Chamberlain's campaign for Tariff Reform had united a badly split Liberal party. The followers of Rosebery, who had supported the war policy of the Unionist government, had separated themselves from the main body of Liberalism when they founded the Liberal League in 1902. The rift between these Liberal-Imperialists and the pro-Boers -- who constituted the bulk of the parliamentary party -- had been a serious one; the
pro-Boer leaders-Rosebery's former secretary for war, Henry Campbell-Bannerman, and David Lloyd George, a parliamentary newcomer from Wales -- had stumped the country during the war denouncing their Liberal-Imperialist colleagues as well as British imperialism on the Rand. Although the defence of Free Trade had given them a common platform, there continued to be some dissenion between the two groups.
When the resignation of Balfour made the formation of a Liberal government necessary in late 1905, the LiberalImperialists plotted to compel Campbell-Bannerman's elevation to the House of Lords and thus to deprive him of the substance of his power as Prime Minister. CampbellBannerman refused to go along with the plan. Having lost on this point, the Liberal-Imperialists did succeed in securing those offices of state with which they were most concerned. Sir Edward Grey was sent to the Foreign Office; R. B. Haldane assumed control of the War Office. H. H. Asquith became second in command as the Chancellor of the Exchequer. Upon Campbell-Bannerman's death in 1908, Asquith became Prime Minister and Lloyd George, whose previous position at the Board of Trade was then assumed by another Radical, Winston Churchill, became Chancellor of the Exchequer. John Burns -- a former trade union official-was made President of the Local Government Board. The union between the two wings was solidified as Radicals were placed in the chief domestic positions while the Liberal-Imperialists took charge of foreign and military policy.
The campaign of 1906 had been a violent one. There were appeals to remember the 'hungry 'forties' and paeans in behalf of the cheap loaf as well as shouts of ' Tariff Reform Means Work for All.' The Liberals united in condemning 'slavery under the British Flag' in opposition to Milner's importation of Chinese labour for work in South African mines. The nonconformists-who were to receive 180 of the Liberal seats in the new parliament -- were concerned about the threatening effects of the Education Act of 1902. The trade unions supported Liberalism in an effort to obtain legislative redress of the Taff Vale decision of 1900, which had held unions financially responsible for strike-caused damages. Élie Halévy has written that just as the election of 1895 can be interpreted as
a call for imperialism, so the election of 1906 can be seen 'at bottom a victory of the proletariat,' and a call for social reform. 20It was difficult to know the wishes of the electorate where so many issues were involved. The construction of the Liberal government -- and the political philosophies of its leaders-made it necessary that both policies, one of imperialism as well as one of the social reform, should be pursued.
The Foreign Office was a post which the Liberal-Imperialists insisted be theirs -- certainly the Cobdenites could not be trusted to ready Britain for the struggle against Germany which many of the Coefficients had anticipated and even longed for. During the last years of Victoria's reign, Great Britain had begun to doubt the wisdom of Salisbury's 'splendid isolation.' Disturbed by French opposition to British moves in Africa and the threatening movements of Russia into China and the buffer states of the Indian frontier, Chamberlain, in the years before the Boer War, had tried to negotiate an Anglo-German alliance. Germany did not respond favourably to these British diplomatic advances, which led Britain to conclude her first alliance in many decades with Japan, in January of 1902. A community of interest was achieved as Britain's concern with Russian threats to her Chinese market and to India were matched by Japan's concern with Russian advances into Manchuria and Korea. Growing German power soon led Britain to seek continental European friends as well. Moves were under way in 1903 to settle the festering conflicts in North Africa which had been disturbing Anglo-French relations, and which in fact had almost resulted in war after the Fashoda incident of 1898. In 1904, an Anglo-French Entente was signed settling outstanding African problems-a most important provision gave Britain a free hand in Egypt, the French receiving the same in Morocco.
The Liberal government of 1906 -- with the Liberal-Imperialist Grey at the Foreign Office-continued the 'entente' policy of its predecessor, a policy Grey had espoused at meetings of the Coefficients even before the construction of the Anglo-French Entente. Grey even conducted military discussions with the French concerning common defence against
For factual detail in these sections, see Halévy, op. cit., passim.
possible German attack. German efforts to' split the Entente at Algeciras in 1906 strengthened it instead. and the Entente was further implemented by the signing of the Anglo-Russian Convention of 1907 which dealt with outstanding Asian questions affecting the two powers and provided a satisfactory solution to conflicts of interest in Persia. The 'ententes' between Great Britain and both France and Russia turned into virtual alliances as a result of shifty German intrigues and -of greater significance -- increasing British, French, and Russian fears of German strength. The diplomatic efforts of the Liberal-Imperialists to prepare for war with Germany were successful.
Another of the Coefficients, R. B. Haldane, had received the War Office and he worked with diligence and also with success to ready Britain's army for the struggle ahead. 21But it was the navy-not the army-which most Britons considered their first line of defence. The German intention to build a large navy-announced by their naval programme of 1898 and reinforced in 1900-could not help but alarm both the British Foreign Office and the Admiralty. Sir John Fisher, who had become First Sea Lord in 1904, had quite early concluded that Great Britain was the target of the German naval build-up and worked to reorganize and modernize the British navy. He began the construction of a new type of naval battleship, the Dreadnought-larger, speedier, armed with more powerful guns than the conventional ship. The first dreadnought was launched in 1906. German yards began to build superships as well. The coming into office of the antimilitarist Campbell-Bannerman resulted in downward revision of naval expenditures and a partial suspension in the building programme, much to the annoyance of the Liberal-Imperialists. Asquith resumed the programme upon his assumption of the office of Prime Minister in 1908.
A chief issue for the imperialists during the decade before the war-and their chief point of conflict with their Radical colleagues -- was in the field of armaments policy. Both Lloyd George and Winston Churchill -- who had charge of constructing and securing the passage of the Liberal programme of
See Chapter XII, infra.
social reform-continued to oppose the large service expenditures desired by the Liberal-Imperialists. Like others in the Radical wing, the Cabinet Radicals wished fiscal emphasis to be placed upon social reform. In 1907, there was a sharp struggle within the Cabinet on the issue of social reform vs. dreadnoughts. A public, aroused by the press to the dangers of German naval expansion-in 1909 England was in the throes of a 'naval panic' -- demanded a full effort, however. 'We Want Eight (Dreadnoughts) and We Won't Wait,' it told those Radicals who wished only four and the head of the Admiralty who was holding out for six. In three years, the British navy had eighteen. The struggle between the Radicals and the naval expansionists resulted in victory for both -- as the Lloyd George Budget of 1909 was able to raise revenue for dreadnoughts as well as for national insurance. 22
The Liberal-Imperialist moves to meet the German challenge, although supported by the imperialists in the opposition parties, by men like the Germanophobe Leopold J. Maxse, the pro-Chamberlain editor of the National Review, and by Robert Blatchford, the socialist editor of the Clarion, met the determined opposition of the Radicals and Cobdenites within their own party. The Radicals insisted that there was no foundation to fears of German aggression and believed that the Foreign Office should act rather to alleviate German fears of a British-French-Russian alliance. This was the declared position of Earl Loreburn, a former pro-Boer and a Cabinet critic of Grey's foreign policy, in his introduction to a pamphlet on the 'German panic.' The pamphlet, by J. A. Hobson, described how first France, then Russia, and now Germany had been successively portrayed as Britain's 'natural enemy.' The current talk was the work of 'the Protectionist party,' Hobson declared. Germany and Great Britain were not 'competing trading firms' as the protectionists insisted; in orthodox Cobdenite fashion, Hobson asserted that 'some private English firms' were simply 'competing with some private German or American firms.' The 'panic' was a capitalist scheme 'to divert the force of popular demands for drastic social reforms.' 23
The Liberal-Imperialists, as Beatrice Webb has told us in her
See Chapter VII, infra.
J. A. Hobson, The German Panic ( London, 1913), pp. 3-30.
diary, were 'at once collectivists and imperialists'; their 'imperialism,' once in office, has been outlined. What of their 'collectivism'? Once in power, the Liberal-Imperialist led government amply demonstrated its desire to enact the social reforms necessary for the breeding of an 'imperial-race,' and thus to prepare the working class for the threat of a coming war with Germany. The working class electorate was able to see a profound difference between the promises of the Tariff Reformers and the performance of the Asquith government. The Tariff Reformers continued to promise steady employment at good wages-an offer which seemed idyllic at best and the sweetness of which was definitely decreased by the thought of the stomach-tax and the failure of similar Tory promises in the past. So far as specific proposals were concerned, the Tariff Reformers frequently -- though not always -- suggested that the money necessary for old-age pensions might possibly be derived from tariff revenues. The Liberals on the other hand enacted a social programme which revealed full awareness that something had to be done to raise the living standards of the poor -- and did so by taxing the wealthy, a most important distinction which will later be elaborated upon.
The enactment of these reforms was overseen primarily by David Lloyd George, first as President of the Board of Trade and then as Chancellor of the Exchequer, and by Winston Churchill, Lloyd George's successor at the Board of Trade. The Fabians had guessed wrong as to who would actually formulate domestic reform legislation when Liberalism achieved power, so their advice was not sought during the great period of reform, 1906-14. The Liberal-Imperialists whom they had cultivated in the Coefficients Club were content to guide foreign and military policy and let the Radicals, not the Fabians, establish policy on social questions. 24
In 1908, an eight-hour day was instituted, with much conflict and difficulty, in the mines -- first in the mines, probably, in deference to the parliamentary strength, both Liberal and Labour, of miners' M.P.'s. In 1908, the Liberals presented a programme of old-age pensions without destroying the cheap loaf. The Tariff Reformers had pointed to the conditions in
R. C. K. Ensor, "Permeation", in Margaret Cole, ed., The Webbs and Their Work ( London: Muller, 1949), pp. 66-71.
the sweated industries and had suggested that a tariff would eliminate sweating by protecting domestic industry from cheap foreign goods. The Liberals attacked the problem differently, using the minimum wage as a weapon. The Trade Boards Act of 1909 applied to four trades which were notorious for sweatshop conditions: ready-made tailoring, paper box making, machine-made lace and net finishing, and chain making. A board was set up for these trades and was authorized to fix minimum rates for time workers and general minimum rates for piece workers.
A move to give substance to the Liberal-Imperial aim of housing fit for an imperial race was made by the Housing and Town Planning Act of 1909. The act increased the powers of local authorities to close and demolish unfit houses and encouraged them to build new ones. In dealing with the problem of relief for the unemployed, the Liberals also gained ground over their opponents. In 1909-10, legislation setting up a national system of labour exchanges was passed, and, by February 1910, sixty-one exchanges were operating under the authority of the Board of Trade. Part II of the famous National Insurance Act of 1911, modelled largely upon the German law of 1889, presented a complex plan of unemployment insurance. The act was to apply to some 2,250,000 workers in trades in which fluctuation of employment was most likely: construction, engineering, shipbuilding, iron founding, sawmilling, and vehicle construction. Both employer and employee were to contribute to the fund, with the state adding one-third of their joint contribution. The same act set forth a system of what can be called 'health insurance.' Beneficiaries included all manual workers between the ages of 16 and 70 and all others earning under £160 a year, excluding public employees. In all 15,000,000 persons were covered.
Mere promises of national insurance from tariff revenues had been made on the street corner, political brochure level by the Tariff Reform League and by such prominent Chamberlain supporters as the Birmingham economist, William Ashley. It was the Liberals, however, who succeeded in presenting to the electorate Bismarckian social insurance -- yet on a Free Trade base. In addition, the Liberals had dealt with
'sweated' industries, had satisfied labour's demands for an eight-hour day, and had taken important steps toward their own goal of housing fit for an 'imperial race.' Certainly the Asquith government could not have presented a more radical set of reforms if it had depended upon the socialistic Fabians rather than upon the left-wing of their own party for their formulation.