§ I come now to the expenditure for 1929. I estimate the Consolidated Fund Services as follow:
| £ | |
| Debt interest and Management | 304,600,000 |
| Payment to Local Taxation Account | 15,000,000 |
| Payment to Northern Ireland Exchequer | 5,400,000 |
| Miscellaneous Consolidated Fund Services (including new Agricultural Mortgage Scheme, £500,000; expenses of returning officers at General Election, £420,000) | 3,500,000 |
| Total | £328,500,000 |
| The cost of the Supply Ser vices has already been stated at | 347,504,000 |
| Total expenditure | £676,004,000 |
| (which compares with £632,201,000 actual out turn for 1928). | |
| Adding rating relief | 15,560,000 |
| and Compulsory Sinking Funds | 50,400,000 |
| Giving (apart from the self-balancing expenditure of the Post Office and Road Fund) a Total of | £741,964,000 |
§ I will now forecast, in the light of 1928, the revenue of 1929. Last year Customs and Excise showed a deficit of £8,400,000. That is almost entirely accounted for by beer alone, which showed a shortfall from the estimate of £7,350,000. That is an Exchequer embarrassment, but it is not a national misfortune. The depression of the basic industries and the impoverishment of a large part of the wage-earning classes through the troubles of 1926 are a partial explanation, but in the main there has been a steady decline in the consumption of alcoholic liquor throughout the island. That is due to a change in national habits and to the growth of alternative attractions. After making full allowance for all the improvements in trade conditions which may be expected, I cannot estimate for more than £79,000,000 of beer revenue in 1929. The move- 43 ment towards greater temperance appears general among all classes, for the wine revenue fell short by £650,000; and, if spirits showed a quite unexpected increase of £300,000 upon the Estimate, that is entirely due to the exceptionally cold weather through which we have passed. In the whole field of this revenue, even prosperity will bring no marked expansion. I think we may all dwell with some complacency upon the results which regulated freedom, corrected by high taxation, have shown compared with those which have followed—or perhaps I ought to say which have flowed—elsewhere from prohibition, tempered by bootlegging.
§ The sugar remission of last year cost £1,000,000 more than I had expected. That is due to the very rapid shrinkage in imports of foreign refined sugar. Whereas in the three years ending in 1927 the British refining industry had fallen to a 50 per cent. share of the home market, it had already risen to 70 per cent. in 1928 and is still expanding. Contrary to the predictions of the right hon. Gentleman the Member for Colne Valley, who was very lavish in his predictions and assertions last year, the farthing remission reached the consumer, and so far from being withdrawn after a few months, it was reinforced by another farthing, which was due to the abundance of sugar supplies throughout the world, and to-day the consumer is paying a halfpenny less on an average for granulated sugar than a year ago. There is very little to complain of in that. The Betting Duty yielded £2,250,000 in 1928 owing to the higher rates being in force during the flat racing season. The full yield of this Duty at the new rates established on 1st October, 1928, would be £1,400,000. The new Oil Duty yielded £800,000 above the £12,200,000 which was my final estimate after the exclusion of kerosene. This duty has proved extremely easy to collect, and it has not checked the rapidly increasing use of petrol as much as we thought it prudent to allow for. After considering all that has taken place, I put the Customs for 1929 at £126,000,000, and Excise at £131,950,000, a total of £257,950,000. I 44 have put the Exchequer share of the Motor Vehicle Duties at £4,700,000.
§ I turn to Inland Revenue. If the Committee will consult the Blue Paper, they will find, in Table 2, details of the Inland Revenue in the year now closed. Income Tax exceeded the Estimate by as much as £4,700,000. This year, we have to face the increased cost of the children's allowances, but even taking that into consideration, I look forward to a receipt, in 1929, of £239,500,000 from Income Tax. The Death Duties yielded the record figure of £80,500,000, showing £8,500,000 above the Estimate, and £3,000,000 above the high yield of 1927. This duty has been substantially underestimated for the last two years, and I feel justified in taking a definitely more favourable view of its prospects than before. Therefore, I put the Death Duties for 1929 at £81,000,000, an increase of £500,000 above the record figure of the present year. Stamps, through the continuing activity of the Stock Exchange and the flotation of new companies, yielded in 1928 £2,000,000 more than the Estimate, and £3,000,000 above 1927.
§ Mr. WALLHEADWhat about 1926?
§ Mr. CHURCHILLThe hon. Member seems to feel very acutely his responsibility for 1926. I estimate for a further growth of £1,000,000 in the current year, making the figure for Stamps £31,000,000. Excess Profits Duty yielded £850,000, notwithstanding repayments of £4,500,000. The Corporation Profits Tax also produced £850,000. I see no reason why these two moribund duties should not repeat in 1929 the yield of £1,700,000 which they made in the current year. The one laggard in the Inland Revenue sphere is the Super-tax, which has fallen short of expectations by £3,800,000. That is partly due to the fact that the acceleration of collection, which was in progress two years ago, has reached the limit. Nevertheless, it is natural to suppose that the Super-tax will reflect the general upward movement of the Income Tax and Death Duties, and my estimate this year is £58,000,000, which is nearly £2,000,000 above the yield of 1928, although substantially below the estimate of that year. It may be for convenience if I just read the forecast for 1929: 45
£ Income Tax 239,500,000 Super-tax 58,000,000 Estate Duties 81,000,000 Stamps 31,000,000 Excess Profits Duty and Corporation Profits Tax 1,700,000 Land Tax 800,000 Total Inland Revenue £412,000,000 I turn now to the Non-tax revenue. The Committee will see, as the Blue Paper shows, that Non-tax revenue differed but slightly in 1928 from the estimate. It produced £93,966,000, against an estimate of £90,848,000. This surplus was almost entirely due to the Miscellaneous Special Receipts, which benefited by larger Reparation payments than I had allowed for, and by certain surpluses from the disposal of stores and the winding up of war agreements. For 1929, I estimate that the
£ This, added to the Customsand Excise 257,950,000 and to the Exchequer shareof the Motor Vehicle Duties 4,700,000 makes the total receiptsfrom taxes 674,650,000 being a reduction of nearly £15,000,000 from the figure of last year. This is due to the fact that we have this year no windfall of £13,000,000 from the Currency Note Reserve. Adding together the Tax and Non-tax revenue, and we get, apart from the self-balancing revenue and expenditure of the Post Office and the Road Fund, a total revenue for 1929 of £753,940,000. Thus there emerges, on the basis of existing taxation, a prospective surplus of £11,976,000. We have also in hand in the Suspensory Fund, our nest egg of £22,633,000.
£ Post Office net receipts will be 8,990,000 Crown lands will bring in 1,250,000 Receipts from Sundry Loans 30,550,000 Miscellaneous Ordinary Receipts 12,500,000 and Miscellaneous Special Receipts 26,000,000 a total Non-tax revenue of 79,290,000 I place these two surpluses, so to speak, upon the mantelpiece, where they can be admired or deplored according to party 46 inclination. Naturally, I am very pleased that the realised surplus should have exceeded, by £8,500,000, the forecast figures which I gave Parliament last year. But the revenue upon which the prospective surplus of 1929 is based has a special charm and virtue of its own. This year there are no adventitious aids and no windfalls of any consequence. We have passed through that period of fortunate but lucky expedients. We stand once more on the basis of permanent and continuing revenue. Moribund taxes have passed out of existence; revenue has become independent of temporary aids, or raids if you like to call them so; and I can present a balanced Budget with a reasonable prospect of a surplus upon the basis of the revenues which will live and grow.