§ The figures are these: The actual expenditure last year comes out at a total of £1,816,873,000, instead of the Emergency Budget estimate of £1,933,341,000. There is thus a saving under various heads in last year's expenditure amounting in the whole to no less than £116,500,000.
§ On the other side of the account, at any rate, we may fairly allow ourselves some degree of enthusiasm. The Revenue estimates, which amounted to £995,000,000 odd, have been exceeded in fact by £54,000,000—over £1,000,000 a week. That is a most heartening result. As the Blue Paper shows, there are several heads in regard to which, in a Johnsonian phrase, cheerfulness may be allowed to break in. The Income Tax and Surtax payers have behaved nobly in paying up so promptly the increased sums demanded of them, and my estimates of last September both for Income Tax and Surtax have been fulfilled practically precisely. I know from many letters I have received on this subject that these direct taxpayers, often citizens of quite modest incomes, made a very special effort to comply with the first request for payment, because they realised how important it was to respond to the appeal I made that the proceeds of the tax should reach the Exchequer as soon as possible. Perhaps I may be permitted to give one brief example without quoting the name or identifying the locality. An invalid taxpayer, living in the North—I will not say how far North—in the bleak and snowy days of January, sent his tax, which amounted in his case to some £13,by the hand of his wife; in the rough weather, on foot, she went to the office of the collector in a town several miles away. He wrote to me the next day in a state of some distress and indignation because, in spite of his efforts to contribute thus punctually to the country's needs, the lady arrived after the office was closed. A fine sense of duty is demonstrated by a case of that sort and goes far to explain the success of this part of our system.
§ May I call the attention of the Committee to a very remarkable thing, namely, that £390,000,000 has been produced by Income Tax in a single year. 53 It is a huge sum, and it is the largest amount Income Tax has ever yielded in a single year. The Committee might be interested to have a comparison. How much was collected by way of Income Tax in the first year of the last war? The Committee will notice that then the fiscal year contained eight months of war and not seven months, because the war began in August and not in September. In the first year, 1914–15, the total Income Tax collected was £59,000,000, as compared with £390,000,000. Take another contrast. Last year Surtax produced £69,750,000, whereas Super-tax in 1914–15 produced £10,000,000.
§ Hon. Members will observe the other figures, and I will run over them very quickly. Death Duties are over £2,000,000 above the estimate, and the National Defence Contribution comes out at nearly £27,000,000, whereas I estimated for £25,000,000 in this case. The Excess Profits Tax from which, as I explained in my Budget speech last September, any considerable revenue during the year was most unlikely, has already contributed its trickle of £40,000. Inland Revenue duties as a whole have provided £583,000,000, instead of the estimate of £578,750,000.
§ Customs and Excise have produced £400,000,000, which is £27,500,000 more than the estimate. There is a very noticeable fact about the total. This surplus is chiefly due to the exceptionally large yield from articles on which I increased the duty last time. From the fiscal point of view, therefore, the choice of commodities was more than justified. For example, tobacco has produced £9,700,000 more revenue than my advisers expected, in spite of the increase in tax, spirits £1,700,000 more, sugar £4,600,000 more, and beer £750,000 more.
§ The most striking case of unexpected yield is furnished by the Motor Vehicle Duties. A year ago, when I ventured to increase the licence duty on private cars up to 25s. per horse-power, there were many who prophesied that I should suffer a disastrous loss of revenue. I admit that when the war came in September, the new conditions—the black-out, the rationing of petrol, the appeal to avoid unnecessary spending—naturally required a revision of the estimates. In my War Budget I put my estimated yield from Motor Vehicle Duties at £22,000,000. In fact, these duties have produced 54 £34,000,000. The receipts from private motor cars for December, January and February last were over £10,500,000, which is £134,000 more than they were in those months in the previous year. We have preserved the revenue while we have discouraged luxury motoring. There is one thing more which is very remarkable. Usually when the private motorist pays his tax and takes out his licence in January he takes it out for the year, and the way in which our accounts are kept gives the whole of that money to the receipts for January. This year a large number of people have taken out the licence for three months only, and therefore the amount received is all the more remarkable.
§ Although the receipts from the Post Office exceeded the September Estimate, the total contributions from Post Office revenue and the balance remaining in the Post Office Fund taken together provided only about half of the fixed contribution of £10,750,000 under the pre-war arrangement. I shall have to refer to this arrangement later.
§ Other sources of revenue produced £6,500,000 more than was estimated, the principal reason for the excess being the additional profits resulting from the increase of stocks of silver coin throughout the country. In that connection, I am glad to find that although postal orders were made legal tender in September as a precaution against a shortage of silver coin, only very limited use had to be made of them for currency purposes in the early days of the war. It was possible to revoke their status as legal tender in December.
§ Summing it up, we spent £1,817,000,000; we found out of revenue £1,049,000,000, and we borrowed the rest, £768,000,000. As the Estimates placed before the Committee in September indicated we might have to borrow last year £938,000,000, this is a good deal better than might have been expected, and I invite the Committee to take such comfort as they can from the results of last year, for the much graver problem of the immediate future is still to be dealt with.