Great Britain After the Great War 1918—22

British losses

British losses during the war were: 750,000 killed from the British isles; 200,000 from the Empire. The French lost nearly 2 million killed. The mass killing created a small increase in the proportion of women in the population. 1.5 million men had some permanent injury. The junior officers suffered most. Whilst most of the deaths were caused by injury in battle, disease also took its toll, especially in the armies of Salonika and Mesopotamia, which suffered outbreaks of malaria. One of the lasting effects on survivors of trench warfare was shell-shock. The other major problem was venereal disease. At first the authorities refused to acknowledge the problem, but the French started organising brothels from 1916, and protective sheaths were issued after 1917, and free treatment for venereal disease was introduced. The direct effect of the war on the general population was minimal — less than 1,500 civilians were killed. There were shortages of commodities as a result of the war. After 1917 real wages almost caught up with their pre-war levels; there was an erosion of the wage differential between skilled and unskilled labour.

Although 40% of the merchant fleet had been sunk, most of this was replaced during 1918, and immediately after the war. The building of private houses had ceased before the end of 1914, and by 1919 there was an acute housing shortage, and 610,000 houses were needed. The railways were rundown.

Economic impact

Capital investment during the war had distorted the natural development of the economy in a harmful way. Shipbuilding had been stimulated, and new steel works created and situated in inappropriate positions. The cotton industry continued to be over-supplied with too much equipment for the processing of Indian rather than Egyptian cotton. Thus those industries which were in long term structural decline were artificially stimulated by the war.

There is some debate about the size and effect of the sale of British foreign assets. Originally, it was estimated that nearly £1,000 million of foreign assets were sold by the British on the compulsion of the government with a view to maintaining the value of the pound in the US; however, this figure has been revised to £550 million and new investments of £250 have been discovered, so it is possible to argue that the direct effect of the sale of British foreign assets on the British economy was minimal. But there were greater losses arising from the repudiation of debts by the Russians and the defaulting of South American countries.

Great Britain lent £1,825 to her allies; she borrowed £1,340 million, including £850 million from the United States. It is possible to argue that the economic effect of these debts was minimal, since Great Britain paid slightly more to the United States than she received from others, but not much. The political consequences of the debt were more damaging.

The cost of the war was £9bn during the war; if the extraordinary expenditures of 1919 and 1920 are added — then the cost comes to £12bn. Of this only 28% was raised from taxes during the war, or 44% if 1919 and 1920 are included. The remainder was borrowed from the British public, and the National Debt rose 14 fold as a result of the war; servicing the debt required 50% of the yield from taxation as opposed to 14% pre-war. Since the money was borrowed during the war, the war had been paid for as it had been fought. The creation of the National Debt had the effect of transferring wealth from the poor to the rich. After the war, the Labour party proposed to cancel the National Debt by means of a capital levy, and this was supported by such people as Beaverbrook and Churchill, but Law, the chancellor of the exchequer, firmly rejected this.

The 1918 Election and the Post-War “Coalition”

Lloyd George invited Asquith to remain in the Coalition as Lord Chancellor. He also invited Labour to continue in the Coalition. Both rejected the offer. Labour was content to fight the election as an opposition party.

Lloyd George struck a bargain with the Unionists in order to preserve the Liberal party as far as possible. This is the famous (or infamous) 'coupon'. 159 Liberal candidates were allowed to stand for seats unopposed by Unionists. He succeeded in preserving the Liberal party from total annihilation for a time and only 54 of the Liberals that had supported Lloyd George during the Maurice debate were issued with coupons — so there was no discrimination against one faction or another in the distribution of coupons. Otherwise, it was a fair election, with the Liberals fielding 425 candidates, the Unionists 410 and Labour 447.

It is also not true that the Opposition parties were in general more in favour of a peace of reconciliation than the Coalition candidates. Some Labour candidates who had opposed the war from the start did advocate reconciliation; but the mood of the public was strongly against reconciliation and most candidates dared not to challenge this feeling. In fact, both Lloyd George and Law realised that economically Germany could not be made to pay, and Lloyd George tried to explain this in some of his early speeches, but he dropped this once he sensed the mood of the public. The nature of the peace settlement did not divide the parties from one another.

The main source of division between the parties was Lloyd George himself. "Lloyd George had won the war" and on the strength of his personal standing the coalition was swept to victory at the polls. 339 Coalition Unionists; 134 Coalition Liberals; 26 Independent Liberals; 59 Labour candidates were returned. All independent Liberal ministers lost their seats; MacDonald, Snowden and Henderson also lost their seats. In Ireland every seat except in Ulster and Dublin university returned a member of the Sinn Fein, who refused to attend Westminster, setting up their own parliament, the Dail, instead.

Churchill became minister for war; Smith became lord chancellor (as Lord Birkenhead); Law ceased to act as chancellor of the exchequer, but remained as leader of the house of commons and effectively deputy prime minister; Austen Chamberlain became chancellor of the exchequer. The peacetime cabinet of 20 members was re-established, but Hankey was retained as cabinet secretary.

Lloyd George behaved in an autocratic way, treating only Law as an equal. However, his position was really untenable — the split in the Liberal party had made him a prisoner of the Unionists. Although he tried to rally the Coalition Liberals and Unionists around the cause of an anti-Labour party, the Unionists rightly insisted that they could provide this themselves. Thus, Lloyd George, without a solid political party to back him, was forced to rely on his personal achievements. He took on too much and endeavoured to be solely responsible for the peace settlement, the reconstruction at home, the resolution of the Irish question and the Empire.

Whilst the war had revolutionised government organisation, the advances were not sustained. Some of the ministries were retained, or regrouped. Thus, there was a new ministry of health; the ministry of labour was retained; there was a new ministry of transport, but in general the new administration was not much different from the pre-war one.

The Paris Peace Conference

The British delegation to the Paris Peace Conference was originally composed of five members. The conference was initially intended to follow a formal procedure. But the leaders of the four Allied powers soon took it upon themselves to settle everything: President Wilson, Clemenceau, Orlando of Italy, and Lloyd George; a Japanese representative was also included in some of the discussions. The disintegration of the Austro-Hungarian and the Ottoman Empires meant that a crucial task facing the conference was the redrawing of the map in Eastern Europe. British and French forces were in occupation of Constantinople. There was prolonged disagreement between the USA and Italy over the status of Fiume, and this was never resolved by the conference itself. However, the determination of the settlement with Germany was the obviously most pressing issue. For the British this was less of a problem: South Africa had taken German South-West Africa, and was refusing to give it up; Australia had taken New Guinea and was also not prepared to relinquish it; the German fleet was interned at Scapa Flow, and Germany was, consequently, no longer a threat to British naval supremacy. From this position of advantage the British could afford to play the role of impartial mediators at the conference.

Wilson was preoccupied with the idea of a League of Nations. He expected the other Allies to oppose its introduction, but this was not the case, and in fact the draft Covenant of the League was prepared by Robert Cecil and Smuts at the British foreign office.

The French still regarded the Germans as a major threat to their security. They wanted Germany divided into separate states, or, failing that, they wanted extensive precautions against future German aggression. The French premier, Clemenceau, did wish to retain the friendship of Britain and the US, and consequently, did give way on a number of points. Germany was not divided; however, the Rhineland was demilitarised and control of the Saar and its coal mines was given to France for a period of 15 years. The French were promised an Anglo-American guarantee of French borders. In the event they never got this guarantee, as the American senate failed to ratify the treaty.

Lloyd George defended German interests in Eastern Europe; and, because of his intervention, Danzig became a Free City, rather than being annexed directly by Poland.

It was Lloyd George also who prevented the level of reparations being settled by the conference. He feared that any figure set by the conference would be too severe, so it was on his initiative that the conference merely stipulated that German was liable to pay. However, he did secure a larger share of the reparations by insisting that pensions were part of the damage created by war. The Allies all agreed that Germany should be disarmed, and that her army should be reduced to 100,000 men. They included a statement that this was a preliminary to general disarmament.

The treaty was signed with Germany on 23rd June 1919; Lloyd George returned to London in triumph, and it was accepted by the house of commons virtually without dissent. Outside the house of commons progressive thinkers were becoming opposed to the treaty, and Lloyd George was later held responsible for its failings, though he had played the role of moderator throughout. The treaty was opposed by Labour, which was particularly opposed to reparations. They wanted a treaty that would reflect the idea that the world was entering into a new phase of peaceful coexistence, and a punitive treaty that discriminated against Germany seemed unjust. This mood was cemented by the publication of J.M. Keynes's book The Economic Consequences of the Peace which blamed the peacemakers for all the sufferings of Germany. Keynes was encouraged to publish this attack by Smuts, probably with the consent of Lloyd George, who wanted to turn public opinion against the French; in this he was successful, and the French were soon regarded as a militaristic power, but he also severely damaged his own reputation as well. The Left blamed Lloyd George personally for the failure of the peace conference, for the creation of Poland, Czechoslovakia and Yugoslavia; he was also criticised for Allied intervention in Russia, which was largely Churchill's doing.

British intervention in Russia took the form of (1) supplies of British tanks and weapons to the White Russians to the value of £100m; (2) British volunteers serving with Kolchak in Siberia; (3) British forces stationed at Archangel and Murmansk; (4) British occupation of Baku; (5) British occupation of Afghanistan. But by autumn 1919 British forces were withdrawn from Russia and the supply of munitions dwindled.

Post-war disillusionment

The initial management of demobilisation created severe social problems. The most skilled workers were released back into the labour pool first, but these were the last to have been called up. It seemed very unfair, and at Calais and Folkestone there were mutinies. Churchill resolved the conflict by scrapping the existing scheme and substituting the principle of 'first in, first out'. 80% of the workforce had been demobilised by the summer of 1919; they were taken back into industry with little difficulty, and were given free insurance against unemployment. Restrictive practices were restored, as women and unskilled labour left British engineering.

The conclusion of the war was attended with great expectations regarding economic and social reconstruction. Everyone wanted to be rid of the wartime controls, and people believed that Britain would be able to pay for new social policies without any change to the economic system and the method of financing government. Control of prices, raw materials and foreign trade were quickly relinquished; the pound went off the gold standard 'temporarily' as a preliminary to the mechanism of the old gold standard being restored later. The removal of the restrictions took the breaks off the economy, and there was rapid inflation, and employers did not oppose increases in wages, which fed further into wage-cost-push inflation.

Industrial conflict also returned. The miners, the railwaymen and the transport workers resumed their 'triple alliance' in February 1919. However, a royal commission under Sankey, who as a high court judge, was appointed to look into the mining industry. Workers and owners were evenly represented, and their was inevitable disagreement within the commission as a result: it produced four reports, with the result that no recommendations of any value were implemented, and Lloyd George used the disagreement to reject nationalisation as an option. In the end, the wages of the miners remained the same, an act of parliament imposed a seven hour day, and government control continued.

The railwaymen went on strike in September 1919 against a proposal to reduce their wages. Lloyd George intervened to the advantage of the railwaymen. Conflict with the dockers was avoided by the establishment of a commission of inquiry, as a result of which their conditions improved. Both groups were less militant and interested in compromise and negotiation in order to improve the situation of their members. But the leaders of the miners were more militant. Trade Union membership was increasing during 1920 to a peak of 8 million. Henderson and other Labour leaders were successful at bye-elections in returning to the House of Commons. The Daily Herald came out as a socialist newspaper.

Rising Class Conflict

In June 1920 the British Communist Party was formed from revolutionary factions of the British Socialist Party. Some members were drawn from the Socialist Party of Glasgow and show stewards in Glasgow and Sheffield. However, other left wing parties did not view this new party with favour. The Independent Labour Party and the Labour Party itself both refused the invitation put to them by the Communists, acting on the instructions of Lenin, to affiliate with them.

The favourable response to events in Russia and Eastern Europe was epitomised by the reaction to the Polish attempt to conquer the Ukraine early in 1920. Left wing groups were hostile to Poland, and London dockers refused to load munitions onto a ship, the Jolly George, destined for Poland. When the Poles were routed and Poland itself was threatened by the Russian army, Lloyd George was prepared to support the French proposal for intervention, but this was strongly opposed by the Labour movement, and the National Council for Labour made plans for an immediate general strike. However, the crisis was averted because the Poles were able to defend themselves without British intervention.

Industrial conflict in the mining industry returned. The miners struck in October 1920 for increased wages. At this time the mines were still under government control. Lloyd George made the government's powers for "dictatorial" measures permanent by ensuring the passage of the Emergency Powers Act, but he also settled the dispute on the miners' terms as a temporary measure.

The End of the Post-War Boom and the Return of Industrial Conflict

During the winter of 1920—21 the post war boom came to an abrupt end. The causes of this were: (1) massive reductions in government expenditure from £2,696 million in 1917-18 to approximately £1,000 million in 1920-1; (2) increases in taxation, hence (3) the creation of a sudden budget surplus in contrast to the considerable deficits of the preceding years; (4) the non-appearance of an expected increase in world demand generally, and specifically for British exports.

This was the beginning of a prolonged economic crisis that gripped the world and affected British prosperity throughout the interwar period. The primary producers overproduced, resulting in low prices for their products; this in turn meant that they lacked the currency with which to buy British goods, and there was a particular decline in demand for the old staple British products: coal and cotton. Unemployment rose rapidly from December 1920 to over 2 million by June 1921. Throughout the interwar period unemployment never fell below 1 million. In some coal, cotton and engineering towns over half the insured workers were unemployed.

The government did not accept any responsibility for coordinating a response to the developing economic crisis. For example, they did not carry out their intention of electrifying the railways, but left this to private enterprise. On 31st March 1921 they returned the mines to the owners, who sought to cut costs by the imaginative policy of cutting wages. They also reintroduced the system of district rates, which meant that miners earned rates according to the quality of the seam at their pit. In response the miners demanded a 'national pool' to ensure that equal wages were paid; but the owners refused and started a lockout on 1st April. The miners were offered a standstill on wages for the period of the negotiations, but the national executive narrowly rejected this offer. Just a few hours before the strike was due to start — on 15th April 1921 — the railway and transport unions decided not to come out in support — which was a palpable betrayal of the miners. The lockout continued until 1st July, when the miners conceded defeat and accepted terms worse than those originally offered.

After the defeat of the miners, wages generally fell during 1921. The working classes were naturally disillusioned with Lloyd George, and were contemptible of the old promise to build 'a country fit for heroes.' After the war lavish promises had been made by all parties to see that enough houses would be constructed for all the 'heroes' returning from the trenches. Christopher Addison, as minister of health, had responsibility for this. In the post-war euphoria, 'expense was no object', and houses were built for £910, which later cost only £385, so resources were squandered. There was a public outcry, and Addison was demoted to minister without portfolio, and later forced out of the cabinet altogether. Actually, 213,000 houses were built, and "much had been done", and the idea that the provision of housing was the responsibility of government was established. However, Lloyd George was also discredited by the scandal.

National Insurance

One of Lloyd George's greatest achievements during his post-war ministry was to extend the national insurance scheme to cover almost the entire working class, in contrast to the 1911 scheme which covered essentially only building, engineering and shipbuilding, and had been extended during the war to cover munition workers as well. Under Lloyd George's initiative, 12 million workers were covered by the scheme. The scheme was designed to operate upon the assumption of 4% unemployment. People did not expect the larger levels that persisted throughout the interwar period. In March 1921 the scheme was extended to 'uncovenanted benefit', which meant that workers received benefits for which they had not contributed. In November 1921 the scheme was expanded to include benefits to the wives and families of unemployed men. The shortfall in revenue was met by loans from the exchequer, but as these were never repaid, they were effectively subsidies. On the one hand, malcontent caused by unemployment was diminished, but on the other, the payments of the benefits made the markets less flexible, and impeded the movement of labour from the declining industries to the new industries. It is an opinion that on the whole the social benefits were more valuable to British society than the costs to the economy of the increased rigidity.

Lloyd George sought to stimulate the British economy. He agreed with the views of Keynes that growth in the German economy would be good for British exports, and he sought at international conferences throughout 1920 and 1921 to settle the issue of reparations. But the French remained intractable in their demand for severe penalties for the Germans.

Free Trade, Protectionism and 'Empire Free Trade'

Lloyd George was not an adherent of the old Liberal cause of 'Free Trade'. He permitted the retention of the duties first imposed by McKenna on 'luxuries', and protectionist duties were retained for shipbuilding and introduced in 1921 to 'protect' other industries. Lloyd George was also interested in the idea of Empire Free Trade, and sought to negotiate agreements to this effect with the Dominions. However, it was the Dominions who were not so keen on the idea. They would have entered into some kind of customs union had Britain been prepared to impose 'stomach taxes' — that is, taxes on foreign imports of food from outside the Empire trading zone. This was too politically sensitive a measure. In an effort to persuade the Dominions to join some kind of customs union, Lloyd George convened a conference of Dominion prime ministers in London, but this simply affirmed the fact that the Dominions were independent states with sovereign parliaments.

Japan and the United States

The Dominions were influential, however, in steering Britain away from alliance with Japan and towards alliance with the United States. Lloyd George personally favoured Japan, but Canada refused to be hostile to the United States, and Australia and New Zealand would not ally with Japan. There was a naval conference at Washington from November 1921 to February 1922, at which a ratio of capital ships of 5 American to 5 British to 3 Japanese was agreed. Britain, under the influence of the Dominions, allowed their alliance with Japan to lapse. To reassure the Japanese the British promised not to develop their naval base at Hong Kong, and the Americans not to develop theirs in the Philippines. The Dominions became the British Commonwealth of Nations. The remaining colonies were still administered from Whitehall.

The Dominions, India and the Empire

However, the British Empire was still growing, especially in the Middle East. For a time the British army occupied Afghanistan, and the British held a protectorate over Persia. However, they withdrew from Afghanistan and French and American pressure also forced them to abandon the protectorate over Persia. Nonetheless, they still held a mandates over Mesopotamia, now called Iraq, and Palestine. Despite nominally recognising the independence of Egypt in 1922, they remained in occupation of that country, ostensibly in order to protect the Suez Canal. For a time the oil and markets of the Middle East seemed more important to British trade than India itself.

The Indian economy was becoming more independent of Britain. By this time the Indian cotton industry was established, and India was importing manufactures from Japan. However, despite the window-dressing of new constitutions for the provinces, India was still ruled by the viceroy with the India Office having ultimate authority. Calls for Indian independence were led by the Indian National Congress, led by Gandhi. The campaign for independence gathered momentum after the Amritsar massacre of April 1919, when a British General, Dyer, ordered his men to fire on an unarmed crowd, consequently killing 379 people. This alienated the Indian people from British rule. Gandhi introduced civil disobedience, but after his arrest, the first campaign of civil disobedience died down. Nonetheless, the writing was on the wall for the end of British rule in India. The British essentially accepted that India would become a Dominion, and the two sides only disagreed over when this would happen.

Ireland

The situation in Ireland reached a critical phase. Whilst Ireland was still in theory part of the United Kingdom, in reality it was ruled by an independent parliament, the Dail, set up by the Sinn Fein after the 1918 election. De Valera, the only survivor of the 1916 leaders of the Easter uprising, was elected president of the Dail. Under a republican government taxes were levied and justice administered. The Sinn Fein planned a non-violent campaign of resistance to British rule, but, without the permission of the Dail, the Irish Republican Brotherhood was formed by militant Irishmen, and it started a war against British rule. There was conflict within the IRA leadership — with Michael Collins and Cathal Brugha rivalling for command. It was actually a small scale conflict, with only 3,000 to 5,000 men on active service in the IRA opposed by the British army of 50,000 men and 10,000 armed police of the Royal Irish Constabulary. However, the British had the worse of the early fighting as they were not adapted to guerrilla warfare. In 1920 the British introduced their own terror squads — the Black and Tans, and the resulting fighting became bloodier, with 750 Irishmen being killed and 500 police and 200 soldiers on the British side. This terror was unnecessary since the Home Rule act had already been passed by the British government during the war, and its implementation delayed only for the end of the war, which had already come! However during, Lloyd George steered through parliament the Government of Ireland Act. This provided an arguably unworkable constitution for Ireland, with two separate Home Rule parliaments, one in Dublin, and one in Ulster, in addition to a Council of Ireland with representatives from both parliaments to ensure Irish unity! In the event, only four of the elected southern representatives (those from the Dublin university) attended the opening of the southern parliament; Sinn Fein elected another Dail, and neither Southern Ireland, nor Ulster agreed to recognise the Council of Ireland. However, Ulster did accept its own Home Rule parliament, and the practical consequence was that Ireland was effectively partitioned for the first time. George V, despite the personal risk of assassination, insisted on opening the Northern Ireland parliament, thus signalling his personal disapproval of the campaign of terror. At the same time Smuts was influential in persuading the southern Irish to accept Dominion status. De Valera, as president of the Irish Republic, entered into secret negotiations with the British government, and a truce was signed on 8th July 1921, following which, after a period of further bargaining, the southern Irish 26 counties accepted Dominion status. However, the issue of Dominion Status against Republic raised intense emotions at the time, though retrospectively it seems that little divides the two parties — a Dominion is effectively sovereign, and holds only a nominal allegiance to the Empire. But at the time, the question raised intense passions. For the British Dominion status was a symbol of the preservation of the Empire, for the Republicans, a Republic would signal a complete break with that self-same Empire! De Valera held out against British proposals. Lloyd George, in an effort to win Sinn Fein over, offered to include Ulster within a United Ireland, ruled from Dublin, in return for the retention of the Dominion status; however, at this juncture, Law, who had retired from the front benches on the grounds of ill-health, returned to active politics to oppose this measure, and it had to be withdrawn. Lloyd George hinted that he would ensure that the boundaries of Northern Ireland were drawn so that Ulster would be unworkable as a economic region, and, for this reason, and because they were anxious to avoid a war, the Dail accepted Dominion status on 6th December 1921, when they signed the 'Articles of Agreement for a Treaty between Great Britain and Ireland', which was approved by the British Parliament on 16th December. De Valera led the opposition within Ireland to the treaty, but it was carried by 67 votes to 57 by the Dail on 7th January 1922. The provisional government of Southern Ireland was led by Arthur Griffith, and the British transferred power to it during March 1922. In the subsequent election there was a 72% majority in favour of parties supporting the Treaty; nonetheless, a large part of the IRA determined to fight for the Republic, and a civil war ensued, which was very bloody and resulted in the deaths of many Irish leaders, including Michael Collins. In the end, the civil war ended with victory for those in favour of the Treaty. The Dail worked out a new constitution for southern Ireland, which became the Irish Free State, which was ratified by the British parliament on 5th December 1922; on the 6th December, Ulster formally dissociated from it. A former Nationalist MP, Tim Healy, became the first governor general, and on 17th December 1922 the last British troops left Ireland. This effectively severed Southern Ireland from Britain. There was an oath of allegiance that members of the Dail were required to swear, and the governor general was an appointment of the king, but otherwise the Irish Free State was a sovereign state, receiving Dominion status on the Canadian model. However, the Irish Free State did not become friendly to Britain, and Northern Ireland started to become an issue. The abolition of the still-born Council of Ireland in 1925 signalled the division between the two communities. Meanwhile, the government in Northern Ireland started to discriminate against their Catholic minority — elections were rigged, and special police power was used to support the maintenance of Protestant political supremacy. It is possible to regard the Irish settlement as one of Lloyd George's greatest achievements. However, it did entail political disaster for Lloyd George personally, since his settlement and methods he used to obtain it alienated support from all sections of British political life — the left offended by the use of terror, and the Right offended by the end of the union.

Economic decline and the Geddes axe

The decline of these British export industries had been accelerated by the war, by making former customers poor, and improving the competitive advantage of such countries as Japan. However, there were some benefits to Great Britain as a result of changes in the structure of international trade: the terms of trade steadily improved to Britain's advantage — in other words, fewer British exports were required to purchase the same volume of imports. The consequence of this was that Britain was able to afford both higher rates of unemployment and an improved standard of living. However, the decline of the traditional export industries did continue, most markedly in textiles and coal.

The remedy for the economic ills of the interwar period would be the movement of labour from the old industries to the new — such as motor car manufacture and the manufacture of electrical equipment. This movement was impeded by the pre- and post-war chaos in both industries: for example, there were 96 different manufacturers of cars in 1922.

The narrow-mindedness of economic thinking was exemplified by the reaction to the collapse of the post-war boom in 1922. Waste of public money was blamed for the crisis, and Sir Edward Geddes was appointed to chair a committee on government expenditure. Its report came out in February 1922, and resulted in cuts in the army, navy, education, public health; recommendations to reduce teachers' salaries and abolish several ministries. Geddes' axe resulted in the scrapping of plans to create continuation schools for children to the age of 16. Parliament followed the recommendation to reduce teachers' salaries, and cut spending in education. Thus, education was worst affected by the Geddes axe. However, the Fisher act of 1918 had brought some improvements to education, the most important of which was the establishment of uniform salaries and the introduction of a pension scheme for teachers.

The Chanak Crisis and the Fall of Lloyd George

Lloyd George's political situation worsened. It was difficult to see what section of the community he could appeal to. The rise of the Labour party made it difficult for him to appeal to the working classes as a man of the people. The political environment of cut-backs of 1922 was unsuited to him, and he was increasingly dependent on the Conservatives. There was a scandal about Lloyd George's sale of political honours. He countered by arguing, rightly, that every government sold political honours, but the validity of the charge still stuck, since the proceeds went into Lloyd George's political fund. This further eroded his political credibility and introduced more strain into his relationship with the Conservatives. The situation in Ireland also damaged Lloyd George. The conflict in Ireland between those in favour of the treaty and those against it spilled over into England, when an MP, Sir Henry Wilson, was murdered in London. This enraged the Conservatives, and the government responded by threatening to use troops in Dublin unless the Irish Free State did something themselves; thus, the Irish Civil War began as a result of this British threat, and this alienated Irish opinion still further. Lloyd George was reduced to political manoeuvring to maintain his position, and he would employ such ruses as offering to resign in favour of Austen Chamberlain, which Chamberlain refused. He made the mistake, as Asquith had done before him, of thinking that he was indispensable. In an attempt to gain a foreign policy coup, Lloyd George proposed what would be the twenty-fourth conference between European leaders since the war. It was held at Genoa in April, 1922. The USA refused to attend, and the upshot was that the Germans and Soviets struck a private deal at the Treaty of Rapello, which enabled the Germans to use the military facilities of the Russians, and thus evade sections of the Versailles Treaty. One aim of the conference was to cancel all war debts and reparations; in order to put pressure on the US, the Balfour Note was issued, stating that Great Britain would only collect debts sufficient to pay her debts to the US, but the US did not cancel their debt. The Genoa Conference was a disaster for Lloyd George.

Whilst the Treaty of S�vres of 1920 apparently settled the situation in Turkey, this was illusory. The Turks developed, under the leadership of Kemal Pasha, a new nationalist consciousness. The British and French both removed their forces from Turkey, which had been occupying the region of the Straits, and made separate peaces with Kemal Pasha; the Soviets also settled independently with him; but Greece remained embroiled in conflict over the control of Smyrna. Lloyd George wanted to support the Greeks, but the majority of the cabinet, including Churchill, Birkenhead, Curzon and Montague, secretary for India, were against it. The Turks took the initiative and defeated and massacred Greeks, capturing Smyrna. They advanced on Constantinople, and reached a British outpost, Chanak, in the neutral zone. Lloyd George instructed the British general there, Harington, to resist the Turks, and, with Churchill, called on the Dominions to assist them, but the Dominions refused. The confrontation was defused by the wise actions of the British general, who did not deliver an ultimatum to the Turks to withdraw, and the equally wise action of the Turks, who did not attack the British. The temporary pact of Mudania, concluded on the 11th October, ensured that there would be no bloodshed until a final settlement was reached, and it was inevitable that that settlement would return to Turkey territory which was its by right. Thus, Turkey was alienated for no good reason.

The excitement caused by the Chanak crisis encouraged Lloyd George to think that it was a good time for an election, and the majority Conservative cabinet supported him in this. However, Conservative backbenchers were opposed to fighting an election on a Coalition ticket. A meeting was summoned at the Carlton Club for 19th October, when Curzon proposed to break the resistance to the plan. However, at the meeting Baldwin spoke against Lloyd George, and Law, coming out of retirement, came out against the Coalition. In the vote that followed there was a majority of 185 to 88 against the Coalition, and as a consequence it was as an independent party that the Conservatives fought the election. Thus, Lloyd George fell from power. Law was elected leader of the Conservative party on 23rd October, and became Prime Minister.