Mr Balfour's Poodle (7 page)

All these considerations added up to one conclusion, and to one only. The Government's next major move had obviously to be the introduction of a highly controversial Budget. But how much was such a Budget to be designed to accomplish? Was it to be based on the assumption that as a money bill it would be immune from the attacks of the peers, and would thus serve for the Government as an alternative to a ‘battle of the veto'? Or was it intended to provoke the peers to rejection, and thus act as a prelude to the ‘battle of the veto'? Lloyd George's biographer, Mr. Malcolm Thomson, who is
always sparing in his documentation, is at once confusing and dogmatic on the point.

‘To Lloyd George it was clear that there must be a fight to curb the Lords' power of veto,' he tells us. ‘But he was not prone to the dangerous miscalculation of wishful thinking, and he did not deceive himself into thinking that rates for Church Schools or reduction of public-house licences, however hotly he and some of his friends thought about them, were issues that would rouse the mass of the nation to a constitutional revolution. “Resign and appeal to the electorate!” taunted the Tories when successive Education Bills were thrown out by the Lords. “If a dissolution comes,” retorted L.G., “it will be a much larger measure than the Education Bill that will come up for consideration, if the House of Lords persists in its present policy!” He was restlessly devising how to shape that larger measure.'
^a

The implication of this seems clear enough, but the same cannot be said of a later passage on the same point. Here Mr. Thomson tells how, after the rejection of the Licensing Bill, Lloyd George

‘had settled his strategical plan of attack on them (the peers) and won Asquith's approval of it. When the Old Age Pensions Bill was before the Lords, Lansdowne had dissuaded them from throwing it out on the ground that, though not strictly a Money Bill, it was essentially a Bill of a financial complexion and was linked with provisions in the Budget allotting funds for it. Finance, he admitted, was by constitutional principle the exclusive concern of the Commons, with which the Lords should not meddle. Very well: Lloyd George planned to link further measures of social reform with Finance—measures which
would be acutely disliked by the Peers—and if the Upper Chamber grew exasperated enough to throw them out, it and not the Liberal Government would be violating the Constitution and making a change in the powers of the Lords inevitable!

‘Accordingly he proceeded to frame his Budget for 1909 with the threefold purpose of raising the extra funds needed for old age pensions and other intended reforms; of making provision for these reforms in the Finance Bill;
and of adopting tax-raising devices which would be particularly distasteful to the Peers and might rouse them to throw out the Budget
(my italics).'
^b

But why, if Lloyd George's desire was to produce a peer-rousing Finance Bill, should Lansdowne's statements on the Old Age Pensions Bill have stimulated him to action? Surely the Unionist leader's reiteration of the principle of the Commons' exclusive control of finance should have made him sceptical of the possibility of this outcome. The argument only makes sense if his primary object was to circumvent the veto rather than to destroy it.

Nor does the speech which the Chancellor of the Exchequer delivered to the Law Society on January 30, on the occasion of the presentation of a portrait of himself, bear out his biographer's theory. In July of the previous year he had threateningly announced: ‘Next year I shall have to rob somebody's hen-roost, and I must consider where I can get most eggs, and where I can get them easiest, and where I shall be least punished.' But at the Law Society he went out of his way to undo the effects of this statement. He referred to this ‘bad jest' on the subject of hen-roosts, and, in the words of the
Annual Register
, ‘emphatically disclaimed any vindictive spirit in his financial plans. The single purpose of the Chancellor
of the Exchequer (he said) should be the protection and confirmation of the national interests; and in that spirit he approached his task.'
^c
Vague conciliatory statements, delivered in this way, do not perhaps mean very much, but there is no conceivable reason why a Minister intent on stirring up the maximum of opposition should trouble to make them at all. This was not an isolated case. Lloyd George continued to be
suaviter in modo
until well into the summer.

The view that Asquith was from the first a party to the Chancellor's supposed tactic of shaping a Budget for the peers to reject is still less convincing. Such a device would have been alien to his character, and in direct contradiction to his clearly expressed belief, repeated at many stages in the controversy, that the House of Lords would never dare to throw out a Finance Bill. In the debate on the Address at the beginning of the 1909 session he was confronted with a direct challenge to the Government's inactivity on the House of Lords issue in the form of an amendment, moved by Campbell-Banner-man's successor
¹
in the Stirling Burghs, which called for legislation in the current session to implement the 1907 resolution. This was pressed to a division
²
and gave serious embarrassment to the Government. But Asquith in his reply, while he stressed (as had been done in the King's Speech) the heavy calls upon the time of the session which the Finance Bill would make, gave no shadow of a hint that it might also precipitate constitutional action.

This approach was characteristic of the Prime Minister's public utterances at the time. At Glasgow, where only a fortnight before the introduction of the Budget he spoke of ‘unprecedented financial strains', he was at pains to prepare the country for a controversial Budget and concentrate attention on financial issues. But there is every indication that he, and the Government, regarded the Budget as an alternative to the struggle with the House of Lords rather than as a method of prosecuting this struggle.

Lloyd George therefore proceeded with the framing of his proposals in the knowledge that the stage had been cleared for their reception. It has been suggested that he had grave difficulty in securing Cabinet approval for his more controversial imposts. To quote Mr. Thomson again:

‘He (Lloyd George) said that by far the most difficult fight he had was in the Cabinet, not in the country. Harcourt was the most inveterate in obstructing his proposals, while posing all the time as an ardent Radical. Crewe, while not liking them, said very little. Grey said nothing. But at heart they were all against him. Sir Robert Chalmers, then the head of the Treasury, walked up to the door of the Cabinet room with L.G. one day when he was going to a meeting to discuss his Budget proposals, and when L.G. had gone in Chalmers turned to the man at his side and said, “That little man goes into the fight absolutely alone.” When L.G. came out, Chalmers said to him apprehensively, “Well? …” “Oh, I carried them all right,” was L.G.'s cheerful reply.'
^d

This story, even if
vero
, is certainly not
ben trovato
. Even under Lloyd George's regime, it can hardly have been the practice for the Permanent Secretary of the Treasury to wait outside the door of the Cabinet Room in 10 Downing Street,
presumably chatting to the messengers, throughout the length of Cabinet meetings.

‘Asquith alone was helpful when it came to a vote,' Mr. Thomson continues, ‘although he never supported the proposals actively. Once, when nearly everyone around the table had raised objections to a certain proposal, Asquith summed up with the words, “Well, I think there is substantial agreement on this point.” 'It appears from the example cited that the Prime Minister was more helpful in avoiding a vote than ‘when it came to' one, and indeed, if Mr. Thomson's account of Cabinet divisions is true, Lloyd George's own proposals would hardly have seen the light of day had continual votes been the method of procedure.

Asquith himself has since expressed a certain lukewarmness towards some of the more controversial of the Budget proposals.

‘Being supposed myself to be a financier of a respectable and more or less conservative type,' he wrote in 1926, ‘I was, in the course of the debates, frequently challenged by Mr. Balfour and others to defend the new imposts, and especially the Undeveloped Land and the Increment Duties. I have undertaken in my time many more intractable dialectical tasks, and though I was fully alive to the mechanical difficulties involved, and perhaps not so sanguine as some of my colleagues as to the progressive productiveness of the taxes, I had never any doubt as to their equity in principle.'
^e

But by the time these words were written a Government presided over by Lloyd George himself had long since repealed the taxes in question. It may therefore be thought that they constitute no irrefutable proof of the half-heartedness of the head of the Government, as against the full-blooded
enthusiasm of his Chancellor, in 1909. And the Prime Minister was probably much more prepared for financial adventure (for which, over a period of three months, he had sedulously been preparing Parliament and the country) in the heat of the day than he was anxious to admit in the cool aftermath of the 'twenties.

Grey, once described by Arthur Balfour as ‘a curious combination of the old-fashioned Whig and the Socialist', indicated by his subsequent statements that he might have reacted somewhat equivocally to the Budget proposals. If his ‘socialism' impelled him to welcome them, and his ‘whiggery' to abhor them, he resolved the conflict by saying that he approved of the proposals themselves but disliked the way in which they were advocated. When a correspondent wrote to him abusing the Chancellor of the Exchequer, he replied sternly: ‘I cannot agree with what you say. Mr. Lloyd George is a colleague with whom I have always been on the best of terms personally, and the Budget raises the money required in a way which presses much less, I believe, upon the poorer classes than any alternative that could be devised.'
^f
And in June he went out of his way, at a dinner given in his honour by the National Liberal Club, to reply to statements made by his old Chief, Rosebery, and to defend the Budget. It ‘was good', he said, ‘by whatever general principle it was tried; it took taxes from superfluities, and taxed people in proportion to their ability to pay'.
^g
But in private conversation he expressed the view that the Chancellor's speeches were unfair, and later in the year he wrote to Mrs. Asquith: ‘I am no optimist: X— (whose identity is not difficult to guess) has made too much running, I fear, to carry the electors with us: in this country they move slowly and distrust rhetoric.'
^h
All this was no doubt compatible with a somewhat uneasy
acquiescence in Cabinet, although not, it may be thought, with any definite opposition.

Haldane, the third member of the Liberal League triumvirate, was not very well disposed towards Lloyd George at this (or any other) time. A remark of his on Budget Day is quoted by Austen Chamberlain's biographer: ‘“It seems to me,” remarked Austen's friend, Leverton Harris,
¹
speaking of the Chancellor of the Exchequer to Mr. Haldane in the smoke-room of the House of Commons that night, “that he read that speech like a man who does not understand what he is reading.” “Of course he doesn't,” replied the other. “Why, we have been trying for weeks to make him understand clauses of the Bill, and he can't.”'
ⁱ

This malicious story,
²
while it certainly shows that Haldane had no desire to enhance the Chancellor's reputation, is quite incompatible with the theory that the Budget proposals, believed in only by Lloyd George himself, were forced down the throats of a reluctant Cabinet.
³

The ultimate test, however, of whether or not Lloyd George had to face and overcome the united opposition of the rest of the Cabinet lies less in any attempt to reconstruct from their subsequent statements and writings the attitude of various Ministers at the time than in the hard facts of the support which they gave to the Chancellor throughout the long struggle to put the Budget through. If the other members of the Government were as hostile to the Budget as some would
have us believe, their loyalty in the ensuing months, both to Lloyd George himself and to the measures which they disliked, was one of the most remarkable things in the history of British politics. Asquith himself, in the Chancellor's own words, ‘was firm as a rock'. For the rest, there were no deliberate indiscretions, no attempts by Ministers to let it be widely known that they stood a little above the conflict, and no resignations. In the House of Commons too, while there was a little cross-voting on individual points, the Liberal back-benchers supported the Government in the key divisions with great solidarity. Mrs. Asquith recorded after the third reading that ‘the remarkable thing about the passing of this Budget was the unanimity with which people of different views backed it. Even the men who act according to their humour … voted for the Bill.'
^j
The shedding of its right wing had for so long been a habit with the Liberal Party that it would indeed be remarkable, even without the suggestion of a reluctant Cabinet, that so controversial a measure as Lloyd George's first Budget should have produced not a single defection of note.

What were the proposals which this famous Budget contained? Today they inevitably seem unexciting, as do the sums of money involved, for financial issues survive the passage of time even less well than do most other subjects of political controversy. The Chancellor wanted £164m., against the £151m. which he had received in the preceding year, and the £148m. which he calculated existing taxes would give him in the year that was then beginning.
¹
This
left him with a prospective deficit of £16m., and as the increased expenditure on battleships and social services was likely to be cumulative, it was important that he should close this gap by taxes of which the yield would increase as time went on.