The Lloyd George Coalition

The Lloyd George Coalition 1918-1922

The Coupon Election 1918

The Representation of the People Act 1918 provided the background to the 1918 election. All men over 21 could vote. A small number of women were also eligible to. These were the over 30's and the wives of important British. men

* The Liberals were still split between old (Asquith) and new (Lloyd George)

* Labour had to decide whether to fight the election independently or continue under Lloyd George. (Mowat: 1966: 2-3, 6-7)

* The Conservatives had to decide the same.

Labour decided to fight independently and the Conservatives decided to carry on the coalition with the Liberals. The Conservatives decided to this as Lloyd George was a popular figure amongst the public.

An agreement was made with the Conservative leader Andrew Bonar Law. 150 Lloyd George candidates would not be opposed by Conservatives in the constituencies in which they were standing for election.

A letter explaining this position (the coupon) was sent to all candidates who were willing to support the coalition. Each letter was signed by both Bonar Law and Lloyd George. Asquith was furious with this and nicknamed the letters "coupons". (Bentley:1967: 16)

The Outcome

The Lloyd George coalition was easily returned to power. However, the weakness of the Liberals effectively made the coalition, in effect, a Conservative government with a Liberal Prime Minister.

(Bentley: 1967: 16-17)

Note: The Conservatives were pleased with the outcome of the coupon election as they rode into power on the back of Lloyd George's popularity'.

The success of this result meant that the "Bolshevik" threat of Labour had been neutralised-the Conservatives held power. (Mowat: 1966: 5)

What were the problems that Lloyd George faced after World War One?

Industrial unrest

* Inflation rose at the end of the war. Prices and profits rose but wages lagged behind. This caused industrial unrest; between 1919 and 1922 there were many strikes due to this purpose. (Mowat: 1966: 27)

* Working men who had fought in the trenches felt aggrieved by the gulf between themselves and capitalists who had done well out of the war.

* The Russian Revolution had given tremendous publicity to worker's control of the economy. "Bolshevism' might in fact, be called one of the major themes of the campaign: even Lloyd George, in his closing speech at Camberwell on December 13, declared: The Labour party is being run by the extreme pacifist, Bolshevist group' and attacked it as a class party, a bad thing - Look at what has happened in Russia."

* The Miners' Federation threatened a national strike if a demand for a six-hour day, wage increase and government control of the industry was not met. Lloyd George offered a seven hour day, continued government control and the sankey commission to investigate the problem. His offer was accepted. (Mowat: 1966: 5, 31)

Economic Slump

* A post war boom did not last for long as the British economy was in a slow decline.

* Extra demand for products during wartime now dropped.

* Foreign buyers unable to buy British goods during the war had now gone elsewhere or were forced to develop their own industries.

* The USA, unaffected by the war, became the dominant force in world trade.

* Britain lost two fifths of her merchant fleet (about seven million tonnes of shipping) sunk by the German U boats. Britain lost very little machinery or factory plant during the war and, in a sense, this proved to be a disadvantage in the 1929s and 1930s. Britain spent no money updating her factory machinery and this proved to be one reason why she was to lose ground to her industrial competitors.

Falling Government Revenue (taxation)

The slump had the double effect of reducing the taxes from business and creating enormous expenditure to combat unemployment. Government expenditure had to be cut (Geddess Axe). Cuts to education, armed forces, health and council house building enraged the Labour Party.

Financial Cost of the war

At the height of the war in 1917, the government was spending an estimated Ј7 million per day, or approximately Ј2550 million a year. Over the four years of the war A.J.P. Taylor puts the cost at Ј9000 million

The Geddes "Axe" 1922

In 1921 it was evident that the economy was slowing down. Lloyd George appointed a Committee under Sir Eric Geddes to examine public expenditure. Geddes reported in February 1922 and suggested swingeing reductions in the amounts spent by the government- and orthodox solution in this period and one which was to be adopted again by the National Government in the 1930s. Geddes proposed to cut back by Ј75 million but eventually a figure of Ј64 million was accepted by the government.

* The Education Act of 1918 was savagely cut back. The Day Continuation Schools never materialised, teachers' salaries were reduced, and class sizes increased.

* The Addison (Housing) Act of 1919 which planned to build homes for workers was terminated as the government, it was argued, could not afford to pay out the subsidies.

* Government spending was also reduced on the armed services, welfare provision and agricultural subsidies.

* The Unemployment Insurance act 1920 which provided payments for the unemployed and sick was modified.

The fall of Lloyd George

* The split with the "old" Liberals under Asquith over the question of state intervention (Examples; 1909 budget, state influence on the wartime economy) meant that the Liberal party became and increasingly divided party.

* Lloyd George was forced to rely upon Conservatives for support. Examples: Wartime coalition, coupon election 1918.

* In order