Pitt Finance And Administration Flashcards
Why was reform in these sectors needed?
. Cost of war - Britain at the Time of Pitt was involved in a variety of wars which led to increased taxation and tax gathering to reduce Britain debt. Many called Britain a ‘fiscal military state’ by 1783.
. Debt - Britains debt had increased by 91% and by 1784 it stood at £243million. This was as a result of many expensive wars e.g. The American war of independence. By 1801 the debt stood at £456million.
. Increased corruption - The political system was unregulated meaning corruption was rife.
What was the Sinking Fund?
. The sinking fund was where each year £1000000 was set aside from taxation which would commissioners to buy government shares.
. The fund reduced Britain debt by £10million by 1793.
. When war broke out with France in 1793 government spending went up which rendered the fund useless.
What policy’s did Pitt introduce to decrease debt and increase income?
. Progressive tax - This was a tax on houses, the bigger the house the more money a person needed to pay.
. Retrenchment - This reduced the number of government jobs in an effort to reduce expenditure. However those who kept their jobs received pay rises.
. Reform of the Civil List - In 1786 the amount of money paid to the Royal Family was greatly reduced in an effort to save money. The reform of the civil list enabled this to happen.
Why were Pitts financial reforms effective?
. The gap between government income and expenditure in 1783 had been turned into a narrow surplus by 1792.
. Income from taxes rose sharply from 1783 and 1800 and increased government income, taxes such as indirect tax and the introduction of the Income tax enabled this to happen.
Why were Pitts financial reforms a failure?
. Pitts sinking fund only reduced public debt by £10million and had no real affect.
. He did not act fully on recommendations to sweep away corruption in the state meaning corruptive activities continued.
