§ Now I approach this figure of £2,667,000,000, and I have to ask myself three questions, and the House will wish to know how I answer them. The first is, How much, as the contribution towards this total, would be provided by the continuance of existing taxes at their present level? The second is, How much more should be contributed by additional imposts which I find it my duty to propose? The third question is, How may we hope to provide the balance which remains after all that has been done?
§ First, as to the produce of existing taxes in the present year. If the standard rate of Income Tax remained at last year's figure of 7s., and if the changes in the allowances which I indicated last Autumn did not now come into effect, then I should estimate that the yield of Income Tax in the current year would be £408,000,000. As regards Surtax, the full benefit of the increased rates imposed last year should now be felt, and the estimated yield is £75,000,000. The yield of Death Duties should also now be fully affected by the increases in the rates of duty imposed last year, and I estimate a total of £85,000,000. The yield of Stamp Duties I place at £19,000,000.
§ The National Defence Contribution and the Excess Profits Tax I ask hon. Members to bracket together for the moment. These are alternative duties, that is to say, a concern does not pay both but the higher of the two. If there were no Excess Profits Tax I think, on the basis of our general information as to trade profits, that, we should look for a yield of £28,000,000 from the National Defence Contribution. As regards Excess Profits Tax, we have as yet very little to indicate to what extent the profits of individual concerns since 1st April, 1939, have exceeded their standard profits, and the best I can do for the time being is to estimate the two taxes together at a round figure of £70,000,000 to cover the total yield to be obtained from the two 62 duties. The other Inland Revenue Duties are expected to yield £1,000,000.
§ As the arithmetic of hon. Members is unimpeachable, everybody by this time will have arrived at the same conclusion, namely, that for the current year the total estimate of Inland Revenue Duties on the present basis amounts to £658,000,000—that is an excess of £75,000,000 over the actual yield last year.
§ As regards Customs and Excise Duties, which produced £400,000,000 last year, it is estimated that a full year's revenue coming in at the rate of flow reached in the latter part of 1939–40 would produce about £420,000,000. In ordinary times a continuing improvement in employment at full wages, and with overtime, would, of course, be expected to lead to a substantial further growth in the Customs and Excise Revenue. But we ought to set against this the restrictive effect of limitations upon consumption, whether they are effected by import restrictions or otherwise or whether they are practised by the good sense of the population, who realise how vital it is to limit civilian consumption as a means of helping to restrain a rise in prices. Taking into account these various factors on either side, I should propose to leave the total figure on the present basis for Customs and Excise at £420,000,000. The items will be shown in the Budget White Paper, and I do not think the Committee will wish me to deal in detail with them.
§ From Motor Vehicle Duties I estimate that the revenue will be a little more than we received in 1939, and so I put down £35,000,000.
§ As to the Post Office, the net cash revenue of the Post Office is expected, on the basis of existing tariff rates, to amount to only £600,000. The Committee may remember that the Finance Act, 1937, fixed the annual contribution which the Post Office was to make to the Exchequer over the three years to 31st March, 1940, and it was then left for further legislation to say what the contribution from the Post Office to the Exchequer should be for subsequent years. I explained in my Budget speech a year ago that as a result of the failure of the Post Office surplus to provide the fixed contribution without drawing on the Post Office Fund, I proposed to review the position in 63 conjunction with the Postmaster-General. The Post Office Fund is now exhausted, and the war has inevitably destroyed the basis for any such review. My right hon. Friend the Postmaster-General and I have therefore come to the conclusion that in present circumstances the only practicable course is to revert for the time being to the position which existed before the Post Office Fund was established in 1933, and to take the whole of the Post Office revenue into the Exchequer. As I have already indicated, the net receipt of the Exchequer will, on the basis of existing rates, be very small indeed, but—and here I am beginning to draw back the veil—the rates at present charged by the Post Office can, and should be made to, bear some increases as a contribution towards our war expenditure, and I shall later announce the increases proposed.
§ With certain minor items, the total Revenue for 1940, on the basis of existing rates, amounts to £1,133,000,000.