Alfred Milner and his associates held a barely disguised contempt for democracy and party politics.  The Secret Elite knew well that the greater their control, the more easily they could lead the Empire towards their vision of a one world government and that vital control was strengthened by the passing of a second Defence of the Realm Act in March 1915.  With many individual freedoms already curtailed through the first Defence of the Realm Act,  Lloyd George boldly extended the government’s powers over production and manufacture in Britain, claiming that he was forced to take such action because of the indolence and drunkenness of the working man.
Behind a rallying call to mobilise the vital work inside the munitions industries, Lloyd George’s Bill gave the government power to take over works and factories which were capable of being adapted to war production. In a dramatic if not drastic step, any manufacturer could be ordered to produce goods that the government wanted. Without any prior warning or discussion, the Liberal policy of ‘laissez-faire’ was cast aside. The Chancellor literally took control of the means of production. Any work in any factory could be directed and changed by order of the Admiralty or the Army Council,  plant could be summarily removed, land requisitioned, and armaments production exempted from previous protections under the Factory and Workshop Act.  Control over the movement of population was also extended so that workers in key industries could not move to areas where the wages might be higher. On sober reflection, only Lloyd George could have convinced the workers representatives that this had to be done in the national interest. That was his absolute value to the Secret Elite. He, and he alone amongst parliamentarians, could convince the working classes that they could put their trust in him.
As a result of a series of conferences between 17 March and 27 March, Trade Union Representatives signed a Treasury Agreement by which they agreed to recommend an end to restrictive practices for the duration of the war on the clear understanding that private employers did not make additional profits. In passing the second Defence of the Realm Act at the same time, the government appeared to be taking over the munitions industry just as it had the railways in 1914, and Unions felt that the proposed package demonstrated that employers and labour were both surrendering their rights for the worthy cause of winning the war. How naïve. The international munitions industry bent its knee to no government and the idea that they would hand over the management of their business to an executive committee was entirely notional, and the only substantial element in ‘taking over the industry’ was the limitation later put on their profits.  Lloyd George intended to oversee the organisation of munitions production in Britain, boosting the profits of his friends in business on the basis that the crisis in shell production was far greater than the general public imagined and had to be solved.
There is no doubt that the level of shell wastage had been extensive. The German diarist, Rudolf Binding wrote in late October, 1914 of the ‘regular evening blessings of shrapnel and heavy explosive shells’ which always accounted for ‘some victims’. He disparagingly commented on the French batteries after Passchendaele opening fire on a single horseman.  How much of the alleged shortage covered military inadequacies? Even in 1917, when the lack of shells had been rendered a thing of the past, the heavy explosives did not win victories. The British infantry officer, James Lochhead Jack, who quite exceptionally rose through the ranks by courage and ability, returned to the western front from sick leave in December 1914 and welcomed the fact that a more limited and systematic use of artillery had made the shortages a thing of the past. He was over-optimistic. 
When the failure of British troops at the Battle of Neuve Chapelle in March 1915 was analysed, the lack of high explosive shells was deemed to have been critical. On 15 March Kitchener expressed his concern in the House of Lords, admitting publicly that a very large number of orders had not been completed on time. But whose fault was that? The War Office? The armaments and munitions rings? No, the official reason was the failure of the ordinary working man. He claimed that;
‘while the workmen generally… have worked loyally and well there have, I regret to say, been instances where absence, irregular time-keeping, and slack work have led to a marked diminution in the output of our factories. In some cases the temptations of drink account for this failure to work up to the high standard expected. It has been brought to my notice on more than one occasion that the restrictions of trade unions have undoubtedly added to our difficulties, not so much in obtaining sufficient labour as in making the best use of that labour.’ 
Shortages of labour began to make itself felt across the country, from agriculture and farming to heavy industry and armaments. Labour shortages in skilled work was a problem for the munitions industries despite attempts by the Board of Trade to restrict the recruitment of engineers and other highly experienced workers to the army. Kitchener’s insistence that any man who wished to enlist should be allowed to do so held true for the first nine months of war, and it was not until March 1915 that he accepted the obvious principle that it was of greater advantage to keep a skilled worker in the workshop than to allow him to join the army and abandon his trade. While he maintained that commanders like Sir John French wasted ammunition by sheer extravagance, he added the callous comment ‘ it isn’t the men I mind. I can replace the men at once; but I can’t replace shells so easily.’ 
Such was the pressure of public opinion that all able-bodied men should enlist, that badges were issued to workers in armaments firms to save them from abuse in the streets. Trade Union reaction to the limits placed on their legal rights and the admission of semi-skilled, unskilled or female labour into factories and occupations that had previously been restricted to skilled men, was understandably negative. The sudden price rise in early 1915 made matters worse and added to the acute shortage of skilled men in workplaces contracted to supply government orders. The unrest was followed by major strikes. Lloyd George’s answer was greater control over these workmen and workplaces, but that required a resolve that others in the Liberal government simply did not have.
Asquith was in denial that there was any real problem at all. In a speech at Newcastle on 20 April, he claimed that the allies had not been crippled by ‘our failure to provide the necessary ammunition. There is not a word of truth in that statement … which is calculated to dishearten our troops, discourage our allies and stimulate the hopes and activities of our enemies.’  Kitchener had assured the prime minister that the British army would have as much ammunition ‘as his troops will be able to use on the next forward movement’.  The double-speak and confusions continued.
In an atmosphere of conflicting opinion, Lloyd George brought special government proposals before the House of Commons on 29 March. He wanted drastic action to curb drink amongst the munitions factory workers. He accused men on the Clyde and Tyne of spending their increased wages on drink and painted a lurid picture of labourers and unskilled workers, ‘loafing in public houses instead of doing their honest day’s work  An unnamed home Office Inspector was cited as never having seen ‘so much drinking at all times of day as he had witnessed in one of the most important districts for shipbuilding and armaments.’ Stories were cited of one street in Scotland with thirty pubs within a half mile of the yards, of one big bar in Scotland where on a Saturday night a hundred bottles of whisky were filled in the expectation that all would be sold between 9.30pm and closing time. 
He complained that there was congestion at the docks because men could now earn enough money in two or three working days to keep them in drink for the rest of the week. The fault, he claimed, lay with weak-willed working class men and the demon drink. Lloyd George, still at this point the Chancellor of the Exchequer, proposed to use the Defence of the Realm Act to grasp the power to close any public house deemed prejudicial to the output in munitions work and increase the duty on spirits and wine through a heavy surtax. These were draconian powers, but served his purpose well. As a tactic to raise much needed government income and to deflect criticism away from the government and the armaments industry, his proposals were typically shrewd.
Sir Richard Cooper, the Liberal MP For Walsall, challenged the Chancellor’s attempt to focus the blame on others and declared that, ‘this resolution is nothing more than an attempt to saddle upon the working people of this country the responsibility for the delays in the production of munitions for war.’ James O’Grady, Labour MP for Leeds East, ripped Lloyd George’s statistics apart pointing out that the men in shipyards had only just survived vile working conditions during the worst winter for years and that materials were often unavailable. He stated that large numbers of orders had been exported abroad included munitions. More importantly, O’Grady explained that the level of physical exhaustion and illness was legitimately high because men were working a 53 hour minimum week; a 45 hour minimum if on permanent night-shift. Many were working even longer hours. He quoted two Sheffield steelworkers, both union branch secretaries, both teetotalers, who for the first time in ten years were unable to work because of exhaustion. Finally, he pointedly turned to the claims made at Newcastle by Asquith that ‘we had sufficient munitions for war and the workmen were working 67-69 hours per week.’ 
An independent report by Harry J Wilson, a Glasgow Inspector of Factories, on 3 April 1915 also demolished much of the apocryphal nature of Lloyd George’s accusations. He interviewed shipbuilders, engineers and the Chief Constable of Govan to determine the extent of the problem caused by drink. His findings were at odds with the government’s. Wilson reported that there did not appear to be any noticeable change in drinking habits since the war began and in a yard employing 10,000 men, it was unusual to find more than 3 in one night who were intoxicated. 0.003% of the workforce hardly constituted an epidemic. Harry Wilson’s findings did find that due to the shortage of skilled men who had volunteered in 1914, some who kept bad timekeeping were tolerated. His conclusion was that the furore caused by the Chancellor’s claims was caused by a small minority of men in important shipbuilding yards and the mass of workers across the country resented the implication that they all had to be punished. 
But Lloyd George prevailed. He successfully switched the public spotlight from the government to the ordinary working class. He was backed by King George V, who wrote to offer his support by personally abstaining from alcohol, ‘if it is deemed advisable’ and banning it from the royal household so that ‘no difference shall be made…between the rich and the poor.’  There it was. Drink and loafing were to blame, and the King himself would surrender at least the first of these to do his bit for the war effort.
‘Squiffy’ Asquith made no such generous offer.
 A M Gollin, Proconsul in Politics, pp. 45-49.
 Defence of the Realm Act ( D.O.R.A. ) No. 2 Act, 16 March 1915.
 Defence of the Realm Act, 4 and 5 Geo. 5 c. 29, 8 August, 1914.
 D.O.R.A. No. 2 Act, 16 March 1915 section 2E.
 Ibid., section 6A.  http://www.theodora.com/encyclopedia/m2/munitions_of_war.html
 Rudolf G Binding, A Fatalist At War, p. 22.
 House of Lords Debate, 15 March 1915 vol 18 cc719-24.
 Michael and Eleanor Brock, HH Asquith, Letters to Venetia Stanley pp. 488-9; and David Lloyd George, War Memoirs,vol. 1, pp. 113-5.
 Reginald Pound and Geoffrey Harmsworth, Northcliffe, p. 474.
 Lloyd George, War Memoirs, p. 116.
 Hansard, House of Commons Debate. 21 April 1915, vol. 71 cc 864-926.
 Ibid., vol. 71 cc 883.
 Ibid., vol. 71 cc 918-9.
 Harry J Wilson, Inspector of Factories, 3 April 1915, cited in http://www.inverclydeshipbuilding.co.uk/home/general-history/drink-absenteism
 The Times, 1 April, 1915, p. 8.