In
1908 David Lloyd George, the Chancellor
of the Exchequer in the Liberal government
led by Herbert Asquith introduced the
Old Age Pensions Act
that provided between
1s. and 5s. a week to people over seventy. To pay for these pensions
Lloyd George had to raise government revenues by an additional £16
million a year.
In 1909 David Lloyd George announced
what became known as the People's
Budget. This included increases in taxation. Whereas people on lower
incomes were to pay 9d. in the pound, those on annual incomes of over
£3,000 had to pay 1s. 2d. in the pound. Lloyd George also introduced
a new supertax of 6d. in the pound for those earning £5000 a
year. Other measures included an increase in death duties on the estates
of the rich and heavy taxes on profits gained from the ownership and
sale of property.
The Conservatives, who had a large
majority in the House of Lords, objected
to this attempt to redistribute wealth, and made it clear that they
intended to block these proposals. Lloyd George reacted by touring
the country making speeches in working-class areas on behalf of the
budget and portraying the nobility as men who were using their privileged
position to stop the poor from receiving their old
age pensions.
With the House of Lords extremely unpopular
with the British people, the Liberal government
decided to take action to reduce its powers. The 1911 Parliament Act
drastically cut the powers of the Lords. They were no longer allowed
to prevent the passage of 'money bills' and it also restricted their
ability to delay other legislation to three sessions of parliament.
The bill also changed the maximum length of time between general elections
was reduced from seven years to five and provided payment for Members
of Parliament.
When the House of Lords attempted to stop
this bill's passage, the Prime Minister, Henry
Asquith, appealed to King George V
for help. Asquith, who had just obtained a victory in the 1910
General Election, was in a strong position, and the king agreed
that if necessary he would create 250 new Liberal
peers to remove the Conservative majority
in the Lords. Faced with the prospect of a House
of Lords with a permanent Liberal majority,
the Conservatives agreed to let the 1911 Parliament Act to become
law.
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