16th November 1910. People’s Budget.
The Liberals had come into office in the 1906 landslide election after the Conservative Party’s, Arthur Balfour had mysteriously called an election.
They now felt they had a mandate to push for social reforms and extra money for the new Dreadnought battleships.
To fulfill this mandate increases in death duties and taxes on tobacco and spirits were necessary. Income Tax would be held for those on less than £2000 per annum, but with a rise for those over this amount, a fortune in those days.
Then a new Super-tax was introduced for those earning over £5,000, and importantly a 20% tax on land sale profits.
As early as 1907 Lloyd George in a speech in Newcastle had sought to destroy the powers of the non-elected House of Lords.
He called them: ‘500 men chosen accidentally from the unemployed’, and that a ‘fully equipped duke costs as much to keep up as two Dreadnoughts and dukes are just as great a terror and last longer’.
However the crunch came with the Lords’ refusal to pass the reforming April 1909 Budget, an act unprecedented in 250 years. In addition money was needed to pay for the new Old Age Pension (The Lloyd George), running above estimate, and new road building.
Herbert Asquith, Liberal leader, said that the Peers in refusing to pass the Budget, was a ‘Breach of the Constitution and a usurpation of the Commons’ rights. Result Deadlock! (1)
So it was Today that in 1910 King George V received ‘Squiffy’Asquith and Lord Crewe to accede to a request for the creation of extra Peers favourable to reform and to settle the 1909 Budget.
‘I disliked having to do this very much’, the King wrote, ‘but agreed that this was the only alternative to the Cabinet resigning, which at this moment would be disastrous’. However the King said he would not be justified in creating Peers unless a second election was held after that of January 1910.
In the electioneering before the second election in December, Lloyd George, at Mile End, London, arraigned the Peers as the descendants of ‘plunderers’, some of whom came over with William the Conqueror whilst others had ‘plundered the poor at the Reformation’.
The second election resulted in Tory and Liberal Unionist getting 271 seats, Liberal 272 ( the last time they won the highest number of seats) Labour 42 and Irish Party 74.
However it was at a price as Prime-Minister Asquith needed the support of Redmond, Leader of the Irish Party who now held the balance of power and a Home Rule Bill was promised for Irish support for the Budget.
Making sure that the Lords could not block the elected Commons in future, the Parliament Act of 1911 was passed, which debarred them from amending Money Bills, (any dealing with taxation).
Also any Public Bill passed by the Commons in three successive sessions, provided that at least two years had passed since its introduction, should be presented for Royal Assent.
Thus was confirmed the paramountcy of the elected Commons; the Lords caved in without new Peers and passed the Budget, only after much rancour, but which can be regarded as the first modern exercise in its effort to redistribute wealth.
(1) Even William IV over the 1832 Reform Act, promised to side with the elected MPs.
newhistories.shef.ac.uk.wordpress.peoples-budget/ Pic of Lords.
Rare Book Pictures/Pic of Cover.