Britain’s Greatest Prime Minister

Kevin Dowd

My good friend and co-author Martin Hutchinson has just had a published a blisteringly brilliant biography of Britain’s greatest Prime Minister. The person in question is (who else?) Robert Banks Jenkinson, 2nd Earl of Liverpool (1770-1828), who was Prime Minister from 1812 to 1827.

More details on Martin’s book Britain’s Greatest Prime Minister [subtitle] Lord Liverpool: An Examination of Gold-Standard Government (love the subtitle!) are available on the book’s website.

Jim Grant provides a delightful endorsement: “Martin Hutchinson, one of the rarest of Wall Street’s birds of plumage — a true original thinker — here makes the persuasive case that the greatest of Britain’s prime ministers is a man whose name perhaps few Americans have ever heard. This splendid, erudite, fast-moving biography assures Lord Liverpool of the recognition he so richly deserves.”

‘a true original thinker’ is certainly one way to describe the old boy. 

Virtually forgotten, those who do recall him tend to think of Disraeli’s ‘arch-mediocrity’ sneer in his 1844 novel Coningsby. Yet when you look at what he achieved, as a wartime and a peacetime leader, he deserves to rank very high indeed.

To quote Martin’s summary:

“Liverpool’s greatest achievements were in economics, not the strong point of Disraeli, or of Liverpool’s remarkably few biographers. As War Secretary in 1809-12, he devised an economic and military strategy to beat Napoleon that relied on constant moderate pressure over several years, rather than the massive short-term coalitions that had previously been unsuccessful. By capturing France’s remaining colonies and the attritional Peninsular War, he increased the pressure on France’s loot-driven economy until Napoleon was forced into an invasion of Russia in 1812 that proved fatal.

After 1812 as prime minister, Liverpool increased the pressure further, providing subsidies to Britain’s potential allies, and pulling together a coalition that won the key Battle of Leipzig in October 1813. The road to victory was a rocky one, however; in June 1813 Liverpool and Vansittart (Chancellor of the Exchequer) were reduced to begging the Bank of England for Treasury bill rollovers week by week, until Wellington’s victory at Vitoria improved Britain’s credit standing.

As victory approached, Liverpool set out the basis for a peace settlement, which Castlereagh (his Foreign Secretary) followed at the Congress of Vienna. Instead of punishing Britain’s enemies after victory, Liverpool decided on a peace that imposed no direct reparations, left France with most of her colonies and brought Britain no additional colonial gains. His moderation, and the deft management of Castlereagh and the Austrian minister Metternich, produced a European peace that lasted for almost 100 years. Their distant successors at the 1919 Congress of Versailles would have done well to follow their example.

The Waterloo campaign was also a masterpiece of organization, with Wellington (then in Vienna) assembling the Allies into a coalition as soon as Napoleon’s return was known, and Vansittart raising £27 million of Consols four days before Waterloo – forty times the funds that Napoleon had available.

Once peace was restored, Liverpool faced three economic problems. The government debt was far too high, the highest it has ever been in terms of the economy. The pound was unanchored, its value governed largely by the Bank of England’s note issues; Liverpool believed the country should return to gold. Agriculture had been over-expanded during the war, with marginal lands planted. Liverpool believed some protection was necessary, to avoid bankrupting landholders and ensure the maximum food self-sufficiency in any future war.

Liverpool tackled the agriculture problem first with Corn Laws that allowed free imports if the corn price was above 80 shillings per quarter, but blocked imports below that price. This allowed farmers to adjust; it also stimulated corn growing in Ireland, which since 1806 could sell freely into the rest of the U.K. 30 years later, Irish corn crops were a modest offset to the notorious potato famine.

The debt was the biggest problem. Vansittart reduced non-debt-service public spending by 69% in three years, balanced the budget, and kept it balanced, raising taxes in 1819 to do so. Liverpool passed legislation that year returning Britain to the Gold Standard, which took effect in 1821. Sound debt management and the Gold Standard helped Britain’s credit rating and reduced interest rates, so holders of Consols (which had no maturity) received a capital gain of over two thirds of national output in the nine years 1815-24. That capital gain financed the industrial take-off of the early 1820s, and offset the deflation caused by the return to gold (prices fell by 40% in the same period). By the time Liverpool left office, economic growth had made the debt much less burdensome – Victorian chancellors like Gladstone had it very easy by comparison.

The first few years after the war were difficult. There was a deep recession in 1816-17, following the crop failure of the 1816 “Year without a summer” then another painful recession in 1819-20 caused by the deflation accompanying the return to gold. Both recessions caused unrest, which Liverpool and his Home Secretary Lord Sidmouth handled deftly. Sidmouth usied informants to watch for revolution, arresting the participants in the 1820 Cato Street Conspiracy before they could break into a Cabinet dinner and assassinate the ministers, for example. The Peterloo massacre, caused by inept Manchester magistrates, was a blot on the government’s record, but overall, order was maintained. Unrest died down once prosperity returned after 1820.

One useful reform in these years was the Savings Banks Act of 1817, by which Trustee Savings Banks were set up, investing only in government bonds, to provide safe havens for worker savings. Liverpool’s next major innovation was to move the country towards free trade, which he did by a speech in May 1820, setting the path for British trade policy for the next 40 years, and opening British business to the world.

After 1820, things became easier as the economy recovered and then boomed. Taxes were reduced, as the budget was now in surplus. Peel, the new Home Secretary, instituted numerous legal reforms, and trades unions were legalized by 1824 and 1825 legislation.

At the end of 1825, a financial crash occurred, caused mainly by speculation by the English country banks, of which there were more than 800 (no bank was allowed to have more than six partners). Liverpool had warned against the speculation the previous March. After the crash he reformed the banking system, allowing the formation of joint stock banks, restricting note issues except by the Bank of England, and pushing the Bank of England to open branches. The new laws were passed early in 1826, and by the end of 1826 the post-crash recession had lifted.

Liverpool had major achievements in both war and peace over 15 years – for one thing, he won four successive general elections, more than any other prime minister. Although his main expertise was in economic policy, he produced an excellent post-war peace settlement and embarked on major programs of legal and social reform. Without his work, the Victorians’ lives would have been much less contented and prosperous. In war and peace, when you look at Britain’s 55 prime ministers, Liverpool deserves to rank No. 1.”

I particularly like Martin’s unconventional, let us say, assessments of other Prime Ministers which you can also find on the book’s website at

Sir Robert Walpole (1721-1742)

Overall, nicely self-described as “no saint, no Spartan, no reformer” he deserves to rank barely in the Top Ten of Prime Ministers. He left Britain richer and more stable than he found it, but also more corrupt and less open.”

Augustus, 3rd Duke of Grafton (1768-1770)

“Overall, Grafton was somewhat ineffective, certainly in conciliating the American colonists, but probably deserves to rank a little above the dregs …”

Arthur, Duke of Wellington (1828-30, 1834)

“A truly great man, but barely an average prime minister.”

Archibald, Fifth Earl of Rosebery (1894-1895)

“Rosebery was prime minister for only 16 months, presiding over a quarrelsome government; his only substantial achievement was to own the Derby winner twice in 1894 and 1895, a feat he repeated in 1905. He retired from the Liberal leadership in 1896, to become an ineffectual centrist elder statesman, surviving into the new world of 1929 and dying to the sound of the Eton Boating Song. He should rank near the bottom of the list, though he did little damage.”

Herbert Asquith (1908–1916)

“Despite his fatherhood of the welfare state, for foreign policy and Irish reasons he does not deserve to be much above the middle of the list, perhaps in the low 20s. Nevertheless, one cannot help liking the man. Like North, another unsuccessful war leader, he would make an excellent dinner companion – and one would certainly also invite Margot!”

David Lloyd George (1916 – 1922)

“Like Asquith, Lloyd George (1863-1945) came from a poor background, but unlike Asquith he traded on it throughout his life. …

Throughout his career, Lloyd George had a phobia about the landed rich – not the rich in general, just those with inherited land, whom he consistently demonized. …

Lloyd George was energetic and notably successful as Minister of Munitions and Secretary of State for War, bringing in outside businessmen to overcome ossified bureaucracies, albeit at the cost of significant corruption. This period convinced him that government intervention, throwing resources at problems to achieve narrow targeted goals, could make the economy more efficient – he became a believer in “war socialism.”…

Lloyd George’s Irish policy was a vacillating mess, causing four years of civil war. When in 1922 scandals broke over Lloyd George’s sale of honours, there was an unsurprising loss of confidence in his leadership, which led to the fall of the Coalition – Conservatives were so thankful to break free from Lloyd George’s leadership that their back-bench organization is called the “1922 Committee” to this day.

Lloyd George is often grossly over-ranked. He was an unpleasant man, able but corrupt and distrusted by his colleagues, who deserves only part of the Chatham/Churchill bonus for inspirational war leadership. He also made some major blunders and poisoned the atmosphere of British politics.”

Mrs T (1979-1990)

“She was not an especially good Leader of the Opposition, and she was surrounded by colleagues who almost all disagreed with her, but even at this stage she showed the way to a more robust pursuit of victory in the Cold War: “I stand before you tonight in my Red Star chiffon evening gown, my face softly made up and my fair hair gently waved, the Iron Lady of the Western World” she said in a 1976 foreign policy speech. This was four years before President Ronald Reagan came to office; without her, it would have been much easier for Soviet-generated propaganda to dismiss him as an eccentric warmonger. …

There were inevitably mistakes. Three stand out, apart from the community charge, a decent idea that was more trouble than it was worth:

First, her settlement of the Rhodesia/Zimbabwe question. Rhodesia had declared independence unilaterally in 1965 under a white minority government, but in early 1979 a moderate black-led government had been installed under Bishop Abel Muzorewa. Thatcher should have left this in place, recognizing Zimbabwe’s independence, but instead she listened to President Jimmy Carter, the United Nations, the global left and party Heathites led by her Foreign Secretary Peter, Lord Carrington (1919-2018) and convened the Lancaster House conference, which handed the country over to Marxist guerrillas led by Robert Mugabe, with massacres and expropriation following.

Second, her financial services legislation. The traditional British merchant banks had suffered a miserable time during the 1970s, with high inflation decimating their capital base and not much business. It was thus unhelpful for Thatcher to invoke a Gladstonian enthusiasm for a “level playing field” through the Financial Services Act of 1986 – essentially this put the now midget British banks on a level playing field with no protection against the Green Bay Packers of the New York houses. The result was not pretty. A ten-year delay, giving the British houses time to rebuild their strength in the prosperous 1980s and 1990s would have helped greatly. The Act’s sudden enthusiasm for regulatory complexity also prevented any entrepreneurial new ventures from springing up and further biased the system towards the behemoths. The result as of today is a London financial system dominated by foreign-owned trading juggernauts, with many scandals and little innovation.

Third, Europe. Thatcher’s Bruges speech of 1988 awakened her supporters to the danger of a unified European super-state, but it came both too late and too early – too late for her to have time to devise an alternative plan for Britain’s future (she had only two more years in office) and too early for her colleagues to wake up to the dangers, which took another generation in many cases. As a result, her last years were clouded by leadership challenges; the first in 1989, was minor, but the second, from Heseltine in 1990, proved fatal, although she was able to pass the leadership on to John Major (1943- ) rather than to Heseltine himself.”

John Major (1990-1997)

“John Major (1943- ) became prime minister by winning Dame Fortune’s lottery several times in succession. …

As prime minister Major had one substantive achievement, winning the 1992 election, which enabled him to stay in the job for 6½ years, longer than Attlee, Lloyd George or Baldwin and just short of Macmillan. Just after the election, Britain crashed out of the ERM, losing billions of dollars to George Soros and other speculators, a debacle that Major extremely unfairly blamed on his successor as Chancellor Norman Lamont (1942- ). Leaving the ERM allowed sterling to find its market level, ending a lengthy and painful recession entirely caused by Major’s ERM folly. A better man would have resigned at this point. …

Major’s unforgiveable error was to sign the Maastricht Treaty, committing Britain to an ever-closer political European Union, without holding a referendum. Had a referendum been held, the Treaty would almost certainly have lost by a substantial margin as it did in Denmark, at which point the EU would have been forced to remain a purely economic community, to which the British people had agreed in 1975. By preventing a referendum, Major deprived Britons of their democratic sovereignty, which was only restored to them (in principle) by David Cameron’s in/out referendum of 2016.”

Gordon Brown (2007-2010)

“Brown’s term as Chancellor was above average by Labour standards, but as prime minister, he proved to lack the equable temperament for the job. He should rank near the bottom of the list.”

Interestingly, Martin doesn’t say who he thinks should be at the bottom of the list, but there is a lot of competition for that position.

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