HC Deb 25 April 1939 vol 346 cc984-6

Now comes the question whether on the existing basis of taxation I can count on equal revenue this year. I must take the figures under each of the heads of revenue and form the best estimate that I can. I take first Customs and Excise. There are several things that must be allowed for. First, we must allow for the fact that forestalling has taken place in anticipation of the present Budget with the result that 1938 has profited at the expense of 1939. Secondly, we must take into account the fact that in the current year we have to make allowance for a full year's reduction in Customs duties arising out of the Trade Agreement with the United States, which will probably cost me about £2,500,000, compared with a loss last year of about £750,000. Moreover, If there is a recovery from last year's low output in the home-grown beet sugar crop, this will mean that a substantial amount of foreign sugar carrying the full rate of duty, will be replaced by home-grown sugar carrying a much lower rate of duty. These, however, are not the really big influences which one has to try to anticipate.

The main consideration, of course, is that of trade prospects as a whole, as they may be affected by changes in the international situation. It is impossible, therefore, to forecast the figures with precision. My advisers, of course, go through the list of commodities affected one by one and make allowances for each varying influence, but I will not delay the Committee with details. They will all be found in the White Paper. But, weighing all considerations as well as I can, I think it prudent to put the Customs and Excise revenue for this year at £338,000,000, or about £2,500,000 below last year's receipts. Then, as to Inland Revenue, I am putting the yield of Income Tax at £327,000,000 which is nearly £9,000,000 less than the actual receipts in 1938. That drop will not come as a surprise to the Committee, because the Income Tax payable in this current year is largely based on the actual income of 1938, and there are many indications that the trading results last year compared unfavourably with the very good year which preceeded it. The Surtax to be collected in the present year, on the other hand, refers back to the better conditions of 1937 and I estimate the Surtax yield at £66,000,000, or £3,500,000 more than the yield last year. For Death Duties and Stamps I have adopted figures approximating to last year's results and I estimate the yield at £77,000,000 for Estate Duties and £21,000,000 for Stamps.

As to National Defence Contribution, this year I can look forward for the first time to a full year's yield and I expect to receive £25,000,000, a figure which the Committee will remember was the estimate I gave when National Defence Contribution No. 2 was originally brought in. The other Inland Revenue Duties, such as Land Tax, Mineral Rights Duty, Excess Profits Duty, Corporation Profits Tax—the last two echoes from a distant past—are expected to realise £1,250,000. The total Inland Revenue estimate is thus £517,250,000. As regards the remaining items of revenue, Motor Vehicle Duties are expected to produce £37,200,000. The Post Office net receipt is £7,200,000. The Post Office Fund will have available only £1,600,000, and I have already drawn the Committee's attention to the fact that this total of £8,800,000 falls short of the Post Office's statutory contribution. I put the receipts from Crown Lands at £1,330,000; Sundry Loans at £5,000,000, and Miscellaneous Revenue at £10,750,000. The total estimated revenue on the existing basis therefore adds up to £918,330,000.