§ What revenue can we find to finance this enormous outlay? I take the smaller items first. The Exchequer's share of the Motor Vehicle Duties remains at £5,000,000, the minimum fixed under the arrangement embodied in the Finance Act of last year. The Post Office Net Receipt, in spite of the extra business which we expect, must be reduced to £11,850,000 as a result of higher expenditure on account of the restoration of the cuts, and also on account of that reduction in telephone charges which my right hon. Friend undertook recently with the approval of the Treasury. Crown Lands I put at £1,330,000, a casual increase of £100,000 over last year's estimate. Sundry Loans are £3,900,000, and Miscellaneous Receipts, always a variable item, I put at £21,500,000.
§ Then I come to the. Inland Revenue Duties. The receipts from Income Tax last year were just below £229,000,000, but I have already pointed out to the Committee that £6,000,000 of that was due to the acceleration of collection owing to the fact that in the March quarter we exceeded all our anticipations, and, in fact, had the best proportion of collection that we have experienced since the end of the War. But the result, of course, of this acceleration was to diminish the arrears which are carried forward into the current year, and therefore the gain of 1934 is the loss of 1935. We must, therefore, compare our Estimates for 1935 not with £229,000,000, but with £223,000,000. I hope, of course, that the Income Tax payer will continue his good work of last year, and even improve upon it, but the rate of collection is now so high that I am afraid we must not expect any more considerable gain from a still further increase in the rate of collection. In 1935 we have to bear the extra cost in a full year of the reduction of Income Tax last year, and I estimate that extra cost at £3,000,000. On the other hand, we may expect to 1625 gain in assessment, because the profits and income in 1934 on which is based the Income Tax for 1935 were greater than the profits and income in 1933, upon which was based the Income Tax of 1934.
§ All the information which I have been able to gather shows that there was a substantial improvement in trading conditions in 1934, and, taking all things into account, I estimate that I may receive from Income Tax in the current year £237,000,000, which is £14,000,000 more than in 1934, leaving out the amount due to the acceleration of collection. Surtax I put at £51,500,000—about the same figure as last year. I have to take account there, also, of the fact that there was a speedier collection last year, and the Committee is aware that there is a lag of a year between Surtax and Income Tax, and we shall therefore have to wait for another year before Surtax shows an expansion comparable to that which I have provided for in Income Tax. Death Duties I put at £80,000,000, that is nearly £1,500,000 less than last year, butt last year the yield from large estates was certainly on the high side. Stamp duties, I think, should show a continued improvement, and they ought to reach £25,000,000. The remaining Inland Revenue Duties including Excess Profits Duty and Corporation Profits Tax, are expected to yield £2,500,000. I, therefore, have a total for Inland Revenue of £396,000,000, made up of Income Tax, £237,000,000; Surtax £51,500,000; Death Duties, £80,000,000; Stamp Duties £25,000,000, and the remainder £2,500,000.
§ Turning to Customs and Excise, I think I may expect, without undue optimism, that most of the duties will respond to the general expansion of trade. Contrary to recent experience, I am expecting an increase of £1,400,000 in the receipts from the Spirit Duty. That is not because I am anticipating an increase of consumption, but because I expect the realisation of clearances which were postponed last year, presumably in the hope that there might be some reduction in that duty. I am allowing also for substantial increases in a number of other items: Beer £1,300,000, wine £300,000, tobacco £1,600,000, oil over £1,000,000, silk £300,000, entertainments nearly £300,000. I anticipate an increased consumption of sugar, but I cannot expect 1626 increased revenue from it, because of the larger proportion of sugar which is now coming from the Empire and which consequently enjoys preferential rates. In the tariff duties, under the Import Duties Act, I am allowing for a fall of £400,000. The Ottawa Duties also show a downward trend, which again is what one has to expect seeing that the purpose of those duties was to divert trade from foreign countries to countries of the Empire. Therefore, from that source, instead of £7,400,000 which I obtained last year I am expecting only £7,000,000. On the other hand, the duties on goods from the Irish Free State seem to keep up their yield. They gave £4,700,000 last year, and I am now estimating them at £5,000,000. Further details will be found in the White Paper which will be available to hon. Members when I resume my seat. The total figure for Customs and Excise is £296,000,000, or over £6,000,000 more than was received by the Exchequer in 1934. That makes a total estimated revenue, on the basis of existing taxation of:
| Inland Revenue | £396,000,000, |
| Customs and Excise | £296,000,000, |
| minor items | £43,580,000; |
| adding up to | £735,580,000. |
| Deducting from that the estimated ordinary expenditure of | £729,970,000, |
| I am left with a prospective surplus of | £5,610,000. |