Features

What explains Britain’s history? In a word: tax

Taxation may not seem a compelling subject for a book, but levies such as the Corn Laws have proved pivotal in shaping our story, says Dominic Frisby.

Sir Robert Peel by John Linnell.

Sir Robert Peel simplified taxes by removing over 600 duties

I've just written a book all about the past, present and future of taxation. Not the most enticing subject for a book, you might think, but I promise you it is. There is fascinating story after fascinating story. Today and over the next two weeks, I'll be telling you some of them. The book's called Daylight Robbery and we actually get that expression from the window tax that was levied in Britain between 1696 and 1851.

Window tax began as a replacement of hearth money, which involved collectors entering people's homes twice a year to count their fireplaces. It was hated and the monarchs William and Mary had it abolished after the Glorious Revolution of 1688 to ingratiate themselves with the people. A replacement for the lost revenue was soon found in the form of window tax. No invasion of the Englishman's sacred privacy was required: an assessor could just walk past and count his windows.

But the tax had many unintended consequences, the worst being that it made people ill. It was "a direct encouragement to disease", said The Lancet. The numerous epidemics during the Industrial Revolution typhus, smallpox and cholera were made worse by the cramped, damp, windowless dwellings. By the 19th century, opposition to it was everywhere. "Neither air nor light have been free since the imposition of the window-tax," fumed Charles Dickens. Pamphlets were handed out, speeches were made. Campaigning went on for decades. When a motion was finally put before Parliament, legend has it that MPs cried "Daylight robbery!".

Protectionism financed central London

But the most pernicious unintended consequences were in Ireland. In the 1840s, the country was hit by the Great Famine. Blight struck the potato plant on which Ireland depended as its staple crop. It needed food from abroad and there was plenty of cheap grain waiting to be exported, especially from the US, but the Corn Laws made the cost too high. Over a million people died of starvation. A million more fled to the US to escape it.

When you consider the influence of the Irish on the destiny of the United States over 20 presidents claim to have been of Irish descent you can see what an effect even apparently minor taxes can have on human history. Attempts to reform the laws met with opposition. Parliament was full of landowners. Even Britain's tax commissioners were landed gentry. In 1838, free-trade campaigner Richard Cobden set up the Anti-Corn Law League and in 1841 he was elected as an MP. He eventually won the ear of the prime minister, Sir Robert Peel.

Repealing the Corn Laws

He had voted against repeal each year from 1837 to 1845, but with food supplies scarce on the mainland and famine in Ireland, he changed tack. British farmers did not produce enough grain to feed its growing population anyway, let alone in a famine. Peel was strongly opposed from within his own Conservative Party. But he found Whig support and the laws were finally repealed in 1846. He resigned the same day, never to hold office again. But as Cobden foresaw, Peel's reforms ushered in an era of free trade in Britain in the second half of the 19th century that in terms of innovation, invention and rising prosperity was perhaps the greatest in British history.

Daylight Robbery: How Tax Shaped Our Past And Will Change Our Future, Penguin Business, £20. Audiobook on Audible.co.uk. Signed copies are available at dominicfrisby.com

Recommended

The charts that matter: more pain for goldbugs
Economy

The charts that matter: more pain for goldbugs

Gold investors saw more disappointment this week as the yellow metal took a tumble. Here’s what’s happened to the charts that matter most to the globa…
18 Sep 2021
With the right political will, inflation can be defeated
Inflation

With the right political will, inflation can be defeated

Governments and central banks can easily control inflation, says Merryn Somerset Webb – they just need the will.
17 Sep 2021
Why are energy prices going up so much?
Energy

Why are energy prices going up so much?

UK energy prices are going through the roof, with electricity the most expensive in Europe and gas at its highest for 13 years. Saloni Sardana explain…
16 Sep 2021
What really causes inflation? Here’s what prices since 1970 tell us
Inflation

What really causes inflation? Here’s what prices since 1970 tell us

As UK inflation hits 3.2%, Dominic Frisby compares the cost of living 50 years ago with that of today, and explains how debt drives prices higher.
15 Sep 2021

Most Popular

The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
How to stop recurring subscriptions becoming a drain on your money
Personal finance

How to stop recurring subscriptions becoming a drain on your money

Tracking and pruning subscriptions isn’t as easy as it sounds. Here's how to take charge.
14 Sep 2021