Peel And Problems With The Economy Plus His Solutions Flashcards
State 3 problems with the economy in 1841
. The economic downturn had effected trade which in turn impacted income as 80% of all the governments income came from customs and excise duties.
. There was a budget deficit of £1.8million and this was expected to rise to £2.5million by 1843. £30million of of £50million of government income was being spent on repaying the debt.
. The downturn caused civil and social unrest over increased bread prices, this led to the support of Chartism and the Repeal of the Corn Laws.
What tax did Peel introduce to try to fix the deficit?
. Peel introduced an income tax of 7 pence in the pound and this was to be issued to those who earned more than £150.
. This was hoped to raise £3million over three years and pay for reduction duties on 750 articles e.g. Timber and coffee.
What were the results of Peels economic reforms and income tax?
. By 1845 the deficit had been turned into a Surplus of £3.4million.
. Peel kept the income tax and continued to fund more cuts in indirect taxes and duties.
. Coal and raw Cotton were now two products free of duties.
What did the Bank Charter Act do?
. The act prevented all banks except the Bank of England printing paper money and therefore prevent inflation in the future.
. This move was not to aid financial growth but was implemented to ensure that money kept its value
How did Peel meet the needs of the economy via the railways?
. There was a massive railway boom in the years 1844-46 and by 1852 some 3000 miles of track had been laid.
. This showed very rapid expansion in the economic sector.
