Pitt the Younger Flashcards
What was the national debt in 1775?
£127 million
What was the national debt in 1784?
£243 million
When did war break out with France? What did this do to finance?
1793 (up until this point Pitt managed to avoid adding to the national debt)
What was the national debt in 1801?
£456 million
What was the issue of ‘debt funding’ and what was the issue with it? What was the issue with corruption surrounding the large national debt?
Interest rates were at a high 6% (benefitting those who lent and the privileged few who could secure govt jobs or contracts). There were issues of corruption and the money paid to service the debt was thought to take away from investment in trade, agriculture and business.
When did Pitt introduce the sinking fund? What did it entail?
1786
One million pounds a year was set aside from taxes and special commissioners would use this money to buy government shares. The prices of shares were lower than face value so they got a bargain and used the interest rate to buy more stock
Who first used a sinking fund?
PM Sir Robert Walpole first used it
How much had the public debt reduced by 1793 due to the sinking fund?
£10 million
When was a new sinking fund set up along the old one?
1792
What was the long term financial plan in 1792?
For the national debt to be paid off in 45 years
What were the issues with the scheme of sinking funds?
It dealt only with long term debt. Short term debt increase £7 million between 1783 and 1793.
It only worked in peacetime
Sinking fund continued until 1829 but was ineffective in war (1793-1815) in war borrowing had to rise so debt reduction was tricky
When was the war with the French?
1793-1815
What things did Pitt increase indirect taxes on?
Bachelors, hats, servants, wig powder, dice, houses (1785 introduced tax paid on male servants and introduced tax on female servants, provision for bachelors to pay more than married households)
What new taxes did Pitt introduce?
Paper duties, carriages, silver and gold plate, beer licenses, bricks and tiles, saddle horses and silk imports
When did Pitt introduce his original idea of taxes on retail shops? What was the effect?
Introduced in 1785
Causes rioting by those who fear price increases
Repealed in 1789
What did Pitt do to attack the smuggling trade?
Hovering act
Reduced high import duties on wine, tobacco and tea (which went from 199% to 25%) encouraging people to avoid heavy penalties for smuggling and pay the tax- raises govt income
What tax policy did Pitt put in place to relate taxes to the ability to pay?
Window tax
Taxes on luxuries
What was the ‘consolidated fund’?
All customs duties were paid into it and measures to combat fraud were put in place.
Why did Pitt give higher pay to officials?
It reduced corruption and provided incentives to collect all due taxes
What is a sinecure? What did Pitt do to them? Which group wanted to get rid of them?
A job with no responsibility but with a salary (usually for supporters to ensure loyalty)
Pitt reduced the number of them
The County Association wanted to be rid of them
What did Pitt do to the King’s estates?
Managed them in a more cost effective way, increases revenue
What idea did Pitt launch that was copied?
The public lottery
When did the national debt turn to a narrow surplus?
1792
Done by reductions in expenditure and increases in income
When did Pitt introduce an income tax?
1799
He was the first British PM to do this.
On all incomes over £60 per year
How was the majority of wartime expenditure raised?
Taxes for the first time ever
When was peacetime between the American war and French war?
1783-1793
Some may credit peace as the reason for financial achievement over Pitt’s actions
What were the issues with govt departments inherited by Pitt?
Sinecures
Resources badly spread (some overstaffed, others understaffed)
Leadership in departments was poor
How did Pitt tackle and reform administration?
Reformed from within
Appointed strong administrators to take charge of departments ( Richard Frewin in customs in 1787)( Sir Charles Middleton the civilian administrator of the Navy)
Gradually abolished sinecures
Tackles East India Company
How many warships did Pitt build in his peacetime ministry?
33! Increased the size of the navy greatly
How many sinecures had Pitt ended by 1792? When did sinecures ended as a practice?
Ended 28 by 1792
Practice ceased by 1806
However Pitt reluctant to dismiss sinecures and usually waited for people to die before abolishing their post
When did Pitt tackle the East India Company? How did he do this?
1784
The India Act of 1784 established a board of control, two cabinet ministers say on this and scrutinised the company’s activities
How did Pitt change the numbers in excise?
Increases in numbers to reflect more taxes
What was Pitt’s plan as PM?
Reduce corruption
Generate income- increasing wealth of country
Making administration more modern and cost effective
How could you criticise Pitt’s administrative reforms?
They were quite slow
Admin changes in the navy not fully implemented
East India Company continued to run India until 1858
Did not push view that promotion should be on principle ( example of Post Master General John Palmer- Palmer pensioned off)
Did not reform ‘rotten boroughs’ as he desired
What did Pitt do to reform ‘rotten boroughs’?
His idea of reforming the composition of parliament by abolishing 36 ‘rotten boroughs’ defeated in Parliament in 1785
Pitt did not attempt to reintroduce it
What did Pitt think about trade?
That Britain needed to expand overseas trade rather than limit existing trade- building alliances and leading to peace
Felt there should be freer trade
Who set up the trade treaty with France in 1786?
William Eden
The Eden treaty
Britain offered low duties on wine import and reduction by both countries on duties on textiles, pottery and leather goods
Silk excluded due to competition fears
Treaty favoured Britain as were producing more manufactured goods than France
What is mercantilism?
World trade stable and only had to increase the share of world trade
Lead to protectionism and 17th century legislation like the Navigation Acts which meant only British ships carried British empire products
Attacked more and more
Who is Adam Smith?
Economist that argues that if competition is allowed to flourish- wealth created and not diminished
Why did Pitt need more overseas trade?
Needed an outlet for the greater number of products produced due to growth of industry backed by expansion of roads and canals and the great amount of agricultural produce
How did Pitt aim to get freer trade?
Reducing duties on trade with America and Ireland
Trying to get commercial treaties with other European powers ( Spain, Portugal, France, Russia)
Envoys sent to most European countries to negotiate reductions in duties but have limited success
What happened to the free trade treaty with Ireland?
Had to be dropped in 1785 as it has opposition from manufacturers (fear of foreign competition)
What was the relationship between trade and the navy?
Trading leads to empire (navy helps get this too)
Navy protects trade and trade pays for wars
What changes socially occurred in high society due to increased trade?
It assimilated wealthy merchants and bankers who financed the high society
Prejudice again trade lessened
Trading and bank wealth could purchase land and lead to MPs and political influence
