Monday, 29 December 2008

Sources: Peel's fiscal policy

Peel’s Speech on the Corn Laws, 27th August 1841

Peel had been a leading member in the government of 1828 which had returned to the principle of a sliding scale on corn, as advocated by Huskisson and implemented by Wellington‘s ministry. In 1834 in the Tamworth Manifesto, Peel said that agriculture along with the other great interests should receive adequate protection, especially in view of the special burdens on the land, land-tax, tithe, poor-rate and malt-tax but he did not accept that the landowners should be regarded as a favoured body for whom the rest of the community should be taxed and he believed that the interests of industry and agriculture were interdependent. His support of agricultural protection was therefore based on expediency. He reserved his right to modify the existing law when he came to power. In 1842, as one of his first major acts of legislation, he passed a new Corn Law that almost halved the previous scale of protection. The following is an extract of his speech to parliament just after he had become Prime Minister. Hansard, 3rd series, volume LIX., columns 413-29.

‘I now approach the more important and exciting question of the Corn-laws. In order that I may make no mistake, allow me to refer to the expressions which I made use of on this point before the dissolution. I said, that on consideration I had formed an opinion, which intervening consideration has not induced me to alter, that the principle of a graduated scale was preferable to that of a fixed and irrevocable duty; but I said then, and I say now, in doing so I repeat the language which I held in 1839, that I will not bind myself to the details of the existing law, but will reserve to myself the unfettered discretion of considering and amending that law. I hold the same language now; but if you ask me whether I bind myself to the maintenance of the existing law in its details, or if you say that that is the condition in which the agricultural interest give me their support, I say that on that condition I will not accept their support.... If I could bring myself to think - if I could believe that an alteration of the Corn-laws would preclude the risk of such distress - if I thought it would be an effectual remedy, in all cases, against such instances of lamentable suffering as that which have been described, I would say at once to the agricultural interest, ‘It is for your advantage rather to submit to any reduction of price, than, if an alteration of the Corn-laws would really be the cure for these sufferings, to compel their continuance.’ I should say, that it would be for the interest, not of the community in general, but especially of the agriculturists themselves, if, by any sacrifice of theirs, they could prevent the existence of such distress. If any sacrifice of theirs could prevent their being the real cause of the distress - could prevent the continuance of it - could offer a guarantee against the recurrence of it, I would earnestly advise a relaxation, an alteration, nay, if necessary, a repeal of the Corn-laws. But it is because I cannot convince my mind that the Corn-laws are at the bottom of this distress, or that the repeal of them, or the alteration of their principle, would be its cure, that I am induced to continue my maintenance of them....’  

Greville on Peel’s 1842 Budget

‘On Friday night in the midst of the most intense and general interest and curiosity, heightened by the closeness and fidelity with which the government measures had been kept secret Peel brought forward his financial plans in a speech of three hours and forty minutes, acknowledged by everybody to have been a masterpiece of financial statement. The success was complete; he took the House by storm; and his Opponents (though of course differing and objecting on particular points) did him ample justice. A few people expected an income tax, but the majority did not. Hitherto the Opposition have been talking very big about opposing all taxes, but they have quite altered their tone. It is really remarkable to see the attitude Peel has taken in this parliament, his complete mastery over both his friends and his foes. His own party, nolentes aut volentes, have surrendered at discretion, and he has got them as well disciplined and as obedient as the crew of a man-of-war. This great measure, so lofty in conception, right in direction, and able in execution, places him at once on a pinnacle of power, and establishes his government on such a foundation as accident alone can shake. Political predictions are always rash, but certainly there is every probability of Peel’s being Minister for as many years as his health and vigour may endure ... There can be no doubt that he is now a very great man, and it depends on himself to establish a great and lasting reputation.’

From Greville, Memoirs, 13th March 1842

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