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3 - ‘This hideous war memorial’: debt and taxation, 1918–1925

Published online by Cambridge University Press:  23 December 2009

Martin Daunton
Affiliation:
University of Cambridge
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Summary

… debt and taxation lie like a vast wet blanket across the whole process of creating new wealth by new enterprise.

Winston Churchill to Otto Niemeyer, 20 May 1927, in M. Gilbert, Winston S. Churchill, Volume V, Companion Part I, Documents: The Exchequer Years, 1922–29 (London, 1980), p. 997

… one of the great constructive tasks in finance … was to wipe off this burden of the War Debt, to abolish this hideous war memorial of capitalist finance and financial jugglery.

Hugh Dalton, Labour Party: Report of the 27th Annual Conference, 1927 (London, 1927), p. 246

Debt and taxation were at the heart of postwar politics, placing considerable strain on the fiscal constitution. One of the most pressing political issues after the First World War – as after the Napoleonic wars – was how to deal with the costs of servicing and repaying the immense burden of debt without alienating taxpayers and threatening the legitimacy of the state (see table 3.1). At the end of the Napoleonic wars, taxpayers were alienated and the legitimacy of the state was threatened. These problems were overcome in the mid-Victorian period, and by the late nineteenth century, the national debt was transformed into a symbol of British financial probity, a guarantee of British liberty by allowing the government to obtain large sums of money at short notice in order to defend the country from danger.

Type
Chapter
Information
Just Taxes
The Politics of Taxation in Britain, 1914–1979
, pp. 60 - 102
Publisher: Cambridge University Press
Print publication year: 2002

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