The Irish Parliamentary Party was divided when it entered the 1892 general election. The larger anti-Parnell faction, led by Justin McCarthy, and having a new external support organization, the Irish National Federation, formed to replace the Parnellite Irish National League, won 71 seats, while the Parnellites, led by John Redmond, won only seven. The Irish votes enabled Gladstone, aged 83, to form his fourth government. The following year he introduced another Home Rule bill, which differed from the earlier one by continuing Irish representation at Westminster, lowering the Irish portion of the imperial budget from one-fifteenth to one-twentieth, and limiting the veto power of the upper house in the proposed Irish parliament to two years. The bill passed the House of Commons, but failed in the House of Lords. Gladstone's Liberal colleagues dissuaded him from calling for a parliamentary dissolution and going to the electorate to rebuke the Lords. He then resigned and was replaced as prime minister by the earl of Rosebery, who regarded challenging the decision of the House of Lords as inappropriate since there had not been a majority for the rejected Home Rule bill in the House of Commons among the members from England.
Rosebery was a different type of Liberal from Gladstone, whose success had been so dependent on the "Celtic fringe," that is, non-Episcopal Protestants in Wales (largely Methodists) and Scotland (Presbyterians), and Irish Catholics.
Rosebery instead championed "Liberal Imperialism," that is, the idea that Liberals should endorse the popular enthusiasm for empire that the Conservatives
Had helped promote, but direct that enthusiasm toward extending progressive development to other parts of the world; a logic followed even by Fabian Socialists such as George Bernard Shaw. However, Rosebery's aims did not have electoral support, as the Conservative-Unionist alliance triumphed at the next general election in 1895 with an overwhelming majority, which guaranteed that Home Rule would not be considered for some time. In the 1895 election Redmond had been able to increase the Parnellite faction from seven to 11. The anti-Parnellite leader Justin McCarthy stepped down and was replaced by John Dillon.
Within five years the two factions came together under Redmond's leadership, although Tim Healy and William O'Brien would continue to act as independents, and they would continue to have a number of adherents among the Irish parliamentary delegation well into the second decade of the 20th century. O'Brien sought to advance a new land movement through the United Irish League, which aimed to break up and redistribute larger pasture holdings for the benefit of smaller farmers. Redmond and his party argued that such issues constituted distractions from the main goal of Home Rule, the achievement of which became increasingly unlikely. The party continued to proclaim it as an ultimate aim while securing almost monopoly control over local Irish political life. The party's political success was especially facilitated by an 1898 act that ended landlord control over local government by establishing popularly elected councils. This local political success worked to dilute the idealist zeal of the Irish Parliamentary Party as much of its activity fell into the pattern of conventional politics with preoccupation over jobs, contracts, and other aspects of the spoils system. This calming of more ardent nationalist and separatist feelings confirmed the Conservative-Unionist promotion of reform as a means of "killing Home Rule with kindness."