Although the results were a cause of celebration for Lloyd George, they might also have given him cause for concern. Labour had attracted strong support among the newly enfranchised working classes, increasing its share of the popular vote from 6 per cent to 21 per cent and polling almost two and a half million votes, but the first-past-the-post system ensured that this failed to translate into parliamentary gains. Nevertheless sixty MPs represented a significant increase on the forty the party had returned in 1910. Labour was now a powerful national force, and the largest single British party of opposition. Meanwhile, virtually all the Irish constituencies outside the four Protestant-majority counties in north-east Ulster were won by the ultranationalist party Sinn Féin, which replaced the IPP as the official political voice of Ireland. Many of the elected Sinn Féin politicians were serving jail sentences; all the party’s MPs declined to take up their seats in Westminster, refusing to take the oath to the British monarch or to recognize the right of a British parliament to intervene in Irish affairs. Instead the politicians set up their own parliament, the Dáil Éireann, in Dublin. Lloyd George’s government would now have to answer an even more urgent ‘Irish question’ than the one with which Asquith’s administration had grappled before the war.
The demise of the IPP also deprived the Liberals of their traditional support from the Irish benches, one of the reasons why the 1918 election results represented a death sentence for the Liberal party. The official ‘Squiffite’ Liberals won a mere thirty-six seats, with Asquith himself losing in East Fife, while the coalition Liberals amassed only 127 seats, making them the junior partner in a Unionist-dominated coalition. The Unionists, with 382 seats, had such a large majority in the Commons that they could, in theory, form a government without Lloyd George whenever they wished. Their dominance was reflected in the cabinet Lloyd George assembled: Law was Lord Privy Seal and leader of the House of Commons, Austen Chamberlain was chancellor, and Balfour was foreign secretary.
The Unionists had performed a brilliant manoeuvre. Under the aegis of a resplendent Liberal war hero, they had appealed to the new workingclass electorate. They had also attracted a fair share of the women’s vote, thereby establishing a strong relationship with the female electorate that would last throughout the twentieth century. The party had, moreover, exploited and exacerbated divisions in the Liberal party, while replacing it as the unofficial representative of business. Many of the 260 new MPs were self-made businessmen, and the overwhelming majority sat on Unionist benches. These new arrivals, who were famously described by Stanley Baldwin as ‘hard-faced men who looked as if they had done very well out of the war’, effectively replaced the aristocracy as the lifeblood of the Tory party. Only a dozen heirs to the peerage were elected at the 1918 election, while there were four aristocrats in the coalition’s twenty-two-man cabinet. Lloyd George had hoped the election would herald the arrival of a new consensual coalition politics, but the parliament which assembled at the beginning of 1919 was as divided as ever. When the prime minister rose to address it, he saw ‘the TUC on the one side and the Associated Chambers of Commerce on the other’ – Labour represented the former, while the Unionists represented the latter. Who did the Liberals on the other benches represent?
Although he was now isolated at the head of a Unionist-dominated administration, things went well for Lloyd George at first. He established hegemony over his Unionist colleagues in the cabinet through a characteristic combination of flattery and bullying, and bypassed many of his ministers as he had done during the war. He also ignored parliament, preferring to deal with issues directly as they arose.
The battle to win the peace on the home front began well. An influenza epidemic, which had claimed over 200,000 British lives since the armistice, gradually abated. The English larder was slowly ‘demobilized’, with meat, sugar and butter coupons phased out. The political, social and industrial unrest feared by many in the government failed to materialize – the 1918 Representation of the People Act had satisfied the popular appetite for reform and the post-war economy was buoyant. The war had created a boom, with high government spending and inflation stimulating the manufacturing and agricultural sectors. The army of workers expanded with the return of men from the front, but they were absorbed into the growing economy, and unemployment rarely exceeded 1 million (though the 750,000 women dismissed from their positions to make way for the returning men were not included in the figures). The boom continued after the war, sustained by the lavish spending of people who had saved money during the conflict, and by the ‘new men’ who had made vast fortunes out of it. An insufficient supply of goods caused a rise in both prices and wages, which encouraged people to spend more, which further boosted wages and profits.
The extravagant spending of the population was matched by Lloyd George’s government as it attempted to inaugurate its reconstruction projects. In 1918 it introduced an Education Act which raised the school leaving age to fourteen. The following year it passed a Housing Act, through which the state accepted responsibility for housing the working classes. So long as the economy was booming and neither business nor wealth felt oppressed by taxation, the Unionists allowed the prime minister to keep public spending high.
Lloyd George was optimistic that he could also succeed in international affairs. In January 1919, he went to Versailles, where the victorious Allies would dictate peace terms to the defeated Central Powers. The prime minister was confident that he could help orchestrate an enduring peace settlement that would be favourable to Britain. His aim was to remove the possibility of future German aggression without undermining her capacity to act as a counterweight to Soviet Russia on the Continent. So far as Britain’s specific aims were concerned, much had been achieved prior to the conference. The German navy had been destroyed following the armistice, and the Allies had tacitly agreed to deprive Germany of her colonies and divide them up amongst themselves. In the event the British Empire would be extended by almost 2 million square miles in Africa, Palestine and Mesopotamia, incorporating 13 million new subjects. Lloyd George could afford to be magnanimous at Versailles.
He also aimed to maintain the close alliance with the United States formed during the latter stages of the war. To further that objective, he endorsed President Woodrow Wilson’s fourteen-point plan as the basis for the peace settlement. One point of Wilson’s proposal was national self-determination for European peoples who had formerly been part of the Ottoman and Austro-Hungarian empires. Wilson and Lloyd George hoped that the emerging nation states would become harmonious liberal democracies, strong enough to resist the economic and political influence of Russia and Germany. Two other points of Wilson’s plan aimed to remove the potential causes of a future war. Armament reduction for all countries was proposed, along with the establishment of a ‘general association of nations’ for ‘the purpose of affording mutual guarantees of political independence and territorial integrity to great and small nations alike’. It was hoped that this association would replace the inherently unstable balance of power diplomacy.
On the German question, Lloyd George supported American attempts to curb France’s appetite for vengeance. The French were determined to reduce Germany’s frontiers and make the country pay onerous reparations, while Britain and the United States insisted that Germany should be diminished but not devastated, lest this create the conditions for future international discord. When the French proposed taking the Rhineland from Germany and establishing it as an independent state they were rebuffed; and when they suggested an exorbitant figure for German reparations, Lloyd George forced them to accept that the final amount of compensation would be decided at a later date.