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With the beginning of the First World War David Lloyd George, as Chancellor, tried to ensure that the country's finances were in a state as to be able to pursue the war successfully. It became increasingly clear that the economic structures of British industry were not flexible enough to allow this to happen, so with his experience as the President of the Board of Trade Lloyd George did much to bring about the necessary changes in industry. By the time of the formation of the coalition government in 1915 Lloyd George attempted to establish a Ministry of Munitions and in May of the same year he was appointed as Minister for Munitions.

In his position as Minister for Munitions David Lloyd George had the power to demand those changes that were necessary in order to fight the war successfully. He was ever conscious of the workers' conditions and part of his reform was an increased role for trade unions, an improvement in health and safety at factories and in workers' housing. He also realised the potential place of women as part of the workforce. Their work in the arms' factories revolutionised their position in public life and to all intents and purposes won them the franchise following the War.

With his success as Minister of Munitions Lloyd George very often found himself impatient with the slow and ineffectual way the Government generally conducted the War. He disagreed with Prime Minster Asquith over the question of military conscription. Lloyd George publicly and strongly supported it and his position within the cabinet was greatly strengthened when, at the beginning of 1916, Asquith had to present a conscription measure. Asquith's position was weakened further by the Government's reaction to the Easter Rising by some Irish nationalists. It was bitterly criticised for executing fourteen of the leaders. After the death of Lord Kitchener, Lloyd George moved to the War Office in July 1916 and found himself in an even stronger position to challenge his own Prime Minister.