§ Now I have to give my estimate of the revenue which we can expect, on the basis that taxation remains exactly as it is now. I have noticed when I go to my dentist and he says to me, "I am afraid that I am going to hurt you a little now," I always brace myself up and bear the pain with greater fortitude than when I get from him an unexpected jab. Bearing that analogy in mind, I think I ought to warn the Committee that the next quarter of an hour will not be an altogether agreeable one for them. I will again take the least important items first. I put the Exchequer yield of Motor Vehicle Duties at £5,000,000—a trifle over the receipts in 1931. I put the receipts from the Post Office at £11,7700,000, which is £500,000 less than last year's Estimate, but about £200,000 more than the actual 1421 receipts. I expect the yield from Crown Lands to reach £1,250,000. Sundry Loans and Miscellaneous Receipts will be considerably down, owing to the exclusion of Reparations and War Debts, and also owing to the cessation of the special transfer from the Exchange Account which appears in last year's Estimates. I put them respectively at £4,350,000 and £17,500,000. The Committee will observe that both the Exchange Account and the Rating Relief Suspense Account have disappeared entirely from the Budget picture, and the revenue this year will obtain no support from either of those sources.
§ When I come to Inland Revenue, I approach graver matters. It may be recollected that last September my Noble Friend the Lord Privy Seal thought it necessary to anticipate that there would be a fall of £35,000,000 in Inland Revenue below the £437,000,000 which had been estimated for 1931; that is to say, he put the yield of Inland Revenue for this year at £402,000,000 on the basis of the then existing taxation. Additional taxation was imposed which he estimated at £57,500,000. The addition of these two makes a total anticipated revenue from Inland Revenue of £459,500,000. I have had to review that figure in the light of the actual receipts last year and of the information which has since come into my hands. I put the yield from Land Tax, Mineral Rights Duty, Excess Profits Duty and Corporation Profits Tax at £2,000,000. I think I am entitled to expect a, slow but continuous recovery in values during the current year, and accordingly, to expect a corresponding recovery in those taxes which are immediately affected by the change, namely, Stamp and Death Duties. I am Budgeting for £23,000,000 in Stamps, an increase of £6,000,000, and of £'76,000,000 from Death Duties, an increase of £11,000,000 from the exceptionally low level which those taxes reached in 1931.
§ But when I come to consider Surtax and Income Tax, I have to remember that these taxes are not based upon profits and income accruing in the present year, but principally upon those of the year that has passed, that is, a year which reached a climax of depression unprecedented in our experience both for its depth and for the extent of the field which it covered. The Estimates which have been furnished to my advisers by 1422 certain business concerns who are good enough to give me this assistance, enable me now, I think, to form a fairly definite idea of the maximum amount of profits which can come under charge for Income Tax, and, therefore, of the maximum yield of Income Tax which may be expected, and I am sorry to say that it is quite clear, from the information which I have received, that I must anticipate a heavy fall both in Surtax and Income Tax. I cannot estimate for the year a yield of more than £66,000,000 from Surtax, nor taking into account the extra allowances for wear and tear on plant and machinery which were promised last year for 1932, for more than £260,000,000 from Income Tax. That brings us to a total for Inland Revenue of only £427,000,000, or no less than £32,500,000 below the Estimates provisionally put forward last September by my Noble Friend. I can hardly imagine a more convincing demonstration of the fact that we have approached the practical limits of the return from direct taxation. Whatever our fiscal views may have been in the past, no Government to-day could possibly afford to neglect other sources of revenue which have not been tapped to the same extent.
§ Fortunately, this Government took time by the forelock, and I can now proceed to investigate what Customs and Excise can do to bridge the chasm that has been left by Inland Revenue. I will omit for the moment the new tariff duties, including those on Abnormal Imports and Horticultural Products. The older duties I estimate to bring in, Customs £140,275,000 and Excise £124,200,000, making a total of £264,475,000. That is an excess of £10,000,000 over the receipts last year, but although I am certainly hoping for an improvement in the economic conditions of the country this year, I am not basing my estimate for this extra £10,000,000 upon that improvement. It largely arises out of the fact that this year I shall get a full year's yield out of taxes which, having been imposed only last September, only gave me a half-year's yield last year. Mainly, therefore, on this account, though not entirely, I estimate on the basis always of existing taxation, increases of over £4,800,000 on beer, over £4,900,000 on oil, £1,500,000 extra on entertainments, and I have put up tobacco by 24,500,000, partly because of the full year's yield of the increased duty, but partly because there were con- 1423 siderable forestalments in the year before last which reduced last year's revenue. On the other hand, I feel bound to assume that the decline in the consumption of spirits will continue, and I am allowing for a drop of nearly £2,000,000 in the yield from that duty. I am also allowing for a fall of £2,300,000 in the sugar Duty, owing to the forestalment to which I made reference earlier in my speech. As to the other items, I think I may refer hon. Members to the detailed Estimates which they will find in the White Paper.