The People’s Budget of 1909 was a proud moment in the history of the Liberal Party and the history of Britain. Delivered by the Liberal Chancellor and later Party Leader David Lloyd George, the budget introduced, for the first time, tax allowances for people with children and support for those unable to work due to illness or invalidity: the latter benefits known as ‘going on the Lloyd George’. This week we mark the 150th anniversary of Lloyd George’s birth, and in the aftermath of last week’s Coalition decision to cut Child Benefit, social security payments and tax credits for almost eight million British families, it’s less a question of going on the Lloyd George as having been ‘Clegged’.
The People’s Budget, which proposed transferring funds from the wealthiest through levying a land tax, was denounced by the Conservative opposition, and subsequently overturned with the votes of Tory peers. But speaking in his celebrated Limehouse address, the Welsh Liberal Chancellor defended his progressive plans with a pride and conviction that must seem quite alien to some of his contemporary counterparts:
‘We are placing burdens on the broadest shoulders. Why should I put burdens on the people? I am one of the children of the people. I was brought up amongst them. I know their trials; and God forbid that I should add one grain of trouble to the anxieties which they bear with such patience and fortitude….at a time of great difficulty, I made up my mind….that no cupboard should be barer, no lot would be harder. By that test I challenge them to judge the Budget.’
The contrast between those socially just sentiments and the decisions now being taken by the Liberal’s successor party could not be starker. The Liberal Reforms between 1906 and 1914 were, of course, the forerunners of our modern welfare state. In addition to the first versions of child benefit and the dole, they included legislation to encourage the children of working class families to stay on at school, provision of pensions for the over 70s, the establishment of the first job centres (Labour Exchanges), health and safety laws for the pits and the mills, more progressive taxation and, of course, the introduction of National Insurance, paving the way for our modern NHS.
What a proud legacy, and what a shame that on his sesquicentennial anniversary, Lloyd George’s statue in Parliament Square will look across at a building where in the last two years Liberal votes have supported its systematic erosion: the closure of educational routes to social mobility through increasing tuition fees and abolishing the Educational Maintenance Allowance; the reduction of support for the low paid and those seeking work through the cuts to modern-day social security; the jeopardising of hard-won gains in safety at work or provision for the disabled; and, worst of all perhaps, the fragmentation of a National Health Service that Lloyd George would surely have supported had he lived to witness Aneurin Bevan’s delivery of it.
On the economy too, Lloyd George’s legacy ought to be instructive for his successors. Both as Chancellor, when pre-war procurement in shipbuilding and public infrastructure works were commissioned by Government to boost employment and to stimulate growth, and later as Prime Minister when the Trade Facilities Act of 1921 directed £25 million of Government funds to productive industry to create jobs, Lloyd George understood that laissez-faire economics left potential untapped and people under-employed. Contrast with the current Coalition, which has seen Tory faith in small government, unfettered market forces and public sector contraction trump historic logic with a resultant flatlining economy. It is ironic, given the Welshman’s subsequent political trajectory that in recent months it has been a Conservative who has, consciously or otherwise, most closely mirrored the rhetoric and policy prescriptions of Lloyd George: Lord (Michael) Heseltine who, in his growth review, called for our economy to be placed ‘on a war footing’, echoing Lloyd George’s description of his 1909 anti-poverty programme as “a war budget.”
Unfortunately, the urgency with which Lord Heseltine urged the current Coalition to address itself to our ongoing economic crisis, is little evident on either Tory or Liberal benches. Yet for reasons of Liberal self-preservation, if for nothing finer, it should be, as other lessons from Lloyd George’s days might remind them. One of the many enemies that the man Keynes described (admiringly) as the ‘goat-footed bard’ made during his time as liberal leader was Sir John Simon, a minister in the pre- and wartime Liberal administrations. A Tory cuckoo in the Liberal nest, he eventually led the breakaway split of the Liberal National party in 1931. Simon may be a better role model for Nick Clegg than Lloyd George, and may even point the way to a life after Liberalism, with his roles in the Conservative-led Governments of the late 1930s. But Mr Clegg should also remember the dread warning offered by Simon on the eve of World War 1, as he contemplated the coalition government that Lloyd George was shortly to lead. It would, he said, ‘assuredly be the grave of Liberalism.’ His prediction was wrong in 1914, of course, but at almost a century’s distance, his hypothesis may not be far from being put to the test once more.
Owen Smith MP is the Shadow Secretary of State for Wales