Abhishek Majumdar
If one were superstitious, the timing would be positively fortuitous. Alistair Darling’s next budget is to fall almost exactly a century after one of David Lloyd George’s most controversial and hard-fought bills.
The year was 1909. Three years previously, the Liberal party of Sir Henry Campbell-Bannerman had swept to power in a landslide election victory, embarrassing the Conservative party with its success. By 1909 the Liberal administration, boasting such giants as Asquith, Churchill and Lloyd George, had joined battle with a recalcitrant and reactionary upper chamber, dominated by Tory old lags that ultimately rejected the government’s radical plans to redistribute wealth by taxing the rich. By exercising its prerogative to veto a budget, a step unprecedented since the 17th century, the Lords induced their own destruction: 1911 saw the Parliament Acts, which broke the power of the House of Lords forever.
Today, the government faces no similar uphill struggle. The Lords, half-reformed and stuffed with appointees, tends not to act as the ‘watchdog of the constitution’ as Lloyd George wished it would do – though it would be churlish to deny the upper chamber’s achievement in, for example, rejecting the 42 days’ detention legislation.
Why, then, ask many commentators on the political left, does Alistair Darling not take a leaf from the book of the Welsh wizard, Lloyd George, who introduced in 1909 for the first time, old-age pensions, higher taxes on higher incomes and increased inheritance taxes? Similarly, conservative commentators extol the virtues of spending cuts. What unifies both sides is that they call for boldness, but know full well that they will get blandness.
For a start, the difference between then and now is stark. Then, Britain was in a relatively sound fiscal condition. Taxes were generally low. The size of Government was small. As historian A.J.P. Taylor has written: “(u)ntil August 1914 a sensible, law-abiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman”.
The truth is that, for better or worse, the size and scope of Government has grown inexorably since the 1909 clash between peers and people. Two world wars and many decades later, we are in Britain heavily taxed, ineffectively regulated and ruled over by what journalist Peter Oborne has referred to as the political class: a caste of homogenous ciphers a world apart from the struggling middle-class families in many of the nation’s cities.
What does this mean for this week’s budget? It means that even though the supremacy of the Commons over the Lords is unquestioned, boldness is still a rare quality among our elected leaders. What we are likely to see this week is a safety first budget, tinkering at the margins with spending cuts while scrambling to appeal to all constituencies with ‘green’ investments and perhaps a limited tax cut of some sort.
Lack of boldness is perhaps endemic to our democracy. When Labour proposed its 45 pence tax rate for higher earners, the Conservatives quickly adopted the plan, as if to dissent would be a step too far. Where does this leave voters? On foreign policy for example, the Commons is more or less unified: to exit the European Union would be beyond lunacy but to go to war in a far-flung Middle Eastern country is justified. The ascendancy and strength of the Commons has made it uniform, not diverse. Debate is stifled rather than heated.
The old Parliamentary system was not wholly democratic. But it worked reasonably well at steering the ship of state and pushing steady reform into law. This system, with its titled ministers, its First Lords of the Treasury (never ‘Prime Ministers’, until Campbell-Bannerman) and its privileged MPs who kept racehorses rather than fiddled expenses, was perhaps always destined for destruction in a modernising world. And the extension of the franchise, particularly to women, was long overdue.
Ultimately, the People’s Budget of 1909 paved the way for true democracy: a Lords that has eventually to bow to the Commons if the latter so wishes it. This, surely, is the fairest approximation of a democratic system we can get.
And yet, the principles of those heady days from 1909 to 1911 – redistribution and people power – have not delivered the promised utopia. Instead they have created a disconnected and insular political bubble that has yet to burst, and laid the foundations for a welfare state that is far advanced but inefficient and poor at rescuing the poor. As we survey the wreckage of our economy and anticipate what will probably be Darling’s last budget, we ought not to reflect upon what was gained during the twentieth century, but on what was lost.