Even after the repeal of the first Irish Home Room Bill, William Gladstone refused to retire and continued as leader of the opposition. He wrote several articles on the subject of Home Rule and questioned the idea that the House of Lords should be able to block government legislation. Although he remained active in politics, a decline in his hearing and eyesight made life difficult. "His memory, particularly for names but also for recent events, although not for more distant ones, showed signs of fading... On the other hand his physical stamina remained formidable. He felled his last tree a few weeks before his eighty-second birthday."
In the 1892 General Election held in July, Gladstone's Liberal Party won the most seats but he did not have an overall majority and the opposition was divided into three groups: Conservatives, Irish Nationalists and Liberal Unionists. Robert Cecil, 3rd Marquis of Salisbury, refused to resign on hearing the election results and waited to be defeated in a vote of no confidence on 11th August. Gladstone, now 84 years old, formed a minority government dependent on Irish Nationalist support.
A Second Home Rule Bill was introduced on 13th February 1893. Gladstone personally took the bill through the "committee stage in a remarkable feat of physical and mental endurance". After eighty-two days of debate it was passed in the House of Commons on 1st September by 43 votes. Gladstone wrote in his diary, "This is a great step. Thanks be to God."
On 8th September, 1893, after four short days of debate, the House of Lords rejected the bill, by a vote of 419 to 41. "It was a division without precedent, both for the size of the majority and the strength of the vote. There were only 560 entitled to vote, and 82 per cent of them did did so, even though there was no incentive of uncertainty to bring remote peers to London."
It is s alleged that Gladstone considered resigning and calling a new general election on the issue. However, he suspected that he could not mount a successful electoral indictment of the House of Lords on Irish Home Rule. He therefore pushed ahead with the Workmen's Compensation Act, a measure that was extremely unpopular with employers. The act dealt with the right of workers for compensation for personal injury. It replaced the Employer's Liability Act 1880, which required the injured worker the right to sue the employer and put the burden of proof on the employee. Gladstone thought that when the Lords blocked the bill he could call an election and win.
However, in December 1893, Gladstone came into conflict with his own party over the issue of defence spending. The Conservative Party began arguing for an expansion of the Royal Navy. Gladstone made it clear that he was opposed to this policy. William Harcourt, the Chancellor of the Exchequer, was willing to increase naval expenditure by £3 million. John Poyntz Spencer, the First Lord of the Admiralty, agreed with Harcourt. Gladstone refused to budge on the issue and wrote that he would not "break to pieces the continuous action of my political life, nor trample on the tradition received from every colleague who has ever been my teacher" by supporting naval rearmament.
Conservatives continued to block the government's legislation. After accepting the Lords' amendments to the Local Government Bill "under protest" he decided to resign. In his last speech to the House of Commons on 1st March, 1894, he suggested that the time had come to change the rules of the British Parliament so that the House of Lords would no longer have the power to refuse to pass Bills which had been passed by the House of Commons.