Churchill's Connections

Budget Protest League

Home » Adversaries » Budget Protest League

1909-1910
UK pressure group

  1. Introduction
  2. Stories
  3. Biographical summary
  4. See also
  5. Further reading
  6. References

1. Introduction

The Budget Protest League (‘BPL’) was a pressure group set up to oppose the Liberal government’s ‘People’s Budget’ of 1909 which proposed increased taxes to pay for welfare reforms that were radical at the time. The BPL was headed by Walter Long, a landowner and member of parliament. In response, Churchill, president of the Board of Trade for the Liberals, established the Budget League, becoming one of the main proponents of the government’s policies. Disagreement about the Liberals’ policies triggered two general elections and resulted in the powers of the House of Lords being much curtailed.

2. Stories

  • Churchill’s leadership of the Budget League was part of a lesser-known aspect of his career: radical social reform.
  • Lloyd George’s Finance Bill of 1909 was called the ‘People’s Budget’, part of the early development of the welfare state.
  • The initial refusal by the House of Lords to pass the budget was the beginning of a major constitutional conflict.
  • King George V rebuked Churchill in 1910 for sounding ‘socialistic’.
  • In his radical years, Churchill was partly motivated by his social conscience but also by his innate ambition and zeal.
  • Churchill presented five budgets while chancellor of the exchequer from 1924 to 1929.
  • By tradition, the chancellor of the exchequer is the only person allowed to drink alcohol in the House of Commons chamber, and then only during a budget speech.

Churchill’s leadership of the Budget League was part of a lesser-known aspect of his career: radical social reform.

Churchill became an MP in 1901 as a Conservative for Oldham, near Manchester. He sometimes sided with the Liberals against his own party, including voting in favour of legal rights for trade unions, against increased military expenditure and against the Aliens Bill in 1904 which sought to restrict Jewish immigration. He backed the Liberals’ commitment to free trade against the Conservatives’ desire for protective tariffs. His local Conservative association in Oldham indicated that it would no longer support him and he switched to the Liberals in 1904, becoming their MP for Manchester North West in the 1906 general election.

David Lloyd George was appointed chancellor of the exchequer in 1908 and quickly set about trying to implement measures for wealth distribution and poverty alleviation. Churchill was Lloyd George’s right-hand man and the two became inseparable for a while, known as the ‘Terrible Twins’, ‘Tweedledee and Tweedledum’, and various other names.

As under-secretary of state for the colonies under Victor Bruce, 9th Earl of Elgin, Churchill facilitated self-rule and equality for the Boers in southern Africa and the phasing out of indentured Chinese labour there. As president of the Board of Trade and then home secretary, he set up an arbitration body to mediate in industrial disputes, limited miners’ working hours to eight hours a day, established trade boards to set minimum wages and gave workers the right to breaks. He established employment exchanges, introduced unemployment insurance and brought about prison and sentencing reform which considerably reduced the prison population. Some of his proposals took time to be approved and were implemented by his successors. Of all of them, he was most proud of unemployment insurance, saying, ‘There is no proposal in the field of politics that I care about more than this great insurance scheme’.1

He summarised his approach as follows: ‘We want to draw a line below which we will not allow persons to live and labour, yet above which they may compete with all the strength of their manhood. We want to have free competition upwards; we decline to allow free competition to run downwards. We do not want to pull down the structures of science and civilization, but to spread a net over the abyss.’2

Lloyd George’s Finance Bill of 1909 was called the ‘People’s Budget’, part of the early development of the welfare state.

Income tax in 1909 was remarkably low (3.75 percent) compared to today and levied on only a small group of people. Most government revenue was derived from customs and excise, one of the reasons for such heated debates about tariffs versus free trade. Lloyd George’s budget of 1909 introduced a rate of five percent on income over £2000 (equivalent to £240,000 today) and 7.5 percent on a higher band.

However, the most controversial aspect was a new tax of 20 percent on land price increases, levied at the time of sale or death. This outraged the Conservatives in particular, traditionally the party of landholders, who were outnumbered in the House of Commons but held a large majority in the House of Lords. The bill also included higher alcohol and tobacco taxes, used by the Conservatives to argue that people with lower disposable incomes would be unduly penalised.

Lloyd George’s objective was to increase government revenue for social measures such as old age pensions while also financing increased military shipbuilding in response to that of Germany. At this stage Churchill opposed the growth of military expenditure but changed his stance after becoming first lord of the Admiralty in 1911.

The BPL was founded to oppose the ‘People’s Budget’ in the public arena, using posters with slogans such as ‘Socialism: Throttling the Country’, and depicting Robin Hood saying to Lloyd George, ‘I took from the rich and gave to the poor / You rob both’. Walter Long was appointed to lead it, a former Conservative MP who became leader of the Irish Unionist Party and proposed the creation of the ‘Black and Tans’ (see Éamon de Valera).

In response, the Budget League was established, led by Churchill. He and his colleagues made speeches around the country, with Churchill lambasting the landowners’ protests, calling them ‘the woeful wail of the wealthy wastrel’ and ‘the dismal dirge of the dilapidated duke’.3 Charles Masterman, later head of British propaganda in World War I, provided Budget League publicity materials including posters portraying ordinary people as tax payers and aristocrats as tax dodgers, with slogans such as ‘Tax the Loafer – Not the Loaf’.

The initial refusal by the House of Lords to pass the budget was the beginning of a major constitutional conflict.

It had been a long-standing custom that the upper house would not reject money bills (i.e., those for taxation and spending) by the government of the day, but the Conservative lords ignored this for the 1909 budget and defeated it overwhelmingly, with some saying that it exceeded the scope of a money bill. They indicated they would pass the bill if there was support for it in a general election. The January 1910 election resulted in a hung parliament but the Liberals were able to form a government with the support of the Irish Parliamentary Party and the growing Labour party.

The budget was passed by the House of Lords but the Liberals then introduced a new bill severely limiting the upper house’s power, which the Lords refused to pass, and another general election was held in December 1910. George V had become king upon Edward VII’s death in May 1910 and agreed to the appointment of hundreds of Liberal peers if necessary to break the impasse. The Lords buckled under this threat and passed the Parliament Act 1911 by a narrow margin.

The act removed the ability of the House of Lords to veto money bills and reduced its power of veto against most other bills to a two-year delay, later amended to one year. It did not approach anything like the measures that Churchill had proposed to his cabinet colleagues. He wanted to abolish the House of Lords entirely but realised that this was an impossible outcome so he proposed (unsuccessfully) that there should be only 150 members of which 100 would be elected from 50 constituencies. Only those with substantial political or municipal experience would be eligible, and all would stand down after eight years. The elected 100 would appoint another 50 in proportion to the party composition of the elected group.

Churchill’s dim view of many aristocrats was reflected in a note to George V while home secretary. He indicated that the Home Office was considering labour colonies for ‘tramps and wastrels’, adding that there are ‘idlers and wastrels at both ends of the social scale’.4 King George was not amused.

King George V rebuked Churchill in 1910 for sounding ‘socialistic’.

Churchill’s comment about labour colonies brought about a letter from Lord Knollys, the king’s private secretary, to Prime Minister H.H. Asquith’s private secretary, saying, ‘The King thinks that Mr Churchill’s views […] are very socialistic. What he advocates is nothing more than workshops which have been tried in France and have turned out a complete failure.’5

It is probably just as well that the new king did not see a 1908 letter from Churchill to Asquith outlining his views on a policy of ‘Social Organisation’. It included state control of the railways; state industries for forestry and roads; laws in favour of the poor; compulsory education until age 17; and sickness and unemployment insurance. The policy was partly modelled on social reforms in Germany, which Churchill said ‘is organised not only for war, but for peace. We are organised for nothing except party politics.’6 He argued that the UK should ‘thrust a big slice of Bismarckism over the whole underside of our industrial system’.7 Otto van Bismarck, chancellor of the German empire, had introduced various types of workers’ insurance and a partly state-funded pension scheme, but was careful to avoid associations with socialism. Despite Churchill’s support for some state intervention, he was highly critical of socialism,* particularly after the Bolshevik revolution of 1917 in Russia (see Leon Trotsky and H.G. Wells).

The king also complained about Churchill’s comment about ‘idlers and wastrels at both ends of the social scale’, saying that it was inappropriate in a note on parliamentary proceedings. He was no doubt also concerned about Liberal attacks on the aristocracy.

Churchill was an aristocrat himself and was proud of his heritage. However, he was by no means an idler (quite the opposite), earning his living primarily from industriousness as a writer. He had a modest income as a politician from 1911 when MPs were first paid. He was also greatly helped by some inheritance income and generous financial assistance from supporters (see Brendan Bracken and Lord Camrose). Unlike Lloyd George, he was not opposed to social stratification in itself but took aim at people that he felt were abusing their aristocratic privileges and responsibilities.

* For Churchill’s own explanation of Liberalism versus socialism, see his speech given at the Kinnaird Hall in Dundee on 4 May 1908: Winston S. Churchill, ‘Liberalism and Socialism’, International Churchill Society, 1908.

In his radical years, Churchill was partly motivated by his social conscience but also by his innate ambition and zeal.

It was not until 1906 while campaigning in Manchester that Churchill saw slums at first hand, but his speeches and papers over the next few years show his awareness of harsh living and working conditions. Some of these are collated in his publication The People’s Rights (1909),8 hurriedly produced to support efforts to pass the People’s Budget.

He had a strong desire to make a high impact in politics and the bold Liberal programme provided an early opportunity. His ambition was evident when Prime Minister Asquith wrote to him in early 1910 when Churchill was president of the Board of Trade, offering him a promotion to the Irish Office. In reply, Churchill, aged only 35, asked for a more senior position, heading either the Admiralty or the Home Office, in that order. Asquith made him home secretary, the youngest person to hold the position since Robert Peel in 1822 at age 33.

As an enthusiast, he undertook broad investigations into whatever subject he was tackling, sometimes being influenced in surprising ways. H.G. Wells had various social views that were radical in the early 1900s, some of which Churchill found appealing, including state support for the vulnerable. Churchill absorbed the ideas of American economist Henry George whose proposals for land taxes appealed to Liberals and outraged Conservatives. Beatrice, wife of socialist Sidney Webb, wrote in 1908 that Churchill had ‘swallowed Sidney’s scheme [against] boy labour and unemployment’.9

He was a pragmatist rather than a theorist and prioritised political outcomes over consistency, changing his approach on various topics over time. By 1928, for example, as Conservative chancellor of the exchequer, he declared that Henry George’s approach was increasingly obsolete. He argued that this was not inconsistency, saying that it was the nature of the economy that had changed.

A long-term influence was his wife Clementine, whom he married in 1908. She had lifelong Liberal sympathies, regardless of her husband’s changes of party, and could be highly persuasive behind the scenes, moderating some of his strong views as well as his personal insensitivity and belligerence.

Churchill presented five budgets while chancellor of the exchequer from 1924 to 1929.

His most notorious action as chancellor was to return Britain to the gold standard at its pre-war rate of exchange, contributing considerably to economic hardship and the general strike of 1926 (see John Maynard Keynes). He was inexperienced in economics and his domestic finances were chaotic. His surprising appointment by Stanley Baldwin was probably to bring him fully back into the Conservative camp rather than risk his disruptive influence. He was confident in military affairs but was far less certain about money matters, saying, ‘I wish financiers were admirals or generals. I can sink them if necessary. But when I am talking to bankers and economists, after a while they begin to talk Persian, and then they sink me instead.’10

After a dinner in around 1930, he commented, ‘Everybody said that I was the worst Chancellor of the Exchequer that ever was. And now I’m inclined to agree with them. So now the world’s unanimous.’11 This was perhaps an overly harsh assessment, focussing on issues related to the gold standard. Other measures were welcomed by many, including the reduction of income tax, the reduction of the pension age from 70 to 65, the improvement of pension arrangements for widows and orphans, the reduction of local taxes on real estate and the abolition of duty on tea.

Adhering to budgetary discipline, he raised taxes on products such as petrol, wine and tobacco, probably through gritted teeth, considering his own consumption patterns. He sought to reduce military spending on the construction of naval cruisers and the development of a new naval base in Singapore to counter a possible threat from Japan. ‘But why should there be a war with Japan?’ he wrote in 1924. ‘I do not believe there is the slightest chance of it in our lifetime.’12 In 1928, he persuaded the cabinet to agree to a continuously rolling 10-year rule: the assumption that there would be no war within the next 10 years unless the cabinet decided on an alternative assessment. To some extent, therefore, he set the tone for the government’s reluctance to re-arm in the 1930s.

By tradition, the chancellor of the exchequer is the only person allowed to drink alcohol in the House of Commons chamber, and then only during a budget speech.

Recent chancellors have tended to avoid alcohol during their budget speeches, sometimes drinking branded mineral water, to the gratification of the brands’ marketers. Alistair Darling drank tap water in 2008 in support of a campaign to reduce the use of plastic bottles. Rishi Sunak, a teetotaller, drank water in 2021 but raised some eyebrows by using a plastic cup.

In earlier times, chancellors have had brandy (Churchill and Benjamin Disraeli), whisky (Kenneth Clarke and Norman Lamont), spritzer (Nigel Lawson) and gin and tonic (Geoffrey Howe, who named his dog Budget). More unusual drinks were milk and rum (Hugh Dalton), orange juice and rum (Hugh Gaitskell) and sherry and egg (William Gladstone).

Another tradition is the use of a red despatch box (a specially made briefcase) to carry the budget speech, with Gladstone’s original box being used from around 1860 to 2010, when it was retired due to its poor condition. James Callaghan and Gordon Brown interrupted the practice with new boxes made in 1965 and 1997.

The chancellor holds the despatch box up for the public to see on the morning of the budget speech, outside 11 Downing Street. The ritual is said to have begun after George Ward Hunt left his speech at home in 1869. In 1993, it contained Norman Lamont’s whisky bottle while his private secretary William Hague stood behind him with the budget in a plastic bag.*

British ministers’ despatch boxes are made of dyed goatskin by Barrow, Hepburn & Gale, opening on the opposite side to the handle so the person handing it to the minister cannot see the contents. It is unclear why ministers and staff are unskilled at turning boxes around; an alternative explanation is that the boxes must be locked before being lifted up. There are various examples at Chartwell from Churchill’s different offices. A box from his time as secretary of state for the colonies sold at auction at Sotheby’s in 2014 for £150,000.

The term ‘budget’ is derived from Old French bougette, a small pouch to carry coins. ‘Exchequer’ comes from Old French eschequier (now échiquier), a chess board, from the use of a cross-hatched table by medieval Crown treasurers to calculate accounts.

* For the full story, see BBC, ‘What Was in Norman Lamont’s Budget Box?’, BBC News, 1998.

3. Biographical summary

[None.]

4. See also

Churchill and David Lloyd George

  • Lloyd George, David

Churchill and the Gold Standard

  • Keynes, John Maynard

Churchill and socialism

  • Trotsky, Leon
  • Wells, H.G.

Churchill’s aristocratic family

  • See Family section

Churchill controversies

  • Anti-appeasement
  • Anti-socialism
  • Financial affairs
  • Gold standard
  • Radical Liberalism
  • Self-promotion

5. Further reading

Churchill and radical reform

Churchill’s own words on Liberal reforms

  • Churchill, Winston S., ‘Liberalism and Socialism’, International Churchill Society, 1908
  • Churchill, Winston, The People’s Rights (Hodder & Stoughton, 1910)

Liberalism and the Edwardian crisis

  • Powell, David, The Edwardian Crisis: Britain 1901–14 (Macmillan Education, Limited, 1996) [also relevant to Suffragettes, UK strikers and de Valera]

Chancellors of the exchequer

6. References

1 Winston S. Churchill, ‘National Insurance Bill’, Hansard, 1911.

2 Martin Gilbert, Churchill: A Life (Random House, 2000), p. 184.

3 Winston S. Churchill, Winston S. Churchill: His Complete Speeches, 1897-1963: Volume 2: 1908-1913, ed. by Robert Rhodes James (Chelsea House Publishers, 1974), p. 1273.

4 Randolph Churchill and Martin Gilbert, Winston S. Churchill. Companion Volume 2, Part 2. 1907-1911 (Houghton Mifflin, 1967), p. 1037.

5 Churchill and Gilbert, p. 1037.

6 Churchill and Gilbert, p. 863.

7 Churchill and Gilbert, p. 863.

8 Winston Churchill, The People’s Rights (Hodder & Stoughton, 1910).

9 Norman MacKenzie and Jeanne MacKenzie, The First Fabians (Quartet, 1979), p. 355.

10 Robert J.G. Boothby, Boothby: Recollections of a Rebel (Hutchinson, 1978), p. 46.

11 A.L. Rowse, The Later Churchills (Macmillan, 1958), p. 439.

12 Martin Gilbert, Winston S. Churchill. Companion Volume 5, Part 1. The Exchequer Years. 1922-1929 (Heinemann, 1979), p. 306.