The economic policies of Lord Liverpool

By Professor Kevin Dowd, August 2022

Professor Kevin Dowd reflects on the accomplishments of a UK prime minister faced with troubling times. 

Bear’s Lair journalist Martin Hutchinson and I have a piece by this title in the valedictory issue of the Cato Journal, published by the Cato Institute in Washington DC last autumn.  

Robert Banks Jenkinson, 2nd Earl of Liverpool (1770–1828) was a (high) Tory UK prime minister over the period 1812–1827. He was prime minister over a turbulent period and had to deal with problems posed by revolutionaries, manage the American and Napoleonic Wars and the disruption that followed the end of those wars. This included the problems posed by Luddite groups opposed to mechanisation, and the 1825 financial crisis, the worst in over a century and which was only to be matched by the recent Global Financial Crisis.    

His achievements were remarkable: he designed the financial attrition strategy that defeated Napoleon; led the UK through the turbulent take-off stage of the industrial revolution; inherited a daunting debt/GDP ratio of about 250% and implemented the austerity measures needed to get on the path to later Victorian low debt levels; reformed the currency; abolished income tax; promoted both the Corn Laws and free trade; pushed through the return to the gold standard and legislation establishing the first Savings Banks; successfully managed the 1825 financial crisis; and pushed through subsequent reforms that put the UK banking system onto a stable trajectory that lasted into the late 20th century.  

His administration set up the conditions for the century of peace and prosperity that followed. Economically, his record is unmatched.  

For an administration that’s long been criticised (with some justification: the press was still muzzled, the Bloody Code still on the statute books, and Liverpool opposed Catholic Emancipation) as reactionary, some of its measures were surprisingly progressive. A striking example was the first step in regulating child labour: the Cotton Factories Bill, passed in 1819. This legislation forbade the employment of children younger than 9 in cotton factories and limited their working day to 12 hours until the age of 16. Liverpool’s speech introducing the Second Reading was brief and eloquent. “I highly approve of the Bill and consider it so much a principle of the common law of the land that children should not be overworked, that I desire some words to be introduced into the bill to declare this fact,” he began. “I contend that the children to whom this bill applies are not free agents, . . . nor is there any doubt that such excessive labour is highly injurious to them.” The following day, he reinforced this view: “Is it possible to say that children compelled to labour more than fifteen hours a day are not overworked? What evidence could [negate] that proposition? If all the medical staff of Manchester were brought before the bar to prove it, I would not believe them.”  

For more on Liverpool, see Martin’s biography Britain’s Greatest Prime Minister: An Examination of Gold Standard Government and my review of it. Martin’s book also includes his own highly unconventional assessment of all the other UK prime ministers from Walpole down, and some of them get an entertaining drubbing. To answer the obvious next question, I tried and tried to get Martin to name the worst UK prime minister, but there was an awful lot of competition for that slot. 

More information on the book and Lord Liverpool can be found at www.lordliverpool.com

More information on Professor Dowd's research interests.