§ After all, however, the best and surest help we can carry to productive industry, and, through productive industry, to employment, is by a reduction of the burdens which enter directly into the cost of production, or which deplete the capital accumulations upon which, in modern times, industry can alone develop. We have in the Suspensory Fund a realised surplus of £22,500,000. I propose to use this for the purpose of making a very important remission of taxation, a remission of a most onerous and invidious form of taxation, namely, the local rates upon productive industry. After the current payments, three-fourths of the rates upon productive industry, and the whole of the rates upon agriculture, will be abolished. I think I mentioned this last year in my Budget speech, and my right hon. Friend the Minister of Health has had to refer to the subject several times in the interval. This is because it was necessary to obtain Parliamentary authority for the accumulation in the Exchequer of the necessary funds and also to pass legislation to enable them to be applied in the most useful manner.
§ Of course, it would have been much nicer if we could have kept this quiet all this time and if I could have announced it for the first time now, but unhappily in a world of reality—and Governments and Chancellors of the Exchequer are painfully anchored to reality—it is often necessary to make long preparations in order to secure any large or permanent advantage. However, the period of preparation is over. The necessary laws have been passed by Parliament, the necessary funds have been gathered, and we are in a position 60 to abolish this year three-quarters of the rates upon productive industry of all kinds and the whole of the rates upon agriculture. That is the best, and by far the greatest, gift which it is in our power to bestow. We have saved up for it, we have toiled for it, and we can now bestow it. The £22,500,000 is not needed for the rating scheme in the year 1929. During this year the yield of the Petrol Duty, £15,700,000, will be sufficient to meet the half-year's relief to industry and agriculture, but in 1930 the full scheme of rating relief comes into operation and the Exchequer will provide in relief of local rates nearly £36,000,000 of new money. In that year the Petrol Duty should yield £17,000,000 and £3,000,000 will be provided from the Road Fund, leaving less than £16,000,000 to be taken from the Suspensory Fund, which we hope by that time will be increased by any surplus resulting from 1929. Thus the finance of this vast scheme of tax remission is fully provided for till the year 1931. Thereafter we must look to the normal increase of revenue which, even in these bleak years, has shown a steady annual rise and which during the last year has definitely exceeded expectations.
§ But, apart from the normal growth of the revenue, there is one special additional factor on which I think I am entitled to dwell. Before the great disaster to the coal industry occurred—[Interruption.] I must describe what happened. Something happened in 1926. To put it in the least controversial way, before what happened in 1926 happened, the principal basic trades of the country yielded profits assessable to Income Tax of £150,000,000 a year. In the present Budget I am counting upon less than £100,000,000 of profits from this same group of trades. It seems probable that a definite and solid revival of prosperity in the basic trades has now begun, but even if these trades do no more than regain in 1932 the levels at which they stood in 1923 and 1924 an addition of at least £10,000,000 would be made to Income and Super-tax on that account alone. Indeed the improved prospects of the revenue and the increase in the Suspensory Fund encourage and justify a further step forward at present in the relief of productive industry.