The budget proposed by Lloyd George in 1909 would change this. The budget was certainly going to hit the rich, and it is often thought that the later known ‘People’s Budget’ was framed precisely to provoke a conflict with the Lords. This is not so. The People’s Budget, also known as the ‘war budget’ was designed to fight poverty and squalor. The Liberal’s had to face a number of costly social and defensive problems, and framed a budget which, although needed to raise millions in order to pay for the new pensions and for increased naval expenditure as well as to replace funds lost to the exchequer during the economic recession, was designed not to antagonise the Lords. Nonetheless, the budget proposal for an extra ‘super tax’ on the very rich, for a new land tax and for an increase on the dreaded death duties, certainly was to affect their lordships. A new tax on petrol and a compulsory motor car licence was also to affect the Lords. As a result, in November 1909, they rejected the whole budget. This meant that the Liberal government had no funds, and as a government can not govern without funds, a general election was to result.
The Liberal’s went into the first of these elections looking forward to making it a contest between the peers and the people. Lloyd George famously asked in a speech why: “five hundred men, ordinary men chosen 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”. This election however, held in January, did not produce the outcome which the Liberals had hoped for. The election had been held in a time of economic depression and the Conservatives had begun to make recessions on the ground lost in the 1906 election, with the Liberals only coming out of it with two more seats than the Conservatives. In the subsequent year’s election the Conservatives gained even more or the popular vote, and were kept out of government only by just over 80 Irish Nationalists and just over 40 Labour MP’s, as both groups felt it would be more in their interests to side with the Liberals than with the Tories.
Two months after this second election Asquith made the decision to proceed with a Parliament Bill. This bill was to prevent the House of Lords from rejecting or changing a money bill, and stated that other bills could only be delayed, becoming law if passed by the House Of Lords for three years. Parliaments were also cut from seven years without having to hold an election to just five. Passing this bill however could be seen as impossible, as the Tory dominated House of Lords would surely reject it. It was for this reason that Asquith turned to the support of the king, who gave Asquith the permission to create sufficient Liberal peers in the House of Lords to allow the Bill to pass through, effectively diluting the Tory majority in the House of Lords. The Unionists then had the choice of allowing the Bill through and seeing their powers diminished, or allowing around 250 Liberal peers to enter the House of Lords. Tension quickly grew between the Liberals and the Tories in this time, and the Tories gradually separated into two camps: the hedgers (lords who wanted to pass the Bill and maintain the few powers that they would have left) and the ditchers (who wanted nothing to do with the Bill and would not pass any part of it). On 24 July 1911, when Asquith returned the Parliament Bill to the Lords there was such an uprising that he could not be heard. Nevertheless he tried again in August of that year, and scraped the Bill through by 131 votes to 114. This was a major milestone for the Liberal government and for all elected governments in the House of Commons to come. Since 1911 the House of Lords has become less and less important in the political world, right up to the present day, where only a select few still remain.
