Municipal, or gas-and-water socialism it was called; and it signalled, if not a departure, at least a deviation from the principles and fundamental policy of Liberalism that Gladstone was instilling in the Liberal party at the national level.
Chamberlain began in 1874 by inducing the town (Birmingham had not yet received designation as a city) to buy out its two gas companies, till then in private hands. The next year he used the profits from this consolidation of service to enable the town to buy out the local water companies. In this case his objective was not further profit but reduction in the price and improvement in the quality of the city’s water supply, in the interests of public health.
These measures, the validation of their extraordinary financing and accounting by Chamberlain’s earlier success in business as a metal manufacturer, and the forceful leadership with which he pressed his proposals forward won dazzled approval from the ratepayers and both parties in the town council. But that bipartisan support broke down when he pressed on with an improvement scheme for centre of Birmingham that combined clearance of the inner-city slums with their replacement by a broad artery for commerce and attendant legal services. It was named Corporation Street in honour of the governmental power that brought it all about. Opposition was aroused by the huge debt with which the scheme encumbered the town, to be turned into a profit only slowly as the leases of the shops and offices on Corporation expired and their ownership reverted to the municipality. Furthermore, regardless of its boldness in other regards, the scheme made woefully inadequate provision for the housing of the dispossessed slum dwellers. The costs and limitations of the improvement scheme were accentuated by the onset of what came to be known as the great depression. Still the improvement scheme along with the municipalisation of gas and water aroused much more pride than dismay in the town and won admiring approval in Britain but abroad. For a while Birmingham was heralded as the best-governed city in the industrial world.
Its leader was labelled Radical more often than Liberal; and Chamberlain’s brand of municipal governance heralded several markedly radical developments in Liberal policy. It was characterised by eagerness to use the powers of government, in this case local government, to address the needs of an urban, industrial society. That disposition was not entirely new to either of the two main British parties, Liberal and Conservative, however much their rhetoric might disguise it: witness Gladstone’s regulation of the railways in the 1840s. What distinguished Chamberlain’s practice of government at the local level from Gladstone’s at the national was Chamberlain’s expansion of the financial base of the town council, in contrast to Gladstone’s determination to curb the financial liabilities and responsibilities of the national Treasury. Chamberlain extended the reckoning of the financial assets of the municipality to include the service infrastructure that it purchased. Thus he increased its capacity to incur debt and encouraged it to do so. But the difference between the two men should not be exaggerated. Chamberlain’s cost accounting was as careful as Gladstone’s and ensured that his reforms would pay for themselves sooner much more often than later. This caution deepened when he moved from the local to the national level and ultimately prevented him from devising any scheme for old age pensions attractive enough to win popular support. Nonetheless, it was his willingness to look for the financial wherewithal for his social reforms that made his determination to extend the responsibilities of the state so alarming from Gladstone’s point of view.
The difference between the two men was even more marked at the ethical level, not because Chamberlain was unethical but because the ethic that he championed was emphatically secular and eschewed an appeal to religion. Though the civic gospel that was enunciated in Birmingham emanated from its Nonconformist ministers, Chamberlain was its most effective propagator. The ministers presented the work of draining, lighting and paving the town as nothing less than divine service. Ignoring the divinity, Chamberlain proclaimed a strictly environmentalist gospel in which social conditions were the source of sin and legislation the basis for salvation. As he explained to the town council in presenting his proposals for slum clearance:
‘We bring up a population in the dank, dark, dreary, filthy courts and alleys such as are to be found throughout the area which we have selected; we surround them with noxious influences of every kind, and place them under conditions in which the observance of even ordinary decency is impossible; and what is the result? When they steal we send them to gaol, and when they commit murder we hang them. But – it is no more the fault of these people that they are vicious and intemperate than it is their fault that they are stunted, deformed, debilitated, and diseased. The one is due to the physical atmosphere; the moral atmosphere as necessarily and surely produces the other. Let us remove the conditions, and we may hope to see disease and crime removed.’
However moving this appeal, it had none of the religious resonance of Gladstone’s rhetoric, and hence failed to tap into one of the most powerful forces in the mentality of the Victorians. Those religious resonances remained vigorous after Chamberlain left the Liberal camp over Home Rule, and they undermined his ultimate challenge to the central Liberal commitment to free trade.
But his insistence on the need for government to do all it could to meet the needs of urban industrial society remained a permanent, though always controversial, principle among Liberal policy makers. The so-called New Liberals built on this principle at the beginning of the next century, though in doing so they encountered hostility from the continuing advocates of Gladstonian economy.
Conflict along these lines was not unique to the Liberals. It broke out simultaneously among Conservatives in connection with Chamberlain’s campaign for imperial preference and tariff protection, another extension of governmental power. In fact, insistence on governmental response to socio-economic problems emerged as common but controversial currency at all levels of government in all the major British parties, provoking debates within as much as between them about how far it should be applied.
 
Peter Marsh is Emeritus Professor of History at Syracuse University in the United States, and Honorary Professor of History at the University of Birmingham. His many publications include a biography of Joseph Chamberlain. This article was written in September 2003.