Pitts Reforms

• The Sinking Fund 1786

  • Every year, £1 million pounds was set aside to pay off national debt
  • reduced interest payments on the debt
  • national debt had reduced by £10 million
  • however it was only effective for long term debt and short term borrowing increased by £7 million in the same period
  • ineffective during war as borrowing has to increase, original debt had a lower rate of interest so borrowing made no sense
• New Taxes 1785

  • aimed at those who could afford it
  • aimed at wealthy individuals
  • luxury taxes on wigs, powder, horses, servants etc
  • window tax - more houses = more taxes, some bricked up windows to save money
• Public Lottery

  • pitt started a lottery to raise funds
  • building of Westminster Bridge and British museum were funded this way
• Better collection of existing taxes

  Smuggling to evade taxation was common, tax on tea was 119%. 1/5 of goods sold in britain had arrived illegally

  • Commutation Act in 1784
  • taxation on imports was reduced. tax on tea reduced to 12% and it was cheaper to buy legally which made smuggling unattractive
  • Hovering Act 1787
  • made it harder for smugglers to evade taxes. Ships could only weigh anchor in port or 12 miles out to sea. Customs officers could search ships anchored closer to shore
• Consolidated Fund 1787

  • taxation from imports placed into a single fund, single account could be easily audited to check for theft
  • done because there were too many bank accounts for government pots so people were siphoning funds
• Administration: increased efficiency

  • pitt reduced number of sinecures, but all werent removed until 1806
  • auditing removed corruption and theft
  • patronage still occured
• The Eden Treaty 1786

  • most successful treaty with France
  • French goods such as wine and silk could come into Britain with reduced taxes and british cotton and manufactures could be exported to France on the same basis
  • Treaty favoured Britain as she haad a more well developed cotton industry with factory machinery
  • defecit in trade became a surplus of £2 million
  • Between 1783 and 1792 British Trade with europe almost doubled