Gladstone and Ireland: A Financial Approach

Ahead of next Tuesday’s Virtual IHR Parliaments, Politics and People seminar, we hear from Dr Douglas Kanter of Florida Atlantic University. On 7 December 2021, between 5.15 p.m. and 6.30 p.m., Douglas will be responding to your questions about his pre-circulated paper on ‘Gladstone and Ireland: A Financial Approach’. Details of how to join the discussion are available here, or by contacting seminar@histparl.ac.uk.

William Ewart Gladstone (1809-1898), four-time Prime Minister of the United Kingdom during the later Victorian era, is today perhaps best remembered as a financial reformer and advocate of Irish home rule. Historians have seldom sought to explore the relationship between these two political commitments, yet they were, in fact, closely related. 

William Ewart Gladstone, by William Walker & Sons, albumen carte-de-visite, 1862-1866, CC NPG

From the 1840s, Gladstone was a proponent of ‘sound’ finance: that combination of fiscal policies involving low taxation, minimal government expenditure, balanced budgets and free trade which he claimed to have learned from his ‘great teacher and master’, Sir Robert Peel.

As Chancellor of the Exchequer in the Aberdeen, Palmerston and Russell ministries (1852-55, 1859-66), Gladstone sought to extend ‘sound’ finance to Ireland. This involved eliminating Irish tax exemptions through the imposition of the British income tax and the augmentation of the spirit duty, approving tariff reforms that exposed Irish farmers to international competition on the British market, and working to constrain Irish civil government expenditure.

Large claims have been made for ‘sound’ finance in the British context where, historians maintain, Gladstone’s policies established a durable consensus on taxation and fostered widespread acceptance of the state as legitimate. But their reception in Ireland—an agrarian, sparsely populated and economically laggard region of the United Kingdom—was quite different.

In Ireland, conservatives and nationalists alike associated Gladstonian finance with over-taxation, chafed at the regressive structure of the Irish tax code, and expressed scepticism about the supposedly beneficent effects of free trade. Many Irish commentators came to advocate an active, managerial state in preference to the minimal state embraced by Gladstone, seeing increased public expenditure as the best hope for Irish economic development.

A nineteenth Century broadside ballad, The Irish Taxation, Early Printed Books, Trinity College Library, Dublin

As Liberal Prime Minister between 1868 and 1874, Gladstone was hostile to Irish demands for exceptional financial treatment. He associated equality of taxation with the rights of full citizenship, insisted that free trade benefitted both Irish consumers and Irish producers, and doubted the government’s ability to pump prime the Irish economy.

His policy preferences served as an unintentional stimulus to Irish nationalism, convincing politicians and opinion-makers that a reform of public finance tailored to Irish economic needs would only be possible if Ireland received self-government. Fiscal grievances, then, were near the heart of the home rule movement when it was launched in 1870.

During Gladstone’s second premiership (1880-85), ‘sound’ finance foundered on the exigencies of Irish economic crisis. A run of poor harvests, accompanied by collapsing commodity prices, resulted in severe hardship for Irish farmers, particularly in the west.

Distress stimulated rural discontent, which found an outlet in the Land War of 1879-82. Irish expenditure, which had been increasing since the 1860s, escalated rapidly, as Gladstone’s government responded to unrest by making money available for land improvement, land purchase, arrears of rent, seed, labourers’ dwellings, fisheries and emigration, while also enhancing the sums spent on policing. Attempts to offset this spending by augmenting Irish taxation failed, with the ministry’s proposal to raise the Irish spirit duty over the objections of Conservatives and home rulers contributing to the government’s resignation in 1885.  

For Gladstone, home rule offered an escape from the Irish fiscal vice. Here, as in other areas of his mature Irish policy, colonial parallels were important. As early as 1848 he had supported ‘responsible government’ in the colonies, in part, because it enabled the Treasury to shift costs to local legislatures. Though colonial precedents did not necessarily apply to Ireland, they came to seem increasingly relevant to the Prime Minister as Irish expenses mounted. As in the colonies, so in Ireland, self-government provided an opportunity to constrain the growth of the British state.

Gladstone introduces the first home rule bill to the House of Commons, 8 April 1886. ILN, 17 Apr. 1886

When Gladstone returned to the premiership and drew up his first home rule bill in 1886, the fiscal provisions of the measure were a major concern. Though some historians have argued that the legislation offered Ireland a financially generous settlement, this contention does not stand up to scrutiny.

Under the bill’s fiscal terms, the Irish legislature would have continued to contribute substantial sums to the Treasury. In the first three decades of home rule, it is certain that a self-governing Ireland would have contributed more to the Exchequer than Ireland under the Union. The British Parliament would have retained control of the rates of Irish customs and excise, ensuring the maintenance of free trade despite nationalist misgivings about laissez-faire.

The Irish government’s working budget would have been modest, inhibiting the ability of Irish politicians to develop an economically interventionist state. The home rule bill was thus designed to augment Ireland’s imperial contribution, limit Irish spending, and secure British-Irish free trade—in short, to safeguard ‘sound’ finance.

Though the fiscal details of the second home rule bill, introduced by Gladstone in 1893 during his fourth and final premiership, differed considerably from those of its predecessor, the intent was the same. This provoked nationalist objections and ensured that the financial scheme was admittedly provisional when the bill left the House of Commons in September, on its way to defeat by the Lords.

A financial approach to Gladstone’s Irish policy is important both for what it reveals about Gladstone, and for what it suggests about the nature of British-Irish relations in the nineteenth century. Gladstone’s engagement with Irish affairs has often been described in terms of dramatic disjuncture, variously attributed to a ‘conversion’ experience, political opportunism, anxieties about Irish political instability, or a growing sensitivity to Irish historical and cultural distinctiveness.

Yet the stubborn persistence of Gladstone’s commitment to ‘sound’ finance indicates that there were significant continuities in his attitude to Irish governance, which had a meaningful impact on policy decisions throughout much of his career. This assessment also reveals some of the material underpinnings of Irish hostility to the Union, as fiscal grievances were channelled into the home rule movement by nationalist politicians.

More positively, it may be noted by way of conclusion, Gladstone’s decision to extend the income tax to Ireland in 1853 modernised Irish finance, which was decades ahead of other early adopters of income taxation in Europe, North America and the Pacific. And while Victorian nationalists denounced ‘sound’ finance, their twentieth-century successors acted more pragmatically—as Gladstone had anticipated—when faced with the responsibilities of self-government.

After independence, Ireland’s first post-revolutionary government embraced ‘sound’ finance as an emblem of political maturity, and Gladstonian nostrums imbued Ireland’s Department of Finance into the 1950s. Therefore, despite the failure of the first and second home rule bills, Gladstone’s fiscal legacy gives him some claim to be considered an architect of the modern Irish state.   

DK

To find out more, Douglas’s full-length paper ‘Gladstone and Ireland: A Financial Approach’ is available here. Douglas will be taking questions about his research between 5.15 p.m. and 6.30 p.m. on Tuesday 7 December 2021.

To register for this virtual seminar, please follow this link and click on ‘Book now’. If you cannot attend this session but wish to submit a question to Douglas, please send it to seminar@histparl.ac.uk.


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