William Pitt's reforms 1783-1793

Pitts reforms

Pitt gained support from the middle classes but lost the support of the upper class, who held the power in parliament which lead to his later resignation out of office.

The national debt:

almost as upset as me me when mrs Ell left
:(

·     Debt was especially high during times of war

·     Expensive war against America settled in 1783

·     All time high debt of £240 million 

·     Most of the government’s revenue was being used to pay the £8 million a month interest on the debt, debt was x16s the governments revenue 

·     Reforms:

1.     Introduced the sinking fund into which he paid £1 million a year from taxes

2.     Cut the national debt by £10 million

3.     Restored national confidence 

4.     Failure as a war-time policy, as money wasn’t being spent fighting to win the war

Trade:

just Blame it on CHINE-A

·     Outdated tariff system was restricting the development of trade and industry (mercantilism, government’s duty to regulate trade for the benefit of the nation)

·     ¾ of government revenue came from indirect taxes, mainly customs

·     Duty import on French wine dating back to the Stuart monarchy

·     Tea and other commodities were seen as luxuries 

·     Smuggling was high and government revenue reduced 

·     Loss of American colonies was having an impact on trade

·     Reforms:

1.      Introduce free trade as much as possible to help reduce heavy customs duties 

2.     Simplified and removed outdated complex customs, this allowed goods to qualify for only one tax not several. (Consolidation Act of 1787)

3.     Collection of taxes easier and more efficient 

4.     Reduced the high taxes on teas, wine and tobacco which lowered the amount of smuggling 

5.     Smuggling reduced by Hovering Act, allowing authorities to confiscate ships used for smuggling goods, for up to 4 miles of the coast 

6.     Excise Bill allowed tobacco and spirits to enter the country untaxed and be stored in a warehouse then re-exported tax free 

7.     Increased legitimacy of trade and in the short term the overall income from taxation was reduced 

Damn straight (love a bit of Ron Swanson)

New taxes:

·     To compensate for the reduction of taxes Pitt increased indirect taxes on horses, coaches, windows, bricks, hats and more 

·     Seen as ingenious and others saw it as ridiculous

·     Window tax seen as a poor decision as it was putting a penalty on air and light

Commercial treaties:

I think we need one of these with
the EU right about now

·     Attempted to make a treaty with Ireland but was strongly opposed, due to manufacturers fearing competition as Irish wages were low

·     Made successful free trade treaty 1786, reducing the duties on imports from other countries: encouraged greater flow of trade 

·     Success was short lived as it was negated by the French Revolution in 1789

Administration:

Best administrator in town!

·      The government needed reform due to its inefficiency

·      No set procedure for day to day business causing confusion

·      MPs took advantages of privileges such as free post 

·      A vast number of MPs were enriching themselves with public fund, with Sinecure offices and pensions

·      Loan system was corrupt as minister lent money to friends to raise loans at high rates of interest 

·      Reforms:

1.    Abolished hundreds of sinecure offices

2.    Removed the lucrative sinecure of Clerkship of the Pells worth £3,000

3.    New budgeting system: took estimates of expenditure and drawing up a parallel tax, still used today 

4.    Created the Audit office to curb corruption through external eyes

5.    Abolished free post for MPs

6.    Set up central stationary department to end money being wasted on expensive luxuries 

7.    Government loans raised from public tender 

8.    Reorganised the Cabinet and established the PMs office as being the most important

Overall effect of Pitt’s work:

Michelle approved, good work Pitt

·      Shaped the way the PMs work is structured even up to today, started the idea of the PM

·      Financial and commercial polices were enlightened and allowed growth of industry and trade, prepping the country for the upcoming industrial revolution 

·      By 1793 government revenue had increased by £4 million through new taxes

·      Value of imports and exports doubled 

·      Smuggling became unprofitable 

·      Restored national credit and public confidence 

·      Britain was in a stronger position than France by the war in 1793