In May 1902 the treaty with the Boers was concluded and the experience of almost falling asleep in cabinet convinced him that it was time to go. On 11 July 1902 he retired, having served the fourth-longest premiership after Walpole, Pitt the Younger and Liverpool. He died at Hatfield in August 1903. The end of his premiership can be seen as a symbolic marker of the end of the Victorian period.
There was never any doubt that Salisbury would be succeeded by his nephew, A. J. Balfour (hence [possibly] the phrase, ‘Bob’s your uncle’ - though it might have an earlier origin). Joseph Chamberlain, the only possible rival, was unacceptable to large sections of Conservative opinion (and was recovering from a fall through a plate glass window at the time).
The 1902 Education Act
The greatest achievement of the Balfour government was the 1902 Education Act, though the government got little credit for it. A new law was necessary in order to clarify the legal status of the ‘higher-grade schools’, the educational establishments run by the school boards, which catered for pupils of 12 and older.
The act swept away the 2568 school boards set up by the 1870 Education Act and made county and borough councils the local education authorities (LEAs) for both elementary and secondary schools. The Act provided some much needed rationalization, and set up a statutory system of secondary education, but at the expense of alienating two important constituencies, Radicals, angry at the loss of the directly elected school boards, and Nonconformists.
In drawing up the Act it had become clear that the great problem was what to do with the ailing church schools, some 14,000 in number, where over one third of children were still receiving elementary education. There was huge pressure from the Conservative back benches to use public money to save these predominantly Anglican schools from collapse. However, Robert Morant, the Board of Education civil servant in charge of the act, pointed out that the Boer War had depleted government funds and that the burden of funding voluntary schools could not come out of the central exchequer, but would have to come from the rates. This immediately roused the Nonconformists (‘Rome on the rates’), especially in Wales, where the village school was usually Anglican. [Compare with the earlier issues of tithes and church rates.] They waged a relentless campaign against the act, much to Balfour’s bewilderment (church schools had been aided by central government since 1833!). The Baptist minister, Dr John Clifford, refused to pay the share of rates he deemed likely to go to church schools; other Nonconformists had their goods distrained.
Some Anglicans, notably the MP Lord Hugh Cecil, were also outraged by the act because they feared that in the long run Anglican schools would be effectively nationalized and deprived of their sectarian features. Lloyd George achieved national prominence by making highly personalized attacks in the Commons on the Prime Minister, accusing him of an attempt to
‘rivet the clerical yoke on thousands of parishes’.The divided Liberal party gained a new lease of life as those who had deserted the party over Ireland began to return to the fold. By-elections began to go against the government – there were sensational Liberal victories at Newmarket and Rye.
Retrospectively the Act can be seen as a major advance in the provision of secondary education, but politically it was an unqualified disaster.
Chamberlain had been absent from the debates on the act as a result of his accident. He felt betrayed by its final provisions (which denied church schools the right to opt out of LEAs) and as a consequence felt released from any reciprocal obligation to the Conservatives. It enabled him to embark on a campaign of ‘imperial preference’ which split the Conservatives in a manner reminiscent of Peel’s abandonment of agricultural protection.
There were two main factors behind the campaign.
1. Chamberlain’s passionate imperialism. Worried about British isolationism and unpopularity (as shown by the international reaction to the Boer War), he at first attempted to force an alliance with Germany. When this fell through he envisaged instead a grand union of the British Empire - seeing this as essentially a project for the Anglo-Saxon races.In a speech in Birmingham in May 1902 Chamberlain declared:
2. Some disturbing economic facts. Between 1870 and 1900 Britain’s share of world manufacturing production had slipped from over 30% to less than 20%. The United States had overtaken her in 1880 and Germany in c. 1900. These two rivals had large domestic resources and markets, acquired through processes of unification. In 1896 Ernest Williams published Made in Germany. By 1902 the focus of hostility had shifted to America, but the principle remained the same - Britain was suffering from foreign competition.
‘The days are for great Empires, not for little states.’He was then absent from the country on a tour of South Africa from where he returned in triumph in March 1903. In a speech in Birmingham on 15 May 1903 he opened his campaign, challenging the premises of free trade and calling for closer economic unity of the Empire. The Times likened this to Luther’s challenge to the Church of Rome at Wittenberg. The Liberals could hardly believe their luck. Herbert Henry Asquith:
‘Wonderful news today and it is only a question of time when we shall sweep the country.’Whatever the merits or otherwise of the economic arguments, imperial preference had huge political problems that were in some ways a rerun of the debates of the early 1840s. The budget of 1902 had temporarily abandoned free trade and put a tariff on imported corn in order to pay for the costs of the war, but this was an unpopular measure. Chamberlain was advocating a fundamental change in the country’s commercial policy. Free trade had been the mid-Victorian gospel, and a group of Conservatives immediately went into action to defend it. Lord Hugh Cecil and Winston Churchill declared that if the Tory party became protectionist it would lose its soul.
Throughout the summer of 1903 Balfour tried to hold the party together and work out a compromise position. But he was unable to prevent the formation of rival groups. Free traders set up the Unionist Free Food League, Chamberlain’s followers the Tariff Reform League.
In September and October the cabinet saw resignations of both Chamberlain and the leading free traders. But as a token that Balfour wished to keep Chamberlain on board he brought in his son Austen to replace the free trader Ritchie as Chancellor of the Exchequer. The result was confusion – had Balfour struck a secret deal with Chamberlain? What did the Prime Minister really believe about tariff reform?
In the autumn of 1903 Chamberlain travelled the country arguing for imperial protection (duties levied on foreign but not colonial imports). At a speech in Glasgow on 6 October he called for a duty on corn, imported meat and all dairy produce except bacon, and a tariff on manufactured goods; to offset the increased charge to the consumer, the existing taxes on wine, sugar, coffee and cocoa were to be lowered. But this reminded many Conservatives of the way the party had split on the corn laws in 1846. On 24 October Winston Churchill wrote:
'I hate the Tory party. … I feel no sort of sympathy with them. … It is therefore my intention that before Parliament meets [late January or February] my separation from the Tory party and the government shall be complete & irrevocable & during the next session I propose to act consistently with the Liberal party.’Meanwhile Asquith went on a similar speaking round arguing against imperial preference. The Liberal argument was the simple Anti-Corn Law League one: protection (in this case imperial preference) would mean dearer bread. Chamberlain’s argument had to be long-term: imperial preference would ultimately benefit British industry and tariffs would pay for social reform (for a while he floated the idea of old age pensions). In December 1903 tariff reformers won three by-elections. But the tide turned in 1904 as Unionist Free Traders began voting against the government.
Balfour tried to heal divisions by promising that if the Conservatives won the next election a colonial conference would be held to discuss imperial preference, and if this were accepted the British electorate would be consulted by means of a second general election.
The Fall of the Unionists
By 1905 Chamberlain accepted that the Unionists were going to lose the next election (though the Liberals were unable to believe that they would win it) but he hoped that after the election he could reconstruct the party round tariff reform. By this time the party was in a state of almost open civil war. In October 1905 Balfour appealed to his party conference for unity but in the following month Chamberlain launched a bitter personal attack. But in December Balfour resigned and the King sent for Sir Henry Campbell Bannerman. Balfour was the last Prime Minister to resign to an opposition leader without first being defeated in a general election.