I am now able to summarise the result. In a full year I should obtain, by the changes in taxation, £103,950,000, derived, as to £60,000,000, from Inland Revenue, and as to £48,950,000 from customs and Excise, thus almost exactly meeting the deficit of £114,000,000, which I calculated we shall have to face in the future normal year. In this calculation I took no credit for the normal growth of the yield in revenue. On the other hand, I allowed very little for the normal growth of taxation. I set the one against the other. But it must be remembered that social and industrial changes now in progress, if by lessening the return on capital they restrict the accumulation of wealth, may eat into the yield of the direct taxes, and especially of the Super-tax and the Death Duties. Again, the £50,000,000 of the £114,000,000, which are attributable to the continuation of the Excess Profits Duty, are avowedly intended only to be temporary and must be replaced from some other source, unless in the meantime we find relief from our burden in other ways.
In the current year I estimate an additional revenue of £41,450,000 net. The final balance-sheet for 1919–20 will thus be:
Deficit to be borrowed, £233,810,000.
On this basis the gross debt on 31st March, 1920, will be increased from 212 £7,435,000,000 to £7,669,000,000, or, if we take the round figure of £250,000,000 as the new borrowing, to allow for a margin of error, £7,685,000,000—still substantially less than the figure of £7,980,000,000 which we thought last year might be the total on the 31st March now passed. Against these future liabilities we shall hold special assets in the shape of loans to our Allies (£1,668,450,000), loans to our Dominions (£196,890,000), and a further contribution from India of £30,500,000, making together a total of £1,895,840,000. Or, if I follow the calculation of my right hon. Friend of last year, who reckoned the Allied debt to us at half of its amount: Loans to Allies, £834,225,000; loans to Dominions, £196,890,000; and Indian contribution £30,500,000, giving a total of £1,061,615,000. There will be, in addition—I do not forget them—the German indemnities, and so much of the remaining assets acquired out of Vote of Credit and of the arrears of existing Excess Profits Duties still outstanding on 1st April next as is not required to meet the abnormal expenditure of that year caused by the overlapping of war conditions. The estimated balance of the Vote of Credit assets, as I have already stated, is £350,000,000, and the arrears of the existing Excess Profits Duty £100,000,000.
I thank the House for the patience with which they have heard me. I have now completed my immediate tasks. I have endeavoured to give the House as clear a picture as is yet possible, both of our present position and of our future prospects. I have had to urge upon the House, as I may have to urge again and again, the necessity for severe economy in national and individual expenditure. I have no hope of any reduction in expenditure unless we in this House show an example. I have had at the same time to impose further large burdens upon the community. I cannot hope that in the discharge of either part of my task I shall earn popularity. But in one point I find satisfaction. I am grateful that it has fallen to my lot to make the first proposal in this House for the statutory embodiment in our financial system of that policy of Imperial Preference with which my father's name and fame will be for ever linked.
§ Motion made, and Question proposed,