Another factor which contributed to the fall of LG was the numerous financial and immoral scandals surrounding his career. Most famous and significant of them was the Honours scandal. The Honours list of July 1922 created a storm of disapproval and LG was accused of selling peerages and honours not least to individuals of questionable character and background such as Sir William Vesley (a tax evader). The Conservatives were enraged particularly with the face that their social club had been intruded with miscreants. The honours scandal also enraged King George who described it as a disgrace to the Crown. Furthermore, LG had not shared the funds collected from selling the honours with the Conservatives which angered them further. Although the issue was shocking, it was not surprising due to the notable reputation of LG. The scandal did much harm to LG’s reputation and the Conservatives no-longer regarded him as a vote winner and that the House of Lords was their house whose integrity must not be stained with the likes of the criminals on the honours list. Therefore, the scandal cost LG considerable support and severely damaged his reputation which had a key impact to his downfall.
However, there were other external factors which contributed to the Lloyd George’s fall. The post-war economic situation was so severe that any government or prime minister would have struggled. The war had cost Britain 745,000 men, with another 1.6 million wounded such that they would never be able to work again. Approximately, 3.5 million people were receiving a war pension or allowance coupled with the fact that many markets had been lost and several key industries going into severe decline such as the steel, iron and coal industry. Unemployment was at 2 million by June 1921. Nonetheless, unemployment insurance was extended and around 12 million were eligible for benefits. Addison’s housing scheme produced about 100,000 government subsidised houses. However, due to the depression and pressure from the conservatives, LG was left with little choice but to cut back spending and benefits, hence unable to fulfil his election promises. Also, following the war, people expected a better and fairer society with better standards of living and education. Most people fundamentally misunderstood the economic situation suggesting that any government would have failed. Therefore, taking into account the structure of the coalition and the post-war economic situation, Lloyd George’s days as prime minister were already numbered.
Another key reason for LG’s downfall was his handling of foreign affairs. Many believed he had been too lenient with Germany, with the Conservatives wanting Germany to pay more as LG had promised in his election campaign. Also, his handling of the Irish Question caused a lot of upset and horror in Britain especially with his use of the ‘Black and Tans’. Consequently, the Conservatives were bitter over the fact that he had negotiated with the Irish rebels which cost him more support. But perhaps most significant of all was the Chanak incident. He urged General Harrington to adopt a firm stance against the Turks even though Britain lacked support from France or Italy. Not only had he brought Britain to the brink of another war, he had offended the pro-Turk susceptibilities of the Conservatives. Perhaps the timing of the Chanak incident was crucial as the Irish settlement had broken down and news of the Honours Scandal had begun to emerge. For many, Chanak was the final straw with the Conservatives calling a meeting at the Carlton Club on 19 Oct 1922, passing a motion in favour of fighting the next general election alone. Therefore, this shows that LG’s handling of foreign affairs cost him support and faith from both the electorate and more importantly the Conservatives which consequently led to his resignation in 1922.
Overall, although there were several external factors which led to the downfall of Lloyd George such as the post war economic crisis and the fact that he did not have a political party of his own, certain key errors on his part cost him his leadership. Numerous scandals such as the Honours scandal severely damaged his reputation and lost him considerable support. His handling of foreign affairs such as the Irish Rising and more significantly Chanak further damaged his political base which was already fragile. Although he did consult cabinet on key issues such as Chanak, his political need to dominate events – inherent in the nature of the coalition government – meant that the policy was seen as his own and was blamed accordingly.