YEAR'S SURPLUS. (Hansard, 2 April 1912)

§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

The expenditure last year aggregated £178,545,000, and the revenue of the year came to £185,090,000. That leaves a balance of £6,545,000, which is, I believe, the largest realised surplus on record. The particulars will appear in the printed Paper which has been left at the Vote Office, and of which I perceive the majority of Members have already secured copies. I ventured to predict last year, when making my annual Budget Statement, that we were in for a sunny year. That has been 1056 realised not merely metaphorically but actually; but the prosperity of trade exceeded my most sanguine expectations. I budgetted on the assumption that it was going to be a year of good trade. All the taxes which are a test of good employment and prosperity have gone beyond the most hopeful expectations of my advisers. They have all done well in spite of the arresting hand of a great strike. Most of them have exceeded the Estimates. Three only have been disappointing. The first is sugar. Owing to the drought the sugar harvest failed and the price at a certain period of the year was more than double what it was at the beginning of the year. High prices always mean limited consumption, a truism worth repeating in a financial statement. It is proof of the great prosperity of the year that, in spite of the fact that prices were almost doubled, the consumption exceeded the consumption of the preceding year. But the estimate was not realised by £321,000 although the yield exceeded that of the two previous years. The same thing applies to tea. This estimate was not realised by the sum of £141,000, although the yield exceeded that of the previous year. There were two explanations of this. One, I am told, is that a good many tea estates have been converted into rubber plantations, and the rubber boom is partly responsible for the decrease in the production of tea in the East. The second explanation is the strike; that had a very considerable effect upon this and other items of revenue during the last month. That applies also to stamps. On the whole, I estimate that the loss to the Revenue up to 31st March directly attributable to the strike —I am referring to the miners' strike— amounts to £400,000. But taking all the other taxes which are generally regarded as a test of good or bad trade, they have done exceedingly well—spirits, beer, tobacco, the Petrol Tax, the Motor Tax, the Post Office, and the Income Tax. Under spirits and beer we have received £2,016,000 above the estimate.

§ Mr. LLOYD GEORGE

Quoting from memory, I think there was an increase of nearly £700,000 under beer; the rest would be spirits. I budgetted for a large increase in petrol and motor licence duty, but that estimate was exceeded by a sum of over 1057 £200,000 and the Income Tax Estimate was exceeded by £504,000. The Post Office was doing remarkably well up to the end of February. Then, entirely owing to the strike, there was a falling off, and we lost about £40,000 during the month of March; but, on the whole, the Budget Estimate has been realised. These results prove that the community as a whole and every class of the community shared in this prosperity. Not merely with the well-to-do but with the wage-earning class there was evidently a considerable margin for indulgencies, such as alcoholic liquors and petrol. Even the underspending, to a certain extent, is a proof of good trade, because the underspending in the Admiralty is partly due, though not entirely, to the fact that all the shipbuilding yards were so full up with private orders that there was a difficulty in finding rivetters and they could not turn any more men on. Therefore shipbuilding slowed down; they could not keep up with the programme, and this underspending is proof of the excellent trade which the country enjoyed last year. The surplus, therefore, is a by-product of great national prosperity. The actual amount of the surplus was, as I have said, £6,545,000, and but for the strike it would have been £7,000,000.