Pitt's finance and administrative reforms

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  • Peel's finance and administration reforms
    • How successful were the financial reforms
      • Success
        • Gap between government income and expenditure had turned into s narrow surplus 1792
          • Income from taxation rose sharply
        • A fairer tax burden since many taxes affected only the rich before
      • Not success
        • reluctant to dismiss those who held sinecures
          • He waited for them to die
        • Biggest financial achievements owed a lot to peace
    • Administration
      • It was small
        • Majority of employees worked in customs and excise
      • Resources were often inefficiently deployed
        • Some government departments were over-manned
    • Administrative reforms
      • Reformed it from within
        • Appointed strong administrators to take charge of departments
      • 1784-tackled independence of East India trading company
        • India act 1847
          • Greater government involvement by establishing a board of control
            • Responsible for scrutinising the company's activities
      • Gradually abolished sinecures
        • sinecures were abolished by 1806
    • Why reform finance and administration
      • Reforms between 1784 and 1792
      • Pressure from the country- defeat in American war showed that the British government was ineffective
      • Servicing an ever-growing national debt
        • Eating up an increasing proportion of government income
          • Pitt's reputation was based on a desire for cheaper government
    • The Financial situation
      • National debt risen from £127 million in 1775 to £243 million in 1784
        • Increased by 91 percent during war years
      • 1793 war with France
        • By 1801 the debt had risen to £456 million
      • Concerns about corruption continued
        • interest on the debt was thought to be for the benefit of the privileged few who could secure government contracts of jobs
    • The Sinking fund
      • Introduced in 1786
      • One million pounds a year was to be set aside from taxation
      • Public debt reduced by £10 million in 1793
        • New sinking fund set up in 1792
          • Dealt with only long term debt
          • During the war 1793-1815, money was borrowed at a high rate and paid into the sinking fund
            • Reduced debt, but interest paid on existing debt was being paid at a lower rate
    • Other ways of raising money
      • Increases on indirect taxes on a large number of items
        • Bachelors, hats, servants and houses
          • 1785- Increased tax paid on every male servant
      • The establishment of a 'Consolidated fund'
        • All customs duties were paid
      • 'Retrenchment' The number of government jobs was reduced
        • reduction in the number of sinecures

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