The Chancellor Meets His Match
Lowe inherited a fiscal State which, in the Tories’ last full year in office, had spent £71,236,000, around 9 per cent of national income. Of this, £2 million was a special grant to finance the Abyssinian expedition. Of the remainder, three-eighths was devoted to servicing the debt, and three-eighths to ordinary military (including Indian military) expenditure. The cost of tax collection accounted for 4 per cent of spending, and the (profitable) outlay on posts and telegraphs 5 per cent. That left £10,385,000 for expenditure on civil administration, of which two-thirds came under three headings: law and justice (£3,021,000), civil service and diplomatic salaries and expenses (£2,276,100) and education (£1,597,400). Most of the rest comprised public works and buildings and the upkeep of the monarchy.
KeywordsSugar Burning Corn Depression Income
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- 3.… and said ‘Like the elephant given by some eastern prince to the man he intends to ruin, Mr Gladstone is an inmate too costly for any party to afford to keep for long.’ Lowe’s own party would be footing the bill within two years. R. Lowe, ‘The Past Session and the New Parliament’, Edinburgh Review, 105, April 1857, p. 567.Google Scholar
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- 38.Lady Burghclere (ed.), A Great Lady’s Friendships: Letters to Mary, Marchioness of Salisbury and Countess of Derby, 1862–90, London, 1933, p. 292.Google Scholar
- 50.E.F. Biagini (in Eugenio F. Biagini and Alastair J. Reid (eds), Currents of Radicalism: Popular Radicalism, Organized Labour, and Party Politics in Britain, 1850–1914, Cambridge, 1991, p. 145) suggests that Lowe chose his trio of measures in further pursuit of impartiality towards all classes (with the succession duty falling mainly on member of the upper class, the income tax increase on the middle and the match tax on the lower) and, in particular, to make sure that militarists of all stations footed the bill they had demanded be sent. Lowe himself was ambiguous on this. His speech of 18 May 1871 does suggest obliquely that the budget was designed to hit all classes equally; yet in the actual budget debate he claimed that the match tax in itself was intended as class-neutral, which would make the three measures taken as a whole class-biased (Hansard, 206, 984, 18 May 1871).Google Scholar
- 76.W. Bagehot, ‘Mr Lowe as Chancellor of the Exchequer’ in R.H. Hutton (ed.), Biographical Studies, London, 1881, p. 351.Google Scholar
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- 83.Gladstone to Granville, 9 September 1873, quoted in John Morley, Life of Gladstone, London, 1903, vol. 1, p. 1010.Google Scholar
- 87.‘The enormous surpluses of the later years of the government were the result of buoyant economic conditions rather than fierce retrenchment.’ J. Parry, ‘Gladstone, Liberalism and the Government of 1868–74’ in D. Bebbington and R. Swift (eds), Gladstone Centenary Essays, Liverpool, 2000, p. 102.Google Scholar
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- 93.Most recently in K. Theodore Hoppen, The mid-Victorian Generation, 1846–1886, Oxford, 1998, p. 606.Google Scholar
- 94.B. Mitchell and P. Deane, Abstract of British Historical Statistics, Cambridge, 1988. This is comparing the last (and only) fiscal year with a Hunt budget (1868/9) to the last fiscal year with a Lowe budget (1873/4). The raw figures show even larger drops in spending but certain items were excluded from Army and Navy headings after 1869, and I have followed Mitchell and Deane in their estimate (p. 595) that this made a difference of 10 per cent to the Army and 5 per cent to the Navy figures. Note also that the 1868/9 figures exclude the cost of the Abyssinian expedition while those for 1873/4 do not exclude the cost of the Ashanti war. To this extent even these figures are unfair to Lowe and too kind to his critics.Google Scholar