HC Deb 11 April 1927 vol 205 cc98-9

We have now reached the summit which we set ourselves to scale. Adding together the £5,900,000 of new Indirect Taxation, the £12,000,000 from the Road Fund Reserve, the £5,000,000 from the brewers' credit, the £14,800,000 from Schedule A, and £300,000 from rectifying the Estate Duty anomaly, we obtain a total increased revenue for 1927 of nearly £38,000,000. The prospective deficit of £21,500,000 is thus converted into a prospective surplus of £16,400,000. This enables me to raise the new Sinking Fund to the unprecedented level of £65,000,000, and so to pay off nearly half of the arrears into which we have fallen through the disasters of 1926. I am now able to balance the Budget for 1927 with a revenue of £834,800,000 and an expenditure, including £65,000,000 Sinking Fund, of £833,400,000, and my final prospective surplus becomes £1,400,000, which is certainly none too large, and requires to be fortified by current savings from the Estimates of the present year.

I shall permit myself very few concluding comments. The indirect taxes which have been chosen, even on the assumption that the whole burden be passed on to the consumer, and not to some extent paid out of profits, spread their weight over all classes. I have proposed no permanent taxes for the sake of a Sinking Fund higher than £50,000,000. If I am using nearly £17,000,000 of once-for-all, or windfall, revenue, to meet current needs, that is because a large part of our difficulty is temporary, and the revenue next year will recover at least to that extent. The remainder of the windfall money goes, as it should go, towards wiping out the arrears into which the Sinking Fund had fallen, and is correctly devoted to the amortisation of debt.

I must however warn the Committee and those in the House who demand expenditure—and they sit in every part of it—that it will be quite impossible to repeat in another year or in other directions the processes which have been adopted this year. Every conceivable expedient has been considered, and I am at the end of my adventitious resources. Unless expenditure can be reduced as revenue grows, there is no chance of any reduction of taxation. If expenditure, apart from self-supporting expenditure, grows, there is no means of meeting it except by the further taxation of tea, sugar or beer, or by the raising of the Income Tax, Super-tax or Estate Duties. And rather than see the Sinking Fund reduced in time of peace below the statutory level of £50,000,000, I shall without hesitation, should I be responsible, recur to any or all of those expedients. Meanwhile, in this period of exceptional difficulty, I have tried my best to guide the country round a difficult corner; I have tried my best to find a way of balancing the Budget without checking the long-looked-for or, at any rate, long-hoped-for trade revival, and without impairing that national credit upon which not only the finance, but the commerce of Britain is vitally dependent.