§ I am now in a position to give the Committee the estimate of income and expenditure for the current year on the existing basis. I estimate the total yield of Inland Revenue Duties at £437,000,000, consisting of £248,000,000 for Income Tax, £72,000,000 for Sur-tax, £90,000,000 for Death Duties, £24,000,000 for Stamp Duties, and £3,000,000 for the remaining items. The yield of the Income Tax last year was £256,000,000. Normally, I could have looked forward to an additional £3,000,000 from the full effect of last year's increase of rate and also for some general growth; but the fall in profits in 1930 in consequence of the world depression in trade has, of course, affected very adversely the prospects of the Income Tax yield in this year, the assessments for which are based upon the profits of 1930. Instead of a growth, I find myself faced with a serious contraction in the yield. The depression in trade will not affect the yield of Sur-tax in 1931 so seriously, for it will depend upon the statutory income for the year 1930. We can, therefore, count upon the full effect of the increased rates of tax laid down by last year's Finance Act. In the case of Death Duties, I look forward to almost the full year's gain from the increased rates of last year's Finance Act, and, taking all the circumstances into account, I think I am justified in estimating for a yield of £90,000,000. The other Inland Revenue Duties call for no special comment, except that I might observe that the yield of the Stamp Duties last year was the lowest since 1921, and in looking for £24,000,000 in the current year, I am counting upon some recovery in Stock Exchange activity, the slump in which is mainly responsible for last year's fall.
§ I now come to Customs and Excise. I hope the tide of depression, which upset all our expectations last year, has reached its limits and that better times are in store for us. But it will take a little time after the tide has definitely turned before the Revenue will feel the benefit, and I must, therefore, face the prospect of a further decline in the Customs and Excise revenue in the near 1399 future. I accordingly put the estimate of Customs and Excise at £238,000,000, namely, Customs £118,150,000, and Excise £119,850,000. The total figure, indeed, shows a drop of nearly £7,500,000 on last year's revenue. But towards the end of the year there were forestalments in a number of articles, particularly tobacco. These forestalments are estimated to have added to last year's Revenue something like £3,000,000, and, in doing so, they deprived me of a similar sum this year. When allowance is made for this factor, which "counts two on a division," my estimate for this year is really only about £1,500,000 down on last year's proper revenue.
§ The consumption of alcoholic liquors fell last year, and I am estimating for further falls in revenue this year, accentuated in the case of spirits and wine by forestalments. The fall in the consumption of alcoholic liquors seems now to be a permanent tendency socially, and from the point of view of national and social well-being it is to be heartily welcomed, however inconvenient it may be for the Exchequer.
§ Other items of revenue show little variation from last year. I put the Exchequer share of the Motor Vehicle Duties at £5,000,000; the Post Office net receipts at £12,200,000; Crown Lands at £1,300,000; Receipts from Sundry Loans at £33,500,000; and Miscellaneous Revenue at £35,000,000. The estimates of revenue which I have so far given amount to £762,000,000 and are nearly £2,000,000 above the actual yield of the corresponding items last year, though £11,000,000 below the estimates of last year. The revenue last year was fortified by the addition of £16,000,000 from the Rating Relief Suspense Account. From this source only £4,000,000 is available this year, and nothing in future years. The addition of this £4,000,000 gives me a grand total of £766,000,000 of revenue for the current year.
§ 4.0 p.m.
§ Turning to the expenditure side, the Committee have had before them already the Estimates for the Supply Services. They amount to £439,016,000. In view of the appointment of the Economy Committee, I trust that the actual expenditure will fall considerably below these Estimates. Out of the Fixed Debt Charge 1400 of £355,000,000, I have to allot£302,900,000 to interest and management of the Debt, leaving over £52,000,000 available for the Sinking Fund, mainly for contractual obligations. The figure for interest and management of the Debt is higher than the actual results of last year, but I cannot confidently rely, as I have said, on the continuance of the extreme cheapness of Treasury Bills, and the low encashments of Savings Certificates. With payments to Northern Ireland at £6,350,000, and Miscellaneous Consolidated Fund Charges at £3,000,000, I reach a total estimated expenditure of £803,366,000. This, when compared with an estimated revenue of £766,000,000, leaves a gap to be bridged of £37,366,000. This deficit is greater than last year's actual shortage of £23,276,000 by some £14,000,000. This is mainly Accounted for by the need for providing £12,000,000 more for the de-rating scheme — a liability left to me by the previous Government—owing to the Rating Relief Suspense Account having, as I have already said, been practically exhausted. I have also had to provide £30,000,000 for transitional benefit. The original Estimate for this service last year was £10,500,000, increased by Supplementary Estimates to £22,000,000, and this year's figure is £8,000,000 higher still. These two items together—£12,000,000 for de-rating and £8,000,000 extra for transitional benefit — are equal in amount to more than half the estimated deficit of £37,366,000. That is the estimated deficit for this year which I have to make up—a figure which will be disappointing to the Jeremiahs who have been forecasting a deficit of anything up to £70,000,000.