Nothing new under the sun

The British Conservative party has torn itself apart over the issue of the UK's EU membership throughout the last 40 years. Indeed, Guy Verhofstadt, the former Belgian prime minister and current MEP who is now lead Brexit negotiator for the European Parliament, remarked recently that the whole Brexit issue was an internal Conservative Party spat that got out of hand. What is less well known is that in the early years of the twentieth century, the Conservatives were similarly split over another economic issue – that of tariffs – which ultimately had disastrous political consequences.

Our story starts at the beginning of the twentieth century in the wake of the Boer War (1899 to 1902) when the limits of British imperial power began to be exposed. The most powerful empire on the planet was forced to use its full military might to defeat an army comprised of farmers, which came as a big blow to national pride and caused a lot of soul-searching at a time when the USA and Germany were beginning to become established as major economic powers.

It was against this backdrop that the Tariff Reform League (TRL) was formed in 1903. The idea was to protect British industry from perceived unfair foreign competition by advocating a policy of Imperial preference in which the British Empire would be transformed into a single trading bloc to compete with Germany and the US. Imports from outside the bloc would be subject to duties which would be channelled towards social reforms, such as the establishment of a universal old age pension scheme. The TRL also claimed that high import duties would allow taxes to be cut in other areas. However, this was a controversial proposition and opponents claimed that such a protectionist policy would raise the cost of goods such as food (especially bread).

Like the Brexit campaign, the TRL was well funded and supported by a range of politicians, intellectuals and businessmen. Moreover, it was popular with the grassroots of the Conservative Party. But politicians were split, and the issue fractured relationships between Conservative MPs and their government coalition allies in the Liberal Unionist Party. As a result, this coalition suffered a landslide defeat in 1906 to the Liberals (not to be confused with the LUP) which advocated Free Trade. Thereafter, the tariff issue appeared to lose momentum. The so-called People's Budget of 1909 was instrumental in introducing a universal pension scheme, undercutting one of the arguments used by the TRL, and by 1914 the league had all but ceased to exist. The Conservative Party also downplayed tariff reform and abandoned a pledge to put the issue to the public in a referendum.

But the coda to this particular piece of history came after WW1 following the official dissolution of the TRL. After comfortably winning the 1922 election with a majority of 78 seats the Conservative prime minister, Andrew Bonar Law, resigned due to ill health. His place was taken by Stanley Baldwin who announced that tariff reform was to become official Conservative policy in order to tackle rising unemployment. Just as Theresa May did this week, Baldwin announced a snap election early in the new term to secure a popular mandate for the new policy. But in the December 1923 election, just 13 months after the previous one, the Conservatives lost 86 seats and although it was still the single biggest party in Westminster, it was unable to overturn a coalition of Labour and the Liberals.

Ironically, the Lib-Lab government failed to hold together and a third election was held in 1924 when the Conservatives won a landslide, helped in part by the infamous forged Zinoviev letter, which was published in the Daily Mail four days before the election. Things got worse for Labour before they got better. The party was blamed for the economic collapse of the early 1930s and polled its worst results at the 1931 election, to which it responded by electing George Lansbury, a left-wing pacifist, as leader.

Whilst history never repeats exactly, the parallels with the British political scene then and now are striking. The Conservatives are split on issues of national economic significance, with Brexit playing the role today of tariff reforms almost a century ago. In addition, the experience of 1923 illustrates that this week's decision to call a snap election is fraught with risks. We should also not overlook the role of the Daily Mail in publishing material whose veracity is open to question. Meanwhile, Labour is repeating its post-1929 convulsions all over again.

As it happens, nobody expects anything other than a thumping Conservative majority following the election on 8 June, so the 1923 experience is unlikely to be repeated. This is partly because, like Lansbury, Jeremy Corbyn is – rightly or wrongly – deemed unelectable. Ironically, Lansbury never actually faced the electorate – he resigned as Labour leader just over a month before the election and the party improved its performance compared to the previous election in 1931 under his successor, Clement Attlee. A Corbyn resignation in the next two weeks is unlikely, but he still has a chance to repeat the rhymes of history.

Perhaps what all this tells us is that there is nothing new under the sun when it comes to politics. The smart leader writers who tell us that the Labour Party is condemned to oblivion really ought to look more closely at history. But it is unfortunate that it is currently unable to mount an effective opposition to a government apparently bent on enacting a ruinous economic policy in the form of a hard Brexit. If there is anything to be learned from the economic and political debates of the interwar period, it is that economic nationalism – for that is what Brexit is about at heart – is a thoroughly bad idea.