Unionist government, 1895–1905

Balfour succeeded Salisbury as Prime Minister in 1902. Eventually, the Unionist government would falter after Chamberlain proposed his scheme for tariff reform, whose partial embrace by Balfour led to the resignation of the more orthodox free traders in the Cabinet.

Punch cartoon, 1903. The Rand mine-owners' employment of Chinese labour on the Transvaal gold mines in British-controlled South Africa was controversial and contributed to the 1906 Liberal landslide.

After the conclusion of the Boer War, the British Government sought to rebuild the South African economy which had been devastated by the war. An important part of the rebuilding effort was to get the gold mines of the Witwatersrand, the richest in history and a major cause of the war, back in production as soon as possible. Because the government decreed that White labour was too expensive and Black labourers were reluctant to return to the mines,[1] the government decided to import over 60,000 contracted workers from China.[2]

This was deeply unpopular at the time, as popular opinion in much of the Western world, including Britain; was hostile to Chinese immigration. It also happened at a time when poverty and unemployment amongst working-class British people was at very high levels.[3] On 26 March 1904, a demonstration against Chinese immigration to South Africa was held in Hyde Park and was attended by 80,000 people. The Parliamentary Committee of the Trade Union Congress then passed a resolution declaring that:

That this meeting consisting of all classes of citizens of London, emphatically protests against the action of the Government in granting permission to import into South Africa indentured Chinese labour under conditions of slavery, and calls upon them to protect this new colony from the greed of capitalists and the Empire from degradation.

— Yap & Leong Man (1996, p. 107)

With his majority greatly reduced and defeat in the next election seeming inevitable, Balfour resigned as Prime Minister in December 1905, leading to the appointment of a minority Liberal government under Sir Henry Campbell-Bannerman. In the general election which followed in 1906, all but three members of Balfour's Cabinet lost their seats, including Balfour himself.