HC Deb 21 April 1936 vol 311 cc42-5

Let me now come to my estimate of the revenue for 1936 on the existing basis of taxation. I start with Customs and Excise. I have already drawn attention to the considerable expansion in the yield of Customs last year and provided that no untoward events occur which might check the purchasing power of the community, I anticipate that the new year will show, again, a considerable upward movement in the revenue from Customs and Excise which is peculiarly sensitive to changes in the spending disposition of the public. Accordingly, I am budgeting for increases, and in many cases substantial increases, in nearly all the items. To mention some of the larger figures, I expect increases in the Beer Duty of £1,900,000; in tobacco of more than £3,000,000; oil, nearly £3,000,000; silk, £400,000; duties under the Import Duties Act £1,400,000 and in the Ottawa Duties, £500,000. I expect only a small rise of £100,000 in the yield of the Sugar Duty, but that is because the effect of the sugar preferences is becoming increasingly costly to the Exchequer. By way of exception to the general rule, I expect to receive from Entertainments Duty £400,000 less than last year, and a similar amount less from the Special Duties on the products of the Irish Free State. The reason for the lower expectation from Entertainments Duty is because, this year, we shall have the full effect of the remission of the duty last year, which only dated from 1st July, 1935, and, in the case of the Irish Free State, the reduction is due to the lowering of the duties on certain animals and meat which took place in connection with the renewal of the coal-cattle agreement last February. Further details will be available, in the White Paper, to hon. Members when I sit down. The total estimate from Customs and Excise on the existing basis of taxation is £314,000,000 or an excess of £10,500,000 over the actual revenue received in 1935.

From Inland Revenue, at any rate from certain items of it, I expect also to obtain substantial increases. I take Income Tax at £248,000,000. That is £10,000,000 over the yield of 1935. Hon. Members must recollect that this year has to bear the full cost of the reliefs granted last year and, if you take like for like, my estimate really represents an excess of £15,000,000 over the yield for last year. That is a pretty big increase, but I put it forward with some confidence that it will prove to be correct, because it is founded upon information collected from a number of concerns which have been good enough to furnish me with forecasts of their trading results for 1935 and that, of course, is the basis for the assessment of Income Tax under Schedule D for 1936. In estimating that I shall get £54,500,000 from Surtax I am allowing for a growth this year of £3,500,000. It will be recollected that there was no growth last year. But hon. Members know that Surtax lags a year behind Income Tax, and in fact this year is the first year in which the receipts of Surtax should reflect the improvement in trade.

Death Duties, as I have already said, gave us a very high yield in 1935, but as there is no reason to anticipate any serious alteration in the high level of security values, counting on that high yield of 1935 I expect that it will be maintained in 1936. Accordingly I have put down £89,000,000 for Death Duties. The Stamp Duties have been rapidly recovering. The yield in 1935 was £25,800,000, which was a growth of about £1,750,000 over the year before; and as the steady expansion of business and improvement of trade is continuing, I think that the Stamp Duties, especially in view of the growth of Stock Exchange transactions, should give me a yield in 1936 of £27,000,000. The other Inland Revenue Duties I have put down at £1,500,000, and, adding together all the various items which I have enumerated, I get a total for Inland Revenue of £420,000,000.

I put the Exchequer share of Motor Vehicle Duties at the same figure as last year, £5,000,000. Crown Lands revenue is £1,350,000. The Committee are aware that His Majesty, in his Gracious Message of 11th March, following the example of his predecessors, placed these revenues at the disposal of the House of Commons. Therefore, it is proper that I should take them into account now, although there has not yet been time to complete the arrangements by granting to His Majesty a suitable Civil List. Sundry loans I estimate at £5,000,000, and miscellaneous revenue at £20,000,000.

I must say a word or two about the Post Office contribution to the Exchequer. The Post Office Fund has now existed for three years, and in accordance with the Finance Act of 1933 it becomes necessary to review the fixed contribution which under Section 34 of that Act was determined to be £10,750,000 for the first three years. For some time past the subject of the relations between the Exchequer and the Post Office has been under consideration by the two Departments. Up to the present we have not been able to accumulate sufficient data to enable us to determine a long-term policy. Accordingly, with the concurrence of my right hon. Friend the Postmaster-General, I propose to keep the Post Office contribution for another year at the same figure of £10,750,000. At the end of that time I think it ought to be possible to propose a fresh, and, I should hope, a lasting basis of settlement. Hon. Members are aware that the actual cash sum received by the Exchequer in any particular year by no means always is identical with the fixed contribution. There are services which are rendered by various Departments to the Post Office free of charge, and vice versa. and there are various other minor adjustments that have to be made. I am proposing in the Finance Bill a small step which will have the effect of accelerating and simplifying this procedure, and, on that basis I estimate that the Exchequer receipts for 1936 will be £11,256,000, while the payment out of the Exchequer to the Post Office Fund will be £600,000.

I can now summarise the total of my revenue from all sources on the present basis of taxation. Customs and Excise stands at £314,000,000; Inland Revenue, £420,060,000; Miscellaneous items, £42,606,000;making a total of £776,606,000. I have already given the Expenditure as £797,897,000, and I am, therefore, left with a deficit of £21,291,000.