The total of these duties—that is, Probate, Account, Estate, Legacy, and Succession Duties—was in 1893–94, before the alteration, £7,578,000. These duties, as recast by the Finance Act of last year, were estimated to yield in 1894–95 £8,800,000, an increase of £1,222,000 on the receipt of 1893–94, of which £1,000,000 was attributed to the operation of the new Estate Duty during the present year. The particulars of the estimate of Death Duties for 1894–95, before the passing of the Finance Act, were composed as follows (the House will observe that I gave the sum of £1,222,000; I am now going to explain that the whole of that sum was not attributable to the Finance Act):—Legacy Duty, £2,850,000, an increase on 1893–94 of £114,000; Succession Duty, £1,350,000, or £103,000 above the previous year; and Probate and Estate Duty, £3,600,000, an increase of £5,000. It will be found that these figures give an increase of £222,000. Under the old law we estimated there would be an increase of £5,000 apart from the operation of the Finance Act. It is a sum we estimated would be realised had there been no change. This was on the old scale of duties. In estimating the probable yield of the new duties, I said in my Budget speech last year:—
The experience of the Succession Duty of 1853, which so largely disappointed the expectations formed of it, and which has not yet realised three-fourths of what was expected 40 years ago, teaches a lesson of caution and diffidence in predicting the results of so great a change, in which we have so little experience to guide us.''
And I added:—
Taking all things into consideration. I cannot count for 1894–95 upon more than a net gain of £1,000,000 from the substitution of the new estate duty for the duties which it replaces.
§ I will now state what has been the actual effect of these duties compared 302 with the estimate formed of them. The Legacy Duty was not touched by the Finance Act of 1894. There was no alteration made. The yield has been £2,809,000, or £41,000 less than the estimate, but £73,000 more than the produce of the preceding year. This duty has not been in any way affected by the Finance Act. The difference from the estimate is an accidental fluctuation, such as occurs from time to time in the ordinary state of things. The new Probate and Estate Duty, with the Succession Duty, were estimated together to yield an additional £1,000,000 upon the new system. They have, in fact, produced together £973,000, or £32,000 less than the estimate. The figures will stand as follows:—The estimate on the old basis was £7,800,000; on the new basis, £8,800,000; the actual yield has been £8,727,000, which is £73,000 below the estimate, of which only £32,000 is upon the duties affected by the new system. The balance is due to a fall on Legacy Duty (not affected by the Finance Act), which is £41,000 below the estimate, but £73,000 in excess of the preceding year. The Succession Duty, which was estimated at £50,000 less than the yield of 1893–94, has, in fact, lost nothing at all. The Probate and Estate Duty has yielded £82,000 less than the estimate. So that the estimated increase of £1,000,000 has been realised within the small fraction of £32,000. Considering the doubts that were expressed as to the result of calculations which necessarily involved so many uncertain elements, which led some people to declare the estimate much too high, and others to pronounce it much too low, this close approximation to the calculated result must be regarded as a marvellous achievement. As so small a share of credit belongs to myself, I may be permitted to claim for it the designation of a miracle of financial calculation. To those who do not understand the difficulties of the subject, it seems as difficult of comprehension as the prediction of the moment of an eclipse, or the periodicity of a comet. How it was accomplished the ordinary mind finds it hard to understand. It gives one some assurance, as, indeed, all these estimates of expenditure and revenue do, of the perfection to which the financial system 303 of the country has been brought by its permanent officials.