The English people supported George III until he had failed; but there was not much enthusiasm for the war, except at places like Birmingham, which possessed a small-arms manufactory and other stimulants to patriotic fervour. It was badly mismanaged by George, and Whigs did their best to hamper his efforts, fearing, with some reason, that success in North America would encourage despotic enterprise at home. George would, however, in all probability have won but for the intervention of France and Spain (1778-1779), who hoped to wipe off the scores of the Seven Years' War, and for the armed neutrality of Russia and Holland (1780), who resented the arrogant claims of the British to right of search on the high seas. At the critical moment Britain lost the command of the sea; and although Rodney's naval victory (1782) and the successful defence of Gibraltar (1779-1783) enabled her to obtain tolerable terms from her European enemies, American independence had to be granted (1783). For Ireland was on the verge of revolt, and British dominion in India was shaken to its foundations. So the two great sections of the English people parted company, perhaps to their mutual profit. Certainly each government has now enough to do without solving the other's problems, and it is well-nigh impossible to conceive a state maintaining its equilibrium or its equanimity with two such partners as the British Empire and the United States struggling for predominance within it.
Meanwhile, Warren Hastings saved the situation in India by means that were above the Oriental but below the normal English standard of morality. He was impeached for his pains later on by the Whigs, whose moral indignation was sharpened by resentment at the use of Anglo- Indian gold to defeat them at the general election of 1784. Ireland was placated by the grant of legislative independence (1782), a concession both too wide and too narrow to provide any real solution of her difficulties. It was too wide because Grattan's parliament, as it is called, was co-ordinate with, and not subordinate to, the imperial parliament; and there was thus no supreme authority to settle differences, which sooner or later were bound to arise between the two. It was too narrow, because the Irish executive remained responsible to Downing Street and not to the Irish parliament. The parliament, moreover, did not represent the Irish people; Catholics were excluded from it, and until 1793 were denied the vote; sixty seats were in the hands of three families, and a majority of the members were returned by pocket-boroughs. A more hopeless want of system can hardly be imagined: a corrupt aristocracy, a ferocious commonalty, a distracted government, a divided people - such was the verdict of a contemporary politician. At length, after a Protestant revolt in Ulster, a Catholic rising in the south, and a French invasion, Pitt bribed and cajoled the borough-mongers to consent to union with Great Britain (1800). Thirty-two Irish peers, twenty-eight temporal and four spiritual, were to sit in the House of Lords, and a hundred Irish members in the House of Commons. The realization of the prospect of Roman Catholic Emancipation, which had been held out as a further consideration, was postponed by the prejudices of George III until its saving grace had been lost. Grattan's prophecy of retribution for the destruction of Irish liberty has often been quoted: "We will avenge ourselves," he said, "by sending into the ranks of your parliament, and into the very heart of your constitution, one hundred of the greatest scoundrels in the kingdom"; but it is generally forgotten that he had in mind the kind of members nominated by peers and borough-mongers to represent them in an unreformed House of Commons.
The loss of the American colonies threw a shadow over British colonial enterprise which had some lasting effects on the colonial policy of the mother-country. The severance did not, as is often supposed, convince Great Britain that the grant of self-government to colonies was the only means to retain them. But they had been esteemed mainly as markets for British exports, and the discovery that British exports to America increased, instead of diminishing, after the grant of independence, raised doubts about the value of colonies which explain the comparative indifference of public opinion towards them during the next half-century. For the commercial conception of empire was still in the ascendant; and if the landed interest controlled the domestic politics of the eighteenth century, the commercial interest determined the outlines of British expansion. Territory was acquired or strongholds seized in order to provide markets and guard trade communications.
From this point of view India became, after the loss of the American colonies, the dominant factor in British external policy. The monetary value of India to the British far exceeded that of all their other foreign possessions put together. The East India Company's servants often amassed huge fortunes in a few years, and the influence of this wealth upon British politics became very apparent in the last quarter of the century. It put up the price of parliamentary pocket-boroughs, and thus delayed reform; it enabled commercial men to force their way into the House of Lords by the side of landed magnates, and the younger Pitt doubled its numbers in his efforts to win the political support of the moneyed classes; and finally, it affected consciously or unconsciously men's views of the interests of the empire and of the policy to be pursued to serve them.