An Act to grant certain Duties of Customs and Inland Revenue (including Excise), to alter other Duties, and to amend the Law relating to Customs and Inland Revenue (including Excise), and to make other financial provisions.
The 1909/1910 People's Budget was a proposal of the Liberal government that introduced unprecedented taxes on the lands and incomes of Britain's wealthy to fund new social welfare programmes. It passed the House of Commons in 1909 but was blocked by the House of Lords for a year and became law in April 1910.
William Manchester, one of Churchill's biographers, called the People's Budget a "revolutionary concept" because it was the first budget in British history with the expressed intent of redistributing wealth equally amongst the British population.[2] It was a key issue of contention between the Liberal government and the Conservative-dominated House of Lords, leading to two general elections in 1910 and the enactment of the Parliament Act 1911.
Overview
The Budget was introduced in the British Parliament by David Lloyd George on 29 April 1909.[3] Lloyd George argued that the People's Budget would eliminate poverty, and commended it thus:
This is a war Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away, we shall have advanced a great step towards that good time, when poverty, and the wretchedness and human degradation which always follows in its camp, will be as remote to the people of this country as the wolves which once infested its forests.[4]
The budget included several proposed tax increases to fund the Liberal welfare reforms. Income tax was held at nine pence in the pound (9d, or 3.75%) on incomes less than £2,000, which was equivalent to roughly £225,000 in today's money[5]—but a higher rate of one shilling (12d, or 5%) was proposed on incomes greater than £2,000, and an additional surcharge or supertax of 6d (a further 2.5%) was proposed on the amount by which incomes of £5,000, or more (approximately £566,000 today) exceeded £3,000 (£340,000 today approx.). An increase was also proposed in death duties and naval rearmament.[6]
More controversially, the Budget also included a proposal for the introduction of complete land valuation and a 20% tax on increases in value when land changed hands.[7]Land taxes were based on the ideas of the American tax reformer Henry George.[8] This would have had a major effect on large landowners, and the Conservative-Unionist opposition, many of whom were large landowners, had had an overwhelming majority in the Lords since the Liberal split in 1886. Furthermore, the Conservatives believed that money should be raised through the introduction of tariffs on imports, which would benefit British industry and trade within the Empire, and raise revenue for social reforms at the same time; but this was also unpopular as it would have meant higher prices on imported food. According to economic theory, such tariffs would have been very beneficial for landowners, especially tariffs on agricultural produce, but the costs to ordinary consumers would have exceeded the gains to these landowners (see Corn Laws).[citation needed]
Election poster from "Labour Party and Democratic League" (a faction of the Labour Party)
Constitutional stand-off
The Northcliffe Press (who published both The Times and the Daily Mail) urged rejection of the budget to give tariff reform a chance.[9] There were many public meetings, some of them organised by dukes, which portrayed the budget as the thin end of the socialist wedge. Lloyd George gave a speech at Newcastle upon Tyne in October 1909 in which he said that "a fully-equipped duke costs as much to keep up as two Dreadnoughts; and dukes are just as great a terror and they last longer".[10] The Conservatives wanted to force an election by rejecting the budget.[11]
The Lords were entitled by convention to reject but not to amend a money bill but had not rejected a budget for two centuries.[12] Originally, the budget had included only annual renewals of existing taxes—any amendment to taxes was part of a separate Act. That ended in 1860 when the Lords rejected the repeal of paper duties, which would have benefited new cheaper newspapers aimed at men who hoped soon to be given the right to vote, at the expense of existing papers. From then on, all taxes were included in the Finance Bill, and no such bill had been rejected, including the controversial introduction of death duties by Sir William Harcourt in 1894.[13]
Despite Edward VII's private urgings for the budget to be passed to avoid a crisis,[14] the House of Lords vetoed the new budget on 30 November 1909 although it clarified that it would pass the bill as soon as the Liberals obtained an electoral mandate for it.[15] The Liberals countered by proposing to reduce the power of the Lords. That was the main issue of the general election in January 1910, setting the stage for a tremendous showdown, which Lloyd George relished.[16]
Despite the heated rhetoric, opinion in the country was divided.[17] The Unionists, with 47% of the votes, were outpolled by the Liberals and their allies from the Labour Party. The outcome was a hung parliament, with the Liberals relying on Labour and the Irish Parliamentary Party for their parliamentary majority. As the price for their continued support, the Irish nationalist MPs demanded measures to remove the Lords' veto so that they could no longer block Irish Home Rule.[18] They even threatened to vote down the Budget in the House of Commons (Irish Nationalists favoured tariff reform and abhorred the planned increase in whisky duty[19]) until Asquith pledged to introduce such measures.
As they had promised, the Lords accepted the Budget on 28 April 1910,[20] but contention between the government and the Lords continued until the second general election in December 1910, when the Unionists were again outpolled by their combined opponents. The result was another hung parliament, with the Liberals again relying on Labour and the Irish Parliamentary Party. Nonetheless, the Lords passed the Parliament Act 1911 when faced with the threat, obtained from a narrowly-convinced new King George V (Edward VII having died on 6 May 1910, seven days after the Budget was passed), that it would be acceptable to flood the House of Lords with hundreds of new Liberal Party peers to give that party a majority or a near-majority there.[21]
↑ Lloyd George, David (1929). "Budget:Newcastle Speech". In Guedalla, Philip (ed.). Slings and Arrows – Sayings Chosen from the Speeches of the Rt Hon David Lloyd George, OM, MP. London: Cassell and Company, Ltd. p.111.
The Liberal Party was one of the two major political parties in the United Kingdom, along with the Conservative Party, in the 19th and early 20th centuries. Beginning as an alliance of Whigs, free trade–supporting Peelites, and reformist Radicals in the 1850s, by the end of the 19th century, it had formed four governments under William Gladstone. Despite being divided over the issue of Irish Home Rule, the party returned to government in 1905 and won a landslide victory in the 1906 general election. Under prime ministers Henry Campbell-Bannerman (1905–1908) and H. H. Asquith (1908–1916), the Liberal Party passed reforms that created a basic welfare state. Although Asquith was the party leader, its dominant figure was David Lloyd George.
David Lloyd George, 1st Earl Lloyd-George of Dwyfor, was Prime Minister of the United Kingdom from 1916 to 1922. A Liberal Party politician from Wales, he was known for leading the United Kingdom during the First World War, for social-reform policies, for his role in the Paris Peace Conference, and for negotiating the establishment of the Irish Free State. He was the last Liberal prime minister; the party fell into third-party status during the last years of his premiership.
Herbert Henry Asquith, 1st Earl of Oxford and Asquith, generally known as H. H. Asquith, was a British politician and statesman who was Prime Minister of the United Kingdom from 1908 to 1916. He was the last Liberal Party prime minister to command a majority government, and the most recent Liberal to have served as Leader of the Opposition. He played a major role in the design and passage of major liberal legislation and a reduction of the power of the House of Lords. In August 1914, Asquith took Great Britain and the British Empire into the First World War. During 1915, his government was vigorously attacked for a shortage of munitions and the failure of the Gallipoli Campaign. He formed a coalition government with other parties but failed to satisfy critics, was forced to resign in December 1916 and never regained power.
The Liberal Unionist Party was a British political party that was formed in 1886 by a faction that broke away from the Liberal Party. Led by Lord Hartington and Joseph Chamberlain, the party established a political alliance with the Conservative Party in opposition to Irish Home Rule. The two parties formed the ten-year-long coalition Unionist Government 1895–1905 but kept separate political funds and their own party organisations until a complete merger between the Liberal Unionist and the Conservative parties was agreed to in May 1912.
Arthur James Balfour, 1st Earl of Balfour, was a British statesman and Conservative politician who was Prime Minister of the United Kingdom from 1902 to 1905. As foreign secretary in the Lloyd George ministry, he issued the Balfour Declaration of 1917 on behalf of the cabinet, which supported a "home for the Jewish people" in Palestine.
Andrew Bonar Law was a British statesman and Conservative politician who was Prime Minister of the United Kingdom from October 1922 to May 1923.
The December 1910 United Kingdom general election was held from 3 to 19 December. It was the last general election to be held over several days and the last to be held before the First World War.
The 1906 United Kingdom general election was held from 12 January to 8 February 1906. The Liberals, led by Prime Minister Henry Campbell-Bannerman, won a landslide majority at the election. The Conservatives led by Arthur Balfour, who had been in government until the month before the election, lost more than half their seats, including party leader Balfour's own seat in Manchester East, leaving the party with its fewest recorded seats ever in history until 2024. The election saw a 5.4% swing from the Conservative Party to the Liberal Party, the largest-ever seen at the time. This has resulted in the 1906 general election being dubbed the "Liberal landslide", and is now ranked alongside the 1924, 1931, 1945, 1983, 1997, 2001, and 2024 general elections as one of the largest landslide election victories.
Reginald McKenna was a British banker and Liberal politician. His first Cabinet post under Henry Campbell-Bannerman was as President of the Board of Education, after which he served as First Lord of the Admiralty. His most important roles were as Home Secretary and Chancellor of the Exchequer during the premiership of H. H. Asquith. He was studious and meticulous, noted for his attention to detail, but also for being bureaucratic and partisan.
In the United Kingdom, the word liberalism can have any of several meanings. Scholars primarily use the term to refer to classical liberalism. The term can also mean economic liberalism, social liberalism or political liberalism. It can simply refer to the ideology and practises of the historic Liberal Party (1859–1988), or in the modern context, of the Liberal Democrats, a UK party formed after the original Liberal Party's demise.
The Parliament Act 1911 is an act of the Parliament of the United Kingdom. It is constitutionally important and partly governs the relationship between the House of Commons and the House of Lords, the two Houses of Parliament. The Parliament Act 1949 provides that the Parliament Act 1911 and the Parliament Act 1949 are to be construed together "as one" in their effects and that the two acts may be cited together as the Parliament Acts 1911 and 1949.
The Conservative Party is the oldest political party in the United Kingdom and arguably the world. The current party was first organised in the 1830s and the name "Conservative" was officially adopted, but the party is still often referred to as the Tory party. The Tories had been a coalition that more often than not formed the government from 1760 until the Reform Act 1832. Modernising reformers said the traditionalistic party of "Throne, Altar and Cottage" was obsolete, but in the face of an expanding electorate 1830s–1860s it held its strength among royalists, devout Anglicans and landlords and their tenants.
The Tariff Reform League (TRL) was a protectionist British pressure group formed in 1903 to protest against what they considered to be unfair foreign imports and to advocate Imperial Preference to protect British industry from foreign competition. It was well funded and included politicians, intellectuals and businessmen, and was popular with the grassroots of the Conservative Party. It was internally opposed by the Unionist Free Food League but that had virtually disappeared as a viable force by 1910. By 1914 the Tariff Reform League had approximately 250,000 members. It is associated with the national campaign of Joseph Chamberlain, the most outspoken and charismatic supporter of Tariff Reform. The historian Bruce Murray has claimed that the TRL "possessed fewer prejudices against large-scale government expenditure than any other political group in Edwardian Britain".
The Budget Protest League was a British pressure group formed in June 1909 and led by Walter Long to oppose David Lloyd George's "People's Budget" outside of Parliament.
The Liberal welfare reforms (1906–1914) were a series of acts of social legislation passed by the Liberal Party after the 1906 general election. They represent the Liberal Party's transition rejecting the old laissez faire policies and enacting interventionist state policies against poverty and thus launching the modern welfare state in the United Kingdom. David Lloyd George and Winston Churchill led in designing and passing the reforms, and building nationwide support.
The Liberal government of the United Kingdom of Great Britain and Ireland that began in 1905 and ended in 1915 consisted of two ministries: the first led by Henry Campbell-Bannerman and the final three by H. H. Asquith.
The 1910 Edinburgh South by-election was a parliamentary by-election held for the House of Commons constituency of Edinburgh South in Scotland on 29 April 1910.
The Unionist Free Food League was a British pressure group formed on 13 July 1903 by Conservative and Liberal Unionist politicians who believed in free trade and who wished to campaign against Joseph Chamberlain's proposals for Tariff Reform, which would involve an import tax on food. About 40 Conservative and 20 Liberal Unionist MPs attended the initial meeting. The former Unionist Chancellor of the Exchequer, Sir Michael Hicks Beach, became president of the group. He was replaced in October 1903 by the Liberal Unionist party leader, the Duke of Devonshire.
The issue of Ireland has been a major one in British politics, intermittently so for centuries. Britain's attempts to control and administer the island, or parts thereof, have had significant consequences for British politics, especially in the 19th and 20th centuries. Although nominally autonomous until the end of the 18th century, Ireland became part of the United Kingdom of Great Britain and Ireland in 1801.
Winston Churchill was first elected to the UK Parliament at the 1900 general election as one of two Conservative Party members representing the Oldham constituency. He took his seat in the House of Commons in February 1901 but soon became critical of the Conservative government on a number of issues. On 31 May 1904, he formally crossed the floor of the Commons to join the opposition Liberals, remaining a party member until March 1924.
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