HC Deb 15 April 1935 vol 300 cc1637-48

Motion made, and Question proposed, That, as respects payments for admission to entertainments held on and after the first clay of July, nineteen hundred and thirty-five, entertainments duty shall be chargeable subject to the following variations:

  1. (a) the duty shall cease to be charged on payments not exceeding sixpence;
  2. (b) the duty shall be charged at the reduced rates set out in the following table in a case where all the performers whose words or actions constitute the entertainment are actually present and performing and the entertainment consists solely of one or more of the following items, namely, a stage play within the meaning of the Theatres Act, 1843, a ballet, a performance of music (whether vocal or instrumental), a lecture, a recitation, a music hall or other variety entertainment, a circus, or a travelling show.

Amount of Payment. Duty.
Where the amount of the payment, excluding the amount of duty:
Exceeds 6d. and does not exceed 8½d. One half-penny.
Exceeds 8½d. and does not exceed 11d. One penny.
Exceeds 11d. and does not exceed 1s.1½d. Three half-pence.
Exceeds 1s.1½d. and does not exceed 1s.4d. Two pence.
Exceeds 1s.4d. and does not exceed 1s.6½d. Two pence half-penny
Exceeds 1s.6½d. and does not exceed 1s.9d. Three pence.
Exceeds 1s.9d. Three pence for the first 1s. 9d. and one penny for every 5d. or part of 5d. over 1s. 9d.

And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913"

5.10 p.m.


I am sure I shall be voicing the views of the whole House in congratulating the right hon. Gentleman on the admirable way in which he has presented his Budget. He possesses the gift of lucidity, and an admirable power of brevity. I am not sure that he has not broken a new record for Budgets to-day, and when I consider the amount of information he managed to pack into a comparatively short time, I wonder what Chancellors of the Exchequer managed to do in the 4½ hours they used to occupy in the past. I do not intend this afternoon to indulge in any controversy. That comes better at a later stage. I should like to express what, I know, is felt by Members on these benches—our pleasure at the reliefs that are being given to the smaller income taxpayers, and particularly to persons with family responsibilities. It was a piece of justice which was overdue. I was also pleased to see the change proposed in the entertainments duty, both in its effects on those occupying cheaper seats and also, particularly, because of the remodelling of the tax in order to meet the case of living performers. I am also pleased with the final restoration of the cuts, and I hope to see the right hon. Gentleman the Minister of Labour following suit very shortly and doing away with another device that was put in to balance the Budget—the means test.

One word I would say with regard to the right hon. Gentleman's general Budget. In order to obtain a surplus, he adopted what one might call a very Churchillian device. His surplus was somewhat precarious, made up by a. raid. Indeed, there seemed to me to be a general festive—almost jubilee—atmosphere about the right hon. Gentleman's speech. When he dealt with beer and tea and entertainments, and then when he followed with his Budget, it certainly seemed to me rather an atmosphere of "Let us eat, drink and be merry, for to-morrow we die." It seemed rather a closing kind of Budget. He managed to get a surplus for this year and he was able to give some benefits for future years. It seemed as if he had a doubt in his mind whether he would be carrying that burden in the future. However, I do not intend this afternoon to look a gift horse too closely in the mouth. I recognise there are some gifts. To-morrow my colleagues will deal with some detailed points and criticisms. There is a good deal to be said about the Heavy Oil Duty.

This is a Budget that is carrying on rather than introducing. It contains nothing very startling, and it is in the ordinary tradition of Budgets. It has given us advantages for which we are grateful. I certainly think it is somewhat precariously balanced. Finally, and this is a serious word, the right hon. Gentleman referred to the fact that we had hanging over us the dangers of the international situation. We have in this Budget provision for greater armaments, and the danger of an armaments race hangs over the Budget. The further point that makes it balance somewhat precariously is the extent to which the right hon. Gentleman depends on the very cheap rates obtaining for dealing with the debt. I am glad to see that the right hon. Gentleman is, at all events, somewhat adventurous. He has made up a Budget which contains a certain number of unknown factors, and I am glad to see that he does not err too much on the side of caution. I will again congratulate him upon the admirable way in which he has placed it before us.

5.16 p.m.


I wish in a few words to join in the congratulations to the Chancellor of the Exchequer and in the appreciation, which I am sure is felt in all quarters of the Committee, at the conciseness and clarity with which, as usual, he has presented these vast and complicated accounts. Speaking on this occasion last year, I expressed disappointment then that nothing had been done to restore the Income Tax allowances to the smaller taxpayers, and particularly to those with families, and expressed afterwards the hope that they would be regarded as having the first claim on any surplus this year. I am glad now, after an interval of 12 months, to be able to express congratulations and thanks that on this occasion those allowances have been, if not completely, at all events, in very large measure, restored.

I am sure that Members in all quarters of the Committee also will rejoice that the remaining cuts in salaries, which had most reluctantly to be imposed on the servants of the State in 1931, are now to be restored. This is not the occasion to enter into any minute examination or criticism of the Budget, but it is necessary to point out, as indeed the hon. Gentleman the Member for Limehouse (Mr. Attlee) has pointed out, that, while these reliefs and the other reliefs will involve an annual and a permanent reduction of revenue, on the other hand, that is made good to the extent of one-half of the sum distributed from what can be called a windfall, namely, the raid on the Road Fund. It amounts to nearly half the surplus which is distributed, and it can only be obtained once and for all, and is not to be regarded as an annual increase of revenue. Consequently I am afraid that, as far as that point is concerned, the right hon. Gentleman has departed somewhat from those canons of strict finance of which he has hitherto been one of the champions.

Furthermore, the concessions made involve only an expenditure or a reduction of taxation for three-quarters of a year, while in this year, therefore, no provision has been made for next year for the increase of 33 per cent. of the charge to be provided for this year. I notice that the right hon. Gentleman has said nothing about the depressed areas or any funds to be made available for the Commissioners who are at work there, but perhaps we may hear something further about that matter after the interview which is to take place next Thursday between the Cabinet Committee and my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). In the meantime, to-day I restrict myself once more to expressing the appreciation which, I am sure, is felt in all quarters of the Committee at the right hon. Gentleman's most able and comprehensive statement.

5.20 p.m.


I wish to associate myself with the congratulations which are being showered upon the Chancellor of the Exchequer, and which he is so modestly accepting this afternoon. I should hate to enter a critical word. Last year I remember that the hon. Gentleman who spoke for the party above the Gangway and the right hon. Gentleman the Member for Darwen (Sir H. Samuel) were very critical, and I was congratulatory, and I found out that that congratulation was one of the biggest sins that I had ever committed in Parliament. I congratulated the right hon. Gentleman for restoring cuts to the unemployed. The note of criticism that I would enter here is that the restoration of the cuts to the unemployed still leaves the unemployed man far and away below the level of the rest of the community, and I could have wished that in this Budget some arrangement had been made for a definite raising of the unemployed man's level above the best point at which it has ever been. The hon. Gentleman above the Gangway referred to the prospects of the removal of the means test, and I would suggest that that is a proper thing to do. I would also suggest that the removal of the Anomalies Act would also be a very suitable object for the Chancellor's consideration. I am not raising this in any controversial way at all, but merely to point out that there are some 300,000 people affected by that in a very injurious way.

There is also the question of the general level of the remuneration paid to unemployed people. After all, we cannot regard 17s. as a reasonable allowance for the maintenance of a full-grown man, even when he gets the whole of it, and I hoped that some provision would have been made there in order to make it possible to increase the allowances for next year without imposing any further burdens upon the other contributors to the fund. Indeed, while I, like other speakers, congratulate the Chancellor upon having restored the cuts to the public servants, I think that he could quite well have drawn a line as between the lower-paid public servants and the higher-paid public servants, as he drew a line in the matter of the entertainments duty. We are all tremendously glad that the lower-paid workers in the Post Office, in the Ministry of Labour and in other public Departments who were on very low salaries, and who will be on very low salaries even after the restoration of the cuts, are receiving these back.

I think that some of the others, including Members of Parliament, could quite well have gone another year or two without the restoration, and that the amount that has gone to them would have brought far greater happiness and relief in the homes of unemployed people than it will to the better-paid civil servants. These are recognised as minor criticisms. My congratulations to the Chancellor are none the less genuine because I make these criticisms. If the right hon. Gentleman takes the optimistic view of the future which ran through his speech, he might quite well have expressed that optimism by increasing the income tax and the super-tax to bring into his hands a free sum of money that could have been used during this incoming year for great national developments in many directions. More and more he is being pressed by the House for schemes of national expansion of one kind or another; they are coming from all quarters. He ought to do that out of revenue, and not out of borrowings, as he might consider doing it.

There is one other thing I would say—and I am sure that it is a matter of regret to all of us—and that is that in the esti- mated expenditure for this incoming year there is £10,500,000 additional for armaments expenditure, and a contingently larger sum to which he has made a general reference. I suppose that every Member in this House regrets that amount. Some believe that it is necessary, and some believe that it is unnecessary. Whether it is necessary or whether it is unnecessary does not represent any failure on the part of the Chancellor of the Exchequer, but failure on the part of some of his colleagues in other Departments. I am sure that every Member of this House a year or two ago hoped that the process of world affairs would be such that very large reductions in armament expenditure would have been taking place now, but the fact that the expenditure has gone up is no fault of the Chancellor's except in so far as he has to share responsibility for the general operations of those who sit on the Government Front Bench with him.

With these very limited criticisms, I conclude my remarks by again saying that the Chancellor of the Exchequer deserves the congratulations of the Committee. The fact that things have run with him instead of against him is not his fault, but he knows as well as anyone here that we have not reached any period of economic stability in this country, and he knows perfectly well that happenings here or in other places might quite easily turn the relative progress of to-day into very serious catastrophe. He is to be congratulated, however, in presenting his Budget to-day with the possibility of making things balance, and with the hope of a reasonable continuance of that stability for the months immediately ahead. May I just make this one small reference to an omitted part of his statement? Perhaps it is not right of me to raise it, but I can remember in. the last two or three Budgets there was always some reference to the question of the American Debt. I notice that to-day it has gone into that very nice category where it no longer needs to be mentioned. That is a very satisfactory way of dealing with external debts, and I hope that he will always be able to deal with them in quite as efficient a fashion by letting them drop into the limbo of forgotten things.

5.26 p.m.


As Chairman of the Income Taxpayers' Society of Great Britain, I hope that I may be allowed to thank very sincerely the Chancellor of the Exchequer for the very valuable concessions which he has made to the smaller income taxpayers in reducing the present half rates of 2s. 3d. in the £on the first £135 to 1s. 6d. in the £ and for the increases in family allowances. I can assure him that that will be very greatly appreciated by the smaller income taxpayer. I think income taxpayers are entitled to receive a concession from the Chancellor of the Exchequer because, after all, had it not been for them his Budget estimate in respect of Income Tax would not have been exceeded by £9,250,000. Whatever be the reasons for that, whether it was partly due to better trade—

Notice taken that 40 Members were not present; Committee counted, old 40 Members being present


I was saying. that I thought the Chancellor of the Exchequer was fully justified in making this concession to, at any rate, a small number of income taxpayers, having regard to the fact that without the income taxpayers his Budget estimate would not have been exceeded by £9,250,000 in respect of Income Tax, and his surplus of £7,500,000 would not have materialised. Whatever be the reasons for this excess of Income Tax over the Budget figures, whether it be owing to the improved prosperity of the country or whether it be due to the patriotic promptness with which Income Tax has been paid, it is something for which the income taxpayer deserves credit.

I was glad to hear my right hon. Friend say that one of the main ingredients of prosperity is low taxation. Undoubtedly, the prosperity of the country, which means improved employment, will never be really on right lines until we get back to normal taxation and away from war taxation. Sometimes I think it would be better if the words "Income Tax" could be changed to "industry tax," so that the public would realise that this tax is really a handicap on industry. While one recognises it is essential that £10,500,000 should be provided this year for our defence forces, which have been allowed to fall so much behind, one can but hope that the Chancellor of the Exchequer will consider whether in future this arrear, which has been running on for eight or nine years, might be met by a loan which could be raised in the City on short-dated security to the amount of £30,000,000, £40,000,000 or £50,000,000 at 2½ per cent. It would be fair that a loan should be raised in this case, because the country has had the benefit for the last eight or nine years of not laying out money which ought properly to have been laid out in connection with our defence forces. Such a scheme would have a double benefit. Not only would the laying out of the money in making up the neglected parts of our defences give employment, but taxation might to that extent be remitted, which would in itself be a stimulus to trade. In conclusion, I must again point out what the Chancellor of the Exchequer recognizes—the terrible drain on the capital assets of the country caused by the continuance at war rates of the heavy surtax payable by the income taxpayer: this together with the annual capital levy amounting to £80,000,000 a year in respect of death duties is gradually eating into and destroying the capital resources of the country on which we ultimately depend for our social services and our national defence.

5.34 p.m.


I rise to make one important point, and that is to make a suggestion to my right hon. Friend with regard to the imposition of the 10 per cent. ad valorem duty on soya beans. He will be aware that the effect of that duty will be that soya oil which is crushed and extracted on the continent will be immediately dumped into this country, and I would ask him if he has made, or if he proposes to make, any provision for the immediate imposition of a duty upon imported soya oil from the continent?

5.35 p.m.


I do not propose to keep the Committee for more than a few minutes, and I am anxious not to qualify the chorus of deserved praise which the Chancellor of the Exchequer has received from all parts of the Committee on the manner in which he has presented his Budget, but I cannot remain silent in face of the situation which exists in South Wales, Durham and Scot- land, when I find that in this Budget no provision whatever has been made for any large expenditure of money for the initiation of schemes to bring relief to those districts. The statement of the Chancellor of the Exchequer showed clearly that the Government propose to continue the harshest cuts which were imposed in 1931. Every newspaper in the country this evening and to-morrow will be carrying the news that the cuts of 1931 have been restored, while the harshest and most substantial of the cuts, the means test, is to remain. That was imposed as part of the economy scheme. I do not understand how the Chancellor of the Exchequer can contend that he is basing his four Budgets upon the principle of restoring the cuts to those who had to carry the heaviest burdens and were the least able to carry it, while he still leaves the means test, which means that the distressed areas of Great Britain have to carry the heaviest load that was imposed in economies of 1931.

It is in the distressed areas where there are to be found men who have been unemployed the longest period, and who therefore are liable to the application of the means test. It is cruel, it is harsh, and it is not good citizenship for the Chancellor of the Exchequer to leave these distressed areas in their present condition, and I should be doing less than my duty as the representative of one of the most distressed areas if I did not raise my voice to-night. In the Budget the Chancellor of the Exchequer will hear a great deal more on this question. I hope he has prepared in his mind some schemes for the relief of these areas, and I hope that we shall have them produced, because we are going to have new unemployment insurance regulations in the near future. I want to protest at the silence of the Chancellor of the Exchequer on this subject and the absence of any mention whatsoever about the cuts on unemployed men who have not yet had their cuts restored. It is a violation of the pledge made by the National Government and in the election of 1931, which stated that the Government would restore all the cuts when the finances were at their disposal. Yet they still leave the poorest and the most helpless members of the community suffering from the burden of cuts which have been restored to the rest of the community.

5.40 p.m.


The petrol engine and the petrol tank are the most dangerous things that mankind ever invented. It was the hope of those of us who take an interest in improving the progress of the air that the Diesel engine would eventually take the place of the petrol engine in aircraft. Every pilot knows that if there is a crash he may be burnt to death. So long as Diesel oil was practically untaxed—there was a trivial tax of £1 a ton on it—the Diesel engine was making progress on the land and it would soon have got into the air, to the safe development of the aeroplane. Now, however, I am afraid that a very heavy blow has been struck at it, and I am deeply disappointed.


The increased tax will be applicable to the oil used in Diesel engines affixed to road vehicles only.


That may be so, but it is only by the development of the road vehicles that you can reach that stage of development of the Diesel engine which will make it ultimately applicable to aircraft. Therefore, I am afraid that this tax will mean a serious setback in that direction.

There is another matter to which I would refer, as representing a Highland constituency. I feel very much aggrieved that nothing has been done to reduce the terrible penal taxation of the whisky duty, which has deprived us in the Highlands of one of our most important industries. At one time it was a huge Highland industry. Some 133 distilleries have been shut down, and I fear that the rest will be shut down unless there is a relief of taxation. It means that the farmers are penalised. Here is something which is taxed 72s. 6d. per gallon. It is wrong to put such a tax upon the Highlands and upon the comparatively small proportion of the population who use that particular commodity. This high taxation is not bringing the revenue to the right hon. Gentleman. Before the War, the whisky duty paid 19 per cent. of the taxation of the country, but now it is only 4 per cent. That is because the high taxation is killing the trade. For the sake of his own revenue and of in- creasing the amount to be yielded from this industry there ought to be a substantial reduction in the taxation. That would be to the convenience of the public; it would greatly increase the possible revenue to be derived, and it would mean that we should take a sensible course, instead of dividing mankind into two classes, those who can afford to pay for whisky so highly taxed, and those who cannot afford to do so. The right hon. Gentleman would be doing a great service if he could give us a reasonable reduction of this penal taxation.

Question put, and agreed to.