The formation of the Liberal Nationals under Sir John Simon marked the culmination of an ongoing campaign of agitation against the Party’s leadership, caused by its relationship with the outgoing minority Labour administration. Simon had become increasingly concerned by the Labour Government’s failure to tackle the unemployment crisis. He also objected to the support Lloyd George was giving Ramsay Macdonald over a series of measures that he perceived to be of a socialist nature. At the opening of the 1930 Parliament, Simon had led four other Liberals into the division lobby to vote for a Tory amendment on the King’s Speech, much to the embarrassment of his leadership. Simon continued to vote against Government measures such as the Trade Disputes Bill before formally resigning the Liberal whip along with Robert Hutchison on 26 June 1931, over Labour’s proposals to introduce a new land tax.
The Conservatives, led by Neville Chamberlain, consequently began coaxing Simon to establish an alternative Liberal group, who could help oust Labour in return for Cabinet seats in a Tory administration. Despite encouragement, Simon made little progress towards this goal, much to the irritation of the Tories, who were clamouring for the opportunity to introduce protection as a means of tackling the economic crisis. In August, the Labour Government finally fell after Macdonald failed to convince his Cabinet to sanction necessary expenditure cuts and the subsequent formation of a National Government placed the Tories in an even stronger position to promote the adoption of protectionism.
When Simon finally adopted the Tory line, arguing that import tariffs were a necessary response to the economic blizzard sweeping the world, many of his colleagues were horrified. Here was the Liberal Party’s most prominent apostle criticising Liberalism’s most sacred doctrine. Simon, the only Liberal who had resigned in protest at the introduction of conscription during the war, now seemed prepared to abandon his principles without a second thought. Yet, not all his fellow Liberals ostracised him after listening to his speech in the House of Commons on 15 September. Some Liberal MPs, including Geoffrey Shakespeare and Ernest Brown, actually gave public support to his call for the introduction of an emergency tariff. A memorandum signed by 29 Liberals co-ordinated by Leslie Hore-Belisha promptly found its way into the hands of the Prime Minister, pledging to support Macdonald in whatever course he thought necessary to achieve economic recovery.
When a general election was called in order to consolidate the National Government’s legitimacy, Simon announced the formation of the Liberal National group, who would fight the election in separation from their Liberal colleagues. Unlike the official Liberal Party, who were now being led by Samuel, the Liberal Nationals declared that they would support the immediate introduction of protection as a means to avert the economic crisis.
It has been suggested that the formation of the Liberal National group and its abandonment of free trade had more to do with the need to ensure political survival than a resolve to ease the economic crisis. Certainly, it was common knowledge that Simon had secured his Spen Valley seat in 1929, as a result of a Tory abstention and many of the Liberal MPs who followed him into the Liberal National group were in a similar position.
The formation of the breakaway group had a devastating impact on the future of the Liberal Party by dividing the Liberal vote and emphasising the organisation’s disunity. With the aid of Conservative abstentions, the Liberal Nationals secured 35 of the 41 seats they contested. Although Liberalism had a combined force of 72 in the new Parliament, its overall strength was undermined by the continued separation of the Liberal Nationals and the Lloyd George family group from the official Party structure. When Simon rejected Samuel’s conciliatory advances immediately after the election, the two became involved in a private wrangle over Cabinet seats. To Samuel’s dismay, the Liberal Nationals were rewarded with a number of posts, including Simon who was given the prestigious role of Foreign Secretary and Walter Runciman, who became President of the Board of Trade. In contrast, official Liberal influence within the Cabinet diminished and Reading and Crewe were not replaced by Liberal colleagues on their retirement from government. Then in the summer of 1932, the two Liberal wings were involved in a particularly bitter public row, when the Liberal Nationals accused the official Liberal candidate in the North Cornwall by-election of failing to support the National Government. In July 1932 the Liberal National group finally established their own separate party organisation, the National Liberal Council, with Hutchison as Chair of the Party’s executive committee. He was responsible for co-ordinating relations with the Tories and ensuring that the Council acted successfully as a general propaganda and fund-raising machine. When the Samuelite Liberals finally left the National Government that year, the Liberal Nationals were able to take advantage of their absence. They continued to work in close co-operation with their Cabinet colleagues in the now Conservative dominated National Government and in 1940 Ernest Brown succeeded Sir John Simon as leader of the group.
After 1945 the Liberal Nationals moved increasingly closer to the Tories, although they denied the existence of a formal pact between the two groups in 1946. In May 1947 the Conservative Chairman, Lord Woolton made a pact with the Liberal National, Lord Teviot, to formalise links between the two parties. It provided for the establishment of a joint Conservative and Liberal association in those constituencies where both parties were already active, with candidatures open to recommendations from either side. In constituencies where only one of the parties was active, it was agreed that membership should be offered to all those who supported joint action against the Socialists and to rename any such grouping accordingly.
In 1948, the Liberal National Party changed its name to the National Liberal Party amid mounting fears that it would be engulfed by the Tory party. Although the Liberal Nationals had gained three seats since the 1935 election, in 1945 they secured just 13 seats and like the remaining official Liberal Party, they were in distinct danger of becoming extinct. In the long run it was evident that the Woolton-Teviot agreement had spelt the end for the Liberal Nationals and in 1968 the Party was finally wound up.