The Making of Modern Britain

by Andrew Marr

  This was the man Lloyd George and his chief whip, Freddy Guest – a cousin of Churchill’s – chose to act as the broker in his honours-selling business. Guest confided that he did not himself like to deal with ‘grubby little men in brown bowler hats’.94 Gregory sold anything. He sold OBEs, the more democratic awards created in a public spirited mood during the war, to the extent that they became known not as the Order of the British Empire but as the Order of the Bad Egg – 25,000 were awarded in just four years, from the arrival of Lloyd George as prime minister to his fall in 1922. He sold knighthoods. Some 1,500 of them were awarded in the same period and those in the know called London the city of dreadful knights. He sold peerages and Privy Councillorships, touting them around in an everything-must-go fashion. He sold them to war profiteers, to convicted criminals and to fraudsters. Not surprisingly, the King became increasingly worried and then angry. Lloyd George and Gregory seemed to be mocking the very foundations of sacrifice and honour with which the country comforted itself in the aftermath of war.

  The King was not the only one. Here we have to reintroduce another mysterious and charismatic character who has appeared briefly already. We last met Victor Grayson when he had been elected as a socialist in a famous 1907 by-election and was about to succumb to alcoholism, which quickly terminated his parliamentary career. He recovered enough to fight in Flanders and the trenches cured him for a time of his whisky addiction. Back in Britain, wounded, Grayson lost his wife and daughter after a premature birth and tried to rebuild his political career, touring the shipyards and factories making pro-war speeches. He joined the vehemently anti-German and anti-Bolshevik British Workers United League, and here he met Gregory and the jingoistic bully and con man Horatio Bottomley. After the war was over he seemed strangely affluent, tried to return to Parliament and continued to make speeches around Britain defending the cause of returning soldiers.95 There were stories that he was being spied on by MI5 or Gregory, suspected of being a Bolshevik or Irish Fenian agent. There were also stories that he was in the pay of MI5 or Gregory, or both. Who was Victor Grayson?

  Whoever he was, in September 1920, he blew the whistle on Lloyd George and Maundy Gregory in a speech in Liverpool, reminding his audience that the prime minister had offered returning servicemen a land fit for heroes to live in:

  And what do they get? A miserable pittance on which to start life anew, the permanent threat of unemployment and never a word of credit. What do they see? The war profiteers with so much money that they pay tens of thousands for a barony. I declare that this sale of honours is a national scandal. It can be traced right down from Number Ten Downing Street to a monocled dandy with offices in Whitehall, who organized the greatest piece of political chicanery this country has known since the days of the Rotten Boroughs. I know this man, and one day I will name him.

  A few days later Grayson was beaten up in the Strand. Then, on the night of 28 September 1920, he had been drinking with some New Zealanders when he got a message to go to a hotel in Leicester Square. He assured them he would be back soon. He was spotted later that night by a painter called George Flemwell who was painting a night scene of the Thames near Hampton Court Palace. Flemwell knew Grayson because he had done his portrait and recognized him crossing the river to Ditton Island in a new-fangled electric canoe, clambering onto a jetty and going into a modest bungalow. Grayson was never seen for certain again. To all intents and purposes, he vanished. The bungalow was called Vanity Fair and it belonged to Maundy Gregory.

  Was Grayson murdered? Was he merely paid off? There were sporadic claimed sightings of him right up to the fifties, in a London Underground train, in Spain, in a poor district of north London and in New Zealand. One journalist who was sure he had recognized him was shunted to a well-paid and obscure government job by the then prime minister Winston Churchill. There had been persistent rumours from Edwardian times that Grayson was a love-child of the Marlborough family (hence his wealth and self-confidence) and was thus Churchill’s secret cousin. The trails seem to have gone cold long ago and this is a mystery unlikely ever to be cleared up. But we know, at least, what became of Maundy Gregory and the sale-of-honours business. Lloyd George carried on blithely. Privately he defended the trade as ‘the cleanest way of raising money for a political party’ even if it could not be defended in public. In his June 1922 honours list, four out of five nominations for peerages were claimed to be ‘unrespectable’. One of them certainly was. A convicted South African fraudster called Robinson had his name published as a new peer. The outrage was such that Freddy Guest had to visit Robinson in his suite at the Savoy Hotel to explain that the deal was now off. Robinson, slightly deaf, thought he was being asked for more money and pulled out his chequebook. King George regarded it as an insult to the monarchy and Lloyd George’s speech to the Commons in the ensuing debate was a disaster. Though the final cause of his fall from power was a cack-handed attempt to engineer a foreign-affairs crisis in Turkey, the Tory MPs who withdrew support from the out-of-tricks Welsh Wizard did so mainly because they were disgusted by his sleaze. He had lost his authority. A Royal Commission produced plans for reform, leading to the 1925 Honours (Prevention of Abuses) Act – though as we know today, the title of the legislation was optimistic.

  And Gregory? He continued in business, simply transferring his trade and taking more precautions. He was finally trapped in a complicated sting operation run by a leading Tory, J. C. C. Davidson. He tried to charge a former naval officer £10,000 for a knighthood and was convicted under the new act, imprisoned and offered a deal to keep silent. As Davidson later revealed, he was told that if he said nothing about all those in high places who had bought their high places, ‘we could bring pressure to bear upon the authorities to let him live in France after his sentence had been served . . . [getting] a quarterly pension’. He was offered £1,000 a year and, haggler to the last, managed to get it doubled. In Davidson’s words, ‘Maundy Gregory did keep his word . . . and we kept him until the end.’ He changed his name and lived a life of apparent respectability in Paris until, when the Germans invaded France again, he was rounded up and sent to Drancy prison camp. He is said to have resisted German attempts to make him turn traitor and died there in 1941.

  The Last of the Liberals

  In the immediate aftermath of the war, Lloyd George’s triumph and Britain’s seemed intermingled. The Royal Navy was bigger than any navy had ever been, or has ever been since. Soon, surely, the pound would again dominate the world’s trading system, and London once more hum as the capital of capital. For the rest, Lloyd George promised a new Jerusalem. Orgiastic scenes had followed the Armistice, with stories of drunkenness on buses and open copulation on the streets – a national tribute, perhaps, to the Goat – and a short boom followed the mirth. Employment rates, wages and prices all rose as the economy returned to peacetime demands and trade suddenly expanded. The industrial and social controls – on prices, on production, on travel and money – upon which Lloyd George had built his wartime state economy fell away.

  Yet Lloyd George had run out of political road. He might have been a radical but his coalition was conservative. His 1918 promise to make Britain ‘a fit land for heroes to live in’ was contradicted by the surrender of almost every mechanism of government he would have needed for economic transformation. After a near-dictatorship in war, Britain abruptly returned to something close to laissez-faire. The railways were handed back to the railway owners and the coal mines, despite strikes and lock-outs, to their former owners. There were few controls over wages or prices, nor any major programme of social reform as after 1945. A flurry of house building did take place, but resulted in the resignation of the minister responsible when the cost was revealed. By 1923 the shortage of new homes, a gap of more than 800,000, was worse than at the end of the war. Many more workers were insured against short-term unemployment and illness after the extension of the pre-war Lloyd George reforms but there was no talk of a new national health system, or radical
reform of education. The school-leaving age was raised, but only to fourteen, and promised new secondary schools for the working classes failed to materialize. Women would not get the same voting rights as men until 1928.

  Given that Parliament was dominated by an anti-big-government party, it is hard to see how Lloyd George could ever have made good. He might talk the language of intervention and reconstruction, but he did not have the cash or the votes to make it happen. The war had cost a massive sum, most of it raised by borrowing. The national debt was fourteen times what it had been in 1914. Patriots were urged to help pay this off: Stanley Baldwin, then a relatively unknown MP and financial secretary to the Treasury, spent a fifth of his wealth on buying War Loan bonds and then handing them straight over to the Treasury to be burned. In a letter to The Times signed (for his job) ‘F.S.T.’ he explained what he had done, concluding: ‘I give this portion of my estate as a thank-offering in the firm conviction that never again shall we have such a chance of giving our country that form of help which is so vital at the present time.’96 Strange times: a Treasury minister had taken a personal stand, and taxed himself first and hardest. Barely anyone followed his lead.

  Meanwhile, income tax stayed high – 33 per cent for well-off people, compared with 8 per cent before the war – and government spending was slashed, from £2.7 million at the height of the war, to around £1 million in 1920–21. When boom turned to bust that winter there was, therefore, no extra spending to cushion the effect, no make-work programmes or plans for industrial modernization. The recession was dire, described at the time as the worst year for the economy since the industrial revolution. British industry had been out of date before the war and was archaic now, except for a few bright spots in engineering. Around half of all exports had been coal and cotton, and cotton was now being produced by Asians, for Asians. Soon fears of foreign ‘dumping’ would revive the old argument about tariffs and even traditional free-trade centres such as the Yorkshire woollen industry would be calling for protection. Across Britain, in the old industries, employers reacted by cutting wages, or closing workshops. Modernization would come, but meanwhile the long agony of high unemployment that marked the inter-war years began, with the jobless total soon reaching a million. In 1920, not even Keynes was a Keynesian. As the newly formed Communist Party began to worry ministers, and industrial unrest spread, any thought that Lloyd George was the workers’ natural friend was finally and permanently laid to rest. He himself became as much a figure of hatred among trade unionists and radicals as his own onetime aristocratic enemies had been.

  Lloyd George quickly found he had limited power overseas, too. Britain might rule the waves, but she was ineffective on dry land. The interventions in Russia to aid ‘White’ forces against Lenin and Trotsky were utter failures. British troops in their thousands had been sent to shiver at Archangel, Murmansk and with Admiral Kolchak in Siberia. There, with Russian nationalists, Americans, French and Czechs trying despairingly to get home, they were to be pitted against the pitiless. The Red armies commanded the heart and nervous system of Russia; the Whites, using terror as enthusiastically as the Leninists, were hardly a democratic alternative; and the entire intervention would succeed only in confirming everything the Bolsheviks thought about the capitalist West. Churchill in the War Office had been the main enthusiast for a new war against the Bolsheviks, ‘a Russia of armed hordes smiting not only with bayonet and cannon but accompanied and preceded by swarms of typhus-bearing vermin which slew the bodies of men, and political doctrines which destroyed the health and even the soul of nations’. The country was in no mood for this kind of talk. Lloyd George hated it. Churchill’s old Westminster critics saw it as another example of his schoolboyish enthusiasm for bloodshed. In his left-leaning constituency of Dundee it went down so well that he was finally defeated by a Prohibitionist candidate. (And it takes something for Dundee to vote teetotal.)

  Failure in Russia was not the only sign that Britain would not have things her own way. In the Mediterranean, the Turks under their new nationalist hero Mustapha Kemal ran rings round the British. In India, rising discontent was met with panic and repression. The worst incident of all, the Amritsar massacre in April 1919 when General Dyer ordered troops to fire on an unarmed demonstration and killed 379 people, caused great debate in Britain between those who saw him as a boneheaded killer and those who thought he was a great imperial hero. It would lead to Gandhi’s campaigns of civil disobedience and the beginning of the end of the Indian Empire. This would be a long ending, delayed for many years by Churchill and other nostalgists, but the rot was apparent soon after the Great War ended. We have despaired already at the ignorant treachery of British policy in the Middle East, and observed how the German fleet water-cocked a snook in Scapa Flow. But the most serious evidence of Britain’s waning ability to control the world around her came, almost inevitably, from Ireland.

  It is rare for a country to take part in a general election and then ignore the parliament for which it was designed, but that is what happened in southern Ireland when Sinn Fein swept to victory in 1918 and formed the independent Dàil, boycotting Westminster. The blood of the Easter Rising leaders had fertilized revolt just as Pearse had dreamed before his execution. The Dàil declared the Republic, chose de Valera as its president, set up its own courts, raised taxes and spent money just as if it was the legal parliament of an independent state. This was, to put it lightly, a poser for Westminster. Had things stopped there it is fascinating to speculate on what Lloyd George would have done; Britain was hardly in the mood to fight a further war. There might have been a peaceful deal. But quickly the old Irish Volunteers were revived by Michael Collins, as the Irish Republican Army. Armed with money and guns from America and inside information from the British administration, Collins and several thousand followers began their own small war of ambushes and murders, targeting British troops, police and anyone thought to be a collaborator. It was a classic guerrilla operation, and very hard for a traditional army to deal with. As the violence spread, Britain responded by outlawing the Dàil and Sinn Fein and, before long, allowing the use of ‘Black and Tan’ auxiliaries, mostly demobilized soldiers, to go to Ireland and use IRA-style tactics on the population.

  It was a bitter, brutal little war characterized by assassinations and cold-blooded executions on both sides. A crowd watching football at Dublin’s Croke Park were fired at by armoured cars sent onto the pitch, and a dozen killed – a British reprisal for the killing of fourteen British officers earlier. As the violence worsened and criticism grew at home, Lloyd George was told by the army commanders that he should either pull out or go ‘all out’, waging full-scale war, which would mean 100,000 men, blockhouses, blocked roads and all the paraphernalia of full-scale repression. It sounded like a greener version of the campaign against the Boers twenty years earlier, and was not appealing. Asquith had already said that British actions in Ireland rivalled ‘the blackest annals of the lowest despotisms in Europe’. By now Lloyd George’s original idea, of an Ireland split between two home-rule parliaments connected by an Irish Council and swearing ultimate loyalty to the Crown, was hopelessly out of date. The relevant act had passed through Westminster, however, and the Northern Irish Parliament was opened at Belfast City Hall in June 1921 by King George V, who seems to have agreed with Asquith about the bloody repression. The King had been advised not to go because of the danger of assassination but insisted, and made an eloquent appeal for all Irishmen ‘to pause, to stretch out the hand of forbearance and conciliation, to forgive and forget and join in making for the land which they love a new era of peace, contentment and goodwill’. This was received by de Valera in Dublin as an olive branch, and plans began to send Michael Collins over to London to negotiate a peace treaty. The historian A. J. P. Taylor called King George’s action ‘perhaps the greatest service performed by a British monarch in modern times’.

  The talks between the guerrilla leader and the cabinet ministers – prefiguring many lat
er incidents when politicians ate their words about not negotiating with ‘terrorists’ – lasted from October to December 1921. They produced a compromise deal. Ireland would have dominion status within the Empire, on the same footing as Canada, governing itself. The six northern counties could opt to stay as part of the UK. Collins believed this was the start of a process which would lead inevitably to full independence for the Irish Free State; but he knew enough about the dark passions roused to predict that in signing the treaty, ‘I have signed my death warrant.’ Whether or not the wily de Valera had sent his rival over in order to destroy his republican credibility, Collins was quite right. The Dàil backed the treaty by seven votes, but the IRA leader was widely denounced as a traitor, the IRA itself split and a vicious civil war began – nastier, almost unbelievably, than the earlier fight against the British. The pro-Treaty and anti-Treaty factions slogged it out for nearly a year from the spring of 1922. The anti-Treaty IRA had more men but they were under-armed and badly led while Collins and the pro-Treaty forces soon acquired artillery, guns and tanks from the retiring British and were able to hold the main towns. The Four Courts buildings in Dublin were held by the anti-Treaty forces for months, and when finally taken by Collins’s men, Ireland’s national records were destroyed. So too were many great houses, symbols of the English ascendancy. The final stages of the war were stained by coldblooded executions of prisoners. These included Erskine Childers, the intrepid author of Riddle of the Sands. He had been given a handgun for his own protection by Michael Collins, a friend to whom he was now opposed. In an early round-up by Collins’s soldiers it was ordered that all who were found with guns should be shot. Childers’s revolver was discovered and, despite its origin, a debate about whether he could be spared ended in the decision that there should be no special cases. Childers agreed that this was fair, and shook hands with the firing squad before they killed him. Collins himself was ambushed and gunned down on a quiet country road in County Cork in August 1922, one of around 4,000 who died.