HC Deb 27 September 1939 vol 351 cc1380-8

Motion made, and Question proposed, That on and after the twenty-eighth day of September, nineteen hundred and thirty-nine— (a)there shall be charged in respect of beer brewed in the United Kingdom, in lieu of the duty of excise theretofore chargeable in respect thereof, a duty of excise at the following rates—

£ s. d.
For every 36 gallons of worts of a specific gravity of 1,027 degrees or less 2 8 0
For every 36 gallons of worts of a specific gravity exceeding 1,027 degrees—
For the first 1,027 degrees degrees 2 8 0
For every additional degree in excess of 1,027 degree 2 0
and so in proportion for any less number of gallons; (b) no rebate shall be allowed from any duty of excise for the time being charge-able in respect of beer to which this Resolution applies; (c) on the exportation from the United Kingdom as merchandise, or for use as ships' stores, of beer in respect of which it is shown to the satisfaction of the Commissioners of Customs and Excise that the duty of excise chargeable under this Resolution has been paid, there shall be allowed (in addition to the drawback allowable under Section two of the Finance Act. 1933, but in lieu of any other excise drawback) an excise drawback at the following rates:
£ s. d
For every 36 gallons of beer of an original gravity of 1,027 degrees of less 2 8 2
For every 36 gallons of beer of an original gravity exceeding 1,027 degrees—
For the first 1,027 degrees 2 8 2
For every additional degree in excess of 1,027 degrees 2 0
and so in proportion for any less number of gallons: Provided that—
  1. (i) nothing in this Resolution shall apply to beer of any description specified in Sub-section (1) of Section two of the Finance Act, 1930; and
  2. (ii) as respects beer of an original gravity of less than 1,027 degrees, the amount of drawback allowable shall not exceed by more than twopence for every thirty-six gallons the amount of duty which is shown to the satisfaction of the Commissioners of Customs and Excise to have been paid.
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

5.8 p.m.

The Chairman

In accordance with the usual course I have put the first Budget Resolution from the Chair. Thereupon, all the Budget proposals are open for debate, but the exact terms of the other Budget Resolutions cannot be known or be in the possession of hon. Members until theyhave been put from the Chair. There have been complaints in the past that some inconvenience has resulted. I, therefore, suggest to the Committee that, if they approve, I should, at the conclusion of the speeches of the Leaders of the two Oppositions, putfrom the Chair all the Budget Resolutions, and that the Committee should pass them with the exception of the last one, which will be left open in the usual way in order to keep the Debate open. I understand that that meets with the approval of the Government and the Leader of the Opposition, and if the Committee generally approves, I shall be glad to adopt that course.

Mr. Pethick-Lawrence

I think your proposal, Sir Dennis, on this occasion would be a very admirable one. There have been occasions in previous practice in this House which have precluded Members of the Committee from discussing Resolutions because they have not seen them, and on this occasion, if the Debate is continued to-day, the Resolution will be in the hands of the Committee, and I think, so far from in any way limiting the Debate, it will make it of larger value because the Committee will be in possession of the facts on this occasion. Therefore, I hope that on all sides of the Committee the procedure which you have suggested will be accepted.

Mr. Tinker

Shall we have an opportunity of being able to raise any points that we desire to raise?

The Chairman

Perhaps the hon. Member did not follow what I said. I said that the last Resolution will be read from the Chair but not put to the Committee to be voted upon. It will be left open as a subject for discussion, and discussions can take place on all the Resolutions which have been formally passed. I take it that the course which I have indicated will be agreeable to the Committee.

Hon. Members


5.11 p.m.

Mr. Attlee

The Chancellor of the Exchequer cannot have thought that the measures he has had to propose are likely to enhance his popularity. He has had a distasteful task. This is the second emergency Budget that I remember. Inevitably my mind goes back to eight years ago, when we had an emergency Budget, caused by what was regarded as a great crisis in finance. That crisis was like a bit of sand to a mountain compared with the crisis that faces us now. I cannot help remembering that the people who then took control have brought us to our present position. There is a touch of poetic justice in that it should be the right hon. Gentleman who has had to place before us the results of the policy for which he was largely responsible.

I do not intend to make a long speech. The general points involved in the Budget will be dealt with by my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence). I agree with the Chancellor of the Exchequer that he is right in endeavouringto raise these large sums by taxation. There was not much enthusiasm for the raising of the Income Tax. I think he is right to do it. He said that there were two great methods— taxation and borrowing. In essence, they are part of the same process. They are, in essence, a method of deciding how you are going to utilise the resources of this country. The two really big questions which face us at this moment are the production of wealth in the form of goods and services, and its distribution. By no possible procedure can we put off the paying for this war to some future occasion, or make some future generation pay by any amount of borrowing. This war, like the last war, will have to be paid for by the efforts of the men and women of this country at thepresent time. That is the point that lies behind the Budget statement.

Adverting to what the Chancellor of the Exchequer said in the closing half of his speech with regard to the need for economy and the avoidance of waste, there is great waste in employing people improperly and there is even greater waste in not employing them at all. It is no use getting an economy in which you are going to throw people out of the jobs in which they are now unless you have jobs in which to put them. I emphasise that point, because I think the Chancellor of the Exchequer was a little short in regard to the real essentials of the situation. The real position is that we have to contrast ourselves with Germany or any other country. We have to consider the resources of this country. Our resources mainly depend upon our productive capacity and our capacity for rendering services. In addition, we have valuable property in other countries which can be mobilised. I look at this Budget from the point of view as to how far it is going to effect an increase in our wealth and the best use of our wealth. A very heavy Income Tax and a very heavy Super-tax undoubtedly effects some better distribution of our spending power by taking away from those who have a superfluity. On the otherhand, there are taxes imposed in this Budget that are going to take away from people who are not getting enough to-day and who thereby will be weakened. The real thing at the back of this Budget is to emphasise the need of a proper rationing system in this country and the proper utilisation of our resources, so as to keep up the strength of our people, and a proper organisation of the internal economy of the country, so as to have a proper balance between what we need for supporting our fighting forces, for obtaining our raw material, and keeping the country going.

Turning to the proposals of the Budget, I suppose one could expect inevitably a steep rise in Income Tax, although we have to remember that the Income Tax at the beginning of this war was alreadystanding a great deal higher than at the beginning of the last war. We have also to remember that we have an enormous debt hanging over us that was incurred during the last war. That must not occur again. At the end of this war we must not find that the men who have fought and worked are in debt to those who merely lend to the Government. One of the factors that has disorganised the world since the last war has been the piling up of these immense debts.

With regard to the Income Tax I think there isa certain rightness in some of the adjustments, but I think some are unfortunate. I can see no reason why you should increase the burden on earned income as against unearned income. I think it is undesirable—it is not a very large thing, but it is important—that there should be the change in children's allowances, because at this time, owing to the increase in prices, there is a very heavy burden on those who have children. This is no time in which we want to discourage the having of children in this country, which is one of our problems to-day.

When I turn to indirect taxation, I am not objecting to the taxes on alcholic liquors or even on tobacco. From the national point of view these are luxuries, and it is a reasonable tax; but there is very grave ground for reconsideration of the additional tax on sugar. I do not think you want to see less sugar consumed unless there is a real shortage. I remember the days of my youth when sugar was regarded as rather a luxury, and as such there was a slight Victorian prejudice against it on that ground. Nowadays we are told to give everybody sugar, because it is extremely valuable as a food, and I suggest that anything which would stop the use of sugar is very undesirable. It may have a bad effect in other ways. Take the question of the use of sugar with fruit. We have a tremendous fruit crop this year and I am afraid that a great deal is going to waste.

I would like to relate one thing to the Chancellor of the Exchequer to show the readiness of our people for service. I had a letter the other day from an old age pensioner, an old lady, far up in Yorkshire. She wrote saying that she was very distressed at the danger that much of our fruit crops in Kent would be lost, and although she had never been South inher life she would like to come down and help to gather it. That is a fine spirit. I emphasise that point because it shows that it requires looking at, whether putting an increase on sugar is not unwise, when, as a matter of fact, our supplies of sugar are going to be far better than they were during the last war. It is essential to see that whatever economies we make are economies which strengthen the country, not weaken it. I emphasise the position in which people of very narrow means are being put by the rise in the cost of living—old age pensioners. If you have this tremendous taxation, if you are going, as I think is perfectly right, by a method of taxation to turn the effective demand for commodities largely into Government hands, you have to see that it does not hit these helpless people.

One word with regard to the levy on wealth. I welcome the suggestion of the taxation of war profits, but the best thing is to have no war profits at all. I recognise that in this war there will be changes of fortunes due to one thing or another, and I gather the suggestion is that there should be some kind of levy at the end of the war in which you would raise a levy from those whose capital wealth had increased during the war period. That makes a certainassumption. It assumes that there is more or less a just distribution of the wealth of this country which is not the case. My objection to a levy on war wealth of one kind or another is that it directs the whole question to the need for a levy on the unequal fortunes of war profiteers, and ignores other profits which are being made.

This is the first official War Budget we have had, although the last two Budgets were war budgets. But we are approaching very great changes in this country, and if this war goes on you are inevitably going to get, if you want to have the national effort at its height, a far greater movement towards equality of fortunes in this country. The taxation which is being put on wealth is something towards that. I agree that without grave dislocation you cannot rush the thing, but I think we shall have to have a clear contemplation that this country is going to get through this war, is going to win, and that it is going to win for the benefit of the whole people, and that never again atthe end of a war are we to find that we have saved the country to find that it belongs to other people.

5.26 p.m.

Sir Archibald Sinclair

First, let me pay a tribute to the Chancellor of the Exchequer for his clear, cogent and revealing statement of the financial situation and of the case for demanding heavy sacrifices from the taxpayer. It was a revealing statement, but there was one point on which I was waiting for information, but did not receive it, and that was in regard to interest rates which must clearly affect the borrowing policy of the Government. I would ask the Chancellor of the Exchequer to make a statement soon on that subject, and in particular to repudiate at an early stage of these discussions the policy of borrowing at the high rates of interest which prevailed during the last war. This war clearly means that we shall have to shoulder financial burdens of almost incalculable weight. Let there be no mistake about it, we are going to shoulder them, and, to my mind, one of the best services which the Chancellor of the Exchequer has rendered us this afternoon has been to enable us to face the facts clearly, instead of indulging in that muddled, wistful thinking which has been only too prevalent in this country, at any rate since rearmament began, about our financial and economic future.. Now we know where we are, and we are taking bold measures to mobilise our financial and economic resources at. the cost of great sacrifices by the taxpayers of all classes. The Chancellor of the Exchequerhas taken the bull by the horns with a vengeance, but he is right to raise as much money as he can by taxation at the start of the war and to amplify and accelerate the diversion of our resources from the peaceful channels of peace to the mighty conduit pipe of war.

No doubt there are many points on which my hon. Friends and I will wish at later stages to offer suggestions, and possibly criticisms, but I do not want to rush into criticism to-day. I feel that the structure of this Budget is one which deserves our support. It is conceived on bold lines, it calls for a great effort when a great effort is needed from the whole people of this country, and, therefore, my hon. Friends and I propose to defer our criticisms until we have given the statement of the Chancellor of the Exchequer that close study which it undoubtedly deserves.

I should, however, like to express gratification—coupled, in one aspect of the problem, with some slight criticism, but on the whole gratification—at the Chancellor's reference to economy. The right hon. Gentleman rightly said that the principles of economy should be applied at the start of the war rather than at the finish but my hon. Friends and I have consistently urged that they should have been applied at thebeginning of rearmament rather than at the start of the war and after we have already had some four years of rearmament expenditure. The Chancellor told us that he was already taking some very useful steps to deal with the problems of effecting economy innational expenditure. He told us that in the Air Ministry and in the Ministry of Supply officers had been appointed for the express purpose of scrutinising all proposals for new expenditure and of keeping a check on existing expenditure. He told us what was going to be done to reduce in some measure the cost of Civil Defence, and he told us of Treasury instructions which had been issued to all Departments; but my hon. Friends and I are not yet quite satisfied with that statement, and I revert once more, in a few sentences, to the suggestion which I made when the Chancellor introduced his last Budget six months ago, namely, the need, in order to secure economy and to convince the taxpayer that we are getting 20s. worth of value for every £ of his thatwe are spending, and that all straggling growths of expenditure in Government Departments are being rigorously pruned, for a Committee of this House to be appointed to go into the question of expenditure.

I do not support the suggestion that has been made in some quarters for what is called a Geddes committee, a committee of people outside Parliament—for I think this matter of expenditure is essentially the responsibility of Members of the House—a committee which would deal with large questions of policy, whereas what we want is a committee which would deal with administrative waste. Therefore, I have always been in favour, and I am still in favour, of a House of Commons Committee like the Select Committee on Expenditure which was appointed inthe last war, and of which my hon. Friend the Member for South-West Bethnal Green (Sir P. Harris) was a member, and of the work of which he can speak with personal knowledge. It was a Committee which, by the testimony of Ministers in the Government afterthe war, saved this country millions of pounds. I cannot help thinking that if we had a committee of that sort at work in the early stages of the war it Would have a real effect in checking the growth of wasteful expenditure, and I hope, incidentally, that it would also do something to stop the increase of well-paid jobs for some young men while others are enduring the dangers and hardships of war without the consolation of the pleasant salaries which are received in some of the Government Departments. I ask the Chancellor of the Exchequer seriously to consider the appointment of a Select Committee on national expenditure, and at the same time I assure him of our support for the main outlines of the Budget, which, severe as it is, does not bring us even within remote range of the limit's of our financial strength, and which the British people will accept, as they will accept further sacrifices when they become necessary, as a means to the victory which they are resolved to obtain. Question put, and agreed to.