“Many senior officials at the Treasury regarded the rising defence estimates and the Liberals’ social policies as dangerous because they required a constantly rising level of expenditure.” It soon became clear, however, that such approach was not appropriate. The outcome of the war became fully dependent on state action and not merely on the economy. It was of a crucial importance for the Cabinet to step in, allocate manpower, and organize the industry so as to avoid an inefficient use of resources (capital and people). Hence, Lloyd George stepped in and decided to initiate Reconstruction by restructuring the Cabinet and introducing various Committees, Ministries, and Commissions which were to assume extended powers and responsibilities within the private sphere of civil activities. It was, however, unclear whether this change in faith would pertain over the post-war period as well.
Furthermore, the aftermath of the war was not a pleasant sight for any politician taking office at the time. The situation awaiting Lloyd George, who had already been assuming the role of a Prime Minister during the war, had been even more damaging partially due to his party’s increasingly severe internal struggles which began with the social reforms of 1906. Even before the climax of the war, it became apparent that the Liberal Party was most likely unable to restore its significance or even secure its survival in the post-war government. Liberals led by Lloyd George became increasingly