HC Deb 25 April 1939 vol 346 cc995-6

My remaining proposals—they are two—are in the region of indirect taxation. In this connection let me remind the Committee that in the three preceding years, 1936, 1937 and 1938, increases of direct taxation—Income Tax and National Defence Contribution—have been imposed to produce some £75,000,000 per annum as against increases of indirect taxation of only some £12,000,000 per annum. My first proposal deals with tobacco. The basic duty is at present 9s. 6d. per lb. I propose to raise this as from to-morrow by 2s. per lb.—1½d. an ounce—making the basic duty 11s. 6d. per lb. with corre- sponding changes, of course, in the other tobacco duties on cigars etc. I estimate that the extra duty will yield £7,000,000 this year and £8,000,000 in a full year.

In order to make up the total of £24,000,000 another £4,000,600 will have to be found. This sum will be provided from the sugar duty by an increase of ¼d. per lb. The present duty on foreign raw sugar is equivalent to 9s. 4d. a cwt. on the refined product. The new rate will involve an addition of 2s. 4d. a cwt. the Empire preferences being, of course, preserved. The Excise Duty on homegrown beet sugar will be adjusted so as to maintain the existing margin of advantage. All the details will be found in the White Paper. The increase of duty, which will operate as from Five p.m. today, is estimated to produce £4,000,000 in the present year, and £4,500,000 in a full year. The changes in taxation which I propose bring the total revenue for 1939 to £942,600,000 and so provide a surplus, a very modest surplus, of £156,000 over the expenditure which that revenue is intended to cover.

I have only one word more. In the survey of our financial position which it has been my duty to make, and in my proposals for dealing with it, the Committee will not have failed to note how easy it is to authorise great increases of expenditure, and to allot a comfortable share of them to be met out of borrowings, and how difficult and painful it is to find even a small portion of the extra money by the instrument of taxation. Yet the use of borrowed money does not do more than postpone the burden, and nothing but the sternest national necessity would justify so immense an outlay. As it is, the provisions contained in this Budget represent an essential part, but only a part, of the total national effort that is needed. The shape and content of our finances to-day are determined inevitably by our Defence needs, and the expenditure to meet those needs, vast as that expenditure is, is approved by the general sense of the country and of Parliament. These objects vitally touch every home alike, from cottage to mansion and palace, and the burden is one which we must all share. Heavy as that burden is, it is part of the price which this country will willingly pay in the cause of world peace and national safety.