The Dreadful Monster and Its Poor Relations: Taxing, Spending and the United Kingdom, 1707-2021 
by Julian Hoppit.
Allen Lane, 324 pp., £25, May, 978 0 241 43442 0
Show More
Show More

‘You  were so generous, you British,’ Hans-Dietrich Genscher, West Germany’s perpetual foreign minister in the 1980s, once remarked: ‘You gave us a decentralised federal structure and a proportional system of election so that never again could we concentrate power at the centre, but you took neither of these for yourselves.’ Canadians and Australians could say much the same: the entrenched powers of their provinces and states remain the lynchpins of the remarkably successful federal systems bequeathed by their former colonial masters (the same is true, to a lesser extent, of the more centralised Indian constitution). But in the UK itself? Scarcely a sniff. Since Winston Churchill toyed with the idea of reviving the Anglo-Saxon heptarchy in 1913, federalism (and PR too, for that matter) has remained a fad for pointyheads. Churchill suggested that parts of England, as well as Scotland, Ireland and Wales, could have their own separate legislatures and parliamentary institutions, ‘in the same way as the great and prosperous states of the American Union and the great kingdoms and principalities and states of the German Empire’. The idea didn’t take off then, and for all the hopeful pamphlets that still patter out of the think tanks, it isn’t taking off now.

Recently, we have had a couple of referendums to prove the point: one in 2011 on the Alternative Vote, demanded by the Lib Dems as a condition of coalition with the Tories and lost by 68 to 32 per cent; and the vote on the North-East England Assembly in 2004 which was lost by 78 to 22 per cent, a thumping result which can only be partly explained by the ingenious campaigning of Dominic Cummings for the No camp. As for ‘upward devolution’ – the sharing of powers at international level – see Brexit, passim. The whole issue simply can’t get popular traction. Why not?

The answer provided by one strong, perhaps dominant, tradition in English historiography is that monarchy, single rule, is a remarkably effective system, the secret of England’s survival and, for many centuries, the driving force behind the expansion of its power. Hence monarchy’s enduring popularity. In his quirky late essay The English (1992), G.R. Elton asserted that England’s remarkable independence ‘sprang surprisingly enough from the strength and weight of the monarchy. Kings of England commanded a range of power and control over all subjects which outdistanced supposedly greater monarchs on the Continent.’ This power consisted, above all, in the capacity to collect taxes. There were popular eruptions and, of course, exceptions (smuggling was one nagging drain on revenue), but between the poll tax riots of 1381 and the poll tax riots of 1990, what’s remarkable is the docility, by and large, with which the English paid their taxes, even when they reached monstrous levels to finance the Napoleonic Wars and the world wars of the 20th century.

Constitutional writers like Bagehot and Dicey agree with historians like Elton and J.C.D. Clark that, after each convulsion – the Civil War, the Glorious Revolution, the Great Reform Bill, universal suffrage – the essential supremacy of the queen-in-Parliament (‘absolute omnipotence’, in Dicey’s phrase) re-emerged virtually unchanged. In this version of history, Parliament itself is reduced to a serviceable appendage for securing popular assent. (Elton provocatively highlighted the successes of Charles I’s personal rule during the eleven years when he no longer bothered with ‘that tiresome body’, as Elton only half-ironically called it.) It is integral to this absolutism that there should be no separation of powers – ‘one of the worst and one of the most influential ideas around’, in the opinion of David Starkey in 2019. Hobbes describes it in Leviathan as ‘a doctrine, plainly, and directly against the essence of a Common-wealth … That the sovereign power may be divided. For what is it to divide the Power of a Common-wealth but to Dissolve it? For Powers divided mutually destroy each other.’ In what Hobbes called ‘a mixt monarchy’, where the power of levying money depended on a general assembly, the power of conduct and command on one man, and the power to make laws on yet another body, the Commonwealth would be hopelessly endangered.

It is this curious, gristly interaction between taxation and nationhood that Julian Hoppit investigates. He follows the history of the Unions of 1707 and 1801 and their cantankerous receptions in Scotland and Ireland, and then the regrowth of nationalisms – English as well as Scottish, Welsh and Irish – in our own time, always concentrating on the financial bones of contention, citing Tocqueville’s maxim that ‘there is almost no issue of public interest which does not derive from taxes or end up with taxes.’ Yet Hoppit reminds us that ‘historians have paid little attention to this facet of the Union state’, despite it having had such ‘an unmatched immediacy and importance in people’s lives’. In this crisp, thoughtful and occasionally sardonic study, Hoppit follows the money, distinguishing himself from those who have concentrated on issues of national identity, political rights and, not least, religious differences.

The British-Irish Union of 1801, for example, was notoriously undermined by George III’s stubborn refusal to countenance the removal of political restrictions on Catholics – arguably the single most disastrous royal intervention since the 1680s – even though Pitt and Castlereagh were convinced that greater toleration was essential to make the Union work. This open sore was aggravated by the unequal representation of the Irish in the new UK House of Commons: they had one MP per 52,000 inhabitants, whereas in England and Wales the figure was one per 17,000. The Scots did little better; they had one MP for every 36,000. Thus the already overwhelming weight of the English was further exaggerated.

But it was the new arrangements for taxation that caused the bitterest rancour. The ‘Dreadful Monster’ of Hoppit’s title is the Scots exciseman as caricatured in a piece of Edinburgh doggerel from around 1707. Before the Union, the Scots had been lightly taxed; for every pound collected in Scotland by a rackety bunch of private operators, £36 was collected in England and Wales by the most efficient tax collectors in Europe. Some of these intensely able bureaucrats were now sent north to mastermind the new boards of Customs and Excise (although most of the actual collectors remained Scottish). The squeals were predictable. Forget the skirl of the pipes in 1715 and 1745. The real squeeze was in the pocket. Hoppit quotes a feisty diatribe by Robert Freebairn, a prominent Jacobite in 1715 (although he was the queen’s printer), who had to flee to the Continent after the rising was put down:

Before the Union we have no Taxes but what were laid on by our own Parliaments, and those very easie, and spent within our own Country. Now we have not only the Cess Or Land Tax, the Customs conform to the English book of Rates, near the Triple of what we formerly pay’d, and Excise, both most rigorously exacted by a Parcel of Strangers sent down upon us from England; But also the Malt-Tax, the Salt-Tax, the Leather-Tax, the Window-Tax, the taxes upon Candles, Soap, Stearch … And which is the heaviest Burden of all, we are for ever deprived of our own Parliament and Officers of State, being reduced in a Manner to a Province, and must every year send up great Sums of Money to London.

This was not at all the way the situation was perceived in England. The queen’s first minister, Robert Harley, was deluged with complaints about how little cash actually came south. Indeed, many of the Scottish complaints were rhetorical flourishes, because Scotland was exempt from several of the more swingeing taxes – on salt, coal, malt and windows, for example. Similar mutterings, coming from both directions, could be heard about the terms of the Union with Ireland a century later, especially as relating to the formula which required the Irish to contribute two-seventeenths of imperial expenditure – a figure plumped on by Castlereagh without overmuch thought. At least the Union with Scotland provided for full free trade, although even this had been greeted with foreboding by Scots who were less confident of their ability to compete. With Ireland, there was no currency union, and quite a few trade barriers stayed in place (which would have hugely distressed Burke had he lived to see it). The two-seventeenths formula never satisfied either side, any more than the Barnett formula has satisfied either side in our own time.

Eye-catching infrastructure projects for Scotland and Ireland – roads, bridges, canals, and, all too often, barracks – were devised to relieve distress and create employment, but these swiftly got a bad name for extravagance and futility. Most notorious was the Caledonian Canal (announced in 1803 and completed in 1822), which was held up during the Irish Famine as an example of what not to do. A ‘Scotch job’ became the equivalent of ‘boondoggle’, and they were greeted with as much scorn as Boris Johnson’s visions of airports and tunnels in improbable places are today. But these were at least well-meaning gestures. By contrast, England’s indifference to the miseries of the Famine offers the most conspicuous and shameful proof of how little the Union touched English hearts, and of how little purchase Irish MPs had at Westminster until the last decades of the 19th century, when they enjoyed the balance of power.

In all these manoeuvres, there was an incurable clumsiness about the English political establishment – the awkwardness of an elephant dancing. You seldom come across any rumination on how a political union might be made to work, especially a union between two or three such unequal partners – nothing approaching, say, the sophistication of the Federalist Papers. There are of course the American speeches of Edmund Burke, and they still read wonderfully. But they were heard by men trained to understand nothing but the absolute sovereignty of the king-in-Parliament, and for whom ideas of federation or devolution, let alone self-government, were delusory or actively pernicious.

Two centuries later, the Kilbrandon Report of 1973 shied away from any sort of federal solution, on the grounds that it worked poorly elsewhere and defied ‘common sense’ – phrasing often deployed by those who don’t care to go into a question very deeply. The report had been commissioned by Harold Wilson in 1969, to head off the Scottish nationalists. At the time, Edward Heath was already proposing a Scottish Assembly, but the arrival of Margaret Thatcher on the scene decisively quenched the feeble flicker of devolutionary spirit in the Tory Party. In the event, both Wilson and Thatcher agreed with Kilbrandon, that – in Wilson’s words – a federal Britain would be ‘artificial, arbitrary and highly legalistic’. When James Callaghan’s Labour government did finally propose devolved government in Scotland and Wales, the voters seemed equally tepid; in Scotland only 52 per cent voted Yes in 1979, short of the required 40 per cent of the electorate; in Wales only 20 per cent voted in favour. Not until the Blair government in 1997 were effective majorities secured, though in Wales only by a whisker.

By contrast, the UK debates on how best and how much to tax have often been thoughtful and of enduring value. There are Adam Smith’s four criteria for a good tax: ability to pay, certainty of impact, convenience and cheapness of collection. The 18th century was well aware of what we now call the Laffer curve. Jonathan Swift pointed out ‘a Secret, which I learned many years ago from the Commissioners of the Customs in London. They said, when any Commodity appeared to be taxed above a moderate rate, the Consequence was to lessen that Branch of the Revenue by one half.’ Pitt and Jefferson came to a similar conclusion, that setting tax rates too high actually reduced total revenue. The subsequent growth of income tax owed less to advancing socialist tendencies than to the remorseless and not easily reversed demands of total war.

The Irish revolution after the Great War was a humiliation for the UK: in Hoppit’s words, ‘here, as with American independence in 1776, was a catastrophic failure of the Westminster constitution and Westminster politics.’ The financial terms of the break-up were an unending source of friction and caused a considerable net cost to the UK Exchequer in the Irish debts that were eventually written off.

Today,​ although the devolved governments and assemblies are too firmly entrenched in public opinion to be undone, the political establishment in London still finds it hard to acknowledge their existence as an enduring constitutional fact. The Tories in particular yearn to yank back any powers that come loose. The prime minister refuses to treat the first ministers with normal civility, and seeks every excuse when venturing north or west not to meet with them. Throughout the Brexit negotiations, the refusal of the Brexiteers to acknowledge the inherent conflict between their stated desire to maintain the unity of the UK and the need to avoid a hard border on the island of Ireland was a national embarrassment. The only possible outcome was a quasi-border in the Irish Sea. Johnson denied that any such thing was contemplated, and then, as soon as the Northern Ireland Protocol prescribed exactly that, started a marathon bluster about renegotiating the damn thing. The English don’t normally have much sympathy for the Democratic Unionists, but it is impossible to deny that they have been vilely treated – courted and bribed when they held the balance of power after Theresa May’s calamitous election in 2017, then abruptly abandoned when they were no longer of any use.

In all this one cannot help detecting in the Tories not simply a brutal cynicism but a solipsistic incapacity to imagine the world outside their own milieu as having any independent existence. This insensitivity was first visible, I think, under the Thatcher regime, which swept away any local structures not to its taste, whether antique like the domestic rates or newfangled like the GLC and the Metropolitan County Councils. In their place came the poll tax, a wheeze disregarded or instantly dismissed by all previous inquiries into the rating system. It was not simply that it was manifestly unjust, the plutocrat and the prole paying the same charge regardless of differences of income or in the demands they made on local services. It was also soon apparent that the tax could be introduced at all only if levied at a very low rate, thus putting an end to any substantial locally raised revenue, and confirming Britain’s place as the most hideously centralised nation in Europe.

The new fad for ‘levelling up’ doesn’t show any weakening of this Tory mindset. On the contrary, it seems that the levelling is to be achieved almost exclusively by the brilliance and munificence of central government. Local regions have to bid for grants, like burgesses supplicating a Tudor monarch. By contrast, after full devolution of income tax and business rates, the proportion of revenue raised in Scotland and Wales has shot up, to 40 per cent in Scotland and 30 per cent in Wales. Meanwhile, in England the council tax, even after the steep rises now impending, will raise nowhere near enough to undo the damage done by George Osborne’s cuts to the central grant, to be continued by Rishi Sunak. Notoriously, too, the more red-blooded Tories are prepared to let declining cities and regions go on declining. In 1981, Hoppit reminds us, the Thatcher government privately considered allowing Liverpool to wither, rather than go on spending public money ‘to pump water uphill’, as Geoffrey Howe put it. The Tories were rescued from this noxious project by the bounce and vision of Michael Heseltine, but similar attitudes continue to lurk in the shadows. Almost forgotten now, though not by Hoppit, is the Industrial Transference Board of 1928, which provided grants for workers, especially coal miners, to move out of depressed areas, with political pressure applied to employers elsewhere to take them on. Between 1931 and 1938, 141,000 workers were subjected to this ‘internal transportation’, mostly from North-East England and South Wales. After the war, the emphasis was reversed, with the work being taken to the workers wherever possible – the DVLA to Swansea, National Savings to Glasgow and so on; the New Towns also offered a humane alternative, in the sense that they were usually built within a bus ride of the old slums and so didn’t entail such a wrench.

Hoppit is a fair-minded observer. He does as much as he can to underline the longevity and the incidental successes. On the bright side, the nationalist movements on the mainland have remained peaceful. The referendums on devolution have mostly been conducted with a semblance of civility. And beneath the political name-calling, the devolved governments work tolerably well and co-operate with the UK government where they have to. But Hoppit does not dodge the unhappy underlying condition of this unbalanced collection of kingdoms, in which old resentments fester on the periphery and the English nationalist core, according to the polls, would willingly be shot of the Celts. It is unrealistic in the extreme to expect a sudden flowering of federal spirit any time soon, or to expect Hoppit’s excellent essay to prompt serious attention to the architecture of the British constitution. The actual break-up of the UK may well be staved off for the foreseeable future by makeshift measures. The best that can probably be hoped for is that power in England – real financial power – is gradually prised from the clenched fist of the central state and securely lodged in local and regional authorities, as it has been in Scotland and Wales. And that in Europe, the next British government – or even this one – inches towards acceptance of shared norms and agreed methods of settling disputes. In other words, that the UK – or just England – grows up and moves on from the infantile egotism that is emptying the supermarket shelves and condemning the soft fruit to rot on the plant.

Send Letters To:

The Editor
London Review of Books,
28 Little Russell Street
London, WC1A 2HN

Please include name, address, and a telephone number.

Read anywhere with the London Review of Books app, available now from the App Store for Apple devices, Google Play for Android devices and Amazon for your Kindle Fire.

Sign up to our newsletter

For highlights from the latest issue, our archive and the blog, as well as news, events and exclusive promotions.

Newsletter Preferences