§ Now I turn to consideration of the revenue that I may expect to get on the existing basis. I begin with Customs and Excise. I anticipate that the economic conditions which gave me such a favourable result last year will continue during this year and will be further reinforced by the festivities connected with the Coronation. Moreover, I must take into account the fact that the Beef and Veal Duties, which were in force only four months last year, will now be running for a full year and should give me £2,500,000 more than they did last year. 1608 In those circumstances I think I am justified in expecting another substantial expansion of revenue from Customs and Excise. I am budgeting for an increase of over £12,000,000 on the receipts of last year. I am assuming an increase on nearly all the main heads. The most important are: from spirits, over £800,000; from beer, tobacco and oil, nearly £2,500,000 each; from the 1932 Tariff Duties, rather more than £2,000,000. Tea will be an exception. I must allow rather less for tea because of the forestalments which I have already mentioned, which had the effect of increasing last year's revenue at the expense of this year's. The full details will be found in the White Paper which will be available when I sit down.
§ The total for Customs and Excise on the existing basis is £333,000,000. Under Inland Revenue I expect also an appreciable increase in Income Tax and Surtax. Last year Income Tax gave me £257,250,000 but, with the growth of profits for 1936, which forms the basis for the assessment of Income Tax in 1937, there should be a considerable advance in the revenue of this year, and I am estimating it at £275,000,000. Surtax in 1936 gave £53,500,000, which was less than I expected. There, again, there should be a recovery this year, and I put the figure at £58,000,000. From Death Duties I estimate that I shall receive £89,000,000, and I put Stamp Duties at the same figure that I got last year, namely, £29,000,000. Adding, therefore, £1,500,000 for the remaining sources of revenue, I get a total for all Inland Revenue Duties of £452,500,000. Coming to other revenue, I estimate that I shall receive from Motor Vehicle Duties £34,000,000, which compares with receipts last year of £32,727,000, the Exchequer share being £5,300,000 and the Road Fund the rest.
§ I put Crown lands at the same figure as last year, £1,350,000 His Majesty, in the Gracious Message that was read on 16th March, followed the example of His predecessor in placing these revenues at the disposal of the House of Commons and it is, therefore, proper to take account of them now, although there has not yet been time to complete the arrangements by the grant of a Civil List. Sundry Loans, at £4,300,000, will be slightly less than last year, and Miscellaneous 1609 Revenue, at £11,000,000, is less than that of last year by £13,600,000. Hon. Members are aware that in recent years Miscellaneous Revenue has been swollen by non-recurrent receipts, and it is always an item which is subject to considerable fluctuation. This year the fluctuations all seem to have gone the same way, but the largest single item is the disappearance of that £5,250,000 which was so generously contributed by the Road Fund to the general revenue last year. I thought last year that I might have been in a position now to propose a revision of the present contribution from the Post Office, which has been fixed for four years at £10,750,000, but after consultation with my right hon. Friend the Postmaster-General we both agreed that the proper thing to do is to maintain the same figure for another three years. Post Office Net Receipt, which is based on that contribution but is subject to adjustments mainly arising out of services between Departments, is taken at £11,800,000. I can now summarise the revenue from all sources, excluding the self-balancing items, as follows:—
- Customs and Excise, £333,000,000.
- Inland Revenue, £452,500,000.
- Other items, £62,450,000.
- Total, £847,950,000.
§ The expenditure I have already given—£862,848,000. I am, therefore, left with a prospective deficit to cover of £14,898,000.
§ I daresay the Committee will be anxious to hear what methods I have in mind for dealing with this deficit but, before I come to that there are certain minor matters which, although they will not materially alter the situation that I have depicted, nevertheless must be mentioned in my statement. I hope, therefore, that the Committee will give me their indulgence for a few moments while I run through them. I think I should warn the Committee not to draw any premature conclusions from the amount of the deficit that I mentioned.