Pitt the Younger Flashcards
(112 cards)
What was the national debt in 1775?
£127 million
What was the national debt in 1784?
£243 million
When did war break out with France? What did this do to finance?
1793 (up until this point Pitt managed to avoid adding to the national debt)
What was the national debt in 1801?
£456 million
What was the issue of ‘debt funding’ and what was the issue with it? What was the issue with corruption surrounding the large national debt?
Interest rates were at a high 6% (benefitting those who lent and the privileged few who could secure govt jobs or contracts). There were issues of corruption and the money paid to service the debt was thought to take away from investment in trade, agriculture and business.
When did Pitt introduce the sinking fund? What did it entail?
1786
One million pounds a year was set aside from taxes and special commissioners would use this money to buy government shares. The prices of shares were lower than face value so they got a bargain and used the interest rate to buy more stock
Who first used a sinking fund?
PM Sir Robert Walpole first used it
How much had the public debt reduced by 1793 due to the sinking fund?
£10 million
When was a new sinking fund set up along the old one?
1792
What was the long term financial plan in 1792?
For the national debt to be paid off in 45 years
What were the issues with the scheme of sinking funds?
It dealt only with long term debt. Short term debt increase £7 million between 1783 and 1793.
It only worked in peacetime
Sinking fund continued until 1829 but was ineffective in war (1793-1815) in war borrowing had to rise so debt reduction was tricky
When was the war with the French?
1793-1815
What things did Pitt increase indirect taxes on?
Bachelors, hats, servants, wig powder, dice, houses (1785 introduced tax paid on male servants and introduced tax on female servants, provision for bachelors to pay more than married households)
What new taxes did Pitt introduce?
Paper duties, carriages, silver and gold plate, beer licenses, bricks and tiles, saddle horses and silk imports
When did Pitt introduce his original idea of taxes on retail shops? What was the effect?
Introduced in 1785
Causes rioting by those who fear price increases
Repealed in 1789
What did Pitt do to attack the smuggling trade?
Hovering act
Reduced high import duties on wine, tobacco and tea (which went from 199% to 25%) encouraging people to avoid heavy penalties for smuggling and pay the tax- raises govt income
What tax policy did Pitt put in place to relate taxes to the ability to pay?
Window tax
Taxes on luxuries
What was the ‘consolidated fund’?
All customs duties were paid into it and measures to combat fraud were put in place.
Why did Pitt give higher pay to officials?
It reduced corruption and provided incentives to collect all due taxes
What is a sinecure? What did Pitt do to them? Which group wanted to get rid of them?
A job with no responsibility but with a salary (usually for supporters to ensure loyalty)
Pitt reduced the number of them
The County Association wanted to be rid of them
What did Pitt do to the King’s estates?
Managed them in a more cost effective way, increases revenue
What idea did Pitt launch that was copied?
The public lottery
When did the national debt turn to a narrow surplus?
1792
Done by reductions in expenditure and increases in income
When did Pitt introduce an income tax?
1799
He was the first British PM to do this.
On all incomes over £60 per year