by Roy Jenkins
The two permanent secretaries were as firmly Gladstonian as was the establishment. Sir Edward Hamilton, in charge of finance, had been one of the G.O.M’s secretaries over many years, and Sir George Murray, in charge of administration, had also served as a private secretary during Gladstone’s fourth government. They held joint office throughout Asquith’s time at the Exchequer and constituted a solid official front in favour of the old, nineteenth century view of the functions of the Treasury. Its role was to enforce economy upon other departments rather than to initiate policy of its own. So long as this view prevailed, and particularly if there were no great revenue changes to be made, the Treasury was rather a dull department over which to preside. It carried high prestige, but unless the Chancellor had some outside functions, as with Harcourt who was leader of the House of Commons in 1894-5 1 it did not necessarily give him a commanding position in the Government.
1 Harcourt’s position would in any event have been dominating because of the impact of his “ death duties ” budget; but budgets of such importance rarely came more than once in a generation.
Asquith’s two immediate predecessors, Austen Chamberlain and Ritchie, had been far from occupying such a position. But Asquith himself had a role much more analogous to that of Harcourt. He was deputy leader of the House, under a leader who, however firmly he had clung to his seat in the Commons, was by no means the most indefatigable of parliamentarians. Asquith was encouraged to range widely over the whole field of policy. His position was indeed much stronger than Harcourt’s. So far from having been passed over for the premiership by a younger man, he was universally regarded as Campbell-Bannerman’s natural and inevitable successor. Even those who had been most strongly opposed to Liberal Imperialism did not believe that they could, or should, keep Asquith out of the first place for long. They had no alternative leader of his generation to put forward. They held, together with the bulk of the party, that it would be intolerable to reward Campbell-Bannerman for his years of service in opposition by superseding him on the threshold of office. They believed too that he was the most unifying leader under whom the Government could make a start. But, with the habitual confidence of those fresh to power, they saw long years of office stretching ahead, and there were few who thought that Campbell-Bannerman, 69 and old for his age, was likely to be there for more than the first two or three. Asquith, at 53 and with a constitution which required no austerity of life to keep it unimpaired, could look forward with a quiet confidence to the premiership. His advance always owed little to chance. From this stage in his career it would have required quite exceptional ill luck to deprive him of the foremost place.
In these circumstances the Chancellor’s traditional residence, 11 Downing Street, next door to the Prime Minister, would have been a more than usually appropriate place for him to live. But he did not occupy it. Margot thought it too small for the family and told her father that she would have “ to farm out ” either her own or her stepchildren as there was no room for both a nursery and a schoolroom. Sir Charles Tennant responded by offering to pay her the rent which she and her husband had been hoping to get for 20, Cavendish Square and which they had been looking to as a small compensation for the replacement of Asquith’s bar earnings by a ministerial salary of .£5,000. This offer enabled them to continue to live in the greater spaciousness of Cavendish Square and to lend 11, Downing Street to the Home Secretary, who had no London house of his own.j
The Government of 1905, unusually for those of this century (the 1922 Conservative Government and the 1931 National Government are the only others in the same category), faced an election as soon as it was formed. There could be no question, despite the by-election victories of the previous two years, of governing through the 1900 House of Commons. The old parliament met only for dissolution.
The opening salvo of the election was fired on December 21st, when Campbell-Bannerman addressed a large Albert Hall meeting, but the campaign generally did not start until immediately after Christmas. Asquith began with a programme of outside engagements and did not go to East Fife until a few days before polling. But he did not speak with the frequency which most modem political leaders would consider necessary, and he did not plan his meetings to cover the country. In the fortnight beginning on December 29th he spoke at Sheffield, Huddersfield, Stockton-on-Tees, Oakham, Henley-on-Thames, Perth and an unidentifiable place described as Lensham. During the period of this tour the one issue which threatened to cause difficulties within the Liberal Government was that of Chinese labour in the Transvaal. The recruitment and mass importation of Chinese coolies for work in the goldmines of the Rand, authorised by a Colonial Office ordinance of 1904, was widely regarded as the most unsavoury aspect of the aftermath of the war in South Africa. “ They have brought back slavery to the British Empire,” Lloyd George proclaimed.
The issue looked a splendid election weapon for the Liberal Party. But, not untypically of such weapons, it proved a dangerous one to handle. In his Albert Hall speech Campbell-Bannerman announced that orders had been given “ to stop forthwith the recruitment and embarkation of coolies in China.” This was received with acclaim by the audience and was taken to mean that no more Chinese would embark for South Africa. Most of the Cabinet, and particularly the lawyers, received the statement with a good deal less enthusiasm. What was to happen to the 14,000 licences for importation which had been issued during November but which, in most cases, had not already been taken up? Were they to be revoked, and if so, how could the action be made legal except by retrospective legislation? And was the British taxpayer then to be involved in compensating the mine-owners for the losses they would suffer from the Government’s change of policy? Asquith was strongly against both of these courses and took the lead in urging the Prime Minister to re-interpret his pledge in accordance with the demands of “ practicability ” and to say that it meant that there would be no further recruitment, but no more than that. The matter was finally settled at a Cabinet on January 3rd, with Campbell-Bannerman good humouredly but a little reluctantly falling into line. It was an early example of the power within the Government of the Chancellor of the Exchequer.
This re-interpretation produced some radical grumbling, and when the new Parliament met several members—and notably Hilaire Belloc, whose liberalism was always most intense when it could be allied with his savage hatred of the “ gallant Alb us,” “ fair young Wemhers ” and “ tall Goltmans ” of international Jewish finance1—complained about the softness of the Government towards the Rand magnates. By then the main problem was not new importations but what was to be done with the 47,000 Chinese already in South Africa.
1 In the same month that this debate took place (February, 1906) Belloc produced one of his most viciously satirical poems against those whom he thought had done well out of the South African bloodshed:
We also know the sacred height
Up on Tugela side,
Where those three hundred fought with Beit
And fair young Wernher died.
The daybreak on the failing force,
The final sabres drawn:
Tall Goltman, silent on his horse,
Superb against the dawn.
The little mound where Eckstein stood
And gallant Albu fell,
And Oppenheim, half-blind with blood
Went fording through the rising flood—
My Lord, we know them well.
With the Liberal Party firmly committed to immediate self-government for the defeated Boers there was obviously a good deal to be said against imposing a solution from Whitehall. This was Asquith’s view, and it was justified by the fact that by June, 1907, the Transvaal took its own decision in favour of sending the Chinese home. The experiment in semi-slavery had by then proved such a failure that not even the mine-owners wanted to keep them.
The Chinese labour incident apart, the Liberal election campaign was remarkably harmonious. The party had the smell of victory in its nostrils, and that did
more than anything else to keep it together. There were differences of stress in the election addresses of the leaders— Asquith’s for instance, concentrated almost entirely upon a close-knit argument of the case against tariff reform—but no contradictions.
Polling was spread over nearly three weeks, beginning on January 12th. The first day brought only one Liberal gain at Ipswich, but the second brought a spate of successes in Lancashire, including the defeat of Balfour at East Manchester, and from then right through to the end the story was the same. Supposedly safe Conservative seats crumbled, and Government victories in the most unlikely places brought into the House of Commons a flood of new Liberals who had been fighting almost without hope. There were in all 377 Liberal members. With them, in some ways an even greater sensation, came 53 Labour members, 24 of them closely allied to the Liberal Party, and the other 29 elected under the independent auspices of the Labour Representation Committee; even these 29 had in most cases escaped Liberal opposition in the constituencies. The Irish produced their usual contingent of 83, which gave a total of 513 members who in a straight clash with the Tories might be expected to support the Government. The Opposition had only 157 members—132 Conservatives and 25 Liberal Unionists. The Government’s normal majority was 356—a preponderance unequalled since the Parliament of 1832—and the Liberal Party’s majority over all others was 132.
Asquith’s own result was not out until almost the end, and he chafed at being kept in Scotland long after most ministers (although not Campbell-Bannerman) were able to return to London. “ Here I still am, delayed by an increasingly meaningless contest,” he wrote on January 27th. The complete and somewhat impatient confidence implied by this statement was not misplaced. But his majority did not soar. East Fife was always a steady rather than a mercurial constituency, and having done adequately for him in the difficult years of 1895 and 1900 it refused to give him a sensational victory in the easy year of 1906. He polled 4723 against his opponent’s 3279, and lost the relative edge over Campbell-Bannerman’s Stirling performance which he had gained in 1900.
The first post-election Cabinet was on January 31st and the new Parliament met on February 19th. Liberal supporters both in the country and in the House of Commons looked confidently for a great unleashing of radical purpose. The King’s speech at least did not disappoint them. It forecast 22 bills, of which three, dealing with education, trades union law and plural voting, were clearly to be of major and controversial importance. In addition, a decision in principle to grant full self-government to the Transvaal had already been taken and announced. It looked a vigorous beginning, but achievement seemed likely to turn on the meaning behind the most pregnant remark of the election campaign. It was the duty of everyone, Balfour had said at Nottingham on January 15th, to see that “ the great Unionist Party should still control, whether in power or whether in opposition, the destinies of this great Empire.” Asquith, not alone, saw clearly that what lay behind these words was the looming shape of the vast Conservative majority in the House of Lords.
1 p. 149 supra.
2 “ I am sure that those who are persuading you to remain in the House of Commons are not your true friends—I beg your pardon, in that direction —and that they do not think of your precious health as the most important matter,” Dr. Ott wrote on December 9th (Spender, op cit., 11, p. 199). This letter was of course too late to affect Campbell-Bannerman’s decision, but it referred back to an earlier agreement, to which Lady Campbell-Bannerman was a party, that “ for your precious health it would be best for you to go to the House of Lords besides occupying the Government.”
3 Chancellor of the Duchy of Lancaster.
4 President of the Board of Agriculture.
5 The King testified to his friendship for Carrington by telling Campbell-Bannerman that he looked “ upon Charlie as a brother ” and asking for him to be made Lord Chamberlain. The Prime Minister fell in with this suggestion, but Carrington refused, on the ground of health, and became a Cabinet Minister instead. (Sir Sidney Lee, King Edward VII, 11, p. 446).
6 Secretary of State for the Colonies.
CROWN PRINCE
1906-8
Asquith introduced three budgets—two of them during his time at the Exchequer and the third several weeks after his accession to the premiership; as he had prepared these last proposals it was thought appropriate that he should present them, although the new Chancellor was left to conduct the Finance Bill. Of these three budgets, the first (as Asquith himself recognised, and thought inevitable because of the short time available for preparation) was uninteresting, the second made an important break of new fiscal ground, and the third laid the first brick of the welfare state. They were all presented in a form suitable to a Chancellor “ supposed ... to be a financier of a respectable and more or less conservative type ” (as Asquith could later describe himself a), but they were highly successful in achieving the maximum of radical result while arousing the minimum of conservative opposition.
The fiscal adventurousness of the second budget lay in the introduction, for the first time, of a differentiation between the rates of tax on earned and unearned income. Asquith records that he had wished to do this in his first budget, but was prevented by Treasury opposition. “ I was at once met with the objection, which was considered fatal, that Gladstone had always declared that any such scheme was impracticable.” b He decided to try and outflank this opposition by the appointment of an all-party Select Committee, and chose Sir Charles Dilke, the erudite and determinedly radical member for the Forest of Dean, as a chairman likely to produce a favourable report. Ironically Dilke, who had become old and arid with disappointment, opposed the recommendation,1 but was unable to make his views prevail against the rest of the Committee.
1 He wanted an entirely separate system of property taxation, as in Prussia and Holland.
Fortified by this report (which also contained a super-tax recommendation which Lloyd George was to implement in 1909) Asquith then felt able to defy the mandarins of the Treasury, and to make differentiation the centre-piece of his budget of 1907. The rate of tax was then 1/- in the £. For earned incomes up to £2,000, provided also that the taxpayer’s total income, earned and unearned, did not exceed this sum, the rate was reduced to 9d. Although the form in which it is expressed has changed, the taxation system has never since been without this differentiation.
The speech in which this and other changes were proposed took just over two hours and was accounted a masterly performance. Haldane thought it ranked with “ the great performances of the great Chancellors,” and Sir George Murray said that it rose “ in some places to levels which nobody in our time except Mr. Gladstone has ever reached.” Mrs. Asquith made a more original and illuminating comment. “ No one speaks quite like Henry,” she wrote in her diary. “ He seems to run rather a bigger show; he can keep to the ground, cut into it or leave it without ever being ridiculous, boring, or wanting in taste, and he is never too long. He gives a feeling of power more than of grace or charm . . .”c One of the most notable passages in the speech was a classical statement of the case that the taxable capacity of a man with an income from property is necessarily greater than that of a man with the same income from work.
The budget of 1907 also paved the way for the principal social reform of 1908—the cautious beginning of old age pensions. Asquith put aside part of his modest surplus of £4111. to help provide for this, and announced firmly what he was doing. The idea of making some national provision for the old was one which occupied his mind throughout the period of his Chancellorship. The fact that, even by his own austere financial standards, it was possible to do this in 1908 was probably the main reason why, as Prime Minister, he exercised the prerogative of introducing’ the budget of that year. The terms in which he did so were typically non-emotional. There were no references to the secure and contented evening of life which he was promoting for an indefinite series of idealised old couples. His approach was severely practical. There w
as to be a non-contributory pension of 5s. a week at seventy for those whose total income did not exceed 10s. a week, and who had not disqualified themselves by being criminals or lunatics or (within the previous year) paupers; married couples were to receive 8s. 9d.
To modern ears the scheme sounds cautious and meagre. But it was violently criticised at the time for showing a reckless generosity. Rosebery, any trace of radicalism now far behind him, thought the plan “ so prodigal of expenditure as likely to undermine the whole fabric of the Empire and another peer described it as “ destructive of all thrift.” Equally, some of Asquith’s own supporters expressed disappointment with the extent of the advance. £13 a year for a rigidly circumscribed half million of the aged poor was hardly the beginning of a social millenium. But it was the most important piece of social legislation for several decades past, and it brought England more or less into line with Germany, Denmark and New Zealand, the coimtries which had hitherto led the way in this field.
Asquith’s other principal Treasury task was the scrutiny of the estimates of the other departments. Although he was a careful financier—and succeeded in 1907-8 in making an unprecedently large provision for the redemption of debt—he was not a fanatical economist. Sometimes, in accordance with the custom of the time, he concerned himself with incredibly small items of expenditure, but he did not do so in a particularly cheeseparing way. “ I think we might well arrange to provide Bryce with an extra allowance for outfit,” he wrote to the Prime Minister at the time of the former Chief Secretary’s appointment to the Washington Embassy, “ and to make up the month’s loss of salary.d
