Gladstone vs Disraeli

Picture of William Gladstone
William Gladstone

Benjamin Disraeli
Bicentenary of Income Tax

The second half of the 19th century was dominated by two politicians - Benjamin Disraeli and William Ewart Gladstone.

A Conservative, Disraeli opposed Peel's repeal of the Corn Laws which had inflated the price of imported grain to support home farmers. He was three times Chancellor of the Exchequer and twice Prime Minister.

Formerly a Conservative, Gladstone supported the repeal of the Corn Laws and moved to the opposition (Whigs, and from 1868 Liberals). He was four times Chancellor and four times Prime Minister - his final term starting at age 82.

Disraeli and Gladstone agreed about little, although both promised to repeal income tax at the 1874 General Election. Disraeli won - the tax stayed (and probably would have done under Gladstone too).

Some views of Disraeli
'Never had I so kind and devoted a Minister and very few such devoted friends' - Queen Victoria

'A cursed old Jew, not worth his weight in cold bacon' - Thomas Carlyle, historian

'And the potent wizard himself, with his olive complexion and coalblack eyes, and the mighty dome of his forehead, is unlike any living creature one has met... Yet the ultimate impression is of absolute sincerity and unreserve. Grant Duff will have it that he is an alien' - Sir John Skelton

Some views of Gladstone
'A sophisticated rhetorician, inebriated with the exuberance of his own verbosity' - Disraeli

'That half mad firebrand who would soon ruin everything and be a dictator' - Queen Victoria

'For the purposes of recreation he has selected the felling of trees; and we may usefully remark that his amusements, like his politics, are essentially destructive. Every afternoon the whole world is invited to assist at the crashing fall of some beech or elm or oak. The forest laments in order that Mr Gladstone may perspire' -Lord Randolph Churchill, Conservative politician and later Chancellor

Income tax - going but not gone
Gladstone spoke for nearly five hours introducing his 1853 Budget. He outlined plans for phasing out income tax over seven years (which the Crimean War was to upset), of extending the tax to Ireland, and introduced tax deductions for expenses 'wholly, exclusively and necessarily' incurred in the performance of an office - including keeping and maintaining a horse for work purposes. The 1853 Budget speech included a review of the history of the tax and its place in society, it is regarded as one of the most memorable ever made.

With the Whigs defeated in 1858, Disraeli returned as Chancellor and in his Budget speech described income tax as 'unjust, unequal and inquisitorial' and 'to continue for a limited time on the distinct understanding that it should ultimately be repealed'. But the Conservatives return to power was short-lived. From 1859 to 1866, the Whigs were back with Viscount Palmerston as Prime Minister and Gladstone as Chancellor.

Gladstone had set 1860 as the year for the repeal of income tax, and his Budget that year was eagerly awaited. Ill health caused it to be delayed and for his speech to be shortened to four hours. But he had to tell the House that he had no choice but to renew the tax. The hard fact was that it raised £10 million a year, and Government expenditure had increased by £14 million since 1853 to £70 million (these figures should be multiplied by 50 for a modern equivalent).

Gladstone was still determined that income tax should be ended. When a Select Committee was set up against his wishes to consider reforms which might preserve it, he packed the committee with supporters to ensure that no improvements could be made. In 1866, the Whigs' modest attempts at Parliamentary reform failed to win support in Parliament and the Conservatives returned to power, although with no overall majority. Disraeli succeeded where Gladstone had failed, seeing the Reform Bill of 1867 become law. This gave the vote to all householders and to those paying more than £10 in rent in towns - and so enfranchising many of the working class for the first time. Similar provisions for those living in the country came with Gladstone in 1884.

While Disraeli had gambled that an increased electorate would ensure a Conservative majority, and in 1868 he was Prime Minister, the election of that year saw the Liberals - as the Whigs had become - victorious under Gladstone. Income tax was maintained throughout his first Government, and there were some significant changes made including the right to appeal to the High Court if a taxpayer or the Inland Revenue thought the decision of the appeal Commissioners was wrong in law. But there was still a determination to end it. The Times, in its 1874 election coverage, said 'It is now evident that whoever is Chancellor when the Budget is produced, the income tax will be abolished'.

Disraeli won the election, Northcote was his Chancellor and the tax remained. At the time it was contributing about £6 million of the Government's £77 million revenue, while Customs and Excise contributed £47 million. It could have been ended, but at the rate at which it was applied (less than 1%) and with most of the population exempt, it was not a priority. With worsening trade conditions, including the decline of agriculture as a result of poor harvests and North American imports, the opportunity never arose again.

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