British Empire policy still in effect in the UK

Hunter Harris, a researcher at the University of Oxford, explains how three imperial policies continue to affect life today

The revelation that Chancellor Rishi Sunak’s wife, Akshata Murty claimed non-dom status in the UK for years has drawn renewed attention to an imperialist policy that still holds true today. Non-doms can live in the UK, but are considered by the tax authorities to be ‘non-domiciled’ in the country and therefore pay no UK tax on their income earned elsewhere.

The backlash to Murty’s non-dom status highlighted that the chancellor’s family benefited from tax loopholes as he raised taxes on the rest of the country. Some articles pointed out the irony that Murty, an Indian citizen, was taking advantage of the rules originally put in place to protect the money the British imperialists earned in India. Non-dom status is one of many policies and provisions that can be traced back to the British Empire, not just in India.

At the end of the 18th century, Britain’s “sugar colonies” were still its most profitable imperial possessions. The income tax of 1799 – the first such tax in Britain – exempted non-resident British subjects from paying tax on income derived from outside Britain. Thousands of British men and women owned agricultural estates (or parts thereof) in the colonies, where enslaved men and women worked to produce sugar, molasses, rum, indigo, coffee and cotton. The favorable tax treatment that these people received testifies to the power of colonial lobbies in policy-making at the time.

The act is non-dom exception would have encompassed absentee plantation owners who might claim their stay in Britain was just a sojourn, as well as all the thousands of British subjects abroad in the West Indies and South Asia. This provided the plantation owners with the cash they needed to keep the wheels of the imperial economy turning and to supply the goods that would pay customs and excise duties to keep the government afloat.

Today, a new generation of international elites are using these relics of empire as non-dom status for their own gain. The difference is that today people from all over the world can take advantage of the UK’s favorable tax system, whereas in the past, Britons went out into the world to make their fortunes.

Free ports and free trade

Other 18th century imperial policies are also experiencing a resurgence. The current plan to create eight free ports in england resurrects a strategy deployed by the British government in 1766. Now that the UK has left the EU, it has the ability to change its trade policies. The free ports plan will reduce taxes, customs duties and other regulations in a defined geographical area, called a special economic zone, around a port. The government hopes that the set of favorable policies in a free port will stimulate job growth and economic activity.

In the 18th century, the government aimed to achieve similar goals by relaxing trade restrictions. Then it was the mercantilist system established by the Navigation acts this most restricted trade. These laws confined most British trade to British ships, imposed duties on foreign goods, and prohibited British colonies from trading with other European powers and their colonies. New England merchants, for example, could not legally sell food and timber to the French and Spanish colonies in the West Indies as they could to the British colonies.

The Free Port Act of 1766 marked a significant break in this restrictive trading system. He opened four Jamaican ports and two in Dominica to foreign traders, partially abrogating the mercantilist policies that had organized British trade for a century. Trade between the British and Spanish colonies then exploded. Exports African captives and British textiles from Jamaican ports to Spanish American ports made up much of this expanded trade.

Any port in a storm

Meanwhile, some longstanding policies have been consigned to history, and will likely never return, but their effects continue to be felt. The 1703 Treaty of Methuen between England and Portugal is an example. As part of a diplomatic alliance forged during the War of the Spanish Succession, Portuguese wines enjoyed favorable customs treatment in England. The treaty helped solidify the famous wool for the wine trade, which the economist David Ricardo used to illustrate the power of comparative advantage.

The British taste for Port and Madeira the wines owed much to the price advantage that Portuguese producers held over their rivals. Additionally, traders from Porto and Madeira – many of whom were British – adjusted their products to suit the tastes of their customers, showing a high level of entrepreneurship and innovation. The Treaty of Methuen may be long gone and dry wines more popular than fortified wines, but a glass of port at Christmas continues to be a British tradition.

global britain

When you look at the history of Britain, the footprints of empire are unmistakable. In the past, British men and women could make money all over the world behind protectionist walls. Today, the UK is courting foreign opportunities through liberal regulatory and tax policies.

Post-Brexit, the UK is now seeking to redefine its international position with its slogan ‘Global Britain’. We would do well to remember how long Britain’s prosperity has been linked to the rest of the world – and what ‘global Britain’ meant for those who were subject to British imperialism.

Hunter Harrispostdoctoral researcher at the City of London and the history of slavery, University of Oxford.

This article is republished from The conversation under Creative Commons license. Read it original article.

Edward K. Thompson