The Chancellors (5): Austen Chamberlain

chambAusten Chamberlain

Conservative, 1903-05; in Lloyd George’s National Government, 1919-21

When Bonar Law gave up the Treasury, Chamberlain was his natural successor. It was something of a poisoned chalice, however. The war had been largely funded by debt and servicing that debt would severely limit the freedom of action of all the chancellors of the ‘twenties. He faced dealing with an overheating economy which he was, arguably, slow to react to. He then faced the 1920-21 recession, one of the most severe in modern British economic history. Unemployment rose to 23% (of insured workers) and real GDP fell by 13%. Conventional Treasury economics demanded tax increases and spending cuts, which restored a budget surplus, but made the recession far worse. His acceptance of the Cunliffe Committee’s recommendation that the government should aim for a return to the gold standard also necessitated higher interest rates, at 7%, which had a similar impact.

As Chancellor, he developed a close working relationship with Lloyd George, and that relationship became as important as the prime minister’s with Bonar Law. When Bonar Law retired in 1921, Chamberlain was his natural successor: unfortunately, he was not an effective leader and his loyalty to Lloyd George saw his downfall at the Carlton Club (see the blog articles on Chamberlain, here, and Bonar Law, here, once more).

He went on to be Foreign Secretary under Baldwin 1924-29. Chamberlain is the only man since 1900 to have served in a cabinet with his own father; he also served in the 1924-29 cabinet with his half-brother Neville (the only brothers to have served in the same cabinet). Not only that, he is one of only three men to have been chancellor twice; another is his brother Neville. The Chamberlains are the only brothers to have been chancellor. He is also one of twelve chancellors to go on to lead his party (one of seven to go direct from being chancellor to the party leadership). He is also one of four men to have been chancellor, party leader and foreign secretary, and one of only nine to have been both chancellor and foreign secretary.

For a fuller look at Chamberlain’s career, see the post on him, here.

To read about his time as foreign secretary, see here.

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