How successful were Peel's economic and financial policies in the period 1841-46?

Authors Avatar

Sarah Cooper 12DGG

How successful were Peel’s economic and financial policies during the period 1841 to 1846?

In the period from 1841 to 1846, Peel had to contend with the economy in a recession. There had been vast budgetary deficits from the Whigs’ overspending before he came to power, and it can be considered that because of Peel’s policies, the economy recovered. Therefore, it is obvious that his economic and financial policies were reasonably successful in this period; however, it must also be considered that the economy has natural cycles to peaks and depressions, and therefore it is likely that Peel’s policy was not wholly responsible for its recovery.

When Peel became Prime Minister in 1841, the economy was in a recession and the Whigs had left debts of around 7 million pounds. His budget of 1842 reintroduced income tax at 7d in the pound for incomes over £150 to deal with the government’s monetary shortfall. This was of course not the most popular of his financial policies, however, Peel felt that it was necessary to deal with the “mighty and growing evil” of the government’s debt and had an added benefit of providing a guaranteed sum of money each year. The carefully calculated figures meant that only the top end of the working class people had to pay the tax, placing the responsibility rather more on the wealthier sections of society. Peel rightly decided that in a time of such social and economic distress, it would have been unreasonable to inflict extra hardship on the poor.  The increase in revenue from this new income tax gave the government room to manoeuvre monetarily speaking, and enabled Peel to reduce duties on a number of goods.

Join now!

Because of the increased revenues from the new tax, Peel was able to put further economic policy in place, which would also prove to have an effect on both the English social situation and his political reputation. Over the next few months, Peel was able to substantially reduce tariffs on about 750 consumer goods, thereby making items more affordable for the working classes.  This made his appeal in that area more apparent. It appeased the working classes, and it was politically well judged – at the time, the Chartist movement was causing significant disturbances. The wide-ranging plug riots in 1842 ...

This is a preview of the whole essay