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 2010  giugno 09 Mercoledì calendario

INCOME TAX

The mid-1800s saw the beginnings of significant social and economic change. With the Whigs (forerunners of the Liberals) in power from 1830, child labour was limited, slavery in the Empire ended, and Parliamentary reform gave representation to cities including Manchester and Liverpool, and to more of the middle classes. Railways transformed communications within England and linked Scotland, Wales and - via Holyhead - Ireland. The potato famine in Ireland began in the mid-1840s.

The general election of 1841 was won by the Conservatives with Sir Robert Peel as Prime Minister. Although he had opposed income tax, an empty Exchequer and a growing deficit gave rise to the surprise return of the tax in his 1842 Budget. Peel sought only to tax those with incomes above £150, and he reduced customs duties on 750 articles out of a total number taxed of 1,200. The less wealthy benefited, and trade revived as a consequence.

Peel’s income tax was imposed for three years, with the possibility of a two year extension. A funding crisis in the railways and increasing national expenditure ensured that it was maintained. For Peel, the debate was academic. In 1846 he repealed the Corn Laws - which supported farmers by inflating the price of corn when cheaper imports were available - and lost the support of much of his party. The Whigs resumed power the same year to be joined by some notable ’Peelites’.