CRITICISM OF BUDGET

Ashburton Guardian, Volume 67, Issue 158, 17 April 1947, Page 3

CRITICISM OF BUDGET

Increased duty, making Britain’s cigarettes twopence each retail, was the shock of the Budget speech. There were gasps in the House of Commons when Dr. Dalton announced the startlingly heavy tobacco tax. The Budget is described in the Parliamentary lobbies and the Press as a “less smoking” and a “no smoking” Budget. The comments of tobacco interests include an Imperial Tobacco Company spokesman, who said it was a staggering increase in' duty. Smokers with lower incomes will be particularly hard hit. i Mr S. Phillips, director of Godfrey Phillips, Ltd., said it was a great shock to the public. “It will be a miracle if it does not reduce the consumption of cigaretts. There has never been a price rise approaching this one.” ' . The president of the Retail Tobacconists’ Union said there was little - doubt that the new duty' will reduce consumption and imports of Virginian tobacco. Tobacconists must face a serious decrease in sales. The union is advising retailters to charge the new prices from to-morrow. It says the public’s pocket has been strained too much, and the working man is hit particularly. Taxes Are Punitive The Conservative Party’s finance ’ committee dissected the Budget and decided that apart from the income tax reduction, which mainly affected wage earners, there did npt seem to be any incentives in it for anybody. The tobacco duty shocked the committee, which felt that it discriminated against the smoker, while the spectator of American films did not contribute. Some Opposition critics would have liked the Imperial preference ratio retained for tobacco, buit it is believed that it was impossible under the American loan agreement. Some Labour members would have preferred tobacco rationing to the new exorbitant tax. i

The Press comment includes “The Times,” which says the taxes on tobacco and electrical appliances are punitive, but not unreasonable in re-

SURPLUS IS NEEDLESSLY HIGH Lack Of Incentives To Industry (N.Z. Press Association—Copyright.) LONDON, April 16. The Parliamentary correspondent of “The Times” says the net result of the Budget proposals is that taxation in the full year will be increased by £53,000,000. Government supporters appeared to be on the whole well satisfied with the Chancellor s speech, but Opposition members criticised it as not providing the hoped-for incentives to industry and production. Specific Opposition criticisms were: (1) That the Chancellor had budgeted for a needlessly high surplus of £270,000,000. (2) That the net increase in taxation at this interval after the end of the war is discouraging. (3) That the Government appears to be stabilising expenditure at an unreasonably high level. Disappointment is also ex pressed that no reduction has been made in the standard rate of income tax. The Opposition s considered criticisms will be given by Sir John Simon in his speech to-day. Dr. Dalton’s all-embracing Budget is unlikely to do much to cheer the City, says Reuter’s financial correspondent. It was confidently expected that whatever he did Dr. Dalton would reduce the standard income-tax fate to assist industry by encouraging workers and, while tax allowances are greater, no other special consideration has been given to employees to encourage them to consider a 40-hour week the minimum rather than the maximum. The increased profits tax did not come as a surprise, as it was generally realised that some form of new or increased taxation was necessary to take the place of the now defunct excess profits tax. As -feared, the Chancellor is taking a gamble regarding tobacco revenue in order to reduce dollar spending' for American leaf. The main theme of the Chancellor’s Budget has been to counter-balance more evenly imports against exports, and all other considerations have been thrown to the wind in order to accomplish this severe task. It will probably take some time for the City to digest all the aspects of this Budget, but the first reaction was unenthusiastic.

lation to special purposes. The taxpayer could expect little or nothing for the current year in view of the need to combat the inflation threat, and that is what he got. It is time for a Pedestrian Budget, with a modest swing from direct to indirect taxation, with special emphasis on consumption requiring dollars, coal or electricity. Although sundry lesser items in the Budget may be questionable, the Chancellor lias fulfilled the main need. The “Daily Telegraph” says the Budget is “good for gilt-edged,” although a considerable part of the estimated revenue is non-recurring. Dr. Dalton’s decision to budget for a £j270,000,000 surplus savours of orthodox finance to an extent which few City persons expected. “Unpopular, But Sound” The “Daily Mail” says that nothing Dr. Dalton said in his speech will arouse so much resentful comment as the tobacco duties. They are among the highest impositions in indirect taxation ever levied in this country. We must credit Dr. Dalton with considerable courage. This step will be highly unpopular, but we must ruefully admit that it is sound. ■ The “Daily Express” says the tobacco tax is a heroic measure. Dollars are running out. Tobacco may be only the first casualty in a long series of human pleasures to be sacrificed for essential food and raw materials. The tobacco tax should not be counted against the Chancellor.

Dr. Dalton, in a BBC broadcast, said he was givihg first place in tax reductions to the income-tax payer, and especially to the man with children. “We must take special thought for salaried people and wage-earners who are bringing up a young family,” he said. “Many persons, including Mr Churchill, said we are smoking too much. We are spending almost as many dollars on United States tobacco as the United States is spending on all British goods and the imports we cut down must be those we need least and we heed food more than tobacco.”