William Ewart Gladstone (1809–1898) dominated liberalism and the Liberal Party in the late 19th century. He served for 12 years as prime minister, spread over four terms beginning in 1868 and ending in 1894. He also served as Chancellor of the Exchequer four times and between terms was usually the minority leader. The historian H. C. G. Matthew states that Gladstone's chief legacy lay in three areas: his financial policy; his support for Home Rule (devolution) that modified the view of the unitary state of Great Britain; and his idea of a progressive, reforming party broadly based and capable of accommodating and conciliating varying interests, along with his speeches at mass public meetings.
Historian Walter L. Arnstein concludes:
Notable as the Gladstonian reforms had been, they had almost all remained within the nineteenth-century Liberal tradition of gradually removing the religious, economic, and political barriers that prevented men of varied creeds and classes from exercising their individual talents in order to improve themselves and their society. As the third quarter of the century drew to a close, the essential bastions of Victorianism still held firm: respectability; a government of aristocrats and gentlemen now influenced not only by middle-class merchants and manufacturers but also by industrious working people; a prosperity that seemed to rest largely on the tenets of laissez-faire economics; and a Britannia that ruled the waves and many a dominion beyond.
In 1909 the Liberal Chancellor David Lloyd George introduced his "People's Budget", the first budget which aimed to redistribute wealth. The Liberal statesman Lord Rosebery ridiculed it by asserting Gladstone would reject it, "Because in his eyes, and in my eyes, too, as his humble disciple, Liberalism and Liberty were cognate terms; they were twin-sisters."
Lloyd George had written in 1913 that the Liberals were "carving the last few columns out of the Gladstonian quarry".
Lloyd George said of Gladstone in 1915: "What a man he was! Head and shoulders above anyone else I have ever seen in the House of Commons. I did not like him much. He hated Nonconformists and Welsh Nonconformists in particular, and he had no real sympathy with the working-classes. But he was far and away the best Parliamentary speaker I have ever heard. He was not so good in exposition."
Writing in 1944 the classical liberal economist Friedrich Hayek said of the change in political attitudes that had occurred since the Great War: "Perhaps nothing shows this change more clearly than that, while there is no lack of sympathetic treatment of Bismarck in contemporary English literature, the name of Gladstone is rarely mentioned by the younger generation without a sneer over his Victorian morality and naive utopianism".
In the latter half of the 20th century Gladstone's economic policies came to be admired by Thatcherite Conservatives. Margaret Thatcher proclaimed in 1983: "We have a duty to make sure that every penny piece we raise in taxation is spent wisely and well. For it is our party which is dedicated to good housekeeping—indeed, I would not mind betting that if Mr Gladstone were alive today he would apply to join the Conservative Party". In 1996, she said: "The kind of Conservatism which he and I...favoured would be best described as 'liberal', in the old-fashioned sense. And I mean the liberalism of Mr Gladstone, not of the latter-day collectivists". That sort of liberalism in the 21st century is termed neoliberalism.
William Ewart Gladstone was the greatest political figure of the nineteenth century. I do not mean by that that he was necessarily the greatest statesman, certainly not the most successful. What I mean is that he dominated the scene.
However, the Great War of 1914 reduced popular support for the Liberals and the Party split in two factions in 1918: Asquith's supporters and Lloyd George's coupons. While Asquith became Leader of the Opposition, Lloyd George forged a coalition with the Conservative leader Bonar Law, continuing to be Prime Minister with a mostly Conservative base. The Liberal internal conflict caused many reformer and radical voters to join in the Labour Party, while more conservative liberals merged to the Conservatives led by Stanley Baldwin. The 1924 general election signalled the end of the Liberal Party as government force. However, the New Liberalism continued to be the preferred ideology by the Liberal Party, until its dissolution in 1988 when formed the Liberal Democrats.
1940–1975: Post-war consensus
The post-war consensus began in the 1930s when Liberal intellectuals led by John Maynard Keynes and William Beveridge developed a series of plans that became especially attractive as the wartime government promised a much better post-war Britain and saw the need to engage every sector of society. The foundations of the post-war consensus was the Beveridge Report. This was a report by William Beveridge, a Liberal economist who in 1942 formulated the concept of a more comprehensive welfare state in Great Britain. The report, in shortened terms, aimed to bring widespread reform to the United Kingdom and did so by identifying the "five giants on the road of reconstruction": "Want… Disease, Ignorance, Squalor and Idleness". In the report were labelled a number of recommendations: the appointment of a minister to control all the insurance schemes; a standard weekly payment by people in work as a contribution to the insurance fund; old age pensions, maternity grants, funeral grants, pensions for widows and for people injured at work; a new national health service to be established.
In the period between 1945–1970 (consensus years) that unemployment averaged less than 3%. The post-war consensus included a belief in Keynesian economics, a mixed economy with the nationalisation of major industries, the establishment of the National Health Service and the creation of the modern welfare state in Britain. The policies were instituted by all governments (both Labour and Conservative) in the post-war period. The consensus has been held to characterise British politics until the economic crises of the 1970s (see Secondary banking crisis of 1973–1975) which led to the end of the post-war economic boom and the rise of monetarist economics. The roots of his economics, however, stem from critique of the economics of the interwar period depression. Keynes' style of economics encouraged a more active role of the government in order to "manage overall demand so that there was a balance between demand and output".
With the rise of Margaret Thatcher as Conservative Party leader in the 1975 leadership election ushered in a resurgence of the old 19th-century Gladstone laissez-faire Classical liberal principles. The UK in the 1970s had seen sustained high inflation rates, which were above 20% at the time of the leadership election, high unemployment, and over the winter of 1978–79 there was a series of strikes known as the "Winter of Discontent". Thatcher led her party to victory at the 1979 general election with a manifesto which concentrated on the party's philosophy rather than presenting a "shopping list" of policies. This philosophy became known as Thatcherism and it focused on rejecting the post-war consensus that tolerated or encouraged nationalisation, strong labour unions, heavy regulation, high taxes, and a generous welfare state. Thatcherism was based on social and economic ideas from British and American intellectuals such as Friedrich Hayek and Milton Friedman. Thatcher believed that too much socially democratic-oriented government policy was leading to a long-term decline in the British economy. As a result, her government pursued a programme of Classical liberalism, adopting a free-market approach to public services based on the sale of publicly owned industries and utilities, as well as a reduction in trade union power. She held the belief that the existing trend of unions was bringing economic progress to a standstill by enforcing "wildcat" strikes, keeping wages artificially high and forcing unprofitable industries to stay open.
Thatcherism promoted low inflation, the small state, and free markets through tight control of the money supply, privatisation and constraints on the labour movement. It is a key part of the worldwide Classical liberal movement and as such is often compared with Reaganomics in the United States, Economic Rationalism in Australia and Rogernomics in New Zealand. Thatcherism is also often compared to classical liberalism. Milton Friedman said that "Margaret Thatcher is not in terms of belief a Tory. She is a nineteenth-century Liberal." Thatcher herself stated in 1983: "I would not mind betting that if Mr Gladstone were alive today he would apply to join the Conservative Party". In the 1996 Keith Joseph memorial lecture Thatcher argued that "The kind of Conservatism which he and I ... favoured would be best described as 'liberal', in the old-fashioned sense. And I mean the liberalism of Mr Gladstone, not of the latter day collectivists".
The Liberal Party win 272 seats in the 1892 general election and Gladstone becomes Prime Minister for the fourth time forming a minority government dependent on Irish Nationalist support. The Liberal Unionists win 45 seats.
The Liberal Party lose the 1895 general election, winning 177 seats. The Liberal Unionists win 71 seats and with the Conservatives form an Unionist Government.
1900 to 1944
The Liberal Party win 184 seats in the 1900 general election. The Liberal Unionists win 68 seats and with the Conservatives form an Unionist Government.
The Liberal Party win an overall majority in the 1906 general election, winning 396 seats. Henry Campbell-Bannerman becomes Prime Minister. This would prove to be the greatest victory for the Liberals and also the last time the Liberal Party won a majority in their own right. The Liberal Unionists win 25 seats.
H. H. Asquith
Henry Campbell-Bannerman resigns as Prime Minister and is succeeded by H. H. Asquith.
The Liberal Party win 274 seats and the Liberal Unionists win 32 seats in January 1910 general election. Asquith forms a government with the support of the Irish Nationalists. Another election is held in December, with the Liberal Party winning 272 seats and the Liberal Unionists winning 36 seats. This would prove the last time the Liberal Party won the highest number of seats in the House of Commons.
After several British set backs in the First World War, H. H. Asquith invites the Conservatives to form a war-time coalition government. This marked the end of the last all Liberal government.
David Lloyd George
H. H. Asquith loses support of the Conservative Party and David Lloyd George becomes Prime Minister. The Liberal Party is now split into two factions: one camp supporting Lloyd George and the other following Asquith.
Lloyd George is forced to resign after loss of support from the Conservatives. In the 1922 general election, the Lloyd George led National Liberals win 53 seats, whilst the Asquith led Liberals win 62 seats.
The National Liberals and the Asquith Liberal factions are re-united as one in support of free trade and the Liberal Party win 158 seats in the 1923 general election. It was the last election in which the Liberals won more than 100 seats.
The Liberal Party agrees to join the National Government. After the National Government proposed to fight the 1931 election for a mandate of tariffs, the Liberal Party was split into three groups. A faction, led by John Simon, supported the protectionist government policy and formed the Liberal National Party. Another faction, led by Lloyd George, became the Independent Liberals. The third grouping, the 'official' Liberal Party, was led by Herbert Samuel. In the 1931 general election, the Liberal Nationals won 35 seats, the 'official' Liberals won 33 seats, the Independent Liberals won 4 seats.
The 'official' Liberal Party leave the National Government.
In the 1935 general election, the Liberal Nationals won 33 seats, the 'official' Liberals won 21 seats, the Independent Liberals won 4 seats. Lloyd George's Independent Liberals rejoined with the rest of the 'official' Liberal Party after the general election. The Liberal Nationals remain in the National Government.
Both the Liberal Party and the Liberal National Party join the Churchill Wartime Government.
The Liberal National Party is renamed National Liberal Party and formally merges with the Conservative Party at constituency level; however some MPs and candidates continue to use the National Liberal label (and variants thereof) for the next twenty years.
The Liberal Party win 9 seats in the 1950 general election. Candidates under the National Liberals banner win 17 seats.
The Liberal Party win 6 seats in the 1951 general election. National Liberals win 19 seats and with the Conservatives form a Conservative Government.
The Liberal Party win 6 seats in the 1955 general election. National Liberals win 21 seats and with the Conservatives form a Conservative Government.
The Liberal Party win 6 seats in the 1951 general election. National Liberals win 19 seats and with the Conservatives form a Conservative Government.
An electoral and political alliance between the Liberal Party and SDP is formed. The Liberal Party win 17 seats and the SDP win 6 seats in the 1983 general election. The Conservatives win another landslide victory with 397 seats.
The Conservatives win another victory with 376 seats and the Liberal–SDP alliance win 22 seats in the 1987 general election.
^Walter L. Arnstein, Britain Yesterday and Today: 1832 the Present (6th ed. 1992) p. 125
^Herbert Paul (ed.), Letters of Lord Acton to Mary Gladstone (George Allen, 1904), p. 57.
^Lord Rosebery, The Budget. Its Principles and Scope. A Speech Delivered to the Commercial Community of Glasgow, 10 September 1909 (London: Arthur L. Humphreys, 1909), pp. 30–31.
^Chris Wrigley, "‘Carving the Last Few Columns out of the Gladstonian Quarry’: The Liberal Leaders and the Mantle of Gladstone, 1898–1929", in David Bebbington and Roger Swift (eds), Gladstone Centenary Essays (Liverpool University Press, 2000), p. 247.
^David Butler and Dennis Kavanagh, "The British General Election of 1979", Macmillan, 1979, p. 154.
^David Dutton, British Politics Since 1945: The Rise, Fall and Rebirth of Consensus (2nd ed. Blackwell, 1997).
^The Observer, 26 September 1982, quoted in Robert Leach, 'What is Thatcherism?', in Martin Burch and Michael Moran (eds.), British Politics: A Reader (Manchester: Manchester University Press, 1987), p. 157.
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