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Prime Ministers and their Chancellors

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As the Government’s Autumn budget statement makes headlines, the Downing Street website featured this blog by History Professor Richard Toye. In it he examines the importance of the relationship between the Prime Minister and the Chancellor of the Exchequer.

The connection between Prime Minister and Chancellor of the Exchequer is probably the most important, and potentially the most problematic, of all ministerial relationships. Foreign Secretaries and Home Secretaries can be powerful figures, and yet they rarely have the capacity that a Chancellor does to define, or indeed to destabilise, a premiership. In the modern era, domestic economic management has generally been seen as the most important factor in determining electoral success. The Chancellor, charged with keeping the economy on track, therefore becomes a unique point of strength or weakness for a government and hence for the Prime Minister. If the relationship goes well and the economy thrives, the Prime Minister can feel fairly secure in 10 Downing Street. If it goes wrong – and economic problems will likely be a major factor in this – the consequences can rock a government to its foundations.

It was William Gladstone – four times Chancellor before he was four time Prime Minister – who developed the Exchequer into recognisably modern form. He did not envisage anything like today’s welfare state, being obsessed with ‘retrenchment’, the nineteenth-century term for cutting public expenditure. Rather, he saw the Treasury as a department that could be harnessed to great national purposes. He was not content merely to balance the books on a year-by-year basis but had a political programme and a vision of how to create prosperity, which put the Exchequer at the heart of domestic politics. ‘Finance is, as it were, the stomach of the country, from which all the other organs take their tone’, he commented in 1858.

Behind Gladstone’s efforts at cheese-paring lay a great populist agenda: the reduction of taxation on items consumed by the masses. In a celebrated controversy in 1860 this brought him into conflict with Lord Palmerston, the Prime Minister. Gladstone wanted to abolish duties on paper, the last of the so-called ‘taxes on knowledge’ and a barrier to the production of cheap newspapers. But the very idea of a mass popular press struck many in the political establishment as potentially subversive, and Palmerston and many other ministers were opposed. Gladstone recorded in his diary that in one Cabinet meeting ‘Lord P spoke ¾ hour… [against] Paper Duties Bill!’ The legislation went ahead anyway and passed through the Commons, but Palmerston wrote to Queen Victoria that the House of Lords ‘would perform a good public service’ if it rejected the Bill. The Lords did in fact do so, and Lady Palmerston was ostentatiously pleased. It was Gladstone who had the last laugh, though. The following year he made abolition of the duties part of his Budget, thereby forcing his colleagues and the Lords to swallow it. It clearly helped that he was promoting a cause likely to have strong popular support.

But being the darling of the people is no guarantee of success when manoeuvring against a Prime Minister. Lord Randolph Churchill, father of Winston Churchill, learned this during his brief Chancellorship, to his permanent cost. A brilliantly witty speaker and the rabble-rousing delight of the Conservative grassroots, Lord Randolph turned himself into a force that the Tory leaders were unable to ignore. Appointed to the Treasury by Lord Salisbury while still in his thirties, he proved himself a mercurial colleague who was all-but impossible to work with. Salisbury noted drily that ‘the qualities for which he is most conspicuous have not usually kept men for any length of time at the head of affairs’.

This young meteor soon overplayed his hand, and at the end of 1886, after only a few months in office, he threatened resignation over what he saw as excessive spending on the armed forces. Salisbury called his bluff and accepted. Lord Randolph – who died early a few years later – never held office again.

Lord Randolph was ambitious, and though his own tactics backfired, plenty of his successors used the office of Chancellor to promote their own careers. Of Queen Victoria’s ten Prime Ministers, only Gladstone and Disraeli used the Chancellorship as a step upon the ladder. Of the twenty-one Prime Ministers since her death, ten served at the Treasury at some point before entering Number 10. By contrast, only five had served as Foreign Secretary, and two of these had also been Chancellor. So, when choosing Chancellors, twentieth-century Prime Ministers needed to watch their backs. On the other hand, it was no good simply appointing an unthreatening non-entity as Chancellor. In a more media conscious age, Chancellors needed to be heavyweights who could take the heat and demonstrate a bit of political showmanship.

David Lloyd George epitomised this new kind of Chancellor. He immediately ran afoul of Margot Asquith, the new Prime Minister’s wife, who suspected him of leaking a list of Cabinet appointments to the press. Asquith himself, though, was fairly relaxed about Lloyd George’s activities, even when his radical Liberal policies helped provoke a constitutional crisis. Lloyd George’s tax-raising ‘People’s Budget’ of 1909 marked a new kind of populism, based on public spending rather than retrenchment, and was a foundational moment in the birth of the welfare state. During the battle with the House of Lords that followed, Asquith sometimes distanced himself from his Chancellor’s wilder rhetorical excesses, but did little to actively rein him in. Although Lloyd George did eventually displace Asquith as Prime Minister during the First World War, the peacetime relationship between the two men was handled by both with considerable skill.

In the interwar years, Winston Churchill stands out as the most colourful Chancellor, serving a Prime Minister, Baldwin, who was even more laid-back than Asquith. Baldwin took little hand in what was arguably the biggest economic decision taken on his watch – the return to the gold standard in 1925 – leaving the question to Churchill and his advisers. Neville Chamberlain, Chancellor successively to MacDonald and Baldwin in the 1930s, came to feel that ‘I am more and more carrying this government on my back’.

Baldwin’s supposed laziness was to some extent a pose, but it also represented one of the final gasps of an older style of government in which the Prime Minister merely presided, and left detailed initiatives to his colleagues.

After 1945, the continued expansion of the state and the growing demands of the media required of Prime Ministers a more activist stance on economic policy. This was a time when the state was committed to a new goal, the maintenance of full employment, whilst Britain’s loss of great power status and relative economic decline generated a narrative of failure against which governments constantly struggled. In 1958, Harold Macmillan’s entire team of Treasury ministers resigned in protest at the Prime Minister’s unwillingness to implement spending cuts that the Chancellor, Peter Thorneycroft, thought necessary to battle inflation. The way in which Macmillan succeeded in shrugging this off as ‘little local difficulty’ became a legendary example of his ‘unflappability’. But when he sacked another Chancellor, Selwyn Lloyd, during the so-called the Night of the Long Knives, it was widely seen as a sign of panic in the face of political and economic bad news. Macmillan’s days in Downing Street were numbered.

In spite of the short-lived experiment of the Department of Economic Affairs (DEA) under Harold Wilson in the 1960s, the Treasury retained its primacy and power in Whitehall. Callaghan showed remarkable skill in keeping all his ministers on board during the International Monetary Fund crisis of 1976, but his successors generally moved away from collective Cabinet government to work bilaterally with the key players. For Thatcher, this technique was for a long time a source of strength, but it was not an infallible one, as demonstrated by the breakdown of her relationship with her second Chancellor, Nigel Lawson in 1989. When her personal economic adviser, Alan Walters, published a newspaper article that clashed with Lawson’s views, the Chancellor demanded she sack Walters. Thatcher refused; Lawson resigned; Walters then resigned as well; and by the end of the following year the Prime Minister herself had been forced from office. It was a sign that even a government committed to ‘rolling back the frontiers of the state’ could not escape intense scrutiny both of its economic management and of the personal relationships of those responsible for it.

Above all, it proved once again that getting rid of a Chancellor is no panacea for a Prime Minister in trouble. The same was true for Major when he dislodged Norman Lamont in the aftermath of ‘Black Wednesday’. Paradoxically, Blair found himself powerless to move against Gordon Brown at a time when the economy seemed to be performing well, despite a problematic relationship between the two which Blair recalled as being like that of ‘some quarrelling, married couple’.

The broader lesson to be drawn from the history of Prime Ministers and their Chancellors over the past 150 years is that, although difficulties may arise in part because of failed personal chemistry, how these problems play out is affected by the economic environment, the nature of the state, and public expectations about the types of issues that governments are expected to solve. In addition, the rise of the mass media has increasingly meant that personal differences between Chancellors and Prime Ministers are played out in the full glare of publicity. If Gladstone had not insisted on abolishing the Paper Duties, it might all have been very different.

Further reading

  • Edmund Dell, The Chancellors: A History of the Chancellors of the Exchequer, 1945–90 (HarperCollins, London, 1997)
  • Roy Jenkins, The Chancellors (Macmillan, London, 1998)
  • Nigel Lawson, The View from No.11: Memoirs of a Tory Radical (Bantam Press, London, 1992)
  • Alistair Darling, Back from the Brink: 1000 Days at Number 11 (Atlantic Books, London, 2011)

Richard Toye is Professor of Modern History at the University of Exeter. His books include The Labour Party and the Planned Economy, 1931–1951 (2003), Lloyd George and Churchill: Rivals for Greatness (2007), and Churchill’s Empire: The World That Made Him and the World He Made (2010). In 2007 he won the Times Higher Education Young Academic Author of the Year award. He is a Fellow of the Royal Historical Society and a member of the History & Policy editorial advisory group.

Shakespeare and the Body in the Carpark

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Philip Schwyzer

Professor Philip Schwyzer, Professor of Renaissance Literature in the Department of English.

Philip Schwyzer is Professor of Renaissance Literature in the Department of English. His book, Shakespeare and the Remains of Richard III, will be published by Oxford University Press next year. Here he asks how the mystery regarding the fate of Richard’s body may have sparked Shakespeare’s imagination.

Though we still await the results of DNA testing, it’s hard to imagine that the remains found under a carpark in Leicester this summer could belong to anyone other than Richard III. The skeleton is not only in the right place – the choir of the church of the Leicester Greyfriars, where Richard is known to have been buried in 1485 – but, with an arrow embedded in its spine and a massive wound to the cranium, it fits what we know about the king’s death on Bosworth Field. As the near-contemporary Song of the Lady Bessiye reports, “they struck his bascinet [helmet] to his head/ until his brains came out with blood.” Most striking and persuasive of all is the severe spinal curvature which would have given the living body precisely the appearance described by the chronicler John Rous: “small of stature, with a short face and unequal shoulders, the right higher and the left lower.”

The story of the Leicester dig, initiated by members of the Richard III Society, could be mistaken for something from the career of Heinrich Schliemann, if not Indiana Jones. As Richard Buckley, who led the excavation, acknowledges, “in archaeology you aren’t supposed to look for famous people.” Much less do you expect to find them. Yet if the fantastically successful result of the Greyfriars Project seems like something out of a film, it is appropriate to its object. The small man with a short face has always seemed larger than life – even before William Shakespeare got hold of him.

The chronicles Shakespeare would have consulted in writing his play are still among our main sources today for the events following Richard’s death at Bosworth. They describe how Richard’s body was mocked and abused on the battlefield, slung naked on the back of a horse and carried into Leicester. According to Thomas More, the king was “harried on horseback dead, his hair in despite torn and tugged like a cur dog.” As the body was carried over Bow Bridge, its head was reportedly allowed to slam against a protruding stone, fulfilling a prophecy made by an old woman that where his heel struck in the morning, his head should strike that same night.

Richard’s naked and battered body was put on display for two days before receiving burial at the fairly obscure Greyfriars priory. Some ten years later Henry VII’s government made a small payment for the construction of an alabaster tomb (complete with an epitaph in which Richard is made to confess his crimes and express gratitude to Henry for treating his remains so mercifully). When the infamous Cardinal Wolsey died and was buried at another Leicester monastery in 1530, a joke circulated that the city had become “The Tyrant’s Sepulchre.” Not long after this, the Greyfriars was dissolved, and Richard’s body disappeared from the historical record. Different stories soon circulated about its fate, the most famous claiming that his remains had been dug up, dragged through the streets, and thrown in the river Soar. Until the eighteenth century, a medieval sarcophagus said to have contained Richard’s body was on display at a Leicester tavern, where it doubled as a trough.

Shakespeare’s response to the traditions surrounding the fate of Richard’s corpse is enigmatic. Following his death in battle, Richard’s body is left lying on the stage, with no stage direction calling for its removal before the end of the play. Although the victorious Richmond gives directions for the burial of others who have fallen on both sides, nothing is said about Richard. Richmond may ignore his fallen foe, but the audience, typically, cannot. In the recent production starring Kevin Spacey, Richard’s body was winched up by the heels to hang upside down above Richmond’s head as he delivered his final speech. (Even as a lifeless corpse, Richard tends to steal the show.)

Did Shakespeare know the story of Richard’s rude deposition in the river Soar? This might help explain why the play is so stuffed with images of watery burial. In his first soliloquy, Richard declares that “all the clouds that lowered upon our house [are]/ In the deep bosom of the ocean buried.” Later on, his brother Clarence reports a vivid nightmare involving corpses on the ocean bed: “Methought I saw a thousand fearful wrecks;/ Ten thousand men that fishes gnaw’d upon…/ All scatter’d in the bottom of the sea.” The fascination with watery burial which runs throughout Shakespeare’s plays, down to Ariel’s famous “sea-change” song in The Tempest, has its origins in Richard III. Though we can now be fairly certain that Richard’s body was never subjected to this fate, the popularity of the story tells us something about the early modern imagination, its preoccupations and its fears. Perhaps it tells us even more about Shakespeare’s personal nightmares.

While we await the results of DNA tests, discussion is shifting to the future of the Greyfriars remains.  Leicester Cathedral, which already contains a memorial to the fallen king, has staked a strong claim. Some commentators, however, have called for Richard to be interred with full royal honours alongside his relations (and reputed victims) in Westminster Abbey. As a northerner at heart, Richard himself might have preferred burial in York Minster, a cathedral to which he showed much favour in his reign.

Though the discovery of the body is in many ways a cause for wonder and celebration, it has its melancholy aspect. The bones from Greyfriars cannot help but speak to us of mortality, of great suffering, and of wasted dreams. They humanise Richard III, and can make us pity him, even if we still believe him to have been guilty of at least some of the crimes laid at his door. Richard – who in Shakespeare’s play is called a devil, a cacodemon, a dog, hedgehog, and a bloody boar – was a human being after all. And someone made a great hole in his head.

In becoming more human, does Richard become less potent as a symbol? I would argue that the fact that Richard for so long had no known resting place contributed to the potency of his myth; it helped Shakespeare create a character who strikes us as unnervingly present, unfailingly contemporary and terrifyingly alive. Paradoxically, knowing just where Richard is may make him seem less rather than more present, leaving him less free to roam the cultural imagination. Yet Shakespeare’s play, the most frequently performed of all his works, will undoubtedly remain as popular as ever. And there will now be another image of Richard to hold in memory alongside the stage villain – one so much smaller and frailer than Shakespeare’s hunchbacked cacodemon, and so much more real.