How successfully did the Liberal
Party deal with the Constitutional
Crisis of 1909-1911?
What is a Constitutional Crisis?
Why did the People’s Budget of
1909/10 cause such controversy?
What was the outcome of the Crisis?
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What is a Constitutional Crisis?
• A situation where the constitution (laws/rules) of
a legal system appear unable to resolve a certain
issue. This often results in a breakdown in the
orderly operation of a government.
• Generally, a constitutional crisis is a situation in
which separate factions within a government
disagree about the extent to which each of their
factions hold sovereignty (ability to rule itself
without interference from outside
sources/bodies).
• The rejection of the 1909 People’s Budget by the
House of Lords caused a two year impasse – a
period of disagreement, no progress and deadlock
in the government of the country.
• This led to the Parliament Act of 1911.
The People’s Budget 1909/10
• The British PM H. H. Asquith’s Liberal
government introduced unprecedented taxes on
the wealthy in Britain and a series of radical
social welfare policies.
• Supported by David Lloyd George and Winston
Churchill, Churchill’s biographer called the
budget “a revolutionary concept” as it was the
first budget in British history with the
expressed intent of redistributing wealth
amongst the British public.
Why would the conservatives disagree with this?
The People’s Budget
• The budget hinted at a socialist movement
which placed the power and wealth into the
hands of the working population.
• This was a key issue between the Liberal
government who championed this change
and the Conservatives who dominated in
the House of Lords. Why might this pose a
problem for the People’s budget?
• This conflict led to TWO general elections
and the enactment of the Parliament Act
of 1911.
What did the Liberals want from
the People’s Budget?
• The budget was introduced on the 19th April 1909. It was argued
that the budget would eliminate poverty.
• The budget included several proposed tax increases to fund the
Liberal government welfare reforms;
• Income tax was held at nine old pence in the pound (9d, or 3.75%)
for incomes less than £2,000, which was equivalent to £181,902 in
today's money—but a higher rate of one shilling (12d, or 5%) was
proposed for incomes greater than £2,000, and an additional
surcharge or "super tax" of 6d (a further 2.5%) was proposed on
the amount by which incomes of £5,000 (£454,756 today) or more
exceeded £3,000 (£272,854 today).
• An increase was also proposed in inheritance tax and naval
rearmament.
• 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. 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.
What was the reaction to the
budget?
• Conservatives believed in tariffs on imports to
benefit British industry and trade within the
Empire = huge disagreement with Liberals.
• Public meetings were held – some organised by
Dukes – which portrayed the budget as the ‘thin
edge of the socialist wedge’.
• Lloyd George (1909) “a fully equipped duke cost
as much to keep up as two dreadnoughts”.
• The Conservatives wanted to force and election
by rejecting the budget. The rejection of a
money bill has not happened for more than two
centuries.
The Rejection of the Bill
• Despite the King’s private urgings that the bill
be passed to avoid a crisis, the Hoes of Lords
vetoed the new budget on 30th November 1909.
Although they were clear that they would pass
it as soon as the Liberals obtained an electoral
mandate for it (democratically won support for
the bill)…
• The Liberals countered this response by making
their proposals to reduce the power of the
Lords the main issue of the election in January
1910.
• Opinion in the country was divided.
Outcomes of the Election
• The Unionists won more votes than the Liberals
but the Liberals won more seats.
• The outcome was a hung parliament with the
Liberals relying on Labour and the Irish
Nationals for their majority.
• As the price for their support, the Irish MPs
demanded measures to remove the Lord’s veto
so that they would no longer be able to block
Irish Home Rule.
• They even threatened to vote down the budget
in the House of Commons IN FAVOUR of tariff
reform proposed by the Conservatives.
The Passing of the Bill
• The House of Lords accepted the budget on
29th April 1910 – 1 year after it’s introduction.
• The lad tax proposal was dropped BUT the
contention between the government and the
House of Lords continued until the second
general election was held in December 1910.
• The Lords passed the Parliament Act of 1911
when faced with the threat from King George
V, that it would be acceptable to flood the HoL
with hundreds of new Liberal peers to challenge
the Conservative dominance there.
The Parliament Act 1911
• The act that governs the relationship between the
House of Commons and the House of Lords.
• The stimulus being that the Commons wants to
establish their dominance after the rejection of
the People’s Budget.
• The Parliament Act looked the prevent this
problem from ever happening again and was passed
with the support (gentle nudge…) from the King.
• The Act removed the right of the Lords to veto
money bills altogether and replaced the right to
veto over other public bills but delay these by a
maximum of 2 years.
• It also reduced the maximum term of parliament
from 7 years to 5 years.
How successfully did the Liberal
Party deal with the Constitutional
Crisis of 1909-1911?
• Using the reading completed over
Christmas and the card sort activity,
consider the successes and failures of
the constitutional crisis and consider
exactly HOW successful were the
Liberals in dealing with this?
• Lowe p399