164. The Liberals in Office: the Elections of 1906.—Hesitating long, but at the last bowing somewhat abruptly before the gathering storm, Mr. Balfour tendered his resignation December 4, 1905. The Government had in the Commons a working majority of seventy-six, and the Parliament elected in 1900 had still another year of life. In the Lords the Unionists outnumbered their opponents ten to one. The administration, however, had fallen off enormously in popularity, and the obstacles imposed by the fiscal cleavage appeared insuperable. Unable wholly to follow Mr. Chamberlain in his projects, the premier had grown weary of the attempt to balance himself on the tight rope of ambiguity between the free trade and protectionist wings of his party. Not caring, however, to give his opponents the advantage which would accrue from an immediate dissolution of Parliament and the ordering of an election which should turn on clear issues raised by the record of the ten years of Unionist rule, he chose simply to resign and so to compel the formation of a new government which itself should be immediately on trial when the inevitable elections should come.
On the day of Mr. Balfour's resignation the king designated as premier the Liberal leader, Sir Henry Campbell-Bannerman, who forthwith made up a cabinet of rather exceptional strength in which the premier himself occupied the post of First Lord of the Treasury, Sir Edward Grey that of Foreign Affairs, Mr. Herbert H. Asquith that of the Exchequer, Mr. Richard B. Haldane that of War, Lord Tweedmouth that of the Navy, Mr. David Lloyd-George that of President of the Board of Trade, Mr. John Burns that of President of the Local Government Board, Mr. Augustine Birrell that of President of the Board of Education, and Mr. James Bryce that of Chief Secretary for Ireland. January 8, 1906, the "Khaki Parliament" was dissolved, a general election was ordered, and the new parliament was fixed to meet at the earliest legal date, February 13. The campaign that followed was the most animated, except that of 1910, in recent British history. The Unionists, being themselves divided beyond repair on the question of the tariff, pinned their hope to a disruption of the Liberal forces on the issue of Home Rule. The Liberal leaders, however, steadfastly refused to allow the Irish question to be brought into the foreground. Recognizing that Home Rule in the immediate future was an impossibility, but pledging themselves to a policy contemplating its establishment by degrees, they contrived to force the battle principally upon the issue of free trade versus protection and, in general, to direct their most telling attack upon the fiscal record and fiscal policies of their opponents. The result was an overwhelming Liberal triumph. In a total of 6,555,301 votes,[223] 4,026,704 were cast for Liberal, Nationalist, and Labor candidates, and only 2,528,597 for Conservatives and Unionists. There were returned to the House of Commons 374 Liberals, 84 Nationalists, 54 Laborites, 131 Conservatives, and 27 Liberal Unionists, assuring the Liberals and their allies a clear preponderance of 354.[224] Prior to the elections careful observers believed the return of the Liberals to power inevitable, but a victory of such proportions was not dreamed of by the most ardent of the party's well-wishers.[225]
VI. The Rule of the Liberals, 1906–1912
165. The Liberal Mandate.—The Liberal ascendancy, made thus secure by the elections of 1906, has continued uninterruptedly to the date of writing (1912), and the years covered by it have been in many respects the most important in the political history of modern Britain. The significance of the period arises principally from the vast amount of social and economic legislation that has been attempted within it. A considerable portion of this legislation has been successfully carried through and is now in effect. Some important portions, however, have failed of eventual adoption, chiefly in consequence of the opposition of the Unionist majority in the Lords; and a direct outcome of the series of clashes between the Liberals and the Lords has been the important constitutional readjustments comprised within the Parliament Act of 1911 already described. Speaking broadly, the Liberals were restored to power in 1906 because the nation desired the doing of certain things which the Unionists seemed unable or disinclined to do. Most important among these things were: (1) the reduction of public expenditures and the curbing of national extravagance; (2) the remission of taxation imposed during the South African war; (3) the reform of the army; and (4) the undertaking of an extended programme of social reform, embracing the establishment of old age pensions, the remedying of unemployment, the regulation of the liquor traffic, and the liberation of education from ecclesiastical domination. The nation was solicitous, too, that the system of free trade be maintained without impairment. To all of these policies, and more, the Liberals were committed without reserve when they entered office.
166. The Party's Performance.—During the years intervening between the elections of 1906 and those of 1910 the Liberal governments presided over successively by Mr. Campbell-Bannerman and Mr. Asquith[226] made honest effort to redeem the election pledges of the party. They stopped the alarming increase of the national debt and made provision for debt reduction at a rate equalled at but two brief periods since the middle of the nineteenth century. They repealed approximately half of the war taxes which were still operative when they assumed office. In the matter of national expenditures they accomplished a momentary reduction, although the normal increase of civil outlays, the adoption of old age pensions, and, above all, the demand of the propertied interests for the maintenance of a two-power naval standard brought about eventually an increase rather than a diminution of the sums carried by the annual budget. In accordance with a scheme worked out by Mr. Haldane they remodelled the army. They maintained free trade. They made no headway toward Home Rule, but they enacted, in 1909, an Irish Universities bill and an Irish Land Purchase bill which were regarded as highly favorable to Irish interests. Above all, they labored to meet the demand of the nation for social legislation. The prevalence of unemployment, the misery occasioned by widespread poverty, the recurrence of strikes and other industrial disorders, the growing volume of emigration, and other related aspects of England's present social unsettlement, have served to fix unshakably in the public mind the idea that the state must plan, undertake, and bear the cost of huge projects of social and industrial amelioration and of democratization and reform. In the realization of those portions of their programme which relate to these matters the Liberals have been only partially successful. They enacted important labor legislation, including an eight-hour working day in mines, a Labor Exchanges act, and a Trades Disputes act, and they established, by act of 1908, an elaborate system of old age pensions. By reason of the opposition of the House of Lords, however, they failed to enact the bill of 1906 for the abolition of plural voting, the hotly contested measure of 1906 providing for the undenominationalizing of the schools, the Aliens Bill of 1906, the Land Values Bill of 1907, the Licensing Bill of 1908, the London Elections Bill of 1909, and, finally, the Finance Bill of 1909, whose rejection by the Lords precipitated a dissolution of Parliament and the ordering of the elections of January, 1910.
167. The Liberals Versus the Lords: the Elections of January, 1910.—Four years of conflict with the overpowering Opposition in the upper chamber brought the Liberals to a place from which they neither could nor would go on until certain fundamentals were settled. The first was the assurance of revenues adequate to meet the growing demands upon the treasury. The second was the alteration of the status of the Lords to make certain the predominance of the popular branch of Parliament in finance and legislation. During the two years (1909–1911) while these great issues were pending the nation was stirred to the depths and party conflict was unprecedented in intensity. On the side of finance, Unionists and Liberals were in substantial agreement upon the policies—especially old age pensions and naval aggrandizement—which rendered larger outlays inevitable; they differed, rather, upon the means by which the necessary funds should be obtained. The solution offered in the Lloyd-George budget of 1909 was the imposition of new taxes on land and the increase of liquor license duties and of the taxes on incomes and inheritances. The new burdens were contrived to fall almost wholly upon the propertied, especially the landholding,