‘… a general election immediately following the rejection of the Budget,’ he wrote, ‘would, beyond all doubt, be disastrous to the fortunes of the union ist Party. The Government would be returned with a sufficient majority to re-enact the Budget and to remain in office another five years. This would be bad enough, but it would be still worse if they obtained—as they must inevitably try to obtain—power to curtail the veto of the House of Lords. … If, on the other hand, the Budget were allowed to pass, its burdens would soon prove odious in practice, and the comforting theory on which it is now founded would be exploded. By the end of another year the Government would have to go to the country and would, I believe, suffer defeat. A union ist Government would then be in a position to amend the Budget, strengthen the House of Lords against further attack, and save the country from the Socialism and class warfare which are being fostered today.’g
This was a most prescient forecast of what was to happen when the Budget was rejected, and an attractive, and not altogether implausible, forecast of what might have happened had the opposite course been chosen. This was very much the point of view which F. E. Smith was urging upon Balfour at this time. In the words of his biographer, ‘he (Smith) was convinced that the Lords should pass the Budget, so that when its brutalities were exposed and the union ists returned to power, its terms could be altered and softened, its more violent clauses repealed’.h He was a useful if surprising ally for the cause of moderation (his attitude at this time was very different from that which he was to take up when it came to the Parliament Bill, eighteen months later), for he was untouched by the heresy of free trade, and was in this respect unlike all the ‘moderate’ peers mentioned above.
This was the key to the whole difficulty. Tariff reform was the issue which rallied the union ist enthusiasts in the country. From a party point of view it was the popular thing with which to be associated. Those who stood aloof found that the applause they received from their followers in the constituencies was less hearty than it might have been, and that they were always in danger of being regarded as bad party men. The free trade element in the party was therefore suspect, and the advice which came from it was given far less attention than it deserved.
Nor was it quite enough not to be a free trader. The Bal-fourians, as opposed to the ‘whole-hoggers’, were also in a difficult position. Arthur Balfour himself was leading a parliamentary party the great majority of which was far to the right of him on the protection issue. To equivocate on this, while retaining the lead, had been difficult enough, and it meant that he could not afford to restrain the fighting spirit of his party on yet a second major question. Lansdowne suffered a double disadvantage. He was not only a Balfourian, he was also an ex-Whig, and not even a member of the Carlton Club. At a time when it greatly needed firm and far-seeing leadership the Tory Party had thus succeeded, by internal schism and distrust, in destroying the self-confidence of its leaders and making them incapable of anything more adventurous or valuable than a little gentle swimming with the tide.
It was not an accident that those who were most vehemently in favour of rejection by the Lords were also, broadly speaking, ardent tariff reformers. Partly it was a question of temperament. No one could deny that to hitch the Tory wagon to the star of protection was a bold act; those who had done this preferred the boldness, or foolhardiness, of a peers’ rejection to the nicely calculated tactics of calling off the battle at this stage. But there was more to it than this. There was also the fact that the protectionists feared the Budget per se more than did the free-fooders and the Balfourians. They had come to believe the propaganda of their opponents to the extent of accepting the view that Lloyd George’s proposals constituted the only effective revenue-raising alternative to a general tariff. They agreed with the substance if not with the form of the argument which the Prime Minister had used in the third reading debate:
‘What, then, are the two ways, and the only two ways, before the country of meeting the necessities of the nation? On the one hand you may do as we are doing. You may impose, simultaneously and in fair proportion, taxes on accumulated wealth, on the profits of industry, on the simpler luxuries, though not the necessities, of the poor.… That is one way—that is the way proposed by this Budget. What is the other, the only other, that has yet been disclosed or even foreshadowed to Parliament and the country? It is to take a toll of the prime necessaries of life; it is to raise the level of prices to the average consumer of the commodity; it is to surround your markets with a tariff wall…. That, Sir, is the choice which has to be made….’i