HC Deb 19 April 1920 vol 128 cc101-46

Continuation of Duties {Customs).

Motion made, and Question proposed, That the duties of Customs specified in the first column of the following table which were imposed by Part I. of the Finance (No. 2) Act, 1915, and continued in Section one of the Finance Act, 1919, in the case of the new import duties until the first day of May, nineteen hundred and twenty, and in the case of other duties until the first day of August, nineteen hundred and twenty, shall continue to be charged as from those respective dates until the dates specified as regards the said duties respectively in the third column of the said table:—

Duty. Section of Date Finance (No.2) Act, 1915. Date to which Duty continued.
Increased duty on tea … 1 1st August, 1921.
Additional duties on dried fruits. 8 1st August, 1921.
Additional duty on motor spirit. 10 (1) 31st December, 1920.
New import duties … 12 1st May, 1921.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.


In accordance with our well-established Parliamentary custom, the first night of the Budget is given, not to contention, and I think not even to criticism, but so far as it is necessary to elucidation of the proposals made by the Chancellor of the Exchequer, and I am very glad to be able, after listening as the Committee has listened with absorbed interest to the prolonged, but not too prolonged, statement of my right hon. Friend to say that, so far as at any rate I am concerned, the demand for further information is very easily satisfied. I have listened to a great many Budget statements in this House during the last thirty odd years; I have made some myself, but I have never listened—I can say it without any flattery or undue exaggeration—to a statement which covered so much ground with greater lucidity and with more persuasive argument. I congratulate my right hon. Friend very heartily on the manner in which, as I knew he would, he has achieved a task of almost unexampled difficulty. I am not going to say anything this afternoon in regard to the financial situation disclosed by the Chancellor of the Exchequer, either as it bears upon the past or as, in the light of the proposed new taxation which he asks the House to assent to, it presents itself in the forecast of the future. That survey, which must be made, had better be reserved according to custom until either to-morrow or the next day, whichever the Government suggests. I quite agree, in view of the proposals of the Chancellor of the Exchequer, that it is essential that he should get some of his resolutions to-night. Obviously those resolutions which involve the imposition of new Customs duties must receive the provisional assent of the House at once in order to prevent forestalling and other familiar evasions. I say provisional, because of course the House always has the matter in its hands afterwards. Therefore I do not suppose there will be any opposition whatever or any undue delay in giving the right hon. Gentleman such of his resolutions as are essential for that purpose. What I want to ask him is upon what resolution he thinks it would be most convenient to take what I think is the practice for you, Sir, to allow to be taken—a general discussion of the financial statement as a whole. In past years we have had it, I think, on the Tea Duty, but it does not matter really what duty is selected for the purpose so long as we know what it is and when it will be taken, and I would ask my right hon. Friend if he would give us that information at once, and we should do wisely to ruminate over his statement.


A larger number of Resolutions than usual are necessitated by the proposals I have unfolded to the Committee. Of these there are several, such as those relating to increased Customs taxes, spirits, both Customs and Excise, beer, Customs and Excise, wines and cigars, and the proposal as to the capital of companies, which I must get to-night for revenue purposes. There are many others which I hope the Committee will be willing to give me to-night, provided that the opportunity for a full discussion is left open. I believe in recent years it has been customary to take the general discussion on a proposal for the general amendment of the law, "that it is expedient to amend the law on Customs and Excise." If that satisfies my right hon. Friend, I shall be very glad to do that. I quite agree that it would be for the convenience of the Committee that serious discussion should not be taken before to-morrow, and my hon. Friend the Financial Secretary to the Treasury will, I have no doubt, be good enough to show what the Resolutions are to the right hon. Gentleman or to any other hon. Member interested, and we can arrange amicably perhaps what shall be taken this evening. I should like to take as many as possible, and I think it would be for the convenience of the Committee to see the Bill as soon as they can.


Can the right hon. Gentleman say when he proposes to introduce the Bill for the changed taxes on road vehicles? The petrol duties, I take it, have to be taken to-night or to-morrow. But may I take it that the Bill will be introduced by the Minister of Transport, and, if so, when? The second question I wish to ask is in regard to the alteration in the tax on life policies, accident and marine. I take it that will not be taken to-night, as it will probably create some feeling, and I think it would only be right that the City should have some time to consider it.


I must take the Resolutions to-night or to-morrow, but that does not exhaust the opportunities for discussion. As regards the petrol duty, it will be included in another Bill introduced by the Minister of Transport, and he himself will be prepared to deal with the Resolution relating to petrol. I am quite ready not to take them till to-morrow if my hon. Friend prefers. If, on the other hand, he will let me have them sub silentio to-night he can raise the discussion on the Report or in the general discussion.


If it will meet the convenience of the Committee I shall be quite willing to take them sub silentio to-night, on the understanding that we may discuss them on Report.


Can the right hon. Gentleman make the corporation tax quite clear, as I am afraid he did not make it clear?

Sir J. D. REES

May I ask about the double taxation? Is it the case that there will be deducted the rate of the Dominion tax, subject to the limitation that the maximum rate for relief should not exceed one-half of the rate of the United Kingdom tax? If that is so, that would be quite satisfactory to the double taxpayer in India and in England, but it would leave the Australian taxpayer still under a serious disability. If such a one paid State Tax and Federal Tax in Australia, and was taxed at home Income Tax and Super Tax, his deduction might only amount in the maximum to 3s., and he would would still be taxed up to 12s. in the £.


Does the right hon. Gentleman intend to say anything in the matter of separating the incomes of married persons for assessment purposes?


I hope I made plain both matters upon which my hon. Friends have put questions, in the speech I have just made. If not, perhaps they will go to the Vote Office, where I think they will now find the White Paper for fuller explanation. I do not pretend that where the Dominion Income Tax exceeds half the United Kingdom Income Tax there can be absolute and complete relief at the expense of the United Kingdom Exchequer. If there is to be absolute and complete relief, something must be done— a portion of the relief must be given by the Dominion Treasury in addition to that which is given by the United Kingdom Exchequer. I think the amount of the relief which I propose to give, as regards the United Kingdom Exchequer, will not be ungenerous. As regards the question put by the hon. Member for Liverpool (Mr. Houston), the tax will be charged on profits, after the deduction of excess profits duty, subject to the limitation, in the case of existing concerns, of 2s. in the £ of the amount available for the ordinary shareholder, after payment of debenture interest and fixed preference dividend. Then the hon. Member for the Wrekin Division (Mr. Palmer) asked me whether I had intended to say anything as to the separation of the income of husband and wife. No, I do not propose to add anything on this occasion to what the Royal Commission on Income Tax said on that subject. I am in entire agreement with the Commission on the point.


Shall we have any opportunity of discussing that question?


When we resume the general discussion to-morrow, or it can, alternatively, be discussed on the Second Readingof the Finance Bill, in Committee on the Finance Bill and at subsequent stages. I am sorry to say that Budget proposals seem to offer no limit to the opportunities on which discussion can take place.


Has the right hon. Gentleman formed any idea as to when his Finance Bill will be introduced?


I cannot say. I have first to get my Resolutions, and the Bill has to be drafted to square with the Resolutions. I will introduce it as soon as I can after the Report of the Resolutions.


I understand the feeling of the Committee is that the serious discussion on the Budget should be deferred until to-morrow. But I think, so far as my recollection goes, it has generally been the custom to say a few words upon the financial aspect of the Budget as introduced on the first day, and I should like to offer a few observations upon this very important Budget. First of all, it deals with very startling figures. Speaking in round numbers, I think we have a Revenue of nearly £1,500,000,000 and an Expenditure of something like £1,200,000,000—an enormous Revenue and an enormous Expenditure immediately after the Great War. We had thought a year ago that, at any rate, there would be some relief to the burden of the taxpayer, but I do not see any prospect of relief under this Budget. On the contrary, I see very considerable additions to the burden already borne. I would like to say one or two words upon what are really minor matters, but which have some bearing upon the Budget. I am very sorry to see that there is to be no reduction in the Land Valuation staff. Really, the first thing which this House ought to do is to save money. It is easy enough to come down and impose enormous taxation, and to say by the imposition of this enormous taxation that we are going to redeem debt. But, first of all, I think some effort should be made to reduce expenditure, and I see very little effort in this Budget to reduce expenditure. On the contrary, though the Land Values are going to be done away with, of which I am extremely glad, and I would congratu- late my right hon. Friend and the Government upon what they have done, still, I think they ought to have followed it up a little more and done away with the staff. It is all very well to say that the staff is going to save money, but, at any rate, we managed to get taxation before by better, or perhaps I may say, more remorseless methods by the officials of the Treasury.

Then there is another point on which I really hope the Committee will pause a little, either now or later on, before they endorse the Budget, and that is the question of the Post Office. The Post Office, as I understand it—I could not quite follow the figures—which before the War yielded a revenue of £6,000,000, now has a deficit of £11,000,000. There is an amount of £29,000,000, apparently, in expenditure, chiefly in wages, which has been added. I want to ask how long is this going on? How long are we going to increase wages in this way, and then come down and say that somebody else has got to pay for it? There must be a limit to this. This expenditure cannot go on. No sooner do they get an advance than they require something more. No greater proof of that can be found than when a settlement was come to last year with the railway-men, and now they ask for another pound a week. This sort of thing goes on, and as soon as the Post Office people receive an enormous increase, everybody else wants it, not because they want it, but because the Post Office has got it. The result is that a very great burden is put upon the middle classes with a fixed income, in order to pay what I venture to say—I know it is unpopular to say it, but I believe it to be absolutely true—is an exaggerated wage, which ought not to have been paid.

I come to the question of the wine duties, about which I have not much to say, except that I am afraid they will not be very popular with our Allies. Then I would refer to the stamp duties. I would ask my right hon. Friend whether he has really considered what the effect of increasing the duty upon registered stock from one-half to one per cent. will be? I am afraid it will utterly destroy the market in these stocks. The half per cent. duty always was very heavy, and did to a certain extent prevent a free market in these stocks, and if you make it one per cent., it is not, I understand, going to bring in a very large amount, but it will be a very considerable deterrent to a free market, which is especially essential if money is to be raised. I hope my right hon. Friend will be inclined to retain an open mind upon this matter, if adequate representations are made to him, to show that the tax is likely to do harm. I come to the Income Tax, and, so far as I can understand, married couples without children with an income of £250 a year are to be exempt. I think that is a mistake. So far as I know—I have not had time to look up the figures— out of 20,000,000 voters in this country, only about 2,000,000 are subject to Income Tax. Under this proposal, which I hope will be reduced very considerably, an enormous preponderance of voters in this country will impose a tax on a very small minority. I think that is a very great mistake. All statesmen in recent years have acknowledged that one of the evils of democracy is when the many impose taxes on the few, and I should have thought a far better way would have been to lower the exemption limit, I do not say to put any large tax upon them, but to bring in more people to feel the burden of the Income Tax, and then they might be a little inclined sometimes to support and recommend saving. With regard to Income Tax and Super Tax, I have often endeavoured to get them combined. I think it is far better that people should know what is being paid by the richer classes. At the present moment a very large number of people are paying half their income to the State, irrespective of death duty. I am not speaking of people with £40,000 or £50,000 a year, but of people with far less. They are paying half to the State without rates, death duties and the various burdens which fall upon people. I do not think that is realised, and I think it would be far better if the Super Tax were done away with and the Income Tax were raised to a corresponding amount.

I want to say a few words upon the Excess Profits Duty and the company tax. I am sorry that the Government have determined to increase the Excess Profits Duty. I was rather in hopes that they would reduce it. It does not in any kind of way affect me personally. I have been long out of business, and, so far as I am personally concerned, I have no interest in it. But I really believe that, after economy, which I hold to be the first essential, I believe the next chief essential is the encouragement and prosperity of trade and business. Naturally those of us who see manufacturers, shipowners, and others all making large sums of moneys are always a little bit inclined, human nature being what it is, to be slightly envious. But they are doing good to the country. The more rich men there are in the country the better for the country, and greater opportunity should be given to the people to make money. I am rather afraid the Government have lost sight of that. I remember the senior Member for the City of London, my esteemed colleague, saying once from that Bench when he was Prime Minister, and someone on the other side had said something about rich people, that what we are suffering from is not too many rich people, but too few rich people, and that, I believe, is absolutely correct. What the Government ought to do is to encourage the making of profits, and not to discourage it. I am very much afraid the continuation of this Excess Profits Duty, especially the raising of it, will do very much to discourage all businesses, and especially the new businesses which have only been started during the last three or four years. So far as I remember, they are only allowed practically a very small sum before the Excess Profits Duty comes in. They are in an exceptionally hard position, and I think a great number of them have looked for relief in this matter. I sincerely hope my right hon. Friend will keep an open mind on this matter.

I would like to ask my hon. Friend the Secretary to the Treasury a question. The Chancellor of the Exchequer has told us that the result of the Budget will be that there will be £234,000,000 available for the redemption of debt. What guarantee have we that that £234,000,000 will be spent in the redemption of debt? Last April the Chancellor of the Exchequer brought in a Budget, and between then and October he had to revise it on account of the extravagance of the Government. The Government have got this £234,000,000; are we quite certain that they will keep it for the redemption of debt, or that they will not spend it upon other matters dear to the hearts of some of them? I notice in the Blue Paper an enormous increase in the Civil Service Items. Education has gone up from £38,000,000 to £56,000,000; the Ministry of Health from £12,000,000 to £34,000,000; the Ministry of Labour is down, not very much, but just a little, and so on. The increase in several of these items is tremendous, and I am very much afraid that some of this £234,000,000 may be taken to deal with other matters, which should not be encouraged. My hon. Friend is not in a position, of course, to give any undertaking, but I hope he will repeat to the Chancellor of the Exchequer the words I have said. I do not quite know what the new position of my right hon. and learned Friend (Sir L. Worthington-Evans) is, but if he represents no Department perhaps he will promise me to keep an eye upon this £234,000,000, and see it is spent in the manner for which we are invited to pass it to-day.

The only other thing I desire to do is to mention the question of the company tax. I do not quite understand whether this is to be a tax to rank upon all profits or only upon excess profits, or rather, I should say, profits larger than before the War. If it is a tax upon the first, it is practically an increased Income Tax upon a very large number of people, or profits. The tendency at the present moment is for firms to become limited companies, and under this proposal they will have to pay a sum which may amount to 2s. in the £1 upon their profits. That may be all right, but it is practically another Income Tax, and it is putting a very heavy burden on certain classes. On the whole I am rather inclined to hope that we will not have many more Budgets like this. I do not want to criticise it too much, but the Chancellor of the Exchequer said that 20 Budgets like this would redeem the National Debt. I should not like to contradict my right hon. Friend for a moment, but I think in the meantime the country would be ruined by those 20 Budgets. They would leave nothing for anybody except possibly the Labour party, and I do not think there would be very much left for them. I do not know whether my hon. and gallant Friend opposite would succeed in retaining a little.


Oh, his salary


But I am afraid the result would be very serious for the nation. I can only repeat that I should have been much more pleased if the Chancellor had been able to say that the expenditure for the coming year would be reduced rather than that he should say that the income would be increased. We all know what happens to the spendthrift. We know what happens to a man who has £1,000 a year and spends at the rate of £3,000 and suddenly by an accession of wealth finds he can increase that thousand. He does not save above the thousand, but goes on to spend at the rate of £4,000 a year. I am rather afraid that if the Government find that it is so very easy to get money that something of the same effect will be produced upon them, and that, instead of encouraging economy, the accession of wealth will encourage expenditure.


I am afraid the general effect of the Budget must be to increase the cost of living, and to that extent I must say that I think it is very disappointing. It may have been impossible to avoid this heavy expenditure, but the taxes as a whole as proposed today do seem to me to tend, without doubt, to accelerate the pace of the unfortunate position in which we find ourselves. There are only two ways to stop that unfortunate position. The one is to reduce the expenditure, and the other to reduce the purchasing power of the people. Whether this Budget may affect something in reducing the purchasing power of the people—not of champagne—remains to be seen. The ultimate effect will be to continue the rise in prices, to continue the increased cost of living, and so to continue the agitation for higher wages. I hope I am not unduly pessimistic, but this seems to me to be the effect of the Budget proposals. I am a member of a Committee on which a good deal of responsibility has been cast to-night. As I understand it the Excess Profits Duty is to be increased to 60 per cent., subject to the possibility of a capital levy on War work. In regard to the Corporation Tax, I do not quite know what the Chancellor said. I understood him to hint that unless something was done in the way of capital taxation, a 1s. Corporation Tax might be imposed. This again throws a certain amount of responsibility on the War Loans Committee by the suggestion.


I think I remember what the Chancellor of the Exchequer said. He did not make any reference to the work of that Committee with which my hon. Friend is connected. His reference was to a Corporation tax. The only point he made about the future was that if there was a possibility of abolishing the Excess Profits duty that he hoped a Corporation tax would take its place. But he said nothing about the scale at which that duty might be.


I think I understand the explanation, and really the responsibility of my Committee is that the Excess Profits duty, which will be 60 per cent., may be reduced to 40 per cent. again, in the event of our finding a satisfactory solution.


I should like to ask the Financial Secretary to the Treasury a question. Am I right in understanding that it is the intention of the Government that a general discussion should take place upon the Resolution referring to the alteration of the law, with the Chairman of Ways and Means or the Deputy Chairman, to-morrow, and also on Wednesday? If that is so, then I think, subject to what experienced Members, like my right hon. Friend the Member for the City, may suggest, that it would be a convenient thing if we left these Resolutions to take their first stage to-night, because it is only by this means that we can get them on the paper. We shall then have all the information as to how the matter stands. We have got it so far as the Government can at this stage give it to us. If these Resolutions are on the Order Paper tomorrow, the discussion can be resumed in a wide general sense, and also on Wednesday


If the Resolutions are passed to-night, the only Resolutions that come into force are those that bear a specific date. When we come to the last Resolution, it will be put as well, but will be so put as to have the effect of continuing the discussion which we wish to continue. We propose to continue the general discussion in Committee tomorrow. If the Committee thinks that that is an insufficient time, we shall provide for continuing the discussion further on Wednesday. The Report stage of the Resolutions will be taken in the ordinary course within about ten days of their passage through Committee.

Commander BELLAIRS

Has the matter to have the concurrence of the Chairman before the arrangements for continuing the general discussion takes effect?

The DEPUTY-CHAIRMAN (Sir E. Cornwall)

That has been agreed to.


I have no objection to that, but I should like to have it quite clearly understood about to-morrow. My hon. Friend said something about Report to-morrow.


The discussion will be continued on Wednesday.


We will continue the discussion on Wednesday if necessary. What I said about Report stage was that it followed naturally within about ten days.


Apart from the taxation on champagne, I think the Committee will agree that the best part of this Budget is the nominal repayment of debt to the tune of £234,000,000. Let me in passing refer to the practical way in which the Budget will increase the cost of living, though I will not criticise or comment upon it. In the first place, as I understood the Chancellor of the Exchequer, he is not including in the £234,000,000 the annual charge of some £15,000,000 that ought to be allocated for the payment of interest for War-saving Certificates. Indeed he is simply taking the War-saving Certificates, increasing their capital amount to 20s., and charging the whole of the five years' arrears of interest on these certificates as an additional debt. This £15,000,000 should be provided for out of revenue. Secondly—and this I am not quite so clear about—the Chancellor said that our external liabilities amounted to £1,278,000,000, most of which is owing to America. I am not quite aware whether the interest on that debt is being taken into account or whether we are also funding the interest on that debt, and adding it to the capital debt. If so, we have to take £60,000,000 or 5 per cent. on that £1,200,000,000 odd from the £234,000,000 before we get a proper idea of the position. Therefore, the admirable situation as painted by the Chancellor must be modified to the extent of the £75,000,000 to which I have referred. That brings down the payment of debt to a more honest figure. That is not all. The Committee will have observed that in the same way that we are paying Death Duties in Victory Loans, or funding loan. So that really the financial position is nothing like so sound as it would appear on the face of it to be from the speech of the Chancellor of the Exchequer. The real vice of this Budget is that although additional revenue is raised in order to make both ends meet, the revenue is raised in a way which will inevitably increase the cost of living. Take the Corporation Tax, because that is an admirable example of how not to raise revenue. The Corporation Tax is an income tax of anything up to 2s. in the pound on those who have their money invested in ordinary stock. At the first blush it may seem right that those people should pay a little more Income Tax, but I cannot understand why all the landed interests should be exempted, and this extra Income Tax should be reserved for stocks and shares. It is a tax which falls upon ordinary shares and not upon debenture or preference shares. The ordinary Income Tax, if increased from 6s. to 8s., would fall upon the debenture and preference shares, and that would not lead to any additional cost of living. If this tax is reserved for the ordinary shares it will be immediately transferred in toto to the consumer, and this will add to the cost of production and will not by any means fall upon the holders of fixed securities, and consequently the cost of production everywhere will be increased and the cost of living will go up.

Not only that, but the policy advocated by the Independent Labour Party is in many ways diametrically opposed to the policy put forward by the Chancellor of the Exchequer. We want a capital levy on all wealth in order to pay off the debt en bloc. The object is to appreciate the currency in order that the paper pound may again approach par value and equal the golden pound. We have an absolutely sound policy for the reduction of the cost of living by the reduction of debt, and thereby securing an appreciation of the currency and a recovery in the value of the pound. We are told that the Government can do nothing whatever to reduce the cost of living but they could do it tomorrow by dealing with the taxation on tea, sugar, and coffee. If they were really anxious to do this, all they have to do is to remove those indirect taxes which press upon large families, and the poorest people in the country. If they really want to reduce the cost of living those should be the first taxes they should do away with. Instead of this we have increased taxes upon beer which will fall very heavily upon the working classes, and will add everywhere to the cost of living. My principal objection to this Budget is not that it increases the cost of living, but because it is above all things a land owners' Budget such as we should naturally expect to see introduced by the party opposite. The Budget not merely abolishes land value duties when the value of the land has gone up by at least 50 per cent. owing to the War and owing to our men fighting in Flanders, but the Increment Tax itself should now be bringing in an enormous revenue to the Treasury. This has all been washed out owing to the action of the Government in not collecting those taxes and abolishing all arrears. Not only have they abolished the land duties, but they have taken no steps to substitute a straight tax on land values for the variegated taxes which were introduced in 1909–10. We had no love for these land value duties when they were imposed, but we accepted them because it was the only way to get a valuation, consequently the Government are reversing the policy of previous years. This Budget is framed in the landlords' interest. The right hon. Gentleman and his friends did not like the valuation. The Corporation tax falls upon everybody except the landowners, and therefore everybody else must pay an increased Income Tax. The Corporation tax is an additional Income Tax, which amounts to 2s. in the pound on the ordinary holders of stocks and shares, and it is specially devised so as to exempt landowners from its purview, and consequently the farmer and the landowner escape. Therefore this tax is really an additional Income Tax, which has special reference to those engaged in trade and commerce, and a burden which they will transfer to the backs of the consumers. The stamp duties are increased enormously for everybody except the landlord, because the stamps on the transfer of land will remain as they were before. Take the Road Tax. Liability for roads is an hereditary burden upon the owners of landed property, subject to which they bought their land and held it. The land- lords are relieved of this charge; £8,000,000 a year from the Motor Tax is used to remove this hereditary-burden from the landowners' shoulders. This is just such a Budget as we might expect from the landlords' interest. Then the right hon. Gentleman tries to make things square up by saying that he will retain the Land Valuation Department, in order to bring in a general valuation, but, frankly, I do not believe we shall ever get a valuation of this kind from the Coalition Government. At any rate, we should be more surprised than delighted if we did get it, because such a valuation will meet with all the careful opposition, and even more careful amendment, than the Budget of 1909–10 met with. I am afraid we shall have to wait for some future Government before the Land Valuation Department at Somerset House will be put to any useful purpose in connection with this valuation.

I am sincerely grateful to the Chancellor of the Exchequer for having at any rate done something to start the repayment of debt, but the additional taxes have been raised in such a way as to add to the cost of living, and no satisfactory Budget can be introduced until there is a general capital levy so that the paper pound may approach the old value of the gold pound, and until we get back to pre-War conditions and sound finance. Until the repayment of debt is faced in that way we cannot possibly reduce the cost of living. The Chancellor the Exchequer has made a beginning, but it is not one which will reduce the cost of living, because the taxes he has put on will increase the cost of living. The stamp tax and the Corporation tax all add to the cost of production and will increase the price of necessaries. If we could get a tax upon land values which would not add to the burden of industry, but would bring land into the market and cheapen land all round and enable people to get their raw materials cheaper, then you would benefit industry, but along the lines of the Budget there can be no salvation for this country.

7.0 P.M.


I should like to say a few words about this Budget. In the first place I desire to congratulate the Chancellor of the Exchequer upon his very able and lucid statement. I have listened to a great many Budget statements, but I have never listened to one which has been so well-delivered as the one we have heard this afternoon. I congratulate the right hon. Gentleman upon the state of the revenue and the way the revenue has come in for the last year is simply marvellous. We have collected £1,339,000,000, which is £450,000,000 more than the preceding year. This has exceeded the Budget Estimate by £138,000,000, and the revised Estimate by £171,000,000, and now comes the disappointment. The right hon. Gentleman said that upon the present basis of in come and expenditure he expected to have £164,000,000 to spare. When he made that statement we thought we were going to get off with no extra taxation at all. I could not quite understand how the right hon. Gentleman managed to absorb this £164,000,000. I believe he said that he would start afresh in order to establish a balance to commence extinguishing the debt, and the amount he estimated in a full year for this purpose was £198,000,000. He proposes to raise £125,000,000 from direct taxation, and £64,000,000 from indirect taxation. It is rather interesting to note what has been done during the War in the matter of increasing taxation. In the year 1914 the total taxation of the United Kingdom equalled £189,000,000. To-day it equals £998,000,000, or five times as much as in the first year named. Again in 1914–15 the Customs and Excise produced £80,975,000. To-day it produces £283,000,000, or an increase of over three times. In 1914–15 Income Tax produced £69,000,000. To-day it produces £359,000,000, or five times as much. No other country has increased its taxation to anything approaching this extent. France, I believe, has only just begun. But in this country during the five years of War the proportion of the costs of War paid out of taxation equalled 26 per cent. In this year, which has been, up till March last, a period of "winding-up" the War, the proportion paid from taxation nearly equals 60 per cent. The taxation amounts to £998,000,000 as against an expenditure of £1,665,000,000.

Now I come to the relationship between direct and indirect taxation. Direct taxation, including the Excess Profits, but excluding Stamps, contributed £693,000,000, or 70 per cent., as against 67 per cent. last year. Indirect taxation, including Stamps, contributed £305,000,000, or about 30 per cent. The proportion of direct taxation has gradually increased from 53 per cent. in 1914–15 to 70 per cent. Direct taxation has gone up from £108,000,000 in 1914–15 to £693,000,000, or six times as much. Indirect taxation has gone up from £80,000,000 to £395,000,000 in the same period, or three-and-three-quarter times as much. This 70 per cent. is contributed by but a small class of the population. Income Tax, Excess Profits, and Estate Duties are generally estimated to be paid by about 2 per cent. only of the population. In other words, 2 per cent. of the population bears 70 per cent, of this taxation without counting any consumption of articles indirectly taxed.

The Chancellor of the Exchequer talked about the Floating Debt. We have been fortunate during the past year in being able to reduce that Floating Debt by £100,000,000, and it is in a better position to-day than a year ago, because then the Treasury Bills amounted to £957,000,000 and the Ways and Means advances to as much as £455,000,000. The Ways and Means advances now represent a very much smaller figure, and, in fact, the right hon. Gentleman told us that on the 31st March they had been practically wiped out. It has been suggested that the increase in currency notes is responsible for high prices. I do not think that is the case. Prices began to rise immediately on the outbreak of War. There was a scarcity of both labour and commodities. The wages bill doubled. There was simply a world shortage, and the laws of supply and demand demanded more currency in order to pay the higher wages and prices. But it is quite a mistaken idea to say that the issue of currency notes has been the cause of the rise in prices. Suppose you artificially reduced the number of Treasury Notes, the result would be that you would simply stop the banker doing his duty to his customers. I should like to quote what was said by Sir John Bradbury on this point: I should say that the whole of the rise in prices is due to the operation of supply and demand, treating currency as a commodity. On this same subject John Stuart Mill wrote:— The favourite explanation of the rise and fall of prices from 1819 onwards, and especially since the financial crisis of 1825, has been the currency, and like most popular theories the doctrine has been applied with little regard for making it correct. There is a great misunderstanding and want of clear thinking in regard to the issues of currency notes. These notes are issued for value received from the bank by the Bank of England and are absolutely necessary in order to pay the enhanced wages and prices. The amount issued depends on the amount standing to the credit of each bank with the Bank of England. The only way they are not issued in exchange for value is when credit is given to the Government on Ways and Means advances which, in ordinary times, was merely an expedient of the Government of the day to obtain credit in anticipation of receipts from taxation. All other banks are restrained from granting credits in this way by the ordinary requirements of bankers to keep sufficient of their funds liquid. In my opinion these notes have come to stay for some considerable time, if not permanently, and the only result of their compulsory withdrawal would be that the banks would not conduct the business of the country.

There was one other point with which the right hon. Gentleman dealt, and that was the habit which fortunately our working people have of saving money. The right hon. Gentleman told us that during the four years of War, thanks to the excellent work of the War Savings Committees, no less than £400,000,000 of War Savings certificates were sold, and that only £38,000,000 had been withdrawn. I have worked these figures out, and find that approximately it representes 45 certificates per family in the United Kingdom. Nearly 20,000,000 of our population are in one way or another interested in Government loans. I believe the total amount which the small investors now hold ranges from £600,000,000 to £800,000,000, and I sincerely hope that the Chancellor of the Exchequer will do all he can to encourage the people to go on saving, because the money will be wanted, and we cannot do without it. The more that. State loans are held by our people all over the country the safer is the State. There is one point which he might very well consider, and that is whether he could not pay a somewhat higher rate of interest in view of the fact that rates for money have already gone up. Treasury bills now pay 6½ per cent., and the War Bands work out at an even better figure. It is not quite reasonable to expect poor people to be content with 5½ per cent. under the present circumstances, and I hope the right hon. Gentleman will consider that.

I think there are unmistakable signs that the country is settling down to real work. Labour is doing so. I am not sure, however, about the position in the City. I have been told by a distinguished man there that financial matters are not likely to settle down until we get a definite declaration from the Chancellor of the Exchequer as to whether or not he intends to make a capital levy. If the right hon. Gentleman will only make up his mind on that point he will do more than anything else to bring about financial stability. The Board of Trade returns for the first three months of this year are simply magnificent. The exports amounted to £295,000,000, an increase of over 100 per cent. as compared with the same period last year, and a large part of this increase was made up of manufactured goods, which fact shows that the country is getting to work. In March the increase was £50,000,000, of which the most satisfactory figure was £40,000,000, representing manufactured articles of every class. I hope that no steps will be taken by the Government, either in conjunction with this Budget or by any other means, to upset the equilibrium of Capital and Labour, but that they will do all they possibly can to encourage a good spirit which we trust is now prevailing among all classes to patriotically do their very best for the general well-being of our country. I am afraid, however, there will be a feeling in some parts that my right hon. Friend has been too courageous and too anxious to pay off the debt quickly. He spoke of a period of twenty years. I should have thought that forty years would not have been an unreasonable period in which to pay the debt off.


If my hon. Friend will allow me, may I say that what I pointed out was that with such a Sinking Fund as is proposed in this Budget it would be possible to pay off the debt in twenty years? But I never contemplated that when the first great reduction of our debt had been made the country would continue to make the abnormal annual sacrifices of the kind we are now calling upon it to make. Then will be the time to reduce our demand.


I should like, in conclusion, to quote a sentence from a speech made by Abraham Lincoln, just after the conclusion of the American Civil War— Let us strive on to finish the work we are in; to bind up the nation's wounds; to care for him who shall have borne battle, and for his widow and orphan; to do all which achieve and cherish a lasting peace.


I should like to congratulate the Chancellor of the Exchequer on the clear manner in which he has explained his Budget. I am sure the manufacturers and traders of this country will be only too glad to assist him in every possible way to reduce the debt and improve our finances, but I should like to express, on behalf of the manufacturing and trading community, the very great regret that he is retaining the Excess Profits Duty, which is a most wasteful tax. I know a man who, when he used to send his clerk to London, used to give him a £5 note to pay his expenses. Now he never sends him with less than £50 or £100; because he says, "I shall charge it against Excess Profits, and it does not matter." That is a principle which is generally applied towards the Excess Profits Duty. You can go wherever you like, or you can experiment and be as wasteful as ever you like, simply because it comes out of the excess profits, of which the Government will take 40 per cent. The manufacturers have made representations to the Chancellor of the Exchequer to get rid of this tax, because of its wasteful nature, and they have suggested to him other methods, including, I think, a tax on turnover and the tax which he has now adopted. The extraordinary thing is that, instead of complying with their request to abolish the Excess Profits Duty, he keeps it on, and also adds the tax which they have suggested should take its place, so that they are going to be made to pay twice over, when they consider that the one tax would meet the case and put trading in its proper position. If you get rid of the Excess Profits Duty you have to pay Income Tax, which is 30 per cent., and that 30 per cent., plus the 2s. tax on the ordinary stock of all companies, is going to punish traders and manufacturers, probably, to the extent of 50 per cent.; but they are still left subject to to Excess Profits Duty also. They would have met any extra amount which the Chancellor of the Exchequer might have suggested by way of a tax on trading profits before the declaration of dividend or on turnover; but to have to pay Excess Profits Duty and then to be subject to this scorpion in the shape of the duty which they themselves suggested for the purpose of getting rid of the Excess Profits Duty cannot possibly meet with the approbation of the trading community, however much they may desire to help the right hon. Gentleman.

There is another matter which requires discussion and explanation, and that is the affinity between this present Budget and the proceedings of the Committee which is sitting upstairs. As I listened to the right hon. Gentleman, he seemed to me to think that we were to be under the fear of another Budget next August or September, upon which we shall have to pay further taxes. At any rate we are now informed that, in addition to this Budget, heavy as it is, we are to be under the lash of another Budget, which, apparently, is going to be forced on by Somerset House, and, I fear, by the Chancellor of the Exchequer as well, next August or September. Can stability in business be expected, can confidence be expected in the City, can it be expected that the price of Government Loans and of new issues of Government Stock for purposes of housing will be kept up, when there is not only a heavy Budget— which would have been readily enough accepted if one could have walked off with the feeling that it was the end of what one had to face—but an additional lash which is to come upon us next August or September.


I share with the hon. Member for the Ecclesall Division (Sir S. Roberts) the opinion that it is unwise to push the country too hard at the present moment, when we are staggering under the debt which the War has forced upon us. If we look back in history, we see that 30 years peace was secured by "Waterloo. Surely we have a right, unless the Peace Treaties are going to be violated and not enforced, to expect a somewhat similar period of peace, or even that war may cease altogether by reason of the League of Nations. If we are going to have anything like a repetition of our experience at the beginning of the 19th century, we have a right to ask posterity, or at any rate the next generation, to share very considerably the burdens which have been put upon us owing to the War. I should have nothing to say about the proposals in relation to the Excess Profits Duty and the further Corporation Tax, if I were not seriously disturbed by what I believe to be the practice of manufacturers and traders, namely, to pass this burden on to the persons who deal with their goods, and who, in turn, pass it on, plus their own burden, until finally the consumer has to pay portions, at any rate, of several persons' Income Tax and Excess Profits Duty. It seems to me that some steps ought to be taken to try and arrest that practice. Those who have investigated allegations of profiteering have been told, and have discovered by their examination of the figures, that those taxes are added as a business expense Such a statement was made, I think, last Friday before the County of London Appeal Tribunal. The matter was a small one, but it is small matters which tell what is in the minds of those who are concerned in the trade of this country. A trader was ordered to repay an amount representing an excess charge upon a hat. She appealed to the London Appeal Tribunal, who, while reducing the amount of the surcharge, dismissed her appeal; and she immediately asked: "How are we to pay our taxes unless we can put them on to the price of the article? There is one case in which the tax cannot be passed on, and that is the tax which a tenant pays under Schedule A, and which he is entitled to deduct from his rent. I suggest that, if we are to grapple with this question of high prices, we ought to see how far this principle, which the Treasury have adopted for many years in relation to Schedule A, could be put into force with regard to the passing on of taxes in other cases The Chancellor of the Exchequer may have better information than I possess, and may brush my suggestion aside, but it seems to me that you cannot examine the question of high prices, with all its attendant mischief amongst the population, without finding that it is in some measure due to the passing on of a portion—I will not say the whole—of taxes which ought to be borne by the individual trader. I see no reason why the professional man should have to pay the full limit of a tax, while the trader is able simply to pass it on. There is evidence that this is done, in the increased use of motor cars and other forms of enjoyment, which is so much more rife now than it was even eighteen months ago. In face of that and other evidence, one cannot but come to the conclusion that persons engaged in trade, even in relatively small businesses, are able to-day to indulge in the enjoyment of things which were hopelessly beyond them in times gone by. It can only be that they have made inordinate profits, and have been enabled to pass on their burdens to somebody else. I represent a district in which, I suppose, there are more retired persons living upon pensions payable, either by the Indian Government or by the Home Government, in respect of services rendered in India or the Dominions, than in the district represented, probably, by any other hon. Member of this House, except, possibly, the hon. Member for Cheltenham; and I constantly receive the most piteous appeals from people whose incomes have been reduced to a minimum, by reason, firstly, of taxation, and, secondly, of the high cost of living. I desire to ask the Chancellor of the Exchequer whether, in his proposals for graduation, when he speaks of married people, he includes the widow with children? I hope he does, because the widow who is left with children to bring up is surely entitled to just as much consideration as married people with children.


A widow or widower with children would be entitled to relief in respect of the children, but would not be entitled to relief in respect of there being two married people to keep on the one income when there is only one.


I think that is a very fine distinction, because a widow is so placed that her income cannot be enlarged. Where there are two married people, even supposing that the wife does not work, the man's income is probably capable of expansion, and I should rather hope that the right hon. Gentleman would consider that a widow so placed should be in no worse position, and should have the benefit of whatever deductions are made in respect of married people. A man, for instance, would be entitled under that scale to deduct in respect of his wife doing the housework, or in respect of a housekeeper, if he happened to be a widower and had to keep a housekeeper. I do not see why that should be confined entirely to men, because a woman, trying to get her living, may have to work, in which case it will be necessary to find someone to do the work of the home.


My hon. Friend has misunderstood. Men and women will be treated exactly alike.


If it amounts to the word "men" including women in the construction of the Budget, I have nothing more to say. If it meant that a person living single, as a widow with children, is to be treated differently from two people living together, the husband making the income and the wife looking after the children, it would create a very serious inequality.


I am sorry I cannot make the position clear to my hon. Friend. Men and women will be treated alike, but neither a man nor a woman, if single, will be treated as if he was double.


A widow surely cannot be regarded in the same category as a single woman.


She would be in the same category as a widower.


A widower with children will be able to get the allowance for a housekeeper, a widow presumably will not be able to, even though she has to go out and earn her living. It is a very serious matter. However, I will not go further into it, but I wish to point out the chances of very grave injustice unless these points are considered at the outset before the actual Resolutions are taken and the Bill is introduced, and I think the right hon. Gentleman will do well, in view of the great hardships under which people live at present, to take care that widows shall not be prejudiced.


I wish to associate myself with those who have expressed disappointment at the Budget, more particularly that portion of it which increases the Excess Profits Tax. To-morrow morning, when the business community have had an opportunity of expressing their opinion, they will be bitterly antagonistic to the Budget as a whole. If we come to examine the Excess Profit Duty we shall find that it is grossly unfair to young traders with new concerns which have sprung up in the last 5 or 6 years. The Excess Profit Tax puts long established traders into an entrenched position, but it does not give the poor man any chance of increased success, or of progress, and in the case of a poor man who starts a business of his own, his hard work only results in payment of taxes. A further reason why I am opposed to the Budget as it has been explained to us, is that it puts on to limited companies, and particularly small limited companies, a multitude of taxes which it is very difficult to understand. I am sure the business community would rather have one Income Tax than a multitude of taxes. For example, a company when it gets its balance sheet out at the end of the year, first of all has to pay Excess Profit Tax on the balance; it has to pay the new Corporation tax, then Income Tax, and then the individuals in the company have probably to pay Super-tax as well. That causes a great deal of inconvenience and trouble to the business community as a whole, and it will not result in the prosperity and employment which everyone would desire.

It is most important to reduce the National Debt, and particularly to reduce the floating debt, but I do not think it is at all necessary that it should be reduced at the alarming rate which is proposed, or that such an extraordinary reduction should take place in this year. Posterity will get a great advantage from the War, and it ought to be left to pay a considerable share also. I am not conversant with the money market, but I am sure it is like every other market, and looks at the commodities either from the point of view that the market has got no top to it, or that it has got no bottom to it, and either things are going to an absurd height or to absurd depths in price. It is the same with the money market. At present things are bad. The Chancellor cannot fund his floating debt. Once the money market finds that the Chancellor is getting over his difficulties, as it is proved by his statement that he is, suddenly without any warning the market will come into a quite different position. There are always plenty of Jeremiahs in any market, and I am sure the money market is not different from any other type of market which may exist. We saw some of it in the Sunday press yesterday. The article which expressed doubt on the solvency of the nation has been proved by the Chancellor to be absolutely ridiculous. But it is not necessary for the right hon. Gentleman, in order to prove his solvency, to pay such an enormous amount of the floating debt or the National Debt. All that is wanted, in order to enable him to fund the National Debt, is national confidence. I am sure he is not going to secure that by putting a huge increase on to the Excess Profits Tax and by the Corporation tax. What he wants is to get one taxation, and to try to be as moderate as possible in the amount he is going to pay off. It is only by that means that he can secure the national confidence which is the great desire at present.

Lieut.-Colonel PICKERING

I wish to express my regret that the Chancellor of the Exchequer has seen fit to increase the Excess Profits Tax. I feel sure it is going to have the effect of immediately sending up prices and it is bound to affect the cost of living and merely continue this vicious circle which will give the working classes an excuse for applying for higher wages. I represent a constituency the chief product of which happens to be cloth. I am interested in a concern in which I have taken no active part since August, 1914, except on the occasion of the last Budget when the Excess Profits Tax was reduced from 80 per cent. to 40 per cent., when I gave directions that this difference should be, given to the consumer. I, therefore, should have been equally justified in giving directions now for the price to be increased to absorb the increase which the Chancellor has put on. In the process of making a suit of clothes, the number of businesses which are engaged amounts to 7 or 8. To commence with you take the wool merchants. Then the wool goes to a top maker, from the top maker to the spinner, from the spinner to the manufacturer, from the manufacturer to the dyer, from the dyer to the merchant and so on to the tailor, and finally it comes on to the person who buys the suit. That means that the Government is having seven or eight different dips into the pocket of each of those concerned, who will put it on to each other, and the consumer finally has to pay. It is very unfortunate indeed that this increase should have to come on at this juncture, because manufacturers generally have been anxious to reduce prices and to stabilise the cost of living, and in many instances there have been arrangements made whereby they could give a certain proportion of their output, produced at an exceptionally low rate, to make certain grades of boots, cloth and so on cheaper in order that those who are poor and needy might be able to get clothes at a reasonable figure. The effect of this increase from 40 per cent. to 60 per cent. will do away with that kind of scheme and the result will be a great loss of confidence in business and an immediate increase in prices.


The continuance of the Excess Profits Duty will be a very great disappointment to all engaged in manufacture. There will be a feeling of the most intense disappointment and particularly a feeling of resentment at the idea of increasing the tax. The tax was agreed to as a War measure. Manufacturers were quite prepared to submit to anything which was necessary for the purpose of winning the War. It was purely a War tax, and, moreover, the first year after the Armistice it was reduced to a half, and we had every reason to expect that this Budget would have seen it entirely swept away. It was a thoroughly bad tax from the start. It was a stupid tax, because it found its way on to the goods which were produced, and did it in the most extravagant manner and added enormously to the cost of production. When, in times of peace, it is proposed to continue it, the right hon. Gentleman will find the very greatest opposition to it. We realise the necessity of raising revenue, but raise it equitably. Do not single out one class of the community, the producers, and put a burden on their backs which is going to hamper and harass them. Just at the moment there is a shortage of goods all over the world. We have practically little competition for our products. The markets of the world are able to absorb anything we can send to them, but that position may change in the next few months, and if you put a burden on industry which is going to increase the cost of production, and will increase the cost of all goods manufactured in this country, you will find you are doing something which is unsound and unwise, and which may very seriously, at a later period of the year, affect the employment of labour. The continuance of the tax will be vigorously resisted.

I should like to ask whether the right hon. Gentleman proposes this year to assess Income Tax on the basis of the three years' average, or is he going to adopt for this year the recommendations of the Royal Commission? I hope he will see his way at once to drop the three years' average. It has operated very unfairly, it has proved unequal and it has hit some firms which have made big profits during the War, and which are now perhaps making no profits. I hope he would say something, but as he has not done so, I trust he has preserved an open mind on the subject, and if he cannot state that this three years' average is to be dropped forthwith at any rate he will reserve his decision until he hears evidence on the matter.


I am afraid it is physically impossible to get the machinery ready for this year. That is one of the provisions I propose to include in the Bill dealing with the general recommendations of the Committee. Even if I could get it now, I do not think I could bring it in this year.


I do not think there is any difficulty, because the right hon. Gentleman levies his revenue on last year's profits instead of taking the average of the past three years.


I am at least as anxious as the hon. Member to bring it into force at the earliest possible moment, because it would be profitable to the revenue. I gave instructions that it should be done, but it was reported to me that it would probably involve 15 Resolutions. Therefore I think the hon. Member will see that it is a more complicated matter than he thinks.


I quite understand that it is easy to make suggestions on the floor of the House, but it is often very difficult to give effect to them by legislation. I realise that the assessment of Income Tax has been established for many years on the principle of an average, and you get a continuity of practice which makes it so much easier. In spite of that difficulty, I should have hoped that it would have been possible to assess each year on the profits of that year, so that people who made profits in one year could pay their share to the revenue and get rid of the contingent liability. I hope the Chancellor of the Exchequer at a later stage will be able to deal with this matter.


On the whole, so far as one can comprehend a Budget of these vast dimensions, I think it is a Budget that people will like, so far as they can like a Budget which imposes taxation of this kind. It is, at any rate, honest in that it tries to meet the situation and to meet it manfully. Britain during the War dealt with the situation manfully in man-power and in money, and now it must foot the Bill manfully when it is presented. I wish the Chancellor of the Exchequer could see his way to abolish the exceptional taxation that was put on in the emergency of the War. I mean, in the first place, the Excess Profits Tax, and I think the Corporation Tax falls in the same objectionable category. This form of taxation falls under two criticisms. In the first place, it is apt to be capricious in its incidence, and in the second place it is apt not to hit the person that it really aims at. The person at whom the Excess Profits Tax aims is the rich merchant or the rich manufacturer, but the person whom it really hits is the poor consumer every time. That is the objection to this form of taxation. On the other hand, the form of taxation by direct Income Tax, although it is not a pleasant thing when it comes in, is the most honest kind of tax. It hits the person it is aimed at, or it is most apt to do that. I was very glad to see that this Income Tax is being made full use of as the foundation tax in the British system of taxation, and, in the second place, I must congratulate the Chancellor of the Exchequer on having the courage to add 6d. in the way of extra graduation to the recommendations of the Commission. Reading the Report of the Commission, one was rather disappointed to find that the graduation stopped at the figure of £20,000 a year income. I gather that at that figure the graduation in the new Finance Act will stop. Upon a single man's income, the graduation will stop at something like 10s. 6d. on an income of £20,000 a year. That, more or less, I think, is the correct view. There is no doubt that, although £20,000 a year is a very much larger income than most of us enjoy, there are a good number of very much larger incomes than £20,000 a year, and I submit to the Chancellor of the Exchequer that he might try to get a little more out of these very gigantic incomes.

The amount of incomes that are above £100,000 a year has nearly doubled from the year 1909 to the year 1919. In America, and, I think, in Canada, these 'very high categories of income are taxed as much as 15s. 6d. in the pound. If any people know the habits of the millionaire, it is the Americans, because America is the native country of that species of fauna, the millionaire; but they do not adopt the argument that is often put forward here, that the millionaire will stop amassing money and will dispose of his capital if you tax him as much as 15s. 6d. in the pound. On the contrary, they think that this very large taxation will encourage him to amass more. As a matter of fact, he must amass more. It is at one time his business and his amusement. It is the only thing he can do. Probably his money is rolling up, and in that case he has got into the habit of amassing money on a vast scale, and you may be sure he will go on, and a big Income Tax will not discourage him. I understand evidence was laid before the Commission by the British Chamber of Commerce and the Inland Board of Revenue, that something like £15,000,000 or £10,000,000 a year could be brought in from a very steeply-graded Income Tax upon incomes in excess of £20,000 a year. I suggest that that method might be used to bring money to the Treasury by a very direct and honest method of taxation, and perhaps relieve people at the other end of the scale. There is always a great temptation for people to suggest forms of taxation which hit a person a good deal above themselves. It is obvious from my appearance even, and certainly from anyone who knows me, that I am not speaking as a multi-millionaire, and that I am pleading for the taxation of those a great deal above me in the income level; but I think the principle is sound, that the broad back should bear the big burden. Accordingly, I suggest that this form of tax might be usefully applied to bring in a good deal more into the Exchequer.


I am quite sure that when the Chancellor of the Exchequer made his statement in regard to the Land Values Duties, he hardly expected that it would receive the unanimous approval of the Committee. I desire very briefly to associate myself with what has been said by my hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) in regard to this matter. We are informed that although the taxation is to disappear the valuation is to remain. We are expected to derive some comfort from that. I understood the Chancellor of the Exchequer to say that the valuation would remain not only for the purpose of assisting the Government in regard to death duties, but in regard to other valuations which are necessary, and that it will provide material which will be available in the event of subsequent legislation to set up some other method of land values taxation, or in the event of an alteration in the system of rating in this country. It is quite evident that whether or not we are to derive any comfort from the fact of the valuation being continued, must depend upon the method on which the valuation is being continued. When the hon. and gallant Member for Newcastle-under-Lyme interrupted the Chancellor of the Exchequer he was informed that that was a question which had not yet been fully determined, and that full consideration was to be given as to the methods which were to be adopted. But the right hon. Gentleman did add that things were to go on as they are. It seems to me that things cannot possibly go on as they are. At the present time it is the duty of the Valuation Department to bring out figures showing the different values set up in the Budget of 1909–10, the total value, the full site value, the assessable value and so on. I can hardly understand that it is intended to continue to prepare these figures, because they are only useful for the purpose of this special taxation. Therefore, I can imagine that there would be no longer any necessity for it. But I would like to be informed whether the provisional valuations which were suspended during the War have now been completed, whether the Valuation Department has at its disposal sufficient material which would enable the Government to tell us approximately the land value of the country, and whether the Valuation Department is to continue to value separately improvements, and the unim- proved value of the land. These matters are very vital and very material. I recognise that broadly an answer cannot be expected to a question interpolated while the statement is being made, but I should like a fuller answer to be given, if not to-night, at any rate during the discussion on the Finance Bill.

8.0 P.M.

I should like to know exactly the lines on which the Valuation Department proposes to go, and what is the work which it is to do. I and those who are associated with me would be very glad if the Valuation Department is to be continued, and if part of its work is to ascertain the unimproved value of the land, because that would be providing material upon which we could probably build in future years. To be informed that the Department is to go on as it is, inclines one to think that the Department is being continued for the purpose of camouflage only. I hope some information will be forthcoming with regard to that. The Chancellor of the Exchequer complained that he had received very little assistance in connection with this matter from the Select Committee which was set up to consider the question of land values duty. That was not entirely the fault of the members of the Committee. The question which was remitted to the members for consideration was whether these duties should be continued or abolished. I and those who thought with me who were appointed as members of the Committee were of opinion that the reference was wide enough to enable us to consider the question whether we could substitute for these duties a system of land values taxation on the basis of the system which is in operation in so many of our Colonies, and which, so far as our information goes, has worked with very useful results, but we were informed by the Chairman of the Committee—I understand that he had a consultation with Mr. SPEAKER—that that was not a matter which we could consider under the reference.

We then suggested that the Government should be asked to extend the terms of reference. While the Committee was not unanimous or anything like unanimous in making that request the Committee was unanimous in asking the Chairman to convey to the Government what the position was and ask whether the Government would so extend the terms of reference, but we were unable to obtain from the Government an answer to that request, which was made something like six weeks before the close of last Session. We were only called together practically on the last day of the Session for the purpose of bringing forward a report when there was no opportunity of hearing witnesses, and we have never had a reply from the Government as to whether they were or were not willing to extend our terms of reference. In these circumstances it was in the power of the Government to authorise the Committee to investigate for it the question whether if these land value duties, for the reasons indicated in the Chancellor's speech, should not be continued, it was still possible to enforce the policy which has been advocated by the Prime Minister for so many years, and was approved of by the electors of the country at two General Elections in January, 1910, and December, 1910, while they were not asked at the last General Election to express, and did not express, any opinion on these duties.

It is quite true, as the hon. and gallant Member for Newcastle-urider-Lyme has stated, that those of us who have been most keenly interested in the taxation of land values in this country were not ardent advocates of these particular taxes. We agreed with them because we were informed that they were a method of getting the valuation and that that was the foundation upon which we could build; but it is true that up to the year 1914 the Prime Minister was still an unrepentant advocate of the policy embodied in these taxes. As a result of actions in the Law Courts some of these duties were difficult to collect, and immediately before the War broke out in August, 1914, the Prime Minister, who was then Chancellor of the Exchequer, was engaged in a great agitation, not for the purpose of getting these taxes abrogated, but of getting a fuller system of land valuation taxation adopted. The Chancellor of the Exchequer seemed rather amused when my hon. Friend the Member for Edinburgh suggested that when the Prime Minister returns from San Remo he will be somewhat critical of the proposals for the abolition of these taxes put forward to-day. He assured us that the matter has been a Cabinet matter, and that the Prime Minister has assented to this change. We must assume that that is so when he states it.

What does that mean? All during these years the right hon. Gentleman who is now Chancellor of the Exchequer, and the right hon. Gentleman who is now Leader of the House, were the keenest and most bitter critics of these taxes, and what it means is that they are now able to drag the Prime Minister at their chariot wheels, because nothing has occurred during the period of the War to render it less desirable that duties should be laid upon the land values of the country. We are told that these taxes are unworkable. Can it be said that the experience of the British Empire is that the taxation of land values is in itself an unworkable policy? The Chancellor of the Exchequer tells us that when he was engaged in investing the question of the taxing of war profits he sent a Committee specially to the United States and Canada for the purpose of inquiring into the system in operation there for taxing war profits. Why then, before abandoning the policy sanctioned by the electors of this country at two general elections, was a Commission not sent to Canada, Australia and New Zealand for the purpose of ascertaining how this system of the taxation of land values was working in these places?

The Select Committee was supplied with official reports from the Governments of all these Colonies with reference to the manner in which land values taxation was in operation, and in every case the report showed that the system was working smoothly and bringing in revenue, and that so far from militating against building, as we are told these taxes would do, in every case they make land much more accessible for building and for use for the purposes of commerce and industry. If the Committee had been armed with the powers, which the Chairman was authorised to state to the Government that at any rate a number of us were anxious to obtain, to investigate these methods of dealing with the problem it could have done so. But even when the Committee broke down, it was still open to the Chancellor of the Exchequer himself to make inquiry, as he made inquiry with regard to the matter of taxing war profits. As I hope we shall have another opportunity of discussing this matter, I will now simply associate myself with what my hon. and gallant Friend has said, that in this particular at any rate, this Budget is really a Budget designed in the interests of the landlords of this country.

We all remember the eloquence with which the Prime Minister drove home to the people of this country the evils of land monopoly and how he showed that some system of taxing land values was the best method of breaking down that monopoly power. I think it was in what has become the famous Limehouse speech that he directed attention to the case of Mr. Gorringe, of Buckingham Palace Road, the proprietor of a large business, and mentioned that that gentleman had been compelled to pay a greatly increased rent upon his own improvements when his lease fell in on the Duke of Westminster's estate. I hope we shall hear the Prime Minister before these debates close as to whether he thinks incidents of that kind have passed away. Unless the circumstances have changed—I am speaking from newspaper reports—within a few hundred yards of Mr. Gorringe's premises there is an island site where there are from twenty to thirty different business men who have carried on their businesses for something like a generation, and the Duke of Westminster, after receiving what these people believed to be an offer to the very last penny they can afford to pay when the leases expired, proposes to turn them out and drive them to other parts of London where they cannot carry the goodwill of their businesses, so that he may get a very largely increased price from someone who proposes to build an hotel.

The Westminster leases will be falling in during the next few years in large numbers. I have never been one of those who joined in any special attack on dukes. Dukes are no worse than others who behave in that way. But I do think that the working people of this country are not likely to feel confidence in the finance of the Government if they find on the one hand that at this time of day the Duke of Westminster is able to exercise such tyrannical powers over business people and, on the other hand, to receive these vast sums which he has done nothing whatever to create, and that the Chancellor of the Exchequer finds this a fitting moment to throw away the weapon which would enable him to levy even a small charge upon the landlord. We will resist to the utmost this surrender to landlord interests. We hope that when the Prime Minister returns, he will not be found to have deserted the cause which was so dear to him and which made him the idol of many people


I disagree with the hon. Member who has just spoken. In my opinion, this is not a Budget designed in the interests of landlords. It is a Budget unwittingly designed in restraint of trade. The Excess Profits Duty will be resented from one end of the country to the other. It is a duty which will have the most disastrous effect on the industry and trade of the country, and just at the time when we need all the latitude and licence we can give to capital and enterprise. It is a Budget which will serve one very useful purpose. It will show the working people of England that inflated wages mean, not only an increased cost of living, but the increased cost of everything. No one who has listened to the statement of the Chancellor of the Exchequer with regard to the loss of the Post Office will fail to understand the risk which we are running in responding to every demand that is made for increased wages. If you realise that letters, telegrams, telephones and the parcel post are essential to the free intercourse of commerce in this country, and that, in regard to these, charges are all increased to-day, it will be obvious that there will be a greater difficulty in carrying on the business of the country.

With regard to the Land Values Department, I congratulate the Government on having at last displayed the honesty to sweep aside taxes which were never honestly and sincerely meant. I remember perfectly well the old days of the 1909 Budget, the "rare and refreshing fruit" days, when the right hon. Gentleman who is now Prime Minister was ramping and raging up and down the country and promising all the blessings of Heaven to the working classes of this country. I remember the years and years during which hon. Members in this House protested that these taxes were not worth the collecting and that the cost of collecting was a scandal. I remember the days when the present. Prime Minister justified those taxes with all the eloquence he could command. And even during the War, when some of us pleaded outside this House as others pleaded inside the House, that the Valuation Department was not an essen- tial industry, the Prime Minister was one of the first to assert that the men who were working in that Department were in an essential industry, and that these wonderful taxes were going to relieve the country of all sorts of burdens. To me it is somewhat amusing to find at last, owing to the association of the Prime Minister with a little cold light and the cool common sense of the Unionist Members of the Coalition, he has been compelled to throw aside this grotesque arrangement and to confess before the world that the Land Valuation Department was a costly and stupid experiment.

I rose principally to say one thing with regard to Income Tax, and that is that there is throughout the country a very strong feeling that the incomes of married people should be separated for the purpose of assessment. I am sorry if I transgressed in any way the rules of the House when I interrupted the Chancellor of the Exchequer in the course of his speech. I was anxious to get some assurance from him before he left the subject of Income Tax. The right hon. Gentleman subsequently told me that he was in happy agreement with the Royal Commission on this matter. "Happy agreement" means, I understand, that he endorses the opinion of the Commission, that there is no case for the separation of these incomes. I know that in many instances in the country there is a very strong feeling that this is a grievance of which more will be heard in this House. This Budget I welcome in one sense as a lesson to the working men of this country. We all believe that Labour should be well treated, but I think Labour will see that the insistent demand it makes upon the purse of public departments is a demand that can be met only by increased calls on themselves. I wonder what the labouring men in this country will say to the penny increase on the pint of beer? We know that during the War the working man felt very keenly the restrictions on the beverage, which he has a perfect right to obtain at a reasonable cost. I rather welcome the whole aspect of this Budget because I think the time will have to come when we as a country will have to come to our senses and realise that all these demands which are made are demands which constantly come back on the people themselves. What is happening with regard to the Post Office is a very salutary lesson to the working people of this country and it is evidence to them of what nationalisation would mean if it came about in any large form. We have nationalised the Post Office, and owing to the workers' demands there are such increases that to-day the poorest woman in this country will not be able to send a letter without paying 2d., and telegrams, which are so essential in industry, are increased to 1s. with a penny per word after 12. We are thus returning to the bad old days which we all thought had departed. Parcels have gone up, and we know how much the farmers rely on the cheap parcel post to dispose of a great deal of their goods. All these things make me, not despondent, but somewhat glad that the proposals of the Budget today are proposals of a kind which are certainly inclined to make the working classes of this country realise that all their demands for increased wages and all their claims for uneconomic awards ultimately fall back on themselves.


I feel bound to reinforce the protest made by my hon. Friend (Mr. Raffan) against the dropping of the Land Value Duties. I may say I am glad that the Chancellor has taken a firmer grip of the Excess Profits Duty because I believe, apart from the material aspect, the public conscience of the country demands that as much as possible of the profits made during and in consequence of the War should be brought back to the Treasury. An hon. Member remarks, "Does that apply to professional people?" Yes, I say it to professional people as well, but I do not think you will find that professional people made fortunes out of the War. When you compare those engaged in industry and those engaged in professions, I think you will find that those in industries make millions, whilst in the other case it is only a matter of scores of pounds in the year. With regard to Land Values Duties, I watched the Chancellor to-day when he was announcing the dropping of the Land Taxes, a matter which presents aspects of tragedy as well as of comedy. I did not detect anything like a funeral dirge in the language of the Chancellor over the passing of the Land Duties. He is the last man we would associate with any feeling of vengeance or vindictiveness, and we regard him as one of the most magnanimous politicians in the House, but I thought I could detect a merry twinkle in the corner of his eye when he was telling us that he was going to drop the Land Taxes. Possibly he was thinking of some of the temporary residents of San Remo at the present time. I think in view of the tremendous agitation and convulsion through which we passed ten years ago in order to get these duties adopted by the House, the matter requires and deserves a little more explanation than the Chancellor gave us to-day.

When one thinks of Limehouse and the attacks upon Dukes and all the turmoil of those wild times of ten or eleven years ago, and now witnesses the dropping of these taxes in sombreless mood during the dinner hour, one must think that some great change has come over the House. Where is the raging, tearing propaganda we had in those years? The then Chancellor of the Exchequer, and now Prime Minister, told us that these Land Taxes would give us a new world, and would regenerate rural life, and would bring a new spirit into urban life as well, and we heard the talk of "rare and refreshing fruit." What has become of all that? The whole meaning of it is that these Land Taxes are not allowed on the other side of the Rubicon, and as a condition of the Prime Minister being allowed to become Leader of the Tory party he must drop these Land Taxes. At a luncheon at the National Liberal Club the other day the Prime Minister made a reference to Mr. Runciman strangling a political "baby," and now the Prime Minister is quite content to leave the present Chancellor of the Exchequer to strangle the " baby " of Land Taxes which he presented to the country in 1909 as the one hope of the country, and to get rid of it in any way he can. Some of the Land Values Department is to be left as a sort of cradle and relic of the Land Values Duty. I think that the Tory party have been rather merciless with the Prime Minister in insisting on the abolition of these Land Taxes, and that they might have left them as a relic of his Radical days. I am sorry that the Prime Minister takes the matter lying down, and has arranged a conference very far from here in order not to be here to see the execution of this very dear relative. The other day at the luncheon to the Prime Minister the " Land Song " was played outside, and I suppose it was the swan song of the Land Taxes, and there we leave it. I consider that his colleagues in the Government have not been very considerate to the Prime Minister in dropping these Land Taxes, which were not taking much from the land and which would remind the Prime Minister of his Radical days.


I do not agree that the Chancellor was well advised in continuing what he describes as the Excess Profits Tax. This is a Tax most unfair, especially to new beginners in business. Why should a new beginner be placed on a different basis to anybody else who suddenly started making immense profits. It also raises another question in regard to firms who were making huge profits before the War, but who, because they have not added to those huge profits after the War, have escaped the Excess Profits Tax altogether. I am very disappointed at the right hon. Gentleman s speech, because it seems to me he has departed from the well-established principle of taxing profits which people make, and as far as I understand the Budget to-day, it is proposed to attack businesses before they are in a position to make their profits. As an illustration take the postage account, which was formerly a penny, was then increased to three-halfpence, and now on every letter a business firm sends out they must pay twopence, while on every receipt they must also pay twopence instead of a penny, and on every catalogue of prices which they send out they must pay excess postage. If they employ motors to deliver their commodities they have now for the first time to pay a very huge road tax, whereas if they employ a pair-horse vehicle they pay no tax. Further, they will have to pay a stiffer income tax, and a new company tax, and there is the excess profits tax in addition. I have listened with some regret to the right hon. Gentleman's speech, and in Committee I shall have to make some proposals designed to bring about an alteration before the Budget becomes law.

Mr. A. J. LAW

I am sure the House will have listened to the right hon. Gentleman's speech with very great interest. It is one of the most remarkable Budgets that has ever been presented to this House, and with many of its proposals I am in entire agreement. He has dealt with indirect taxation in a very bold and comprehensive way, and the tax on luxuries, for instance, is one to which the country probably was looking forward, particularly to those on wine and cigars, with which I find no fault whatever; but when we come to the Excess Profits Duty, that is a matter of very great concern to some hon. Members who happen to be engaged in trade. I remember a year ago that the Chancellor of the Exchequer said this tax presented anomalies and was not quite right in its incidence, and I was utterly astonished to-day that he did not propose to vary the form of that duty. In the first place, it was a war tax, but now the war is over, and in view of what the Chancellor himself appeared to promise a year ago, I think the basis of the tax should have been made more comprehensive, so that everyone liable to excess should have been brought in. It is the pre-war basis of the tax which makes it very unfair to some firms, because the Chancellor of the Exchequer has unconsciously, it seems, provided a way of escape from the tax for certain firms. Some businesses were not making much profit before the war, and it follows that anything above that is called excess profits, whereas, on the other hand, I know of companies which were making profits of 40 or 50 per cent before the war, and they now escape this duty in consequence. I therefore hope the Chancellor will see his way to making this duty more comprehensive, so that businesses which are making any profit at all will be taxed in a more equal manner, a percentage, for instance, on capital. Such a tax might bring in £460,000,000, or twice the amount named by the right hon. Gentleman. If he had adopted such means it would have been fairer in its incidence and would at the same time, I believe, have brought in a greater revenue to the Exchequer.


The position of voluntary hospitals is going to be a very serious one in the future, and the State may in a very short time be faced with having to pay out a very large sum of money for their upkeep, or at any rate, to help maintain them, and I would like to suggest that the Chancellor of the Exchequer might consider the claims of these hospitals. I think the best way in which it could be done would be by allowing an abatement or total exemption from Income Tax off subscriptions made to recognised voluntary hospitals. A man with, say, £7,000 to £9,000 a year has at present to pay taxation at about 9s. 6d. in the pound. In other words, if he were to give £200 to a hospital, he must earn £380 to enable him to do so, and if, an individual could treat a donation or subscription to a hospital as a deduction from Income Tax, both Schedule D and Super-tax, a very great step forward would have been taken. I have no doubt the Chancellor of the Exchequer would say that while he would like to help these people these suggestions would diminish his income. At the same time, if that matter is considered to its fullest extent, I think it will be found that, so far from diminishing the income of the State, it would really be the cheapest way of meeting a position which will most certainly fall to be faced by the State ultimately. Of course, the loss to the State from small subscriptions would be very much less, because no doubt people who gave small subscriptions to hospitals would not bother to claim the abatement on their Income Tax. That is really the only point I wish to bring forward. I think it is well worthy of consideration. The question is bound to arise in the future, and I put it forward as a suggestion, which, I hope, the right hon. Gentleman will consider favourably.

Question put, and agreed to.

Continuation of Additional Medicine Duties {Excise).

Resolved, That the additional duties of excise upon medicines imposed by Section Eleven of the Finance (No. 2) Act, 1915, and continued by Section Two of the Finance Act, 1919, until the first day of August, ninteen hundred and twenty, shall continue to be charged as from that date until the first day of August, nineteen hundred and twenty-one. And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Spirits (Excise),


(a) in addition to the duty of Excise now payable for every gallon computed at proof of spirits distilled in the United Kingdom there shall, on and after the twentieth day of April, nineteen hundred and twenty, be charged the following duty (that is to say):—

£ s. d.
For every gallon of spirits computed at proof and so on in proportion for any less quantity; and 1 2 6

(b) that it is expedient that the Excise duty on spirits should be charged on spirits by whatever process manufactured in the United Kingdom as well as on spirits distilled therein.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Spirits {Customs).

Resolved, That, in addition to the duties of Customs now payable on spirits imported into Great Britain or Ireland, there shall on and after the twentieth day of April, nineteen hundred and twenty, be charged the following duties (that is to say):—

£ s. d.
For every gallon computed at proof of spirits of any description except perfumed spirits 1 2 6
For every gallon of perfumed spirits 1 15 10
For every gallon of liqueurs, cordials, mixtures, and other preparations entered in such a manner as to indicate that the strength is not to be tested 1 10 3

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Beer (Excise).

Resolved, That in addition to the duty of Excise now payable in respect of beer brewed in the United Kingdom, there shall on and after the twentieth day of April, nineteen hundred and' twenty, be charged the following duty (that is to say):—

£ s. d.
For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees a duty of 1 10 0
and so in proportion for any difference in quantity or gravity.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Beer (Customs).

Resolved, That in addition to the duties of Customs now payable on beer imported into Great Britain or Ireland there shall on and after the twentieth day of April, nineteen hundred, and twenty, be charged the following duties (that is to say):—

£ s. d.
In the case of beer called or similar to mum, spruce, or black beer, or Berlin white beer or other preparations, whether fermented or not fermented, of a similar character—
For every thirty-six gallons where the worts thereof are or were before fermentation of a specific gravity—
Not exceeding one thousand two hundred and fifteen degrees, a duty of … 6 0 0
Exceeding one thou sand two hundred and fifteen degrees, a duty of … … 7 0 7
In the case of every description of beer other than that above specified—
For every thirty-six gallons the worts thereof were before fermentation of a specific gravity of one thousand and fifty-five degrees, a duty of … 1 10 0
and so in proportion for any difference in gravity.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Wines (Customs).

Resolved, That the duties of Customs charged on wines imported into Great Britain or Ireland shall on and after the twentieth day of April, nineteen hundred and twenty, be double those now chargeable, and that on and after the date aforesaid a further additional duty equal to fifty per cent. of the value thereof shall be charged on sparkling wines so imported. And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Cigars (Customs).

Resolved, That in addition to the duty now payable there shall on and after the twentieth day of April, nineteen hundred and twenty, be charged on all cigars imported into Great Britain or Ireland a duty equal to fifty per cent. of the value thereof. And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Mechanically Propelled Vehicles.

Resolved, That— (a) the duties of excise for motor-cars now payable in the United Kingdom shall cease to be payble on and after the first day of January, nineteen hundred and twenty-one, and that on and after that date there shall be charged annually in the United Kingdom the following duties of excise in respect of mechanically propelled vehicles used on roads:—

Description of Vehicle. Rate of Duty.
(1) Cycles (including motor-scooters) not exceeding 7 cwt. in weight unladen:—
£ s. d.
Not exceeding 200 lbs. in weight unladen 1 10 0
Exceeding 200 lbs. in weight unladen 3 0 0
Bicycles if used for drawing a trailer or side-car, and tricycles 4 0 0
(2) Vehicles not exceeding 5 cwt. in weight unladen adapted and used for invalids 0 5 0

(3) Vehicles being hackney carriages.

In the Metropolitan Police area and such other districts as the Minister of transport may fix. In all other districts.
Tramcars 15s. 15s
Other vehicles:
Seating not more than 5 persons £15 £12
Seating more than 5 but not more than 14 persons £30 £24
Seating more than 14 but not more than 20 persons £45 £36
Seating more than 20 but not more than 26 persons, £60 £48
Seating more than 26 but not more than 32 persons £72 £60
Seating more than 32 £84 £70

(4) Vehicles of the following descriptions used in the course of trade, otherwise than for the conveyance of goods, and in agriculture, that is to say:—

Locomotive, ploughing engines, agricultural tractors, and other agricultural engines, not being engines or tractors used for hauling on roads any objects except their own necessary gear, threshing appliances, farming implements,. or supplies of fuel or water 5s.

Road locomotives, and agricultural engines, other than such engines in respect of which a duty of 5s. is chargeable—

Not exceeding 8 tons in weight unladen £25
Exceeding 8 tons but not exceeding 12 tons in weight un laden £28
Exceeding 12 tons in weight unladen £30

Agricultural tractors, other than such tractors in respect of which a duty of 5s. is chargeable, used for haulage solely in connection with agriculture—

Exceeding 2½ tons but not exceeding 5 tons in weight un laden £6
Exceeding 5 tons in weight unladen £10
Tractors of any other description £21

(5)Vehicles (including tricycles weighing more than 7 cwt. unladen) used for the con veyance of goods in the course of trade—

Not exceeding 12 cwt. in weight unladen £10
Exceeding 12 cwt. but not exceeding 1 ton in weight unladen £16
Exceeding 1 ton but not exceeding 2 tons in weight unladen £21
Exceeding 2 tons but not exceeding 3 tons in weight unladen £25
Exceeding 3 tons but not exceeding 4 tons in weight unladen £28
Exceeding 4 tons in weight unladen £30
With an additional duty in any case if used for drawing a trailer of £2

(6)Any vehicles other than those charged with duty under the foregoing provisions—

Not exceeding 6 horse power or electrically propelled £6
Exceeding 6 horse power £1 for each unit or part of a unit of horse power

(b)the unit of horse power for the purpose of duty under this Resolution shall be calculated in accordance with Regulations made by the Minister of Transport;

(c)on licences for vehicles (other than cycles and tramcars, and vehicles in respect of which an annual duty of 5s. is chargeable) taken out for any quarter of the year duty shall be charged at the rate of. thirty per centum of the full annual duty; and

(d)the abatement of duty granted in the case of motor cars used by medical practitioners or veterinary surgeons for the purpose of their professions shall cease.

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