1. Gladstonian Era

For the next thirty years Gladstone and liberalism were synonymous. William Ewart Gladstone served as Prime Minister four times (1868–1874, 1880–1885, 1886 and 1892–1894). His financial policies, based on the notion of balanced budgets, low taxes and laissez-faire, were suited to a developing capitalist society. Called the "Grand Old Man" later in life, Gladstone was a dynamic popular orator who appealed strongly to the working class and to the lower middle class. Deeply religious, Gladstone brought a new moral tone to politics, with his evangelical sensibility and his opposition to aristocracy.^[1] His moralism often angered his upper-class opponents (including Queen Victoria) and his heavy-handed control split the Liberal Party.^[2][3]

In foreign policy, Gladstone was in general against foreign entanglements, but he did not resist the realities of imperialism. For example, he approved of the occupation of Egypt by British forces in 1882. His goal was to create a European order based on co-operation rather than conflict and on mutual trust instead of rivalry and suspicion whilst the rule of law was to supplant the reign of force and self-interest. This Gladstonian concept of a harmonious Concert of Europe was opposed to and ultimately defeated by a Bismarckian system of manipulated alliances and antagonisms.^[4]

As Prime Minister from 1868 to 1874, Gladstone headed a Liberal Party which was a coalition of Peelites like himself, Whigs and Radicals. He was now a spokesman for "peace, economy and reform". In terms of historic reforms, his first ministry 1868–1874 was his most successful.^[5] He was an idealist who insisted that government should take the lead in making society more efficient, more fair and that the government should expand its role in society in order to extend liberty and toleration.^[6] The Education Act of 1870 made universal schooling a major national policy.^[7] The judiciary system was made up of multiple overlapping and conflicting courts dating back centuries. The Judicature Act of 1873 merged them into one central court.^[8] In local government, the challenge of sanitation and clean water in fast-growing cities were met with new powers in the realm of public health. Local government was streamlined in a later Gladstone ministry and made more powerful and standardized. Patronage and favoritism was replaced by civil service examinations, downplaying the role of family and aristocracy and emphasizing the role of talent and ability. The secret ballot was enacted in 1872 to prevent the buying of votes—politicians would not pay out the money if they were not sure how the person voted. The Trade Union Act of 1871 lessened the intimidation of employers, made unions legal and protected their funding from lawsuits. The Protestant Church of Ireland, serving a small minority of rich landowners, was disestablished. Catholics no longer had to pay taxes to it.^[9] While the Navy was in fine shape, the Army was not. Its organization was confused, its policies unfair and its cruel punishments were based chiefly on brutal flogging. At the county level, politicians name the officers of the county militia units, preferring connections in class overcapacity. The regular army called for enlistments for twenty-one years, but with reforms initiated by Edward Cardwell, Gladstone's secretary for war, enlistments were reduced to six years, plus six years in reserve. Regiments were organized by territorial districts and advanced with modern rifles. The complex chain of command was simplified and in wartime the county militias were under the control of the central war office. Purchase of officer commissions were abolished and flogging in peacetime was also abolished. The reforms were not quite complete as the Royal Duke of Cambridge still had great authority despite his mediocre abilities.^[10] Historians have given Gladstone high marks on his successful reform program.^[11]

Regarding Ireland, the major Liberal efforts focused on land reform, where he ended centuries of landlord oppression and the disestablishment of the (Anglican) Church of Ireland through the Irish Church Act 1869. Gladstone became a champion of Home Rule, but it caused a secession from his party and he failed to enact legislation In the 1874 general election, Gladstone was defeated by the Conservatives under Benjamin Disraeli during a sharp economic recession. He formally resigned as Liberal leader and was succeeded by the Marquess of Hartington, but he soon changed his mind and returned to active politics. He strongly disagreed with Disraeli's pro-Ottoman foreign policy and in 1880 conducted the first outdoor mass-election campaign in Britain, known as the Midlothian campaign. The Liberals won a large majority in the 1880 election. Hartington ceded his place and Gladstone resumed office.

Among the consequences of the Third Reform Act (1884–1885) was the enfranchisement of many Catholics in Ireland and the growth of the Irish Parliamentary Party led by Charles Stewart Parnell. In the 1885 general election, this party won the balance of power in the House of Commons and demanded Irish Home Rule as the price of support for a continued Gladstone ministry. Gladstone personally supported Home Rule, but a strong Liberal Unionist faction led by Joseph Chamberlain, along with the last of the Whigs, Hartington, opposed it. The Irish Home Rule bill gave all owners of Irish land a chance to sell to the state at a price equal to twenty years' purchase of the rents and allowing tenants to purchase the land. Irish nationalist reaction was mixed, Unionist opinion was hostile and the election addresses during the 1886 election revealed English radicals to be against the bill also. Among the Liberal rank and file, several Gladstonian candidates disowned the bill, reflecting fears at the constituency level that the interests of the working people were being sacrificed to finance a rescue operation for the landed elite.^[12] The result was a catastrophic split in the Liberal Party led by Joseph Chamberlain, who formed the breakaway Liberal Unionist Party.^[13] It met heavy defeat in the 1886 general election at the hands of Lord Salisbury. There was a final weak Gladstone ministry in 1892, but it also was dependent on Irish support and failed to get Irish Home Rule through the House of Lords.

Gladstone finally retired in 1894 and his successor, the Earl of Rosebery, led the party to another heavy defeat in the 1895 general election.