To consider how the Constitutional Crisis affected the Unionist Alliance, exploration is needed on the reasons why the Conservatives rejected the Budget, how different opinions to the Budget caused disharmony within the party, the effect of the Parliament Act becoming law and Balfour's reaction.
Many Unionist peers were against the People's Budget for many reasons. One reason was that due to an agricultural depression in the 19th century land prices had declined. Also landowners had found that, starting in the 1880s, their privileges were being restricted by legislations already in place. They were also annoyed by a tactic used by Salisbury and Balfour. Salisbury and Balfour thought that by allowing some of the minor reforms to pass they could block or delay some of the more important reforms. They meant that some reforms passed caused unwelcome consequences to many peers.
However leaders of the Unionist Alliance had their own reasons for opposing the Budget.
They were hoping that by rejecting the Budget a general election could take place. As the Conservatives popularity was on the rise, success had been found at many by-elections, there was a fair chance that they could win. Also many Conservative members viewed the Budget as a Socialist conception. Moreover by objecting to the Budget they would help prevent more and more social reforms for becoming law.
The People's Budget of 1909 split the Unionist Alliance into three groups. Those who were adamant about rejecting the Bill in the Lords, who were called 'diehards'. Others who preferred not to make a decision and supported abstention were called 'hedgers'. Some, in the House of Lords, were called 'rats' as they agreed with the government. This led to disagreements in the Conservative Party:
'This bad feeling, often personal but also based on deep political differences, was reciprocated'
This suggests the tension between many peers had been brewing for some time and the Constitutional Crisis helped to bring the hidden conflict out into the open.
The Liberals action against the Constitutional Crisis was to introduce the Parliament Bill. This bill proposed that the Lords could not reject a finance bill and a bill passed by the Commons three times automatically became law. Balfour encouraged Conservative peers to pass this Bill to prevent new Liberal peers from being created. However 114 peers, mostly those labelled 'diehards', ignored Balfour's pleas and rejected the Bill:
'His inability to take a strong line during the Parliament Bill episode eroded his support'
This means that his popularity within the Conservatives was waning. Soon after this he resigned as leader of the Conservative Party.
The next leader was Andrew Bonar Law, who boosted the Party's enthusiasm:
'his dry purposeful manner and his readiness to take on the Liberals with brutal directness did wonders for party morale'
His leadership gave the party more confidence, which made them into a more worthwhile opponent to the Liberals.
The Constitutional Crisis troubled the Unionist Alliance greatly as it brought out the hidden tensions between many peers, which could have resulted in disaster. Balfour's resignation could have potentially left the party in a dire state. However Bonar Law's new approach to leadership did wonders for the party's confidence and managed to save them from failure.