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?

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.

Why would the conservatives disagree with this? 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