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

On this day in 1909, David Lloyd George delivered his “People's Budget”, waging war “against poverty and squalidness”. It eventually led to reform of the House of Lords.

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.

Recommended

We’re doing well on pensions – but we still need to do better
Pensions

We’re doing well on pensions – but we still need to do better

Pensions auto-enrolment has vastly increased the number of people in the UK with retirement savings. But we’re still not engaged enough, says Merryn S…
4 Jul 2022
The income investor’s dilemma
Income investing

The income investor’s dilemma

Pay attention to dividend growth as well as initial yield when picking income trusts, says Max King.
4 Jul 2022
How to boost your income as dividends come back in fashion
Income investing

How to boost your income as dividends come back in fashion

Dividends are back in fashion. But how do you go about building an income-generating portfolio?
4 Jul 2022
The transition to renewable energy is easier said than done
Renewables

The transition to renewable energy is easier said than done

We are on a path to “net zero” carbon emissions, says Edward Chancellor, but fossil fuels will be with us for some time yet.
4 Jul 2022

Most Popular

UK house prices are definitely cooling off – but are they heading for a fall?
House prices

UK house prices are definitely cooling off – but are they heading for a fall?

UK house prices hit a fresh high in June, but as interest rates start to rise, the market is cooling John Stepek assesses just how much of an effect h…
30 Jun 2022
How to invest in copper, the most important metal in the world
Industrial metals

How to invest in copper, the most important metal in the world

As the world looks to electrify and try to move away from fossil fuels, copper looks set to be the biggest beneficiary. But how can you invest? Rupert…
30 Jun 2022
Don’t try to time the bottom – start buying good companies now
Investment strategy

Don’t try to time the bottom – start buying good companies now

Markets are having a rough time, so you may be tempted to wait to try to call the bottom and pick up some bargains. But that would be a mistake, says …
1 Jul 2022