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Free trade and protection

By the 1820s the old 'protectionist' attitudes embodied in the 17th century Navigation Laws came under increasing criticism in Parliament. There was growing feeling among merchants and manufacturers that British industry was sufficiently strong not to need protection against foreign competitors. The danger was that if Britain maintained high duties on imports, foreign countries would react in the same way against British goods.


In 1820 the merchants of Britain's largest trading cities - London, Manchester and Glasgow - petitioned the House of Commons for the abolition of all duties, in other words, for 'free trade'. It led in 1823 to the Reciprocity of Duties Act, a radical initiative which enabled Britain to sign mutual trading agreements with foreign powers on an individual basis.

Other outdated aspects of the Navigation Laws were also repealed. It was becoming widely accepted that the freeing of trade in this fashion would make goods cheaper to produce, and make them more competitive in the international market. This, in turn, would increase exports and prosperity.


Free trade did not suit all merchants and shipowners, however, and was not fully implemented until the 1840s and 1850s. In 1846, in an atmosphere of divided opinion, Parliament took the controversial step of repealing the regulations which had guarded British corn prices since the end of the Napoleonic Wars.

Three years later, the Navigation Laws, which had underpinned the whole policy of protection of British goods for two centuries, were also repealed. In his Budget of 1853, the Chancellor of the Exchequer, William Ewart Gladstone repealed or reduced duties on 250 articles. In his next Budget, in 1860, he removed nearly all remaining protectionist regulations.

Back to import duties

Britain remained officially committed to free trade into the 20th century. But the collapse of Britain's industrial primacy in the depression of the 1920s left little option but to abandon free trade altogether in a desperate attempt to regenerate the economy.

This major change in trading policy was signalled in the passage of the Import Duties Act in 1932. It placed a ten per cent tariff on imports, but gave preferential treatment to goods from within the Empire in return for concessions on British exports.

Related information

Historic Hansard

The House of Commons considers the Committee Stage of the Reciprocity of Duties Bill

Gladstone delivers his 1853 Budget

The House of Lords debates the Second Reading of the Import Duties Bill

Did you know?

The longest Budget speech ever delivered by a Chancellor of the Exchequer was that by W. E. Gladstone on 18 April 1853, lasting 4 hours and 45 minutes.