Arthur Balfour - Prime Minister

Prime Minister

On Lord Salisbury's resignation on 11 July 1902, Balfour succeeded him as Prime Minister, with the approval of all sections of the Unionist party. The new Prime Minister came into power practically at the same moment as the coronation of Edward VII and the end of the South African War. For a while no cloud appeared on the horizon. The Liberal party was still disorganised over their attitude towards the Boers. The two chief items of the ministerial parliamentary program were the extension of the new Education Act to London and the Irish Land Purchase Act, by which the British exchequer would advance the capital for enabling tenants in Ireland to buy land. A notable achievement of Balfour's government was the establishment of the Committee on Imperial Defence.

In foreign affairs, Balfour and his Foreign Secretary, Lord Lansdowne presided over a dramatic improvement in relations with France, culminating in the Entente cordiale of 1904. The period also saw the acute crisis of the Russo-Japanese War, when Britain, an ally of the Japanese, came close to war with Russia as a result of the Dogger Bank incident. On the whole, Balfour left the conduct of foreign policy to Lansdowne, being largely busy himself with domestic problems.

Balfour has a distinct distrust of the American concept of equality. During the negotiations over the creation of the League of Nations, the topic of "all men being created equal" came up in the context of the American Declaration of Independence. Speaking to Col House, an aide to President Wilson and David Hunter Miller, the Chief Legal Adviser to the US Commission, Balfour said "that was an 19th century proposition that he didn't believe was true. He believed that it was true that in a sence all men in a particular nation were created equal, but not that a man in Central Africa was created equal to a European." Source, notes of David Hunter Miller, pg 183, Vol I, The Drafting of the Covenant, 1928, Putnam.

The budget was certain to show a surplus and taxation could be remitted. Yet as events proved, it was the budget that would sow dissension, override all other legislative concerns, and in the end signal the beginning of a new political movement. Charles Thomson Ritchie's remission of the shilling import-duty on corn led to Joseph Chamberlain's crusade in favour of tariff reform—these were taxes on imported goods with trade preference given to the Empire, with the threefold goal of protecting British industry from competition, strengthening the British Empire in the face of growing German and American economic power, and providing a source of revenue, other than raising taxes, for the costs of social welfare legislation. As the session proceeded, the rift grew in the Unionist ranks. Tariff Reform proved popular with Unionist supporters, but the threat of higher prices for food imports made the policy an electoral albatross. Hoping to split the difference between the free traders and tariff reformers in his cabinet and party, Balfour came out in favour of retaliatory tariffs—tariffs designed to punish other powers that had tariffs against British goods, supposedly in the hope of encouraging global free trade.

This was not, however, sufficient for either the free traders or the more extreme tariff reformers in the government. With Balfour's agreement, Chamberlain resigned from the Cabinet in late 1903 to stump the country in favour of Tariff Reform. At the same time, Balfour tried to balance the two factions by accepting the resignation of three free-trading ministers, including Chancellor Ritchie, but the almost simultaneous resignation of the free-trader Duke of Devonshire (who as Lord Hartington had been the Liberal Unionist leader of the 1880s) left Balfour's Cabinet looking weak. By 1905 relatively few Unionist MPs were still free traders (the young Winston Churchill crossed over to the Liberals in 1904 when threatened with deselection at Oldham), but Balfour's long balancing act had drained his authority within the government.

Balfour eventually resigned as Prime Minister in December 1905, hoping in vain that the Liberal leader Campbell-Bannerman would be unable to form a strong government. These hopes were dashed when Campbell-Bannerman faced down an attempt ("The Relugas Compact") to "kick him upstairs" to the House of Lords. The Conservatives were defeated by the Liberals at the general election the following January (in terms of MPs, a Liberal landslide), with Balfour himself losing his seat at Manchester East to Thomas Gardner Horridge, a prominent solicitor and king's counsel. Only 157 Conservatives were returned to the House of Commons, at least two-thirds of them followers of Chamberlain, who briefly chaired the Conservative MPs until Balfour won a safe seat in the City of London.