peel as prime minister

why whigs lost 1841

• Extravagant hopes raised by the reform act which could not be met. Governing through a mixed constitution meant the whigs had little room for manoeuvre and had limited ability to govern through popular policies.

• Peel’s successful recreation of the conservatives as an attractive alternative.

• Absence of a consistent whig policy.

• Loss of public confidence from belief that whigs would give in to any public pressure.

peel political position 1841

Strong - conservative clear majority secured in the test of electoral opinion, strong team including prominent former Whigs Stanley and Graham. Stanley was then the best debater in the Commons, and Graham was a competent administrator.

The whigs were divided and poorly led, Melbourne retired and Russell was now leader but lacked real authority. The whigs had no clear view on the Corn laws, few wanted to repeal with most continuing to favour a fixed moderate duty.

peel strong position 1841 reasons

• The most pressing problems the government faced were those of government finance and this was an area in which Peel was an acknowledged expert. Eg he served as chairman of the Currency Commission in 1819.

• He was the commanding political figure of the period. A politician throughout his life, now 53 and at the height of his political and intellectual powers.

• Headed a modernised conservative party. The Tamworth Manifesto brought the support of middle and upper class men of property, the whigs and its radical allies were marginalised.

peel issues in party 1841

his reformist and liberal approach to conservatism was not shared by a large part of his parliamentary supporters

1841 election won few seats in the large boroughs and urban centres of the north and midlands, electoral strength resided where it had always been, in the counties and small market towns whose MPs supported the status quo and represented the landed interest, difference between party leadership and backbench conservatives who wished to uphold the landed and Anglican establishment and who had little interest in political economy and needs of an industrial society

peel ideology/personality issues 1841

was stubborn and inflexible, saw himself as leader of the nation not party.

Once Peel had formed an opinion about what was in the national interest then he pursued it without reference to the views of his own party. This could have been sustained with the support from the monarch’s patronage, but this was no longer possible and Peel needed party support to survive because the influence of the monarch had decreased.

peel economic/social situation 1841

economy was in crisis, unemployment was high. In Manchester 116 cotton mills had stopped working, in Bolton 30 out of 50. In Birmingham 20% of the entire population was on poor relief. Radical agitation was high with chartists and Irish unrest.

peel economic goals

in short term secure governments finances, in long term secure social stability

issue with govs finances 1841

inherited a government budget that had been in deficit for 3 years and by 1842 the deficit was approaching £7.5 million. The national debt was larger in 1840 than it had been in 1830 despite 10 years peace

how peel wanted to sort govs finances

bringing back the income tax

how peel wanted to secure social stability

expected for income tax to be in surplus which should be used to cut taxes on imported goods, would be beneficial because would boost trade and national prosperity would increase and this could lead to a greater total revenue. Free trade would raise incomes, employment and profits and lead to greater government revenue in a virtuous circle. Cutting taxes on goods would also lower prices and make Britain a cheaper country to live in

first budget 1842 income tax

paid by those earning £150 a year or more, brought in a substantial amount of money, about £3.7 million a year was expected, announcement to bring it back brought great surprise, the whigs had never imagine peel would do it, the anti-corn law league said the middle class were being used to subsidise the aristocracy, the chartists welcomed it as a measure of social justice, overall the voting public accepted the return of the tax (which was said to be a temporary measure).

first budget 1842 duties

cut import duties -used revenue from the income tax to do so. Out of 1200 articles then subject to tariffs, 750 were reduced, leading to a loss of revenue of £1.2 million. Export duties on manufactured goods were to be abolished. The effect of this was to cut the price of imported goods, encouraging trade and lowering the costs of consumption.

result of first budget 1842

finances did not immediately improve following the 1842 budget as the industrial depression continued and it took time to set up the machinery for income tax collection. By 1844 the reforms had proved a success and the budget was in surplus by £2 million.

second budget 1845 income tax

income tax was continued for a further 3 years and accounted for 10% of all government income.

second budget 1845 duties

reduction in tariffs was 3 times that of 1842. Duties on raw materials, including raw cotton, were abolished completely. The duty on imported sugar was cut. The duties on most manufactured goods were cut to just 10%. Total customs revenue was reduced by £2.4 million.

second budget 1845 result

• By the spring of 1846 the budget surplus was £2.5 million. Growing trade meant the cut in tariffs had reduced tariff duties by only two-thirds.

• In 1846 there was another £1 million taken off duties.

peel’s impact on trade 42-47

In 1842-46 customs and excise duties were reduced by £8.2 million, yet by 1847 the net loss in actual customs collected was £50,000. Although the number and rate of duties levied had been cut dramatically, the total amount yielded by customs duties stayed the same because of growing volumes of trade.

bank charter 1844 aim

increase the availability of currency in the economy to facilitate the expansion of trade and industry, to stabilise the monetary system, help reduce the potential for inflation and business fluctuations

bank charter 1844 terms

only bank of England could issue new paper currency and existing banks could only sustain their existing paper issues so over time the Bank of England currency would become the normal and dominant currency, currency issued by the bank of England was limited, paper money had to be backed up by gold of government debt, the requirement that it publish its accounts weekly which increased confidence in bank

bank charter effect on confidence

increased confidence in the banking system and helped ensure monetary stability, was crucial for business operations as firms could make contracts for the purchase of materials and the supply of goods whilst having confidence in the value of the currency

bank charter effect on economic expansion

phasing out of private bank notes and the limitations to the bank of England’s issuing powers might have restricted economic expansion. However, this did not happen because the period from the 1840s was one of growing global gold supplies so there was no shortage of gold, and the cheque book system was developed in this period so businesses could carry out transactions with no need for paper money at all.

issue with bank charter recession

in 1847 the bank act had to be suspended because in economic recession people wanted cash as a precautionary reserve. Fearing that there would be a shortage of case owing to the act there was a run on the banking system, and to supply the cash needed the bank was permitted to issue currency unbacked by gold.

issue with bank charter inflationary booms

The act did not end inflationary booms. There was no limit to bank’s ability to create bank deposits, but this was a form of currency so while a private bank could not issue you with paper money it could credit money to your account and this could be spent via the cheque system.

issue with joint stock companies

fraudulent activity and businesses were unstable because of weak regulation. The directors of joint stock companies had discretion as to what information they disclosed, how accurate it was, and what rewards they took.

result of issues with joint stock companies

investing in a joint stock business was very risky because the investor could not be sure as to the financial health of the business and its future prospects, and there was unlimited liability which meant that an investor in a firm that went bankrupt was liable for a share of the total losses, irrespective of how much they had invested, 1844 joint stock companies act passed

1844 joint stock companies act terms

• All joint stock companies had to be registered.

• A salaried registrar of companies was appointed.

• Every registered company had to publish a prospectus and an audited balance sheet every year.

result of 1844 joint stock companies act

bolstered confidence in the joint stock business sector and thereby encouraged greater investment and business growth. It was a typical Peelite measure, moderate and limited reform to improve the functioning of existing institutions.

limitations of joint stock companies act

• The act did not end the practice of unlimited liability. Investment in joint stock companies remained risky.

• The act did not apply to railways. Each railway company was sanctioned by a particular act of parliament and railways were already subject to limited liability. This meant that railways attracted the savings of thousands of investors and their financial management was generally poor, resulting in railway booms and busts that destabilised the economy.

peelite social reform living conditions

• The renewal of the New Poor Law for another 5 years.

• In 1843, following Chadwick’s report on the Sanitary Condition of the Labouring Classes, a Royal Commission on the Health of Towns was set up. Set up momentum for change.

peelite social reforms working conditions

• The Mines Act of 1842 forbade the employment underground of women and boys aged under 10.

• The Factory Act of 1844. This fixed a maximum working day for women and young persons aged 14-18 of 12 hours and of 6.5 hours for children under 13. No child under 9 was to be employed in factories.

peelite social reforms education

Education reform was a failure under Graham.

He proposed to fix the working hours of children such that they would either have a free morning or a free afternoon so they would attend compulsory grant-aided trust schools. These schools were to be Anglican establishments, and non-conformists objected to this because they argued that the education reforms accorded too much power to the Anglican establishment. Extreme Anglicans also objected that the proposed schools were not sufficiently given over to teaching Church of England doctrine. The proposals were abandoned.

peelite administrative reform

• Creation of district bankruptcy courts to deal with local cases.

• Small debtors no longer to be imprisoned.

• Uniform system of county courts was created.

peel promoting better peace relations with ireland tactics

measures to improve bad relations between landlords and tenants, undertook policies designed to win greater support among catholic middle class for british rule, maynooth

peel improving relations between landlords and tenants

Devon Commission in 1843 to inquire into the state of the law and practice in respect of the occupation of land in Ireland.

It recommended that outgoing tenants were to be compensated for any improvements they had made to the land, confirm the emerging contemporary belief that Irish rural poverty and low agricultural productivity were primarily the result of an oppressive land system

limitations of peel improving relations between landlords and tenants

However, a bill proposed by the devon commission introduced in the House of Lords in 1845 received hostile reception and never became law.

policies to win middle class catholic support for british rule

1844 Charitable Bequests Act to help the endowment of Catholic Church,

1844 he proposed the creation of three secular colleges in Ireland where all Irish were invited to attend regardless of religion

gave the government money to expand the provision of elementary education in Ireland with the view that schools should attract children of all religions.

limitations to peels policies to win middle class catholic support for british rule

colleges were denounced by both Catholics and Anglicans, elementary education provisions did not end up happening

peel action for maynooth

proposed in 1845 to increase the annual British government grant to the Catholic Seminary at Maynooth to £26,000 per annum, grant it a building grant of £30,000 and to begin an effective system of inspection.

This was an attempt to conciliate the Catholic clergy, most of whom supported the Repeal Association. However these proposals generated a strong and bitter outcry in Britain.

opposition to maynooth

anti-catholic feeling had grown in intensity in recent decades, and the Anti-Maynooth Committee organised such outcry, with 10,000 petitions with 1.25 million signatures being presented to parliament opposing the increased grant. Anti-Peel feeling also contributed to this, especially in the House of Commons.

causes of abolition of corn law

the adoption of free trade and famine in Ireland

free trade as reason to end corn law

The advantages of free trade were becoming the consensus in British politics and Peel’s free trade budgets had won general approval.

However there was no free trade in wheat. It was difficult to justify the protection of wheat farming in an increasingly, urban, industrial and free trade Britain because it only increased class tension and led the middle class to push for a more fundamental change in the configuration of power in Britain

famine as reason to end corn law

Poor weather and the arrival of a disease affecting the potato crop meant that about half the crop was lost. Peel had witnessed famine in Ireland in 1817 and knew he had to introduce a system of national relief to buy corn and provide it to the starving Irish. It would be impossible to justify British tax payers paying for food Ireland at artificially inflated prices due to the corn law, so it had to be abolished.

gov aid for irish famine

• From October 1845 Cabinet agreed to a series of emergency measures for Ireland, including the secret purchase of £100,000 of maize from America and instructions to the Lord Lieutenant to set up a relief organisation.

peel first introduction of idea of stopping corn law to cabinet

• On 6 November Peel put to the cabinet a proposal to suspend the corn laws and then give parliament notice of a new corn law bill after Christmas. Only 3 members were prepared to sanction the measure.

• On 5 December cabinet met and Lords Stanley and Buccleuch announced that they could not accept the extinction of the corn laws and would resign if Peel went ahead. Without their support the Cabinet resigned from office and Peel resigned as Prime Minister.

prime minister option after peel resignation

queen called upon Lord John Russell, who had declared in his Edinburgh Letter his commitment to a total repeal of the corn laws, to form a government.

However he failed because the whigs were in a minority in both the commons and lords, the whigs were divided over the corn laws and most senior whigs still preferred a fixed duty while backbenchers favoured repeal. Russell acknowledged his failure and the Queen was forced to go back to Peel.

peel second introduction of idea to stop corn laws

Peel returned to office alongside his Cabinet apart from Stanley. In January 1846 Peel announced to the Commons a further range of tariff reductions, and proposed that over the next three years the corn duty would be successively lowered until in 1849 it would cease altogether.

opposition to corn law commons in general

plan to abolish the corn laws faced opposition from conservative MPs and their constituents, there were resignations from the lower ranks of the government, local patrons of MPs called upon those supporting Peel to resign, the Central Protection Society organised meetings across the country, petitions to parliament were organised and constituents were encouraged to put pressure on their MPs to oppose the measure

opposition to corn law attacks on peel

Peel was attacked personally with arguments saying he was dishonest and had betrayed his party and gone against the very corn laws he had supported in 1841.

opposition to corn law conservative party

the conservative party split against Peel. Two thirds of the party opposed corn law repeal and one third supported it. On the second reading of the bill the conservative party voted 231 against the bill and 112 supported it.

how peel got corn law repeal through

support of whigs and radicals, on the third reading in May 1846, MPs voted 327 votes to 229 to repeal the corn laws. It got through the house of Lords in June because many lords had been persuaded of the merits of free trade.

peel final resignation reason

June 1846 Peel’s Irish Coercion Bil was defeated in the commons by 292 to 219, and this defeat forced Peel to resign as Prime Minister.