Question 2

How Did The Tudors Pay For Government?

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16^th century government did less than 21^st century governments
Tax was smaller proportion of GNP then (smaller public sector) ie. tiny bureaucracy/civil service etc
Biggest expense in peace time: king/queen and family, household, palaces, defence etc
Although law and order an obvious part of government; it was in the hands of unpaid officers
Clear exception: when armies had to be raised for war or to suppress disorder

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Tudor monarchs were expected to live off their own income ie crown lands, feudal dues, and customs duties
Their subjects were expected to pay ‘extraordinary’ revenue in emergencies (war/war scare/rebellions) – ordinary not enough
In form of direct taxes assessed on property and income
Even in peacetime Elizabeth needed such grants from Parliament
Government increasingly under-financed in her reign – revenue not keeping pace with inflation

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Extraordinary revenue (forced loans, benevolences and tax granted by Parliament) didn’t cover war costs
Henry VIII & Elizabeth had to use own resources and borrow heavily
This put a long-term burden on future income
Tudors made no permanent additions to Crown’s financial resources

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Monarchs didn’t/couldn’t access the financial resources of better off citizens
Incomes of rich heavily under-assessed when direct taxes granted – especially by end of 16^th century
Indirect tax lower than other of European states

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Local government finances unlike those of 21^st century
Regular rate payments in 16^th century limited to poor relief – charity funded most of it

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During 16^th century government ordinary income rose from £100,00 to £300,000
Prices quadrupled in same period
Henry VI dissipated the royal demesne
Yorkist kings set about restoring it
This was continued by Henry VII
Crown lands and customs revenue established as most important sources of revenue
Henry VII ensured that none of his feudal dues were overlooked ie wardship, marriage and relief
Received the ‘profits of justice’ (fines from law courts), fee farms from corporate towns in return for their privileges, and profits from royal mint
Traded on his own account
Accepted French pension
Exploited his right of purveyance

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Henry VII’s government not well-endowed
So made a surplus gradually by restrained spending especially avoiding wars
Early parliament gave extraordinary grant and there was a forced loan
These were mainly to pay for struggle against Simnel and Warbeck and to pay for expeditions to Scotland, Brittany & France
Alarmed by Cornish rebellion (tax 1497)
2^nd half of reign felt it better to ‘live of his own’

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Henry VII funds from subsidy, plundered Church and the Great Debasement
Main costs – wars and palace building
Subsidy introduced as a more productive tax alternative to the ‘fifteenth & tenth’ – a tax on movable property granted by parliament on special occasions
Royal attempts to tax individual incomes rarely allowed by parliament until 1513
‘Subsidy’ first granted to pay for Henry’s first French war
Subsidies granted in addition to ‘fifteenth & tenth’ covered only 1/3 of war’s costs
Since 1334 ‘15th & 10th’ had declined to fixed amounts for each locality
Subsidies didn’t represent the ability of the rich to pay

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Defence spending rose in 1530s due to break with Rome
1536 Cromwell’s solution – confiscate Church property
He set up Court of Augmentations to receive the proceeds
1536-1544 took average £112,000 p.a. from former monasteries
Wars of 1540s led to sale of much monastic lands – rapidly consumed
So Henry threw away chance to permanently double ordinary Crown income
1542-46 last war cost £2 million
Extraordinary income provided £1 million ie subsidies, forced loan & 2 benevolences
Balance acquired through ordinary revenue, loan from Antwerp exchange and sale of monastic land
Started the Great Debasement of coinage to make money for the war
Duke of Somerset continued these in reign of Edward VI
Duke of Northumberland’s peace policy led to measure of financial recovery and reduction of government debt

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Elizabeth I’s finances enhanced by new Book of Rates compiled at end of Mary’s reign
Increased customs duties and extended number of dutiable goods
Customs revenue £29,000 (1556-7) rose to £83,000 (1558-9)
The new reign didn’t continue such financial enterprise
Elizabeth and Lord Burghley were stabilisers not innovators
Even though prices rose, allowed vital sources of income to stagnate
Yields declined in real terms
Rents for Crown tenants not increased in line with inflation
Crown lands sold for quick cash so future revenue decreased
Elizabeth came to rely on subsidy to manage even in peacetime

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Value of subsidy fell
Shire tax assessors reluctant to correctly assess income of rich neighbours
Nobility assessed at less than under Henry VIII despite inflation
Thus need for grants of subsidies in war years after 1585
4 subsidies granted over as many years
These and forced loans and benevolences covered less than ½ cost of war
Other revenue – vacant sees, recusant fines and prize money
Other devices (unpopular) – ship money, purveyance and sale of monopolies
Government failed to properly tap its major income sources
Lack of means forced Elizabeth to strictly economise
In lieu of salaries she used various forms of patronage to reward her household and government employees: gifts of land, tax farms, wardships, monopolies
Patronage sometimes regarded as tantamount to revenue for the Crown ie it reduced salary bill
There was never enough to satisfy all aspirants
Gifts sometimes reduced Crown resources
In case of monopolies could have serious political repercussions

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Central government not funded by regular guaranteed income
Not protected against inflation
Ordinary and extraordinary income varied in amount
Henry VII only Tudor monarch who didn’t die in debt
Cause – wars which royal subjects reluctant to fund
Modest but frequent subsidies granted even for Elizabeth’s ‘popular’ war against Spain resented, especially to subjects who had to provide ships/ship money and ‘coat and conduct’ money for the army
In war and peace government financed according to how much money the people could be persuaded to surrender
Not all parliament grants were collected due to passive resistance
Tudors had few means of coercion – government feared resistance

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Tudors relied on unpaid officers to govern the regions Eg sheriffs, JPs and constables
This service by the ruling classes was one reason for not asking them to pay higher taxes - their support was indispensable
Monarchs happy for local affairs to be largely controlled by local men supervised by Privy Council

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Only rate was Poor Rate
Levied only in emergencies
Borough and parish authorities made levies from well-off for specific local purposes – militia, road/bridge repairs etc – no regular funding
Tudor ‘paternalism’ – a parental interest in subjects’ well-being was derived from concern for law and order

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