Commutation Act 1784

The Commutation Act of 1784 was a statute passed by the British Parliament under William Pitt the Younger, who became Prime Minister in 1783. On the advice of the major London tea dealers, Pitt introduced the Act to reduce the tea tax from the previous 119% to 12½%. Consequently, tea smuggling almost disappeared in a very short time. On the other hand, the Act aimed to establish the absolute monopoly of the East India Company in the international trade of tea.

Historical Background

Catherine of Braganza, as a tea addict, brought tea-drinking culture to the English court in the mid-17th century. But the high tax restricted tea consumption to the wealthy. At the end of the 17th century, the retail price of tea was about ￡1 per lb. At that time, the highest weekly income of a skilled craftsman was only ￡1, and that of the average labourer only about 40p. The pursuit of tea by the British was phenomenal in the 18th century.