Before 1868 the Liberal Party had been an uneasy coalition of Whigs and radicals. The broadening of the suffrage in the boroughs in the Reform Act of 1867 strengthened the radicals and the Gladstone government of 1868–74 ranks as one of the great reforming administrations of modern times. Whig disquiet grew, especially during the second Gladstone government of 1880–5. There was a slow drift of Whigs to the Conservatives but Gladstone's Home Rule Bill of 1886 was the catalyst for the realignment of parties which had long been prophesied. Ninety‐three Liberal MPs voted against its second reading in June 1886. Despite the loss of Chamberlain and his closest colleagues, the effect of the schism was to radicalize the Liberal Party: it also fractionalized it.
More important than the Whig secession was the change in the character of radicalism. Until 1868 radicalism was an individualist creed. The mid‐century Liberal slogan—‘Peace, Retrenchment and Reform’—summed up radical aspirations. The mid‐century radicals were conspicuous champions of laissez‐faire. The radical programme was negative in character. It called for the disestablishment of the Church of England and for the redress of other nonconformist grievances. It sought to limit the power of government and demanded that government should not intervene in economic and social affairs.
After 1868 there was a gradual but major change in the nature of radicalism. Radicals began to address the problems of industrial society. Thus, Joseph Chamberlain as mayor of Birmingham embarked on a major programme of social reform in that city.
In the 1890s a new cleavage developed. After Gladstone gave up the leadership, some of the most prominent Liberals, such as Rosebery, his successor as prime minister, demanded a reorientation of party attitudes. The Liberal Party must show that it could be trusted with the administration of a great empire. Liberal Imperialism ranged itself against Little Englandism. Asquith, Grey, and Haldane, all to hold high office in Liberal governments after 1906, were among the leaders of the new organization, the Liberal League. The onset of the Boer War dramatized and made more acute the division of the party.
In the end, the mistakes of the Unionists restored the unity of the Liberal Party. The Education Act of 1902 upset the religious balance achieved by the Liberal Education Act of 1870. Nonconformists were outraged and many of those who had deserted the party in 1886 came back. More important, in 1903, Chamberlain, now one of the leading figures in the Unionist government, repudiated free trade, an article of faith to both parties for over 50 years. The Education Act and tariff reform healed the rift in the Liberal Party which, in 1906, won a landslide victory.
Liberal hegemony lasted until 1915. During those nine years the party largely completed the unfinished agenda of Victorian radicalism, restricting the powers of the Lords, introducing Irish Home Rule, and disestablishing the Church of England in Wales. At the same time it looked forward, with the introduction of old‐age pensions in 1908, the Trade Boards Act of 1909, and the National Insurance Act of 1911, to the collectivist agenda of the 20th cent.