Tariffs and Corn Laws

All governments need to collect taxes. Some are on the wages people earn (income-tax), and some on what they buy. For most of the eighteenth century, the government's money came mainly from tariffs (customs duties). These were taxes on imports, such as tea, silk, and brandy. But Adam Smith said that tariffs reduced trade, and so harmed Britain. He was in favour of free trade.

In the 1780s, the government did reduce some tariffs. But during the wars with France, from 1793 to 1815, it needed more money, so tariffs went up again. Then in the 1820s they were cut once more, but Britain was still a long way from free trade in 1830.

There were always tariffs on corn imports in the eighteenth century. But the Corn Laws passed in 1815 banned imports if the price of corn in Britain was less than £4 per quarter. The motive was to keep the farmers' profits up, so that they could pay high rents to the landowners.

Merchants and mill-owners did not like the Corn Laws. In 1838 a group of them formed the Anti-Corn Law League. They said that the Corn Laws put up the price of bread, and that if they were repealed (abolished), the price of bread would fall. Workers' wages could then be reduced, so British-made goods would be cheaper, and there would be more trade.

The government did not give in straight away. But in 1842, Sir Robert Peel, who was then Prime Minister, made a big cut in tariffs. (He brought in an income-tax at the same time.) Then in 1846 came famine in Ireland. The Irish needed cheap food, so Peel repealed the Corn Laws. The move split Peel's party, the Conservatives, but it made Britain a free trade nation.

Walter Robson: Britain 1750 – 1900; Oxford University Press, 1993/2002, page 54