§ What is the income of this country? The income, of this country in time of peace is two thousand four hundred millions, and now it is probably more. Why? We are spending hundreds of millions of borrowed money here. Most of it is spent in this country. Men are working time and overtime; their wages are higher and the profits in certain trades are certainly considerably higher. The result is that, the income of this country at the present moment is probably higher than it is in time of peace. Some are making probably huge profits, and others have raised their income far beyond their ordinary standard. I have no doubt, that it would be perfectly just when we come to consider, if we ever have to do it, what taxes you have to raise or what contributions you have to levy in order to enable you to get through a war lasting two or three years; then it 1017 would be perfectly legitimate to resort to those who make exceptional incomes out of the War. But even that will not carry us through successfully. The numbers are too limited. The community as a whole will have to assist.
§ The State, in carrying through a great War like this, must primarily depend on the savings of the community. What are the ordinary savings of this country? In time of peace the ordinary savings are about from three hundred to four hundred millions per annum. The income is higher, and I do not think it is too much to say that in every country in Europe the standard of living is considerably lower—I am not sure to what extent that is true of this country—and the savings of this country during the period of the War when the income is higher ought to be doubled. What does that mean? If the standard of living is lowered, then, undoubtedly, that increases the national income and the savings ought to be considerably increased. What does that mean, apart altogether from any question of taxation, and the question of taxation is one which I do not raise at this moment. The extent to which you should tax is a question we shall have to be confronted with later on, certainly if the War proceeds. In the Napoleonic Wars our ancestors had to face it, and they faced it like men. They began the war with taxes which were equivalent to one-seventh of the national income. They proceeded to one-sixth as the war went on, and they went on to one-fifth, and as the war continued they taxed themselves to the extent of one-fourth, and they ended by taxing themselves to the extent of two-sevenths of their income. That is what our ancestors did to meet the great Continental war in which we were engaged.
§ What I want to point out now is this: I am not on the problem of taxation, but I am on this problem, that if the savings of the nation have increased there is a fund available either to release existing securities or to invest in any national loan. It is practially the same thing. You may have one man who would say, I am not going to invest in that loan, but I will buy some other security." That releases the money which the other man has invested in that security. Thus it is vital—and this is really what I want to impress upon the Committee from the point of view of the successful conduct of the War—if we are 1018 to take our part not merely in financing our own share but in helping our Allies to finance theirs, that the national savings should be increased. I should not be doing my duty as Chancellor of the Exchequer if I did not call attention to this problem at this stage. At the present moment I shall confine myself, as far as the problem to-day is concerned, merely to inviting the House of Commons to renew the Income Tax upon its present scale, with a modification which I shall make. I have already indicated certain other alterations in the taxes and in the duties to which I propose to invite the House of Commons to assent. But for the moment, I simply ask the Committee to pass the Resolution renewing the Income Tax at its old scale, and simply give this warning to the House, that if the War is prolonged it will be the duty, in my judgment, of the House of Commons to consider what fur the contribution, and in what other form, the community should make, to enable us to conduct through a war—a war the success of which is vital to the very existence of this Empire.