Joseph Chamberlain began his crusade against Free Trade, Glasgow 1904. Photo: Russell & Sons / Cassell's universal portrait gallery Joseph Chamberlain began his crusade against Free Trade, Glasgow 1904. Photo: Russell & Sons / Cassell's universal portrait gallery

The Tories’ brewing civil war over Europe is not the first to divide the party

The cracks are appearing in the Tory party over the EU referendum.

Cameron long ago had to abandon any idea of cabinet responsibility in the campaign, (which is why he wants to go for a short one). He has so far, it must be said, managed to avoid the kind of civil war that paralysed John Major’s government, but this may not survive a deal, as it seems increasingly unlikely that he will be able to negotiate a deal that even the moderate Euro sceptics will accept, let alone the ultras.

The one thing that is holding the Tories together is power, and fear of losing it. But even that may not be enough in the end.

The fact is they have split like this before. The question of membership of the European Union is not the first such controversy to disrupt the party for years, even decades, at a time.

The Tories’ obsessions have always concerned terms of trade with the other major economies, concerns that have often been proxies for ruling class’s unease about Britain’s place in the world and fear of national decline.

Free Trade

A hundred years ago the bone of contention over which the Tories relentlessly fought was the question of Free Trade versus tariffs. The economic orthodoxy in Britain at the start of the 20th century was for Free Trade, the idea that charges made on imported goods, tariffs, were bad for trade in general and therefore the British economy, specifically.

This belief was a core tenet of both the Liberal Party (the dominant political party in the second half of the nineteenth century) and the Labour Party until the mid 1930s. The Conservatives were always more diffident on the subject.

They were the descendants of the Tories, who had resisted tooth and nail the repeal of the Corn Laws, which imposed a tariff on imported wheat. This protected landowners, but also kept the up the price of bread (a major part of most workers’ budgets) and so was opposed by industrialists.

In 1848 after a long campaign by the Anti-Corn Law League the tarriffs were  repealed by Robert Peel’s Tory administration, splitting the party in the process.

Within the a few years under their new leader, Benjamin Disraeli, the Tories had embraced Free Trade and reinvented themselves as the Conservatives.

Their traditional opponents, the Whigs, then joined with Peelites to create  the Liberal Party, which under one of their number, William Gladstone, would dominate politics for the rest of the century.

Increasing competition

The idea of Free Trade of course made sense for Britain in the mid-nineteenth century. Britain was the most industrialised country on earth, ‘the workshop of the world’. Its goods could undercut everybody else’s, and so it wanted to take down barriers to them being sold everywhere.

However, as the century came to end the British economy faced increasing competition from new rising economic powers, and first amongst these were the newly unified states of Germany and the USA.

Some in the British establishment, mostly in the Conservative party, started to question Free Trade.

They wanted a system of so-called ‘Imperial Preference’ whereby the British Empire (which then included nearly a quarter of the world’s population) would become a trade bloc with tariff charges imposed on goods imported from without. This would restrict imports and create an area where British goods were protected from competition (as American and German goods were in their home markets).

Chamberlain’s crusade

In 1904 the Colonial Secretary, Joseph Chamberlain, quit the cabinet and then dropped a political bombshell on it.

He broke a fifty-year old political consensus, spoke out against Free Trade and began his last, great crusade for what was known as ‘Tariff Reform’.

Joseph Chamberlain was a maverick. Now much less well known than his hapless son, Prime Minister and appeaser of Hitler, Neville, he was one of the most influential figures in British political history. Winston Churchill described him as “the man who made the weather”. He had split the Liberal Party in 1886 when, over the question of Home Rule in Ireland, he led his Midlands-based supporters across the House to the Tory benches.

A reactionary nationalist and imperialist he had also, paradoxically, been the leader of the, so-called, ‘Radical’ wing of the Liberals.

He believed that social reform was necessary to satisfy an increasingly restive working class. Thus he extolled tariffs as both a means to protect British industry and as a way of paying for reforms such as old age pensions.

His campaign was unashamedly populist and he led it with the slogan “Tariff Reform Means Work for All.” The newly formed Tariff Reform League soon had 250,000 members.

The campaign was more successful in the Tory party, though, than it was in the country. The National Union of Conservative and Unionist Associations (which represented the Tory ‘grass roots’) soon backed it and it was popular amongst MPs. The party’s grandees, however, along with most of the establishment mostly remained in favour of Free Trade. Some Free Traders (such as Winston Churchill), defected to the Liberals as they became as about as popular on the Tory benches as the the Europhiles today.

With the party divided Prime Minister Balfour resigned and in the subsequent general election the Tories were swept from power. A Liberal landslide gave them 397 seats to the Tories’ measly 156. But what was left of the Tory party in the Commons was markedly more pro-tariff than before.

The Liberals and the infant Labour Party (which had won 29 seats in 1906) both strongly backed Free Trade though, and this was an important factor in the so-called Progressive Alliance, which they formed against the Tories.

Free Trade was also still popular in the country where most working class people saw it as assuring (in a country which by then imported most of its food) cheap food.

To many at the time, including some Tories, it seemed that their obsession with Tariff Reform as the cure-all for Britain’s economic ills would keep them out of power forever.

A different world

The world changed dramatically with the First World War. The government was forced to take control of imports and exports and Free Trade was effectively suspended though it was restored with peace).

The British Empire had expanded as it seize do the possessions of the vanquished nations. It would reach its peak size in this period.

However the British economy’s place in the world had slipped. The war had left the country massively in debt and its industry, starved of investment during the war years, increasingly lagged behind that of the United States, which had experienced a massive war-time boom

The war had also upturned domestic politics.

The previously dominant Liberal Party into two warring factions, the followers of Prime Minister David Lloyd George and the those of his predecessor (whom he had ousted from Downing Street) Herbert Asquith.

The Tory party, with their sidekicks, the Lloyd George Liberals, now dominated parliament following a landslide election victory in 1918.

On the opposition benches the Labour Party had emerged as their main opponent. But it retained the old Liberal position on Free Trade, which there was still a consensus in the country.

The Tories, however, were more strongly pro-Tariff  than ever.

So when in 1923 the Tory newly elected government (they had comfortably won an election in 1922 having cut loose Lloyd George and Co.) controversially  decided to impose some tariffs they had, once again, to go to the country. Unexpectedly the Tories lost seats and were forced out of government temporarily, to be replaced (for just nine months), by the country’s first Labour government.

The issue of tariffs did not go away though. But they were to become the Free Traders’ problem rather than the Tories’.

Labour’s debacle

It was the Great Depression which, in the end, killed Free Trade. But when the crash hit it was the Labour Party which happened to be in office, having just won the 1929 election.

Its response to the global slump in trade was the follow the orthodox liberal policy of ‘retrenchment’: trying to balance the books by making cuts to public spending and hoping everything would just sort itself out (more or less the policy pursued by the advocates of austerity today). The alternative was to raise taxes and impose tariffs to raise income. Neither of these though were compatible with liberal economics. Labour was trapped. It was fully committed, and had been since its birth, to Free Trade, the Gold Standard and balanced budgets.

The only other way of balancing the books was to cut unemployment benefit. The TUC was opposed to this though and when the cabinet did in fact vote for reductions it only passed by the narrowest margin

It was not the ringing endorsement which the establishment was demanding of the government and Ramsey McDonald resigned as Prime Minister. The King however immediately asked him to form a new government with Liberal and Tory support.

He did so but without the bulk of the Labour Party which expelled him and the other Labour ministers who had joined him in the so-called  ‘National Government’.

The new Tory-dominated administration, on which the Labour splitters were just ornaments, quickly dumped Liberal orthodoxy: the Gold Standard was abandoned and tariffs proposed. To push through this radical change in government policy a general election was called.

Labour got hammered and was reduced to just 52 MPs. Many of the party’s new leaders lost seats and it was effectively decapitated. It kept much of its vote though and would spend the rest of the decade rebuilding itself.

The splitters would suffer a more ignominious fate. In the election they had kept their seats but they had run on a manifesto pledging to overturn the very policies for which they had destroyed the Labour government.

Within less than a decade Labour was back in government, and five years after that enjoyed its own landslide. McDonald and Co. however have been reviled ever after as traitors.

History repeats itself

The Tories are often said to be the oldest and most successful ruling class party in the world (a title they probably share with US Democrats).

They and others have often put this down to their lack of ideology. They stand for interests, not ideas. Whilst this is in part true, it ignores the fact that they have in the past gone through periods of internal strife, and in fact, intense ideological dispute.

The Tories’ strife over Europe, which dates back to the late 1980s with the emergence of Euroscepticism is just the latest such episode.

The pattern has been similar each time: it has focused on the external trade relations of the country but has also tended to involve a rearticlation of nationalist jingoism. This was less the case with the Corn Laws, but very much with Chamberlain’s campaign. The latter, in an era of growing imperialist competition, was all about the xenophobia, paranoia against competitors, particularly Germany, and the need to join working class opinion to the Tories imperialist project. It also marked a break from the Liberal economics and the classic Liberal attitude to international relations: the belief that interstate conflict (between European powers at least) was bad for business.

By the time Joseph Chamberlain died in 1908 his adopted party had seemingly become isolated from power by its newly hostile attitude to Free Trade. Had he lived a few more years he would have seen his old party the, the Liberals, destroyed by the war and the end of laissez-faire whilst the Tories emerged triumphant.

Learning the lessons

The Tories woes on these issues have always provided opportunities for the left (in that they have helped reshape the political environment) just not ones easily taken.

The Edwardian Tories were continually hamstrung by their opposition to Free Trade, and the ructions became the deus ex machina that ended Thatcher’s reign and helped destroy the premiership of John Major, despite his own, mysterious, popularity.

But the Tories’ adversity has not always been the left’s opportunity. In fact they have involved many traps for the left to fall into.

Many working class activists were fooled into supporting the campaign against the Corn Laws, for instance, despite the fact that the main motivation of the reformers was to cut wages.

Fifty years later support for the ‘free breakfast table’ (i.e. one without tariffs on the food) would fool much of the labour movement and Labour Party in particular into support for liberal economics. The result was misery for workers in times of slump and eventually the wreck of the Labour Party itself in 1931.

Labour’s support for the European Union will come back to haunt it if when the party returns to power it tries to implement policies which go against the neo-liberal orthodoxy which is hard-wired into the Union.

Those that wish to oppose the Tories this time by voting to ‘stay’ in the EU would do well to consider how well support for the previous ruling class consensuses have served the workers’ movement in times past.

Alastair Stephens

Alastair Stephens has been a socialist his whole adult life and has been active in Unison and the TGWU. He studied Russian at Portsmouth, Middle East Politics at SOAS and writes regularly for the Counterfire website.

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