History - Economic Reforms: How Liberal were the Tory Governments 1822-30

• Huskisson and Robinson = able administrators and financers
• British merchants were restricted by many tariffs/importat duties and other restrictions.
• They had been appointed to protect British industries from foreign competition and to raise money during the French wars.
• 1820 - merchants from London, Manchester and Glasgow petitioned the government for Free Trade, meaning the abolition of all duties. They thought British industries could beat the competition and if they used tariffs, then other counties may do the same to protect their industries.
• Huskisson = influenced by by Adam Smith. He wrote a book called "The Wealth of Nations". It argued that fewer economic restrictions would mean the nation's economy could develop more successfully, and proposed 'laissez-faire' (meaning no/little government interference).
• Huskisson did many things - see the following cards

What was it: Reduction of duties on many manufactured goods and materials, like tea, cotton, wool and iron. Tea was reduced from 6 pence to 1 pence per pound of weight.

Liberal: It was a move towards 'laissez-faire' and free trade. People were now much more likely to buy things, because they were cheaper. An example of freer trade (unfair to criticise for not being full free trade - no country had free trade).

Not liberal: Not all duties were removed, so free trade wasn't fully realised.

What was it: Restrictions and duties reduced on goods from the colonies. For example, ships from the colonies now didn't have to come to Britain first before moving on.Goods from the colonies paid lower dutues than similar goods from foreign countries = Imperial Preference. The aim was to encourage trade with the Empire.

Liberal: Move towards free(r) trade - British colonies could now trade freely without having to stop at Britain first for taxation

Not Liberal: -

What was it: The Navigation Laws were an outdated set of restrictions stating that goods being imported to Britain and colonies must be carried in British ships or ships from their native country. They were originally introduced to stop the Dutch competing with British trade, but by the 1820s, they were restricting British trade. Other countries were bringing out similar policies meaning that British ships were being excluded from EUR ports or paying high duties. Huskisson introduced the Reciprocity of Duties Act 1823 so that countries could allow free entry of each other's ships. 15 signed, including Brazil, Prussia and Sweden.

Liberal: Allowed free entry for foreign ships is a step towards free(r) trade

Not Liberal: Only for 15 countires, almost all of which had underdeveloped ecomomies. This means it is not true free trade.

What was it: Introduced a sliding scale of duties on imported wheat (1828). If British wheat was selling at 73s+ per quarter then there would be no duty on foreign wheat. If costs of British wheat went over this limit, then more foreign bread/wheat could be imported.

Liberal: Meant that more foreign bread/wheat could be imported. The sliding scale decreased import duties if the price of selling wheat was over 73s (lower than previous 80s per quarter)

Not Liberal: The new scale was still rarely reached so nothing really changed and bread/wheat imports were still restricted

Successes:

• Cheaper raw materials -> manufacturers can produce goods at lower prices -> British exports and shipping increased as industries became more competitive
• Smuggling reduced. Reduction in duties made it unnecessary

Problems:

• Government lost income because of lower duties
• December 1825 - sudden slump in exports caused by over-production -> unemployment increased and machine-breaking increased in Lancashire

What he did: In the 1820s, banks could issue private notes. Some banks issued more notes than they had in gold stocks. By 1825, many country and London banks had gone out of business following the demand for gold from people with notes. The banks did not have enough money to pay. Robinson's Bank Act 1826 began to reform banking system. Attempted to decrease number of notes and increase size of banks, creating more stabilty and confidence. Private banks were not allowed to issue notes of less than £5. Led to greater confidence and more investment in banks, helping British industry expansion.

Liberal: Was a good thing - increased industry expansion - but it wasn't really liberal

Not Liberal: Private banks could not issue notes unless less than £5 -> government was interfering in finance. It was restrictive and protective.