Lloyd George’s People’s Budget
The budget that Chancellor of the Exchequer David Lloyd George presented to the Commons on April 29 1909 was one of the most significant in British history. Not only did it for the first time bring in coordinated measures that would begin redistribution of wealth to attack poverty, but the struggle against it by the Tory dominated House of Lords eventually led to the 1911 Parliament Act, establishing the supremacy of the elected house over its unelected counterpart.
In the 1906 general election the Liberals had won 59 per cent of the seats in the Commons, but the Lords was packed with hereditary peers representing a landowning elite. Lloyd George’s so-called People’s Budget was constructed to pay for Liberal Reforms like Old Age Pensions and Labour Exchanges, with progressive taxation, increased excise duties, inheritance tax, a tax on cars, and taxation of property and land sales and income among other measures brought in.
With the Liberal majority in the Commons the measures were passed there, but on November 30 rejected by the Lords most of whose members would be adversely affected by it.
A general election was held in January and February 1910 resulting in a hung parliament, the Liberals needing the support of Labour and Irish Nationalist MPs to remain in government. The People’s Budget was passed precisely a year after its presentation, but only because the Lords won a concession that saw the land tax measures dropped.
Continued struggles eventually resulted in The Parliament Act of 1911 being passed, removing the power of veto from the unelected chamber. The approval of the Lords was won after George V made it clear he was in extremis willing to create hordes of new peers to defeat the hereditary (and Conservative) majority in the Lords. Churchill , who had crossed the floor of the house in 1904 to become a Liberal over free trade issues, as President of the Board of Trade was one of Lloyd George’s firmest supporters.
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