§ There is, however, one other tax to which I invite the approval of the House. It is impossible, as the House will see in a minute, to give any accurate estimate 718 of it, arid, though I rely upon receiving considerable Revenue from it, I wish ii to be regarded as something extra, over and above the calculations which I have made. It is what is called a Luxury Tax. Last year I desired to introduce such a tax. I had it examined as closely as I could, and I came to the conclusion—I was advised—that the difficulties were so great that it was not worth proceeding with. I am not sure whether that was a wise decision, but at all events there has been an additional year of war, there have been an additional year of expenditure, and there is greater need than there has ever been before. There is also, the fact that the tax has actually been imposed in France. In January I saw M. Klotz, the French Financial Minister, and discussed the tax with him at length. I gained from him all the particulars which he had available, and carefully studied them. The tax in France was not put on at once. The Chamber sanctioned it and left the details to be arranged by a Commission. It was subsequently put on, and it came into operation at the beginning of this month. just before it came into operation I sent a representative of the Treasury to France to study on the spot the methods by which they proposed to collect the tax. I have come to the conclusion that the right way is to adopt, as the guiding principle, the course which has been taken in France. Their tax is composed of three varieties. There is, first of all, a tax on articles which are essentially articles of luxury, apart altogether from price, such, for instance, as jewellery. There is, in addition, a tax on all articles, or on a great variety of articles which, in the opinion of the French Government and the French Chamber, become articles of luxury above a certain price, and should, therefore, be subject to the tax. There is, in addition, a tax on luxury establishments, hotels, and restaurants, which is also included in the Luxury Tax. It would have been very easy to have made a list of the first class, and to have denned a certain number of articles, and to have said, "We will have a duty on them," but the amount of revenue which in any case could have been got from them would have been small, and it would not have had the effect which such a tax is desired to secure. I have put it on mainly for revenue, but I do not think that there is anyone in the House or out of it who will doubt that at a time like this if it can be arranged, it is a good thing in 719 the national interest to make it more difficult, apart from revenue, for people to spend money on articles of pure luxury. I think that view will be taken. If the tax were only on particular articles, the result would be to a large extent that those articles would be avoided, and the extravagant expenditure would continue on other articles which were not subject to the tax.
§ I propose, therefore, to adopt, as I have said, the general principle adopted by the French Government. In arranging schedules, they appointed a Commission, consisting of Government officials and representatives of traders. I am going, if the House sanctions it, to adopt a different principle. I am going to ask the House of Commons to set up a Select Committee to prepare these schedules. Of course, they will have either to co-opt traders, or, in their discretion; take advice from them as they think best. I have been encouraged to take this course, because of the advantage which the Government have already received—and I hope it will be greater—from the Select Committee set up on expenditure; last year. It may be said that, as a matter of fact, I am leaving the most difficult part of the Budget to be dealt with by the House of Commons. That is true, but I do it partly for this reason, that this kind of tax is novel and it may be found very objectionable by those through whom it will be collected, and I desire, if possible, to get the additional sanction which will be given to the proposal by a Committee of the House of Commons.
§ With regard to the amount of the tax, the French rate of the tax is 10 per cent., but they have in addition a tax on retail turnover irrespective of whether the article is a luxury or not. I do not ask the House of Commons to adopt that tax. I propose, therefore, a purely Luxury Tax on rather a higher scale of duty than was taken by the French Government. The rate which I propose—and the House, especially those who are in favour of the decimal systems, will be shocked by the method by which I propose that it should be calculated—is two pence in the shilling, or one-sixth of the amount. I am told that will be a much more workable arrangement than to take a percentage, 10 or 15 per cent. The method by which this tax has to be collected must, I think, be by stamp duty. In that way the stamp is put on the bill, and the customer himself will to a certain extent 720 check the transaction, though, of course, there must be inspection by Government officials as well. I believe, if, as I hope, the -Select Committee of the House of Commons will try to ass-1st in this matter, that it will do extremely useful work, and will elaborate a form of taxation which will give a large revenue. The amount which the French Government have calculated to get from their Luxury Tax is-£24,000,000. Our rate is, as I have said, higher What the amount will be must depend, of course, on the nature of the schedules which are prepared, but I shall be disappointed if, as a result of this tax, a very considerable addition is not secured to the Revenue of the country.
§ I have now come to the end of my statement. I am sorry to have occupied so much time of the Committee, but I hardly see what I could have left out. I recognise as fully as any Member of the House how very heavy is the burden which I am asking the country to bear. I can only say to the House of Commons that, in considering the proposals of the Budget, I hope they will try to look upon it as a whole and to realise that I have attempted at least to balance fairly the taxation between the different classes who are called upon to bear it. I am convinced that the House of Commons will begin the examination of these proposals with a full realisation of the necessity of the additional taxation, and with the desire to support the Government in the methods which they have taken to secure it. I am perfectly certain that the country as a whole will boar this heavy additional burden in the same spirit in which they have submitted to sacrifices far more heavy than anything measurer! by mere money value.