At home Charles had promoted his Cabal Ministry, as if they had done some great deed, to honours and titles. Clifford was called Lord Clifford of Chudleigh; Lord Arlington, Earl of Arlington; and Ashley, Earl of Shaftesbury. Buckingham and Arlington received the honour of the Garter. In order to protect the bankers whom he had kept out of their money from the suits commenced against them by their creditors in Chancery, Charles desired Bridgeman to enter an injunction there, but Bridgeman doubted the rectitude of the proceeding, and he was removed, and Shaftesbury put in his place (1672), who at once issued the injunction, and appointed a distant day for hearing evidence against it. Ashley, as the new Lord Chancellor, displayed a vanity and eccentricity which caused him to be greatly ridiculed by the lawyers. He went to preside on the bench in "an ash-coloured gown silver-laced, and full-ribboned pantaloons." He at first acted with much self-sufficiency and conceit, but was soon brought to his senses by the lawyers, and afterwards became one of the most tame and complying judges that ever sat on the bench. Violent altercation, however, arose between Ashley and Arlington, who expected Ashley's place made vacant in the Treasury, which was given to Clifford.

On the 5th of February, 1673, Parliament was summoned after a recess of nearly a year and a half. Ashley undertook to justify the shutting of the Exchequer and the Dutch war. But the days of the Cabal were numbered. The king, by their advice, had, during the recess, issued a Declaration of Indulgence. This was done with the hope of winning the support of the Nonconformists and the Papists. But of all subjects, that of indulgence of conscience in religion, at that period, was the most double-edged. The Nonconformists were ready enough to enjoy indulgence, but then the eternal suspicion that it was intended only as a cloak for the indulgence of Popery made them rather satisfied to be without it than enjoy it at that peril. No sooner, therefore, had they granted Charles the liberal sum of one million two hundred thousand pounds, to be collected by eighteen monthly assessments, than the Commons fell on this Proclamation of Indulgence. The members of the Church and the Nonconformists united in their denunciation of it. On the 10th of February they resolved, by a majority of one hundred and sixty-eight to one hundred and sixteen, that "penal statutes, in matters ecclesiastical, cannot be suspended except by Act of Parliament." Charles stood for awhile on his prerogative, but the effervescence in the House and country was so great that he gave way, and his declaration, on the 8th of March, that what he had done should not be drawn into a precedent, was received with acclamations by both Houses, and by rejoicings and bonfires by the people. Shaftesbury immediately passed over to the Country party, as the Opposition was called.

The Cabal was now forced to submit to another humiliation. The Country party introduced, at the instance of Shaftesbury, an Act requiring every person holding any office, civil or military, not only to take the oath of Allegiance and Supremacy, but also to receive the Sacrament in the form prescribed by the Church of England, or be incapable of accepting or holding such office. All such persons were likewise required to make a declaration against Transubstantiation, under a penalty of five hundred pounds, of being disabled from suing in any court of law, and from being a guardian or executor. This Act was passed by both Houses unanimously, the Nonconformists being promised that another Bill should be introduced to protect them from the operation of this. But before it was done Parliament was prorogued on the 29th of March, and they were caught in their own trap.

No sooner was this Act passed, which became known as the Test Act, and continued in force till the reign of George IV., than the Cabal fell to pieces. Its immediate effect was to compel Lord Clifford and Arlington to resign: the wedge was thus introduced into the Cabal, and the Duke of York, who resigned his office of Lord High Admiral, became inimical to them. The office of Lord Treasurer, resigned by Clifford, was given by the king to Sir Thomas Osborne, a gentleman of Yorkshire, who was created Earl of Danby, and became in reality Prime Minister. The rise of Danby was the certain destruction of the Cabal. His foreign policy was entirely opposed to theirs: he saw clearly enough the ruinous course of aggrandising France at the expense of the Protestant States of Europe; his views of domestic policy were more profound, though not less unprincipled than theirs. He saw the necessity of combining the old Royalist and Church interests for the support of the throne, but he set about this process by buying up the favour of the Cavaliers, the nobles, the country gentlemen, and the clergy and universities. He was not the first to bribe—the Cabal had done that so far as Parliament members were concerned—but Danby, like Walpole, and the ministers after him, bought up by direct bribes or lucrative appointments any and every man that could secure his views.

When Parliament reassembled on the 7th of January, 1674, there appeared alarming proofs of some whispered disclosures having taken place during the disruptions in the Cabal, regarding the king's secret treaty with Louis. Charles solemnly denied his having any secret engagement whatever with France. Parliament also exhibited its uneasiness regarding the practices of the Papists. The Duke of York, since the prorogation of Parliament on the 4th of November last, had married Maria D'Este, a Catholic princess, sister of the Duke of Modena. This had roused all the fears of the country regarding the succession, and the Commons recommended severe measures against the Papists, and that the militia should be ready at an hour's notice to act against any disturbances on their part. They also demanded the removal from the ministry of all persons Popishly affected, and of those who advised the alliance with France and the rupture with Holland, and the placing a foreigner at the head of the army. Both army and navy, in fact, were commanded by foreigners—Prince Rupert had succeeded the Duke of York as admiral; Schomberg was sent with the army to Holland.

Charles himself not having been able in the autumn to draw his pension from Louis, and Parliament now holding fast its purse-strings, he was ready to listen to terms from Holland, whereby the triumph of the Country party was completed. On this the States offered, through the Spanish ambassador, Del Fresno, the terms which they had once already refused. The conquests on both sides should be restored, the honour of the flag conceded to England, and eight hundred thousand crowns should be paid Charles for indemnification for the expenses of the war. Had the terms been far inferior, the fact of the money would probably have decided the matter with Charles. As to the dignity of stadtholder for William, the States themselves settled that, by conferring it on him and his heirs for ever, before the time of their treaty, and nothing whatever was said of the ten thousand pounds for liberty to fish. On the 9th of February the treaty was signed, and on the 11th announced to Parliament by Charles.

We may now take a brief glance at proceedings in Scotland and Ireland.

In Scotland Archbishop Sharp had pursued his persecuting and coercive system to such an extent, that Charles was obliged to order him not to overstep his proper duties, but to confine himself to spiritual concerns alone. Such was the hatred which this renegade Churchman had excited, that in 1668 a young man of the name of Mitchell, who had witnessed the horrible cruelties which followed the battle of Rullion Green, believed himself called upon to put Sharp to death. He therefore posted himself in front of the archbishop's palace in St. Andrews, and as the archbishop came out with the Bishop of Orkney to get into his carriage, he stepped up and fired at Sharp, who was just seated; but at the same moment the Bishop of Orkney raised his arm to enter the carriage, and received the ball in his wrist. There was a cry that a man was killed, but some one exclaimed, "It is only a bishop!" and Mitchell, coolly crossing the street, mixed with the crowd, walked away, and changed his coat; and though the Council offered a large reward for his apprehension, it was six years before he was discovered.

The Earl of Rothes had been removed from the office of Royal Commissioner, and the Earl of Tweeddale, who now occupied that post, endeavoured to soften the spirit of persecution, and granted a certain indulgence. This was to admit the ejected ministers to such of their livings as were vacant, or to appoint them to others, provided they would accept collation from the bishop, and attend the presbyteries and synods. But this was to concede the question of episcopacy, and the king's supremacy in the Church. The more complying of the ejected members, to the number of forty-three, accepted the offer; but they found that by so doing they had forfeited the respect of their flocks, who deserted their churches, and crowded to other preachers more stanch to their principles. Lauderdale soon after returned to Scotland, and his very first proceeding was to pass an Act to appoint Commissioners to co-operate with English Commissioners, to endeavour to effect a union of the two kingdoms. His next was to pass another, converting the Act of Allegiance into an act of absolute Supremacy. This at once annihilated the independence of the Kirk; and a third Act was to give the king a right to maintain an army, and to march it to any part of the king's dominions. This was so evidently a step towards despotism, that not only in Scotland, but in the English Parliament, the indignation was great, and the English Commons presented an address to the Crown, praying for Lauderdale's removal. The address, however, produced no effect. Lauderdale proceeded, plausibly offering indulgence to such easy-principled ministers as would accept livings subject to the oath of Supremacy and the acknowledgment of bishops, whilst at the same time he passed an Act in July, 1670, more rigorously prohibiting conventicles within private houses or in the open air. Any minister preaching or praying at such meetings was to suffer forfeiture of both life and property. The Scots did not understand this kind of indulgence, which allowed their ministers to enter their churches by the sacrifice of their moral principles, and put them to death if they took the liberty of following their consciences. The people took arms and went to their meetings, determined to defend their preachers and themselves. Lauderdale then, with the aid of Archbishop Leighton, extended the "indulgence" to all such ministers as would attend presbyteries, where the bishops should have no negative voice; but this did not deceive the people. The rigour against their own chosen ministers and places of worship was kept up, and they declared that bishops, even without a negative voice in the presbyteries, were bishops still; that such assemblies had no resemblance to those previous to 1638; that they had no power of the keys, no ordination, no jurisdiction; that the whole was but a snare to draw in unwary or self-interested ministers, and after them their flocks. To assent to such terms would be apostacy from the principles of the Kirk. Lauderdale made another step in his "indulgence" in 1673. He named eighty ejected ministers, and ordered them to repair to their churches and officiate there, but nowhere else, under severe penalties. This was to lock up the conventicles in which these preachers ministered. About one-fourth of the number refused to obey, and were confined by order of the Council to particular places. But this did not diminish the number of conventicles: it only excited a schism between the complying and the non-complying. He next passed an act of grace, pardoning all offences against the Conventicle Acts committed before the 4th of March, 1674; but this only encouraged the people to fresh freedom in their attendance on conventicles. They regarded his concessions as certain proofs of his weakness, and scorning any compliance with episcopacy and royal supremacy, their independent meetings spread and abounded more than ever. They assembled in vacant churches, where they would not have entered to listen to what they called an intrusive minister, or in the open air in glen or mountain, around a lofty pole erected as a signal. "The parish churches of the curates," says Kirton, "came to be like pest-houses, few went into any of them, and none to some; so the doors were kept locked." No policy, however severe or plausibly insinuating, could induce the wary Scots to swallow the hated pill of episcopacy.

In Ireland, the prohibition of importing Irish cattle into England was followed by a like prohibition from the Scottish Parliament, and the Irish Parliament retaliated by prohibiting Scottish woollens being imported into Ireland. These illiberal measures only spread mischief and misery on all sides. So long as the Duke of Ormond retained the lord-lieutenancy, he endeavoured to mitigate these evils. He procured the liberty of free trade between Ireland and all foreign countries, whether at war or peace with England; and five hundred families of Walloons were induced to settle in Ireland and to establish the manufacture of woollen and linen cloths. But the many sufferers from the Act of Settlement, which confirmed the possession of the Irish lands in the hands of the English soldiers and adventurers, complained greatly of Ormond, and his enemies at Court procured his removal in 1669. After him succeeded Lord Robartes, and next Lord Berkeley; but it mattered little who governed, nothing could induce the natives to sit down quietly under the loss of their estates, and that, too, whilst they had been often firm loyalists and the intruders rebels. In 1671 a Commission was appointed to inquire into all alleged grievances, consisting of Prince Rupert, Buckingham, Lauderdale, Anglesey, Ashley, and others. This lasted till March 26th, 1673, but ended in nothing. The possessors of the Irish lands were too powerful at Court, and no result followed but fresh severities against the Catholics, who were expelled from all corporations, and their priests banished the kingdom.