Mr. CHAMBERLAINI come now to Income Tax, the last subject with which I have to deal. I have already mentioned the satisfactory yield of the Income Tax last year. In the current year we expect to do even better. Last year's Income Tax and Super-tax together produced £291,000,000. This year we expect them to produce £354,000,000, an increase of £63,000,000 without any further change in the rates. Apart from normal growth, the increase is due to two causes: First, owing to the imposition of the tax at higher rates last year, the arrears carried forward from last year to this year are at a higher figure, and, secondly, this year will see a full collection under Schedule A, whereas, owing to the introduction of the instalment system, only one-half was collected last year.
Now what am I to do about Income Tax? The Committee knows that a Royal Commission has been appointed to investigate Income Tax and Super-tax and all the problems to which they give rise. It was recognised before the War that the time had come for such an inquiry. The higher rates—we thought the rate of Income Tax high then—had increased the anomalies of the tax and rendered greater any hardships which were endured. But, of course, the pre-war rates were nothing compared with the post-war rates. Accordingly, all the old anomalies and grievances pressed more urgently for consideration and new ones were created by the circumstances of the War. I therefore appointed a Royal Commission as soon as I could after entering upon office. I do not know what the Report of that Commission may have in store for the taxpayer or the Chancellor of the Exchequer. The taxpayer, I imagine, views it with hope; the Chancellor of the Exchequer looks forward to it with foreboding. Whatever may happen, they are likely—I think they are certain—to propose great changes and great changes are seldom made in a tax without decreasing its yield at the then existing rate. Under the circumstances, I have thought that the wisest course for me to pursue was to make no change in the Income Tax pending the Report of that Commission.
Mr. CHAMBERLAINNo change pendding the Report of the Commission, except 211 so far as may be necessary to carry out special undertakings already given, such, for example, as the exemption from Income Tax of wound and disability pensions and of gratuities payable on demobilisation. On the other hand, in pursuance of the same principle—for what is sauce for the goose is sauce for the gander—I do not propose to ask the Committee to modify this year any of the temporary reliefs from Income Tax or Super-tax, which have been granted from time to time as the result of the War. Whether right or wrong the proposals which I make with regard to the Income Tax are consistent proposals, to be treated as a whole, and I hope that the Committee will accept them as such. I think they may be encouraged by the thought that Lord Colwyn, the Chairman of the Royal Commission, hopes that the Commission will be able to report in time to enable effect to be given, if the House so wills, to their recommendations by the Budget of next year.