§ I turn to the Inland Revenue. I cannot expect that the Death Duties will repeat in 1928 the exceptional advance they made in 1927.840
§ Mr. CHURCHILL
It is no lack of good will on my part. Nevertheless, in this field there is a definite expansion, and I estimate that the yield in 1928 will amount to £72,000,000. The Excess Profits Duty, which yielded in 1926 £2,500,000 more than I expected, fell away last year to less than nothing. There is a great heap of claims by the Exchequer, aggregating nearly £80,000,000, against which there are indefinite counter-claims. The cases are dealt with as rapidly as possible, and it depends on pure chance whether the resulting decisions yield in any given year results favourable or unfavourable to the Exchequer. There is this important difference, that whereas a counter-claim given against the Exchequer is met at once out of revenue, there are many claims in which the Exchequer succeeds against persons who have not only lost their excess profits, but everything else as well. In all the circumstances, I have with some hesitation included £1,000,000 from the Excess Profits Duty, and I cannot estimate for more than £1,500,000 for the expiring remnants of the Corporation Profits Tax. Stamps, which yielded £1,000,000 above the Estimate last year, may in the present speculative activity be expected to produce an additional £1,000,000, and I put them at £28,000,000.
I now come to the staple, the Income Tax. The Committee will remember that last year I had to write down the estimate of the Income Tax by £21,000,000 on account of the general strike and coal stoppage. As I then stated, I had to face in the present year a loss from the same cause of nearly £7,000,000. I looked forward to the improved trading conditions of 1927 to make up for this handicap, but the recovery of the Income Tax has not by any means come up to my expectations, still less to my hopes. The Inland Revenue authorities have received considerable assistance from trading concerns in making their forecasts of profits, and it is worthy of note how very close the estimate of last year turned out to be in actual practice, having regard to the fact that we are no longer on the three years' average but on the basis of the previous year. The Inland Revenue estimate of the profits in 1927, 841 which are, of course, the basis of the tax in 1928, although better than 1926, the coal stoppage year, actually falls short of the profits in 1925 instead of showing the improvement I looked for. The significance of this result will be apparent to all. Even when allowance is made for the fact that some of the trading profits of 1927 will relate to accounting years which may have commenced in the period of the coal stoppage, nevertheless the result is disquieting. It is clear that the injury done by the industrial civil war to the means of earning the national livelihood, and the consequent injury to the national revenue which resulted there-from, is very deep and lasting. It was a wound felt like so many ordinary wounds, less painfully on the battlefield at the time than afterwards in the hospital. The consequences will long he with us. Moreover, in 1928 I can no longer count on that acceleration of Schedule A payments which saved us from additional taxation last year. That measure was estimated to produce, for one year only, an extra sum of £14,800,000. It succeeded beyond all expectations. Nearly £17,000,000 has, in fact, been gathered. The collection has proceeded with more rapidity than in any previous year when only half of the whole Tax was paid in January, and scarcely a single complaint has reached the Treasury, although we were dealing with the affairs of 11,000,000 hereditaments. There is, of course, no anticipation of this year's revenue, as people continually imagine, because of the Schedule A decision taken last year. That trouble will not, as I explained, arise until the world's end. Nevertheless, we now revert to the normal, having expended in our distress a valuable and important reserve. In all these circumstances I cannot put the yield of Income Tax in 1928 beyond the figure of £225,000,000.
Super-tax follows a year behind Income Tax, and it is therefore even more involved in the disasters of the strike and stoppage year. It fell somewhat short of the estimate in 1927, and I cannot count on more than £60,000,000 on this occasion. The foregoing, with the Land Tax and various minor items, give a total Inland Revenue figure of £398,350,000.