ABSTRACT
Disraeli’s publication of his two major Commons budget speeches from 1860 and 1862 confirmed Gladstone as the main target of Conservative invective and sought to affirm Disraeli’s rival claim to mastery of the nation’s finances. Both speeches were effective in maintaining Conservative morale and demonstrated Disraeli’s skills in parliamentary oratory.
Disraeli’s budget of December 1852 had been intended as a bold stroke, offering some relief to the landed interest and levying direct taxation on a broader basis. This was an ambitious redefining of Conservative financial policy after the abandonment of Protection, with a view to securing Commons support among non-Conservatives. Gladstone initially declared Disraeli’s budget to be ‘a most daring bid for the support of the Liberal majority’. It proposed a progressive reduction of the tea duty; a reduction in malt duty; an increase in house tax; and an extension of income tax, distinguishing between ‘spontaneous’ income (unearned income from land and funded property) and ‘precarious’ income (earned income derived from farming, trade, and the professions). The Public Works Loan Board was to be abolished, saving £360,000 of expenditure. However, Gladstone, ‘choked with passion’, violently attacked the budget as subversive and profligate. The budget was defeated by 305 to 286 Commons votes. This immediately ended Derby’s first government. It also cut short the Conservatives’ negotiations with France over a bi-lateral commercial treaty.
Delivered in a speech of epic proportions lasting five hours, Gladstone’s budget of April 1853 simplified Britain’s tariff of duties and customs; 123 duties were abolished, and 133 duties were reduced. The income tax was renewed for seven years, until 1860, to fund tariff reductions. Gladstone proposed to re-enact it for two years, from April 1853 to April 1855, at the rate of 7d. in the £; from April 1855, to enact it for two more years at 6d. in the £; and then for three years more, from April 1857, at 5d. At this point, on 5 April 1860, the income tax law would expire. Succession duty was extended to property. To maintain a balance between direct and indirect taxation, and eventually abolish income tax, Gladstone declared there would have to be considerable retrenchment in government expenditure. His performance confirmed national finance as central to executive politics.
The onset of the Crimean War in 1854 and the commercial crisis of 1857–1858, however, compromised hopes of significant retrenchment and the phased reduction of the income tax. In his budget of April 1858 Disraeli declined to write off the deficit incurred by war expenditure and the interest on loans raised, levying income tax at the rate introduced by Gladstone in 1853 of 7d in the £. It excited no fierce Commons opposition. Gladstone expressed a general approval, while reminding parliament of the continuing need for government retrenchment.
Gladstone’s budget of February 1860 was introduced along with the Cobden-Chevalier Treaty between Britain and France, reducing tariffs between the two countries. The budget reduced the number of import duties to 48, with 15 duties constituting the majority of the revenue. To finance these reductions in indirect taxation, the income tax, instead of being abolished, was raised to 10d in the £ for incomes above £150 and continued at 7d in the £ for incomes above £100. In 1860, Gladstone also attempted, by separate legislation, to abolish the duty on paper. A bill to abolish paper duty narrowly passed the Commons, but was rejected by the House of Lords, the first time the Lords had rejected a money bill for over 200 years. In 1861, Gladstone included the abolition of the paper duty in a consolidated Finance bill, so forcing the Lords to accept it. The proposal in the Commons of one bill only per session for the national finances was a precedent uniformly followed from that date until 1910. In 1861 Gladstone also reduced the higher rate of income tax to 9d in the £. In 1863 he reduced it to 7d in the £.
Disraeli’s speeches touched on broader themes in Conservative argument of the 1860s. That the fiscal principles Gladstone’s ‘eager mind and impetuous rhetoric’ had enunciated in 1853 were inconsistent with the policies he adopted in his subsequent budgets; that aspects of Gladstonian finance were shared with Disraeli’s budgets of 1852 and 1858; yet, it was Gladstone’s fierce opposition to Disraeli’s December 1852 budget that had ejected the Conservatives from office. Similarly, in 1859 the opposition combined against a specific proposal in the Conservative Reform bill and then misrepresented the government’s foreign policy over Italy in order to drive Derby and Disraeli out of office. The latter episode was a long-lasting Conservative grievance, the national interest, they asserted, being sacrificed to factious scheming.
