§ There is one other item of direct taxation to which I want to refer, namely, Schedule A. In the Finance Bill debates last year, I said that the proper time for the Committee to decide on the future of Schedule A would be in connection with the 1963 Finance Bill, when the new valuations for rating purposes in 978 England and Wales would take effect. That stands. It is, however, obvious that we could not charge owner-occupiers of residential property with Schedule A Income Tax on the new rating valuations. We should then be suddenly trebling or quadrupling the burden of the tax on many of those who pay it. That would be intolerable.
§ Indeed, the new situation, which the revised rating valuations will bring about, indicates the unsatisfactory character of this tax in its application to the owner-occupier of residential property. Unless it is charged on current values it is difficult to find a firm basis for the tax which is, in any event, a tax on what has been described as notional income. Many people have to make their plans ahead: there are decisions to be made whether or not to appeal against new assessments.
§ Therefore, although I intend that this matter shall be dealt with in the 1963 Finance Bill, as I have said before, it is right to say this now. We will not seek to use the new rating valuations for Schedule A purposes so far as these owner-occupiers of residential property are concerned. On the contrary, for the reasons which I have set out, we will make proposals for bringing this tax on them to an end.
§ I cannot say now whether this will be done in a single operation in one year. It will mean giving up about £50 million a year. Whether we can manage to get to that position in one year will depend on revenue considerations. But Schedule A for owner-occupiers of residential property will go.
§ The moment has now come, I think, to recruit my energies in the usual manner, by drinking from this glass. Last year I was able to tell your predecessor, Sir William, how much a gallon of this particular commodity would cost him in duty. Alas, the moment has not yet come in my speech this year for me to be able to be so' precise; but, Sir William, do not be too hopeful. Also, because of the next passage in my speech, a little short-term stimulation may be advisable.