29 April 1909: David Lloyd George introduces the People’s Budget

The People's Budget - David Lloyd George and Winston Churchill © Getty Images
David Lloyd George and Winston Churchill – advocates of land tax reform and social welfare

Life in Edwardian England is often depicted, Downton Abbey style, as a terribly civilised and genteel affair; a time of “peace and plenty”.

But of course, there wasn’t plenty for everyone: 25% of the country was living in utter poverty. A quarter of children born in Britain’s disease-ridden slums wouldn’t survive to the age of one. If they did, they were sent out to work at a scandalously young age to help support the family.

The Liberal Party of the day was becoming more radical. The government of Herbert Asquith was keen to push through a swathe of social welfare reforms, with Winston Churchill chief among the advocates of a land value tax.

And on this day in 1909, the Chancellor of the Exchequer, David Lloyd George, introduced the ‘People’s Budget’ to Parliament, claiming it would “wage implacable warfare against poverty and squalidness”. Its social insurance provisions, paid for out of increased land and income taxes, laid the foundations of the welfare state that would follow.

In the Budget, the over-70s were given a pension. Acts provided for new schools, and increased access to secondary education for working class pupils. Tax relief was given to those with children, and free school meals were introduced. A probation service for young offenders was set up, and labour exchanges were created to help alleviate unemployment.

Of course, not everyone was in favour. The Conservatives waged a campaign against it; newspapers, including the Times and Daily Mail, petitioned for its rejection; landed gentry organised protest meetings up and down the country.

The House of Lords rejected the Budget, and sparked a constitutional crisis. The Liberals went on the offensive, and vowed to reform the Lords.

Lloyd George quipped that “a fully-equipped Duke costs as much to keep as two Dreadnoughts – and they are just as great a terror – and they last longer”, and demanded to know if “500 men, ordinary men, chosen accidentally from among the unemployed”, should override the judgement of “millions of people who are engaged in the industry which makes the wealth of the country”.

The crisis resulted in the introduction of the Parliament Act of 1911 – stripping the Lords of their power of veto.

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