Peel In Power 1841- 1846 www.educationforum.co.uk Peel’s Problems Poverty – 1:10 Englishmen was still a pauper despite the industrial wealth of the UK and the reform of the Poor Law The UK had a massive budget deficit Chartism – the working class was becoming politically active and a hreat to the power of the landed aristocracy and newly enfranchised middle classes . Budget Deficit The main cause of the budget deficit was the inefficient system of taxation then in place. Income tax had been abolished in 1816 and had never been restored – instead taxes on goods and purchases of common goods such as corn, meat, butter, soap and sugar were high as were taxes on imports – these hit the poor hardest and were also bad for international trade. Such taxes also were hard to enforce and caused black markets to develop. Peel’s Solutions Henry Goulburn appointed as Chancellor. His first act was to radically reduce duties on a range of imported produce in the 1842 budget A picture of a national emergency was painted by Peel during the budget debate and income tax was reintroduced as an emergency short term measure (for three years only – now 168 and still going strong!) Income tax was to be collected at a rate of 17 pence in the pound for those earning an income of over £150 a year The working class were therefore exempt from income tax – Peel argued that their desperation was being made evident in the upsurge in support for Chartism. The introduction of income tax allowed Peel to be able to afford to cut or remove completely duties on over 700 imported items – cheaper goods meant more were consumed and therefore the loss of duty felt less keenly By 1845 the nation was back in budget surplus, food was cheaper, harvests had improved and Chartism was on the decline Reform of the Banking System In the years since 1815 the British banking I promise to pay the bearer on demand the system had proved very unstable with many sum of….. small banks going to the wall – in 1825 as many as 70 banks collapsed! The main problem was the over issue of currency by small banks seeing the vast investment opportunities of the industrial revolution (especially the railways) without sufficient reserves to tide them over in difficult times. Peel believed that the economy could only develop if the currency was stable and the banks could be trusted Peel’s solution was the Bank Charter Act of 1844 which limited the amount of money existing banks could issue, disallowed any new banks from issuing currency and gave a regulatory role to the Bank of England who had to make sure sufficient reserves of gold existing to back up issued currency in the system Peel’s Economic Reforms were a great success The lowering of tariffs and duties encouraged trade and made food cheaper Income tax reduced and then abolished the National Debt The stabilization of the currency made investment more attractive and encouraged economic growth The distress and radical politics of the early 19th century gave way to a prolonged period of mid Victorian stability largely thanks to Peel and his reforms. Factory Reform A Commission on child labour in the mines headed by Lord Shaftesbury (a Christian humanitarian) reported in 1841 – its findings of child and female labour in the mines were genuinely shocking and Shaftesbury’s Mines Bill was passed by the Commons – it faced resistance in the Lords from the great coal owner Lord Londonderry, but was eventually passed banning female employment in the mines together with the employment of boys under 10 years. Factory Act 1844 There quickly followed a factory act – again proposed by Shaftesbury which reduced female hours to 12 a day and the hours of children reduced from 9 to 6.5 Shaftesbury attempted to get the ’10 hour day’ for all adults but this was rejected by Peel who believed that British trade would become ‘uncompetitive’ if this went ahead The Corn Laws By the mid 1840’s Peel’s free trade reforms were working. Britain was prosperous and stable. There was less distress and disorder The protectionist Corn Laws now stood out as a bit of an oddity. Historical opinion is divided on what was the biggest factor in making Peel reform the Corn Laws in 1846 – the threat from the Anti Corn Law League, or the pressure for change brought to bear by the Irish Potato famine of 1845. The repeal tore the Conservatives apart with Disraeli leading the attack which was to lead to Peel’s resignation and the end of his political career. Peel died in 1850 after being thrown from his horse. Task Group A: Who were the Anti Corn Law League, their aims methods and how influential were they in the reform of the Corn Laws? Group B: What was the Irish Potato Famine and why was this important in the repeal of the Corn Laws?