A. Explain Why the House of Lords Rejected the 1909 Budget
The House of Lords in 1909 consisted mainly of aristocrats that where part of the conservative party. There are many different reasons for the rejection of the people’s budget, which was an idea, brought forward by David Lloyd George of the Liberal party. The swift rejection by the House of Lords sparked the first constitutional crisis of the 20th century. The first reason I am going to bring forward is that this new budget included the idea of taxation on the rich for money that would go to support the poor.
A position in the House of Lords was inherited; this meant that the peers in the House of Lords were all relations with inherited wealth. This meant that the people the Budget targeted included the peers in the House of Lords; they did not feel it was fair to have their money taxed of them and saw it as an attack on them by the Liberals. So they rejected this budget so they wouldn’t be taxed.
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The peers believed that this budget was unfair on them ‘These (land) taxes are justifiable if you believe that land is national property’ however they did not believe this, they believed that the land they owned was theirs and no one should be able to take it from them as, that, they said could be seen as stealing- therefore they had hostility towards the new budget. This budget not only taxed them directly but indirectly to, David Lloyd George also wanted to put taxes on luxury goods such as motor cars and beer.
This luxury goods tax also hit the wealthy; they didn’t think the poor should be getting their money because they thought the lower class were poor because they were lazy (they believed in self-help), therefore they did not think the lower classes deserved to be given their money because they were not doing anything to be worthy of it. Another reason is that the House of Lords felt that the Budget was too controversial; they thought that Lloyd George had other motives for introducing this money bill.
A reason why they thought this is that the House of Lords was dominated by rich land owners which the budget directly affected. With this in mind the peers did not want to be seen as weak in the eyes of the voters, so in order for them to appear strong they had to reject the budget, showing that they would not fall for the Liberals tricks. So the rejection of the People’s Budget could be seen as an act of strength by the House of Lords. The House of Lords were mostly, if not all conservatives.
These conservatives argued that this People’s budget was no ordinary budget because it amounted to a social reform. Opponents of this money bill were worried by the idea of redistributive taxation and also of progressive taxation. This is because it did not advertise self-help which the conservative party strongly believed in. They feared that once these principles, of the budget, were established they could be extended to ‘soak the rich’ and even out the unfair distribution of income and wealth in Britain.
So in 1909 the Lords vetoed the budget. I think that the most important point that influenced the House of Lords to vote against the People’s budget is that it may harm their image to the general public. If they looked weak to the voters this would impact on the number of votes that the conservatives in the House of Lords would get which in turn would make them weaker. Therefore I think this is the most important point, the peers vetoed the money bill to make them appear stronger.