Changes in government and finance, 1689-1702

Importance of 1689

It paved the way for a new monarch, with new concerns. William and Mary- providence- God’s will. It was an era of personal monarchy. Louis XIV'‘s was very committed to restoring James to the throne.

Willian and Mary

William, r. 1689-1701, Mary r. 1689-1694

William and Mary: the context

From 1690 onwards, William was often absent from England on campaign, each year generally from the spring until the autumn. William continued with campaigns abroad to wage war against France in the Netherlands throughout the Nine Years’ War (1688-97) against Louis XIV.

• Whilst her husband was away, Mary administered the government of the realm with the advice of a nine-member Cabinet Council.

• William became the sole ruler upon her death in 1694. He reigned as sole monarch until his own death in December 1702, he was succeeded by Mary’s sister, Anne.

Limited monarchy

William and Mary had to accept a limited monarchy, through the Bill of Rights (Dec 1689). The Tories were the majority of the Political Nation. Bill of Rights- the joint monarchs could not levy taxes without parliamentary consent.

William’s aims

• To ensure James II did not ally with Louis XIV.

• To utilise the resources of England and Scotland for his struggle against France.

Towards a constitutional monarchy

Through the development of an efficient system of admin and taxation England found a way to sustain military power. This process led towards a constitutional monarchy in which the power of the monarchy was kept within the limits by Parliament.

• A form of monarchy in which the sovereign exercises authority in accordance with a written or unwritten constitution.

The balance sheet

• 1690 Public Accounts Commission, established by the Public Accounts Act, to examine government income and expenditure (which improved public accountability).

• 1690s Excise Tax extended to cover a wider range of commodities.

• 1692 Land Tax introduced levying 4 shillings in the pound (20p), voted annually by Parliament but not always levied at the same rate.

Parliament and faction

William favoured a policy of balance between Whigs and Tories. After the elections of 1690 William began to favour the Tories, led by Thomas Osborne, Lord Danby and Earl of Nottingham- Finch.

• The Tories (landed interests, land-owners and gentry) were not against war with France- they objected land campaign on the continent. the Tories were willing to pay for a comparatively cheap “blue-water” campaign to secure treasure and colonies.

• The Whigs (cross-class alliance, led by a small number of wealthy Lords) were willing to tax and spend on whatever William III wanted.

The Junto seals the (financial) deal

These changes made it possible for William to wage war against Louis XIV- but gave rise to discontent from Tories, who resented high taxation.

• So from 1694 William began to prefer the Whig faction known as the Junto. (William dissolved Parliament in 1695, and the new Parliament that assembled that year was dominated by the Whigs). The Whig Junto funded William’s war-faring- the moneyed interest.

Manpower- financial revolution

1689-97: 116,000 soldiers every year of the nine year’s war- average annual expenditure- £5.456m a year. Average annual tax revenue- £3.64m a year. End of William’s reign- English state owned £16.7m and interest (nationalised the debt of the monarch and made it a state debt). William plunged the English state into debt.

Summing up: the development of the military-fiscal state

• Parliament had completed the transition from personal to government finance with checks and balances introduced.

• Britain could manage a growing National Debt and guarantee repayment of that debt- because of secure, predictable, guaranteed tax income managed and made workable through a bigger, more efficient administrative base and checks and balances provided by Parliament.

  • Britain could borrow huge sums of money on the international financial markets (especially from the Dutch!).

The ‘Rage of Party’

Annual sessions of Parliament- which were necessitated by William’s precipitation in the Nine Years’ War- were a breeding ground in which political rivalries could develop.

• Frequent elections led to the intensification of party differences (Rage of Party- 1690-1715 period).

  • It was the appearance of controversial issues that caused the most political division.

Whigs and Tories

The Whigs:

• They supported the war against the French for religious and financial reasons (these prominent Whigs were called the Whig ‘Junto’- they dominated government between 1695-1701.

• They were keen to restrain Catholic absolutism and were the main beneficiaries of the financial revolution.

The Tories:

• They wanted to end the war and restrain William; their aim was to reduce the executive power of the King and return the power to the JPs and landowning gentry.

  • The discovery that William intended to maintain a large standing army despite the peace deal (the Treaty of Ryswick) led to a short-lived alliance between some Whigs and Tories (a new ‘Country Party’).