Lloyd George Takes the Reins
by Professor George Cassar, Eastern Michigan University
A Resume for Leadership
David Lloyd George (1863–1945) had already been in politics for slightly over a quarter of a century when he snatched the premiership from H. H. Asquith in December 1916. Drawn to politics while still a teenager, Lloyd George had gained local prominence through his work as a Liberal activist, many speeches and articles for various causes, and as secretary to the Anti-Tithe League in south Caernarvonshire. These activities not only kindled his political ambition but also advanced his prospects as a young lawyer. An opportunity opened up when the sitting MP representing Caernarvon Boroughs died suddenly, precipitating a by-election. Lloyd George was chosen as the Liberal candidate and, in a hard-fought campaign, defeated his Tory rival by a mere 18 votes. Twenty-seven years old when he entered Parliament in 1890, he would hold the seat through 13 general elections over the next 55 years.
MP David Lloyd George, 1895
Although single-minded and eager to make his mark in national politics, Lloyd George was bound up with issues mainly of local or Welsh interest during his early years at Westminister. As a backbencher, he was actively involved in supporting Welsh Home Rule, financial assistance for Welsh education, and the Disestablishment of the Welsh Church. His stinging and hard-hitting speeches, together with his habit of placing Welsh goals above all else, annoyed the Liberal leadership as much as the rival Tory party. During the ten years of Conservative ascendancy he became the leading spokesman for the Welsh Liberals and the recognized champion of Welsh non-conformity. Nevertheless, outside of Wales he remained an unknown public figure until the Boer War, which broke out in 1899.
The Liberal party was divided over the war and Lloyd George associated himself with the radical left of the party, which regarded the war as morally insupportable. From the start he battled to counteract the jingoistic hysteria whipped up by the government, exposing himself to considerable danger, both politically and personally. His stinging attacks on the government, accusing it of waging a war for the benefit of gold mining syndicates without any consideration for the suffering of the Boer women and children herded into concentration camps, caused riots and counter-demonstrations and made him the most unpopular man in the country. The best-known incident, one which brought him within peril of his life, occurred at a meeting in Birmingham, fortress of Joseph Chamberlain, the colonial secretary. An angry Lloyd George was also heavily involved in an issue far more explosive than the Education bill. To promote imperial unity, enhance revenues, and protect British industry, Chamberlain pressed for the establishment of an Empire customs union with tariffs directed against nations outside the Empire. The radical proposal split the Conservative party and re-energized the Liberals, always historically a free trade party. The country as a whole was unwilling to turn its back on free trade, which had helped bring Britain unprecedented growth.
Using such slogans as “Your food will cost you more,” the Liberals rode the unpopularity of tariff reform back into power in the general elections in 1906. When the Liberal leader, Sir Henry Campbell-Bannerman, formed his government, Lloyd George became president of the board of trade.
In his first ministerial post, Lloyd George used all of his energy and resourcefulness to prove to his colleagues that he was a serious and competent administrator. He began by piloting the Merchant Shipping Bill in 1906, which, apart from raising the standard of safety for ships, improved the pay, working conditions, and accommodations of merchant sailors. This piece of legislation was followed by the Patent Act, designed to protect domestic inventors and manufacturers, and the Port of London Act, which placed all docks in London under a new authority.
Furthermore, Lloyd George showed himself to be a skillful negotiator in the handling of labor, especially in averting a railroad strike in 1907. During the two years that he served at the board of trade he compiled a solid if not spectacular record, confirming the growing impression in political circles that his wild and rabble-rousing days were a thing of the past and that he had now become a moderate and diligent statesman.
In 1908 Lloyd George became chancellor of the exchequer, an office vacated when H.H. Asquith succeeded the dying Campbell-Bannerman as prime minister. In his new capacity, he provided a powerful stimulus to the social policies of the Liberal government. He emerged as the leader of the radical wing of the Liberal party, determined to use the power of the state to improve conditions for the poor and the suffering. His first major task was to introduce the outgoing chancellor's budget, which, among other things, allotted pensions to those over 70 years of age.
When he prepared his own budget for the following year, he was required to find additional revenue in order to finance the construction of new dreadnoughts, as well as to cover the costs of old age pensions and other social services. His solution was to raise death duties sharply (inheritance taxes on estates) and impose a super tax on incomes over £5000 (a land tax amounting to a 20 percent levy on any increase in the value of land, to be paid whenever it was sold) and an annual duty on the undeveloped land of large estates.
Introduced in 1909, the so-called People's Budget announced the intention of the government to tax the rich to promote a limited redistribution of the national income through social programs for the poor. It was a revolutionary principle and created a firestorm of controversy. It was heatedly debated in the House of Commons, session after session, and delayed other legislation for the rest of the year. Only after the general elections of 1910, when the Liberals were re-elected by a narrow margin, was the budget issue finally settled.
Another of Lloyd George's cherished causes requiring navigation through rocky waters was the National Insurance Act of 1911, the capstone to the body of social legislation the Liberals had begun five years earlier with free school meals for children. The general plan provided for insurance against sickness and disability for manual workers as well as unemployment benefits, though limited to industries in which employment was seasonal. It was to be a contributory scheme with the employer, employee, and the state sharing the costs. The bill aroused widespread opposition, and Lloyd George had to call upon all his reserves of charm and skill before it was carried into law.
After years of hard work and impressive political achievements, Lloyd George faced a major threat to his career in the form of the Marconi scandal. In the spring of 1912 Lloyd George, who was always looking for a windfall to alleviate his financial worries, unwisely bought 1000 shares in the American Marconi Company at £2 each. The purchase had taken place at a time when the English Marconi Company was about to enter into a very lucrative contract with the British government to construct a chain of wireless stations between Britain and its Empire. It was not very long before the shares were selling for £4 on the open market and Lloyd George immediately recovered his investment by selling half of his holdings. When his activities were revealed in the press in the summer there was a clear suspicion that he had benefited from insider trading to line his pockets. The Opposition accused him of corruption and hypocrisy, and it was only because of Asquith's indulgence and robust defense in the Commons that he survived.
Although Lloyd George would remain under a cloud for some time, he was still a central figure in the cabinet and indispensable to Asquith. He was the chief spokesman for the radical wing of the Liberal party. He was on intimate terms with labor and was instrumental in settling a railroad strike in 1912. Furthermore, he was sent to Ireland to try to bring the opposing factions together. In early 1914 he devised a plan that called for the temporary suspension of the application of Irish Home Rule to the six counties of Ulster. Asquith proposed to Sir Edward Carson, leader of the Ulster backbenchers in Parliament, that the six counties could remain separate from Dublin for six years after which the public, through general elections, could decide their fate. Carson rejected the compromise. At that critical juncture external events intervened.
The long spell of peace in Europe was shattered on 28 July 1914. A champion of international peace in his earlier career, the war would transform Lloyd George into a belligerent nationalist who would frequently call, at least publicly, for a decisive victory over the enemy. Lloyd George shared his colleagues' expectation that the war would be brief and one of limited liability for Britain. He told his wife on August 11: “We are keeping the sea for France – that ought to suffice for the moment especially as we are sending 100,000 men to help her to bear the first brunt of the attack. That is all that counts for Russia will come in soon.” Fortunately, Lord Kitchener, who was brought in by Asquith as secretary for war to give the cabinet the benefit of his military experience, had the foresight to see that the war would last at least three years and set about immediately to recruit a million-man army. Standing in awe of Kitchener's military reputation, the cabinet deferred to his opinion, as it did regularly in the early months of the war. The consensus among the ministers was that the war would be over before the new armies were fully trained and equipped, but no one dared challenge Kitchener or place obstacles in his way.
Lloyd George's most immediate concern in the opening days of August was to deal with the monetary panic that began as soon as the war appeared imminent. The bank holiday on 3 August was extended an additional three days while he sought advice from experts and implemented various measures to restore the credit system and bolster confidence. Public credit was made available to banks, specie payment and gold standard were maintained, interest rates were raised, new one-pound and ten-shilling notes were issued to increase the amount of money in circulation, and a moratorium on all debts for three months was proclaimed. When the banks reopened on 7 August, they reported that business was proceeding as usual. The financial crisis had passed. Leading economists, long suspicious of Lloyd George's ability to handle public finance, now praised him for his skill and courage in saving the economy from ruin.
Lloyd George's next challenge (when the politicians realized that the conflict would not be over by Christmas) was to provide the financial means to carry on a major war of undetermined duration. In November he submitted his first wartime budget in which he raised direct taxes and increased duties on tea and beer.
Beginning in the autumn of 1914, Lloyd George clashed almost continuously with Kitchener. Initially he was convinced that the War Office was not providing enough arms and munitions for the enormous army that was being raised. In October he persuaded Asquith to set up a Shells Committee of the cabinet to assist the War Office on the supply side. Kitchener resented any attempt on the part of politicians to encroach in what he considered was his own domain. The committee did reasonably good work, finding new sources of supply and placing additional orders with old firms. But the difficult part was not in placing more munitions orders but in ensuring their promised delivery dates. Kitchener, who considered the committee an annoyance, brought it to an abrupt end early in January 1915 by announcing that he could no longer find the time to attend its meetings.
In the spring of 1915 the munitions question re-emerged when it became apparent that part of the New Armies would not be able to take the field because armament firms were in arrears of their deliveries. Lloyd George was especially critical of the War Office's reluctance to extend the list of companies to which contracts were given. It was incomprehensible to him not to take full advantage of the nation's formidable engineering capacity. Kitchener, by contrast, wanted to restrict contracts only to established and dependable firms, lest inexperienced manufacturers produce substandard material. The dispute dragged on until the coalition government was established in May 1915.
Lloyd George played a central role in the events leading to the creation of the coalition government. In mid-May the conjuncture of two controversies occasioned the change – one a military setback attributed supposedly to a shell shortage, and the other the abrupt resignation of the impetuous and headstrong First Sea Lord, Lord Fisher, after a volcanic dispute with Churchill. On 17 May the Unionist [opponents of Irish home rule] chief, future conservative prime minister Bonar Law, called on Lloyd George at 11 Downing Street and told him that, owing to the recent revelations, he could no longer hold his backbenchers in check. Lloyd George agreed with him that the only way to maintain a spirit of unity in the Commons was to broaden the government to include the Unionists. Lloyd George then went straight next door to see Asquith and impressed on him the need to forestall a renewal of party conflict, which would damage the war effort. Lloyd George's arguments in favor of a coalition won the day. When the government was reconstructed under Asquith's leadership a week later, Lloyd George left the Treasury to take charge of the newly created Ministry of Munitions.
"History as well as by the DMO at the time, Sir C.E. Callwell, who wrote that neither the country nor the armed forces were told “that the great increase in the output of guns, howitzers, machine-guns and ammunition, which took place from the autumn of 1915 onwards up to just before the battle of the Somme, was the achievement, not of the Ministry of Munitions but of the War Office.”
Still Lloyd George worked at a relentless pace from the moment he undertook his new task. Large orders were place with foreign firms, new national factories were built, men were recruited from industry to carry out policy or act as administrators, controls were imposed on the supply of raw materials, technical innovations were made, and production was sped up by relaxation of trade union rules. Although Lloyd George exaggerated the obstacles that he had to overcome and gave no credit whatsoever to what Kitchener and the War Office had accomplished in very difficult circumstances, there is no denying that his stay at the Ministry of Munitions was a success and that his contribution in stimulating armament production was substantial.
Despite his pronounced tendency for self-promotion, his speech to the Commons on 20 December 1915 captures the fire Lloyd George brought to the mission and his determination to win the war.
Too late in moving here! Too late in arriving there! Too late in coming to this decision! Too late in starting with enterprises! Too late in preparing! In this war the footsteps of the Allies have been dogged by the mocking spectre of “Too Late,” and unless we quicken our movements, damnation will fall on the sacred cause for which so much gallant blood has flowed.
Far less constructive was Lloyd George's involvement in strategic matters about which he knew precious little. He had no army experience and prior to 1914 had shown little, if any, interest, in the study of warfare. In pushing for grandiose schemes he thought mostly of the benefits that would flow, paying insufficient heed to logistics, topography of the land, interior versus exterior lines and probable enemy response. He believed that, as in politics, there was a method to war and that, by applying common sense, the desired results could be achieved. He never understood that, in any major operation, the sudden,unexpected emergence of obstacles is usually the rule rather than the exception."
The material presented here is excerpted from Professor Cassar's 2009 work Lloyd George at War, 1916-1918 by his permission.
Tomorrow — Pt. II: 1915 to Taking the Reins in 1916
