People's Budget facts for kids
| Finance (1909–10) Act 1910 | |
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| Presented | 29 April 1909 |
| Passed | 29 April 1910 |
| Parliament | 28th and 29th |
| Party | Liberal Party |
| Chancellor | David Lloyd George |
| Website | Hansard |
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‹ 1908
1911 ›
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| Finance (1909–10) Act 1910 | |
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| Act of Parliament | |
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| Long title | An Act to grant certain Duties of Customs and Inland Revenue (including Excise), to alter other Duties, and to amend the Law relating to Customs and Inland Revenue (including Excise), and to make other financial provisions. |
| Citation | 10 Edw. 7. & 1 Geo. 5. c. 8 |
| Dates | |
| Royal assent | 29 April 1910 |
| Text of statute as originally enacted | |
| Text of the Finance (1909–10) Act 1910 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk | |
The 1909/1910 People's Budget was a big plan by the Liberal government in Britain. It suggested new taxes on rich people's land and money. The goal was to pay for new social programs to help everyone.
This budget passed in the House of Commons in 1909. But the House of Lords stopped it for a whole year. It finally became law in April 1910.
The main person behind this budget was David Lloyd George, who was the Chancellor of the Exchequer (like a finance minister). His friend Winston Churchill, who was then a Liberal politician, also supported it. Some people called them the "Terrible Twins."
A writer named William Manchester said the People's Budget was "revolutionary." This is because it was the first budget in British history that openly aimed to share wealth more fairly. It caused a huge argument between the Liberal government and the House of Lords. This fight led to two general elections in 1910. It also led to a new law called the Parliament Act 1911, which changed the power of the House of Lords.
Contents
What Was the People's Budget?
The People's Budget was introduced in the British Parliament on April 29, 1909. David Lloyd George said it was a "war Budget." He meant it was a fight against poverty and hardship. He hoped it would help make poverty disappear from the country.
How Did the Budget Raise Money?
The budget planned to raise money through several new taxes. These taxes would pay for new social programs.
- Income Tax: People earning less than £2,000 a year paid a tax of about 3.75%. But those earning more than £2,000 paid a higher rate of 5%. There was also an extra tax, called a supertax, for very high earners (over £5,000).
- Inheritance Tax: Taxes on money or property left to people after someone dies were also increased.
- Land Tax: A new and very debated tax was on land. It proposed valuing land and taxing 20% of any increase in its value when it was sold. This idea came from an American tax reformer named Henry George. This tax would mostly affect large landowners. Many members of the Conservative Party were large landowners.
The Conservatives thought money should be raised differently. They wanted to add tariffs, which are taxes on goods brought into the country. They believed this would help British businesses and raise money at the same time. But many people didn't like this idea because it would make imported food more expensive.
The Big Fight Over the Budget
The new budget caused a big argument. Newspapers like The Times and Daily Mail told the House of Lords to reject the budget. They wanted to force an election to bring in tariff reform.
Some wealthy people, including dukes, held public meetings. They said the budget was the start of "socialism." Lloyd George famously joked that "a fully-equipped duke costs as much to keep up as two Dreadnoughts." He meant dukes were expensive and caused trouble.
Why the House of Lords Opposed It
The House of Lords had the power to reject a money bill, but they hadn't rejected a budget in 200 years. Usually, they just approved the yearly taxes. But in 1860, they rejected a tax change. After that, all taxes were put into one bill, called the Finance Bill. No Finance Bill had been rejected since then.
Even King Edward VII privately asked the Lords to pass the budget. He wanted to avoid a crisis. But on November 30, 1909, the House of Lords voted against the budget. They said they would pass it if the Liberals won an election based on this budget.
The Elections and the Parliament Act
The Liberals then decided to reduce the power of the House of Lords. This became the main issue in the general election in January 1910.
The election results showed that people were divided. The Liberal Party and their allies (like the Labour Party) won more seats than the Conservatives. But no single party had a clear majority. This is called a hung parliament. The Liberals needed help from the Labour Party and the Irish Parliamentary Party to govern.
The Irish politicians agreed to support the Liberals. But they had a condition: the Lords' power to block laws must be removed. This was important because the Lords had blocked a law that would give Ireland more self-rule (called Home Rule).
As promised, the House of Lords finally accepted the Budget on April 28, 1910. But the fight between the government and the Lords continued. This led to a second general election in December 1910. Again, the Liberals and their allies won more votes than the Conservatives.
Finally, the Lords passed the Parliament Act 1911. This happened because the new King, George V, agreed to create many new Liberal peers (members of the House of Lords) if the Lords didn't pass the law. This threat made the Lords give in. The Parliament Act greatly reduced the power of the House of Lords.
See also
- Budget League
- Budget Protest League
- The Land (song)
- Welfare state in the United Kingdom
