§ The total expenditure in 1925 is, as have said, £799,400,000. What is the Revenue which I have to set against that? I have, first of all, to encounter a progressive loss of revenue of upwards of £14,000,000 on account of the remissions of taxation on which the right hon. Gentleman opposite was so much complimented last year. £14,000,000 is a very serious lag to have to face at the outset of the problem. But that is not all. I do not feel justified in budgeting for any substantial expansion of trade. I believe in a sure and steady improvement in trade. It is not possible. in this scientific age, for Great Britain, for Europe, for the world to remain at peace for any long series of years without the process of recuperation being continuous. This is borne out by all the tests which it is possible to apply to the internal economic and financial circumstances of our own country. But the improvement will be only gradual, and it may even be slow. We have a long pull before us. It would be improvident to count on any speedy or important relief. We may all hope, but the Treasury cannot build its Budgets on hopes. If, contrary to my calculations but in harmony with all our hopes, any large or marked expansion of trade or business 61 should occur, that will be a windfall to the Exchequer. I am not counting on any such windfall.
§ In any of the figures and proposals which I make to the Committee, I am not counting on any sudden or brilliant improvement in our affairs. I am not counting on, nor am I making provision for, any serious disaster such as would overwhelm our country if peace were broken by war abroad or by great industrial convulsions at home. Our destiny is in our own hands in these matters. We have our fortunes to make or to mar in these Islands. I am delighted to think that the realisation of that fact—that sombre and brutal fact—is becoming more and more common ground between all parties and all classes, apart from their other serious differences.
§ Proceeding in this sombre garb along the middle way, I estimate the Customs and Excise revenue in 1925 at £235,000,000. That is against £234,500,000, the actual receipts in the year which has just closed. It is really a bigger increase than it looks, because to make the comparison between the receipts of last year and the estimates of this year exact, to compare like with like, about £2,500,000 should be deducted from the figures of last year for reasons into which I will not enter now. So I am really budgeting for about 1 per cent. increase on Customs and Excise. The Motor Vehicle Duties rise by £1,250,000 to £17,500,000—to such dimensions has that modest child which my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) called into being 16 years ago, already grown. It is almost certain to grow larger in future.
§ Coming to direct taxation, under the three years average the Income Tax will benefit by the fact that the deplorable trading results of 1921 pass away and a better year takes its place. On these and other favourable factors I feel entitled to estimate for a larger yield of the Income Tax. It has already, together with the Super-tax and Death Duties, exceeded the right hon. Gentleman's Estimate by £16,000,000 last year. I do not feel that there is any need to anticipate a diminution in the growing productivity of the of the Death Duties. The Super-tax will also reflect the improving trade of 1924. It is very difficult to make estimates which are other than speculative about 62 the remanets of Excess Profits Duty and Corporation Profits Tax, but I am advised that some grain at any rate will be winnowed from the huge mass of chaff which is represented by the aftermath of those duties.
§ At the present rates I estimate the total yield of Inland Revenue at £459,000,000, compared with last year's estimate of £432,000,000, and with the actually realised yield of £439,000,000. Perhaps the Committee would like to have the actual figures. They are:
£ | |
Death Ditties | 62,000,000 |
Stamps | 24,000,000 |
Land Tax, etc | 1,000,000 |
Income Tax | 289,000,000 |
Super-tax | 70,000,000 |
Excess Profits Duty | 4,000,0470 |
Corporation Profits Tax | 9,000,000 |
Total Inland Revenue | 459,000,000 |
§ That gives me a total tax revenue of £711,500,000.
§ With regard to non-tax revenue, I estimate the
£ | |
Post Office receipts at | 57,000,000 |
Crown Lands | 900,000 |
Interest on various Lands | 12,600,000 |
Miscellaneous ordinary revenue | 14,000,000 |
Special receipts | 30,000,000 |
§ Sir WILLIAM DAVISONWhy not? Has not Ulster paid?
§ Mr. CHURCHILLThe Treaty must be observed in its integrity, and Article 5 is an essential part of it. I have not the slightest reason to assume that the Government of the Irish Free State have 64 not the intention of taking up with us, at the proper time and in the proper way, a, discussion of the important issues connected with Article 5, but I feel it necessary at this moment, when I am making a statement on the general finances of the country, to record this fact as one of the facts which must by no means be allowed to pass out of consideration, although it forms no foundation for my actual Budget. Neither am I counting, in the last case, upon any diminution of expenditure such as I hope may be achieved by the exertions of the Cabinet and the Public Accounts Committee, aided I trust by the House of Commons as a whole. Having regard to all these very considerable factors, I think I am justified in saying that the surplus of £26,600,000 in 1925 may without exaggeration merit the epithet "satisfactory."
A surplus of £26,600,000 may be satisfactory in itself, but yet it may not be adequate for the needs of public policy. What are the twin supreme objectives of public policy at the present time? I can give them in a single sentence. Security of the home of the wage-earner against exceptional misfortune and encouragement of enterprise through a relief of the burdens resting upon industry. It is no use attempting to handle large matters of this kind in a partial wand ineffective fashion. Action, if it is to be taken, must in its character and in its scale be such as to produce an appreciable effect upon the lives and experience of all classes in the community. If, therefore, we are to advance upon these formidable problems. it is imperative that I should fortify the revenue, and this I will now, with the permission of the Committee, proceed to do.