The reason for the split in the Liberals was the conversion of Gladstone to the cause of Irish Home Rule. The 1886 General Election had left Parnell's Irish Nationalists holding the balance of power, and had convinced Gladstone that the Irish wanted and deserved Home Rule. Some Liberals believed that Gladstone's Home Rule bill led to de facto independence for Ireland, and the dissolution of the United Kingdom, which they could not countenance. Seeing themselves as defenders of the Union of Britain and Ireland, they called themselves Liberal Unionists.
Most of the Liberal Unionists were drawn from the Whig faction of the party, including Hartington and George Goschen, and had been expected to split from the party (for reasons connected with economic and social policy) anyway. The surprise was that a small group of Radicals led by Chamberlain joined the breakaway. The National Liberal Foundation supported Gladstone, so the rebels formed their own organisations: the Committee for the Preservation of the Union, the National Radical Union, and later the Liberal Unionist Association.
The leading Liberal Unionists were invited to join the Conservative Lord Salisbury's government, but most initially sat on the back benches, leaving the way open for the reunion of the Liberal Party. Goschen was a notable exception, and became Chancellor of the Exchequer. Gladstone's second Home Rule bill in 1892 hardened the division and in 1895 the leading Liberal Unionists joined Salisbury's government. The resulting government was generally referred to as "Unionist", and the distinction between Conservatives and Liberal Unionists began to dissolve.
The Duke of Devonshire and other supporters of free trade left the Liberal Unionist Association in 1904 in protest at Chamberlain's Tariff Reform campaign. Chamberlain himself was crippled by a stroke in 1906. The Liberal Unionist Association merged with the Conservatives to form the Conservative and Unionist Party (the modern Conservative Party) in 1912.
