Tobacco Fraud and the Prorogation of April 1707

In the latest blog for the Georgian Lords, Dr Stuart Handley, senior research fellow in the Lords 1715-90 section, considers how an unexpected prorogation around the time of the Union was employed to attempt to secure the passage of much-needed legislation

Prorogations have been much in the news of late, but they are a common occurrence in parliamentary history. Parliament is prorogued at the end of a session thereby terminating all business; if it is adjourned the session continues.

In the eighteenth-century prorogations usually occurred in the spring or summer and lasted for several months before the next session began in the winter. However, prorogations could occur unexpectedly, and sometimes this has caused problems for all but the most eagle-eyed. For example, the standard reference work, The Handbook of British Chronology (3rd edition) missed the short prorogation of April 1707 (which to the unwary looks suspiciously like an Easter recess). Parliament was prorogued on 8 April, with a new session beginning on the 14th, which lasted until 24 April.

Monnington, Walter Thomas, 1902-1976; The Parliamentary Union of England and Scotland, 1707
(c) Parliamentary Art Collection

Why did this short session take place?

The Queen’s Speech on 8 April was extremely short and to the point, in explaining why a new session had been called:

I was willing to give you an opportunity of coming together again, to consider if anything can properly be done, to prevent the inconveniences, that may happen to our trade, by too great an interval between the rising of the Parliament and the first of May; and I need not add, that whatever is to be done of that kind, will require to be dispatched in a little time.

What did she mean?

The problem was the discovery of a loop-hole in the Act of Union, which was due to come into force on 1 May 1707. Specifically, the practice of some merchants in importing goods (such as tobacco), claiming a drawback of the duty and re-exporting them to Scotland, ready to bring back into England after 1 May, thereby under-cutting their competitors and depriving (some might say, defrauding) the government of tax revenue.

An attempt to close this loophole had foundered, although a bill “to prevent and obviate frauds relating to the customs, by exporting tobacco, plantation, and East India goods, in order to obtain a drawback, and afterwards to re-land them in England, without payment of duties; and for better securing the duties on goods brought from The East Indies; and for the better payment of customs for goods imported through Scotland by Englishmen and foreigners” was ordered to be drafted on 14 March 1707 and introduced into the House of Commons by William Lowndes, the secretary to the Treasury, on the 20th. It passed the Commons on 7 April received its first reading in the Lords the same day and was ordered to be committed on 8 April (the day of the prorogation).

In order to tackle the issue again, a fresh session was necessary, and on 14 April a petition was presented to the Commons seeking legislation to deal with this problem. The resulting bill for preventing “the mischiefs of a fraudulent practice, in obtaining drawbacks for goods carried from England to Scotland, in order to be brought back again; and in carrying goods by Englishmen or Foreigners from Foreign Parts into Scotland, in order to be brought into England without paying the English Duties; and for the better securing the Duties of Goods brought from The East Indies“, received its first reading on 16 April and was passed on the 19th. It received a first reading in the Lords on 21 April, but it never emerged from the Committee of the Whole House as on 23 April the judges declined to give an opinion on whether as “the Laws now stand, there be a sufficient Remedy to prevent the Inconveniences mentioned in the Clause of the Bill, which has been now read, in respect to Drawbacks?” On the 24th the bill was abandoned and Parliament again prorogued.

The chief promoter of the scheme to make money from this loophole in the Act of Union was Thomas Johnson, MP for Liverpool. However, it was his fellow Member for Liverpool, William Clayton, who was instrumental in alerting the ministry to the potential for illicit gains. Indeed, even before the articles of Union passed into law, Clayton, on 11 January 1707, had alerted the House of Commons that the revenue could suffer from such schemes, and on 4 February he even spoke against article four of the Union that provided for exceptions to be made to the removal of obstacles to free trade within the new kingdom.

With Parliament stymied in resolving the problem, the issue of the fraudulent activity was ultimately solved by executive action from Lord Treasurer Godolphin!

SNH

Georgian lords 2

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