Pitt rationalised the system of taxation rather than embark on a radical programme of reform. While attempting to meet the immediate need to raise revenue, Pitt tried to avoid the dangers of overtaxing expanding areas of commercial activity. He explored new ways to gain revenue, but often with little success. For example he introduced tax on windows, an attempt to capitalise on the increasing trend for private wealth to be converted into housing property. However this was limited because of the tendency of the owners of large properties to respond by simply blocking up their windows. It is fair to say that Pitt did contribute to the national revival, however he did make a lot of policies that failed, like shop tax, coal tax, and an Act in 1784 which compelled bleachers, printers and dryers to take out licenses at a charge of £2 per annum. This had to be abandoned the next year because of pressures from the textiles and materials industry.
Pitt did contribute to the national revival a little bit through taxation, however some of his policies did fail and cost the government money when they were supposed to be saving money.
Pitt contributed to the national revival through targeting smuggling. With the country in such debt it was logical for Pitt to combat smuggling first as it accounted for one-fifth of all Britain’s imports. Pitt’s intention was to reduce the attractiveness and profitability of smuggling through a reduction in the duties on those goods, which were most subject to illicit transportation into Britain. The Commutation Act of 1784 therefore reduced the import duty on tea – it has been estimated that 3 to 4.5 million tons were smuggled into Britain each year. This was followed by a reduction of wine, spirits and tobacco. The Hovering Act of 1780 increased the threat of detection because it meant that officials could now search ships with suspicious cargoes 12 miles out of port. This helped the National Revival because it meant that less people would take the risk to try to bring goods into Britain and more people would be paying taxes of goods brought into the Britain.
Another policy that helped national revival was the system of bonded warehouses. It was a means of increasing the volume of legitimate trade. Before this, the importer had to pay import duties immediately on they’re landing. With the idea of bonded warehouses the importer put his goods into official storage in a warehouse, where they would be guarded, free of charge. If the goods were taken out of the warehouse for re-export then the importer would be free of charge. The importer paid the duty only when he took out the goods and only on the quantity taken out at any one time.
This proved to be a long-term success, with the value of food and raw materials rising. However this was not Pitt’s idea because it was proposed by Sir Robert Walpole in 1773. So you can not say he was responsible for the national revival because these ideas and policies he got from other people, however it mean Pitt contributed to the national revival because he implemented these idea.
As a result of the American War of Independence the country was in huge finical debt. Pitt’s mechanism for dealing with the problem of the national debt was the Sinking Fund – another area of policy where Pitt ‘borrowed’ and then modified the ideas of others.
Sir Robert Walpole introduced the idea of a sinking fund in 1716. The concept of the sinking fund was to set aside surplus revenue each year and accumulated for the purpose of running down the national debt. The device was partially successful in the 1720’s and 1730’s but its potential had been limited by the fact that ministers kept raiding the fund for immediate purpose during short-term crises rather than letting it accumulate as intended. The idea was re-vamped in 1772 by the Nonconformist minister Richard Price, he advocated a fund, which would be regularly topped up and not drawn out on a short-term need. By earning compound interest it would eventually extinguish the debt. Pitt introduced the Sinking Fund in 1786, which had modifications from Walpole’s original mechanism. Every year the government would put some surplus revenue into the bank. So that the bank wouldn’t be raided in ‘crisis-raiding’, which had occurred in the past. Exclusively ministers managed it but also by a statutory board of six commissioners, who included the governor and deputy governor of the Bank of England. The Sinking fund did work as the debt was reduced by almost £11 million. As an added bonus the Sinking Fund boosted business confidence and therefore indirectly stimulated the volume of investment. In this way it could be argued that the Sinking Fund made a wider contribution to the ‘National Revival’ than just paying off the debt.
Pitt was well aware that Britain’s prosperity depended on overseas trade, and was therefore linked to its diplomatic and foreign policy. Pitt sought to open negotiations with the other major European states to secure reciprocally lowered tariffs. The Eden Treaty Signed with France in September 1786 was, however, the only major, if temporary, result of this policy. The treaty meat that manufactured goods from both countries would be allowed in on easier terms than before, and that duties on other types of goods such as silk and wine would be lowered. The treaty certainly enabled Britain to gain the benefit of lower prices of French products imported into Britain. As a result of the treaty it meant that international relations increased, however after the outbreak of the war with France in 1793 it brought the arrangement to an end and led to a return to protectionism. This meant that Pitt brought about a national revival in international trade with France from 1786-1793. It did increase international trade in these 7 years, however it did mean that Britain returned to protectionism.
Pitt also contributed to the national revival by reducing spending and making taxes more efficient. He wanted to reduce spending by making the government more efficient. His basic problem was that the system was neither systematic nor structured in such a way as to encourage efficiency.
Pitt’s solution was to avoid confrontation with established and powerful vested interests by simply allowing ‘offices of profit’ to lapse on the holder’s death. Most of the 180 posts which the public accounts commissioners recommended should be abolished in 1786 disappeared in the next 20years. Departmental management was gradually made more efficient. Pitt introduced A Treasury Commission of Audit in 1785 to oversee public expenditure. Transfers from the Treasury and the Excise Board reinforced the board of taxes. Talented people were encouraged to promote and develop administrative policies on their own initiative. This all greatly increased administrative efficiency, reducing the amount of labour required and the level of confusion. The consolidation Fund Act of 1787 meant that 103 accounts were combined and controlled by the treasury.
Pitt was responsible for the national revival. However some of these policies/changes/reforms were not his idea (like the sinking Fund) and this is a sign of a good leader if he is able to take in other people’s ideas and adapt them to suit the situation. Pitt’s policies were:
- Targeting Smuggling
- New Taxes
- Efficiency of Taxes
- Sinking fund
- Overseas Trade
- Reduced spending
He targeted smuggling very well and reduced it a lot gaining the government a lot of money. With the policy of new taxes and efficiency of taxes he went about this the right way and reduced spending and saved money. The sinking fund was an excellent policy as it paid off £11 million in debt. Free trade benefits the most efficient producer, and Pitts most successful move in the direction of free trade, the Eden Treaty with France, favoured Britain hugely and was a major benefactor in the national revival. I think that Pitt was very responsible for the national revival as he introduced these policies. Some may say that Pitt was a lucky beneficiary of circumstance as he had time to introduce these policies because he was in power so long.