earlier, however, it had been decided that this was to be a year for the breaking of new financial ground. Old age
pensions, even without the additional naval expenditure, meant that more revenue had to be raised. And there was a settled Cabinet view that this should be done in such a way as to strike back at the House of Lords and regain the initiative for the Liberal Government. Asquith’s first Cabinet letter of the year, on January 26th, warned the King that “ the main business of the year must... be of necessity the Budget,” although he also informed him of the Cabinet’s hope, utterly misplaced as matters turned out, of avoiding an autumn session.
^d
But what form was the strike against the peers to take? Was it to be an outflanking move, based on the assumption that the Lords would never touch a money bill? In this case a controversial Budget would be an alternative to a “ battle of the veto.” Or was it the intention that the Budget should provoke the peers to the rash step of rejection, and thus serve as a favourable prelude to the battle ”?

Some commentators, including at least one of Lloyd George’s numerous biographers,
¹
have suggested that the Chancellor, with the approval of the Prime Minister, dehberately framed his Budget so as to court a peers’ rejection. The evidence in favour of this view is unconvincing.
²
What is much more likely is that it never seriously occurred to the leaders of the Government that the Lords would dare to attack a Finance Bill. They would therefore use it as the one legislative means open to them of achieving some radical objectives.

¹
_{Mr. Malcolm Thompson.}

²
_{See the present author’s
Mr. Balfour s Poodle
, pp. 40-2.}

Unfortunately the Cabinet was far from unanimous about what were legitimate radical objectives, particularly in the social and fiscal fields. As a result the budget proposals involved a great deal of internal discussion and controversy. Between mid-March and Budget Day (which was April 29th) fourteen Cabinet meetings were in large part devoted to discussions of the Chancellor’s proposals. In each of two weeks (those beginning March 14th and April 4th) no less than three meetings were held. A single meeting was rarely sufficient to produce agreement on a particular point, and the almost invariable practice was to adjourn until the following day. The proposals were considered in groups: the controversial land taxes in mid-March; the liquor and stamp duties at the end of the month; the income tax and estate duties in the first days of April; and the indirect taxes immediately following. Then, after the Easter recess, the general position was discussed and the earlier proposals reviewed in the light of it.

Lloyd George always maintained that he had a most difficult struggle to force his proposals through the Cabinet against the nearly unanimous opposition of his colleagues.
¹
Only the Prime Minister, he allowed, gave him decisive help, and that took the form more of the deft turning of difficult corners than of argumentative assistance. Nevertheless the proposals almost all survived. In his Cabinet letters to the King Asquith records only one occasion when the Chancellor was overruled, together with another when he may have been forced to present a proposal in a more conciliatory form than he might himself have wished. Both were concerned with the famous land taxes.
²
The first was on March 19th. “ The Cabinet rejected a proposal submitted by the Chancellor of the Exchequer to tax the ground rents of land built upon on the ground that it would involve an interference with existing contracts.” And on March 24th the Prime Minister reported: “ The provisions for the additional taxation of land values were carefully revised with the object of minimising cases of possible hardship and safeguarding existing contracts
.”
^e
The lawyers, always a powerful body in that Cabinet, were keenly watchful of the Chancellor on anything to do with the sanctity of contracts.

Nevertheless it would be easily possible to exaggerate the dissension
within the Cabinet. Lloyd George had his enemies—notably Haldane and McKenna—who were always critical of his methods and style. There were others, notably Harcourt (despite his radicalism on other issues), Runciman, and, more silently, Crewe, who disliked the substance of some of his proposals. And there was Grey, who was instinctively hostile to any raising of party controversy. But none of them carried their opposition or hostility into the open. Throughout the long and bitter struggle to get the Budget through there were no obvious attempts on the part of ministers to dissociate themselves from the Chancellor and to suggest that they were above the battle. Still less were there any hints of resignation. Haldane and Bums (another of Lloyd George’s enemies) contented themselves with making malicious comments about the Chancellor’s Budget Day performance —but then it was a strangely bad speech.

During the late spring and summer and early autumn the battle went on without respite. It was most intense in the House of Commons. Forty-two parliamentary days were required to get the Finance Bill through its committee stage, and a good half of these involved parliamentary nights as well as days. The process was not complete until October 6th—without any summer recess—and even then report and third reading, which between them occupied twelve days, had still to be taken. The bill did not complete its passage through the Commons until November 4th. In these proceedings the Prime Minister, as was natural, left the lead to the Chancellor. He was not over-assiduous in his attendance, and he voted in only 202 of the mammoth total of 554 divisions which took place on the bill. But when he was there he occasionally intervened (as a Prime Minister would be unlikely to do today) with a supporting speech; he several times came across from Downing Street at the end of an all-night sitting and took over for the last hour or so before breakfast; and he moved the minor but permanent procedural changes which, at the end of July, the Government decided were essential if the bill were ever to get through.

Outside the House the battle was equally bitter but more sporadic. At first the opponents of the Budget made most of the running. City opinion was particularly quick to mobilise itself. On May 14th Lord Rothschild (who was a Liberal) sent the Prime Minister a letter of protest which was signed by the principals of most of the leading financial houses. A month later he presided over a crowded meeting
of agitated financiers, most of them nominally Liberals. By this time Lord Rosebery had also entered the fray, and had denounced the Budget as “ inquisitorial, tyrannical, and Socialistic.” The Budget Protest League had been established under more regular opposition auspices.

Asquith showed no sign of weakening under this pressure, and he was equally unyielding when a deputation of thirty rather Whiggish Liberal members waited upon him later in the summer and expressed apprehension about the land taxes. Altogether his behaviour throughout this period fully merited Lloyd George’s tribute that he was “ firm as a rock.” He did not speak much in the country in support of the Budget. But nor for that matter did the Chancellor. Lloyd George’s famous Limehouse oration of July 30th, in which he goaded the dukes into some extremely injudicious replies, was an exceptional foray. Asquith never sought to compete with this provocative oratory, but the few speeches which he made gave powerful support to the Budget at crucial times and in crucial places. In July he addressed a meeting of the City Liberals at the Cannon Street Hotel, the scene of Lord Rothschild’s protest. And on September 17th he spoke with great force to 13,000 people at Birmingham. By this time attention had moved from the merits of the Budget to the still more important question of whether the Lords dare to break a 250-year-old rule and reject it. And as the constitutional issue replaced the financial one so the Prime Minister replaced the Chancellor of the Exchequer as the Liberal protagonist.