BRITISH BUDGET.

Dominion, Volume 2, Issue 496, 1 May 1909, Page 5

BRITISH BUDGET.

. A : BIG DEFICIT. TAKING OF THE UNEARNED INCREMENT ; STATE-AIDED INSURANCE. AN IMPOSING LIST OF NEW TAXES. . Tho; feature of the British Budgot is its how taxation proposals, framed to meet the hugo deficit of about sixteen millions which increasing . social, reform burdens and decreased rcvonuo would otherwise create in tho year 1909-10. The', new taxes, and their estimated revenue yields, are as follow: 1 NEW TAXATION. :■ ■' . . ■ ... £ • Reduced Sinking Fund 3,000-000' .. Increased Income Tax ... ... 3.500,000 . Revised Estate Duties ... ... 2,850,000 Increased Stamp Duties ... ... 050,000 ■Motor and Potror Taxes ... ... 600,000 Unearned Increment, etc., taxes 500,000 Increased Tobacco .Duty ... 1 ... . 1,900,000 Increased Spirit Duty ... ... 1,600,000 Revised License Duties ... ... 2,600,000 v.; V,' £17,200,003 "■ FALLING OFF IN REVENUE AND . TRADE. / 1 ". - : -' ' " - I (Rcc. April 30, 9.45 p;m.). London, April 30.' . ; Tho 'Chancellor of- the Exchequer, the Right Hon. D. Lloyd-George, delivered his first .Budget—tho fourth . Budget of the' present .liberal ■ Government—before a ...House which was crowded in all parts oxcopt the strangers' 1 gallery. . The Chancellor spoko for four hours and a half. ' The interest with which Mr. Lloyd-George's Budget / speech anticipated was keener than, in the 'caso of any Budget 6ince that of the late' Sir William/Harcourt in 1894.- ; .The facts usually embodied -in 'the first part ; of the " Budget had been pre-announced in a White Paper. Tho revenue for tho year 190S-09 is £150,678,000,'. which is £3,772,000 below the!estimate (£154,350,000).' / _[The cablegram does,not make it clear what the actual expenditure for 190S-09 is, nor what the actual deficit is. Anticipations arrived at in March wore that the deficit would bo about five millions, In addition to this deficit, the Chancellor of the Exchequer would have to find fresh revenue for 1909-10 to cover tho increased naval burden, and the cost of .old age pensions. Those/liabilities have been roughly/estimated at six'millions each. : Henco:tho quest for. new taxation.] Tho estimates of revenue- and expenditure for tho current year 1909-10 are as follow: Estimated Expenditure, 1909-10 ... £164,152,000 Estimated/ Revenue, 1509-10 „. £148,380,000 i Estimatod Dofifit, ,1909-10 .„ £15,762,000 , The decreaso. in tho estimated revenue for 1909-10 (which, is £2,188,000 below tho actual revenue for is duo .'to, tho necessity.-.of estimating tho following 1 revenue, decreases, for. 1909-10 as compared with 1908-09 :Customs,' £1,000,000; exciso, £1,500,000. :/ /-';/■ ;' i,: ; Tho diminution in l foreign trade in 1908 was 114 millions, of which from a third to a. half was accounted • for by a gonoral' fall in prices below , the 1907 level. Tho Chancellor finds, it impossible to ' prophesy an immediate.-rapid); re<x>very, - but thoro arc somo indications: that . foreign trade .-is beginning to' improve. ' : • -.' - [The fall of millions in the foreign trade tho United Kingdom in 1303,.as compared with 1907,. was;mado up of 1 the .'following decreases : .Imports, 452,589,784; exports,' 419,002,; 199; re-exports, 412,723,580. In 1907 tho . imports; exports, and re-exports totalled 41,16-1,-224,2-11; in 1908, , 41,049,905,382.] ; •V Reduction of Sinking Fund. \ In, his Budget / speech,. Mr. v Lloyd-George claimed that tho increased expenditure : liqrl been substantially incurred with tho unanimous assent .of all parties. 'The. growth of. temperance had added : considerably, to his financial diiEcalties., Ho had to'find , additional revenno'to tho amount of £16,600,000, which would loave a surplus of £488,000. Ho proposed to moet tho deficiency by tho following methods:— -/"- v ." , . (1) Roducmg by three millions tho annual Bontribution: paid .into tho Sinking Fund for tho production of, tJio National ■ Debt.-: This wm expected.-to/yield £3,000,000 i.(2). Increasing the, incioirio, tax:' thb tax on' earned mcoiues below £2000. a year, .would remain at 9d. in tho £.-, On otlier incomes up to £3000 tho tax would bo Is. as at present; ,on all inco'mcs abo'vo; £3000; .14d;';"on bll incomes r,bovo £5000, a further' super-tax of "6d: in- tho.' £. - It ywas 'oxpected that in the following year, the supor-tax would alono field £2,300,000. Thcso iiic'onio tax-ohanges wero. estimated to yield ... ,/ ... £3,500,000 (3) Revising the ostato (death, ctc.)'duties: By; this rovision; it wits expected to raiso an additional . ... . ■ ■ ... / ... N £2,850,000 : (4), Increasing tho stamp dutios: It was proposed to; increase the • stamp dutios on' share' transactions, so ns to raiso r . nn iddjtional ... ; ~.\ ... ... £650,000 (5) Motor taxes: Motor vehiolos would bo taxed at, from 40s. up to 40 guineas according to horse-power, doctors' cars paying half taxes;; ; Motor 'cycles would be. taxed at £1 each, and petrol at 3d. per gallon, with a rebate of Jd. per gallon to commercial oars, rhe revenue derived' would be, expended on the improvement of. roads'. : Tho motor taxes wore expected to yield. ... . ... £600,000 (6), Taxirtfl unearned Increment, etc.: The Budget™es that the State shall take: : . ~ (aj./O.pflr cent. l of tho unearned increment of land, payable at death of ; owner or when tho land Is sold. (b) A further half-penny in tho & on , tho capital value of. undeveloped land and ungotten minerals, (e) Also a half-penny in the £ on mining royalties. ' v ; ■ (d) Also .10 per. cent, of the reversion ■ . duty on benefit accruing at the ter- , ..initiation .of a lease of land. Thoso taxes, it is estimated by the Chancellor, will produce a revonue of . ...' ....',£500,000 (7) Increasing tho tobacco duty: An increase of. Bd. per lb. on manufactured tobacco was " oxpected to yield/, an additional ■ ... .. ... ... £1,900,000 (8) Increasing the spirits ■ duty: An increaso of 3s. 9d. per gallon on spirits was expected to yield an additional... £1,600,000 ; (9) Revising license dutios: A 'rovision of tho liquor licenses iuid tho chkrging of a uniform porcontago on tho > annual . valuo should produce an additional ... £2,600,000 • .Compulsory and Contributory Insuratico. V The, Government, - tho Chancellor stated, was considering an 'industrial insurance scheme that would. bo compulsory, sclf-coii-tributory, and State-aided, while preserving tho existing bonefit societies.. Ho proposed iioxt year to givo old age pensions to people in workhouses aged 70 years or over. . ' ' The aggrognte of imu.wis assessed for income ttu ill 1808-UU wua £UMQ,OOO,OOO, an

increase' of sixty Millions on the--total foi 1907-08 (£930,000,000). The Ohancelloi stated that undor the income tax rovisior owners of incomcs of under £5000 would be granted an abatement at the rate of £10 pel child for children under sixteen years of ago. The present total of . the National Debt is given at £754,121,309. Mr. Lloyd-George suggested that . th« whisky duties would justify an increase ir the retail prioo of that beverage by a halfpenny per glass. Naval Burden: No Loan Required. In conclusion, Mr. Lloyd-George stated that the greater purt of the cost of the neti Dreadnoughts would fill on tho finances next year; and if the four contingent Dreadnoughts wero also built, the naval bill would be gigantic. Nevertheless, tho Government did not intend to avoid its obligations. Failure, to do so would bo not Liberalism but lunacy. At the same time it would be an act of the greatest unwisdom to throw away eight millions. The Government could not build, a navy against nightmares. The increased yield of'his new taxes would make the necossAry provision for the Navy' next year'possible without resort to the vicious expedient of a loan. ■ Criticisms: An Electioneering' Manifesto. Mr. Austen Chamberlain,, who was Chancellor of tho Exchequer in the last Unionist Government, said the 'Budget was so dotailed that immediate criticism was impossible. It might serve tho purposes of an electoral manifesto, but it would take three Parliaments to-pass tho legislation necessary.' for the full achievement of its proposals. As to the stamp duties, bonds and other securities transferable by delivery would bo raised 10 to 20 per cent, of their nominal value, but bonds issued by colonial Governments would remain at half a crown per oent. ' ■ . . < .\. "Tho Times" expressea the opinion that the Istamp duties'will operate very disadvantugeously to' bankers, who will be. paralysed; with; respect to tho raising' of colonial corporation loans. Such loans are: expected to.be obtained by' New York bankers in future. ■ ■" ■■■:" Mr. John Redmond (leader of the' Nationalists) and the Irish members strongly opposed the Budget; proposals, particularly the spirit duties. ; ' ' The House agreed to the spirits, tobacco, and petrol duties by 281 votes to 120. Lobby; opinion emphasises tho vast complexity of the Budget and characterises it as several; Budgets in one. The Radicals . believe that Mr. LloydGoorgo js tinder-estimating the revenues derivable from tho new taxes, and think -that tho next Budget may. show, an unexpected surplus. ■ "Plundering tho Middle Classes." ."Tho Times" 6avs that tho.'deficit is being covered at'tho cost of tho, wealthy and the fairly well-to-do sections of the public! The doctrine of social ransom was never carried; quite so far.: ... ; Tho "Daily Mail" remarks that tho plundering of tho middle classes shows that free trade finance has hopelessly broken down. ■The "Standard" comments .that Ministers flung . away vast revenues' in abolishing or reducing the taxes on coul, sugar, and.tea) and aro now without oourago to recant, ' : ' The "Jtanohestor Guardian" (Liberal) dcclares that Mr. Lloyd-Georgo has vindicated the elasticity of free trade finance. Tho "Daily Chronicle". (Liberal): It ;is a bold Budget, but -a' bad speech. It wearied the Commons ' ,Mr. Lloyd-George was so anxious to sketch tho future developments of .the Liberal policy that-lixs .'Budget specch became a political manifesto. -Tho death duties for 1908-09 produced £18,370,000, which .is £700,000 less than tho amount paid into tho Exchequer'for 1907-08 (£19,070,000); . ... : .: NEW TAXES. ; .Some of _the new Budget taxation was ahtiMminonf i J' 10 i° tlo, ™g V anticipatory ooinment is taken from a rccent: artiolo by a Unionist, wntor, whose' observations, though not froe from party bna, are very apropos:— National Debt and Sinking Fund. 'ho Ministerial Press suggest that, notwithstanding Mr. Asquith's deofthe - 13 ? 7 'Il at tta V bt ls , . tll o present moment one of jes of the Chancellor of tho Exchequer, a raid will be made on the Sink-Slnf-th f ,a S. ' be'defended by the statement that the Liborals have paid off a considerable - amount of National Debt. It is, therefore,- important to ascertain what sne'oial provision tho .present Government has made lor debt repayment, and what tho Sinkini Fund ,/T? 1 ® Unionist Government in 1905 fixed '■he sinking Fund _at £28,025,000, and, in addition® provided surpluses in floi-ii of;XI,413,000 and [U; 1000-fl of jfi3,465,000, which went to tho rePAVS® -i The Liberal Government in l0t)6-7,placed it at 428,600,(100, added wither mi won. in 1007-8,; and-, restored it to the fiiure 3f ~28,000,000 in 1003-0, In the two vears 1006-7 and 1907-8 there were Liberal surpluses aggregating an amount of ten millions, which went to repayment of debt,, but against these must be set the deficit this year of at least Evo: millions, which will come' out of tho Sinking Fund., The Liberal Government will, therefore, next April have paid off debt to the total amount of only, six and a half mil-lions-in excess of the repayment arranged by the Unionist Administration, whoil'. it' placed the. Sinking Fund at Tho total lebt of tho nation will stand in April 1909 at lpproximately .£755,000,000, as compared' with £085,000,000 in 189!). bel'oro tho Boer ,war, and £788,000,000 in the last year of Unionist administration. • ■ , . . ■ . (Note.—Tho'Budget Statement itself puts tho present National Debt at .13764,121,309.) "The' Sinking Fund before; the- war' was £25,000,000,' but jn; 1899 it was; reduced' to £23,210,000. If it is now reduced to tho firiiro Df 1809, it will yield somo .£4,800,000 to meet jurrent expenditure. But then tho financial ponstquences.of such a reductionwhen tho debt is .6120,000,000 greater than in ISOO have to bo taken into account. It must be remembered that originally the. Sinking Fund was■' so adjusted by Mr..Gladstone'as to redeem the entire National Debt withiii. tho period during ivhich the British coal measures would be able to supply" cheap coal. It was calculated, in jther words, with; direct reference.to Britain's national resumes. Tho gradual rise in the price 'of coal in this country in rccent years proves that Mr. Gladstone here showed great statesmanship and sound finances.", . . . Estate (Death, etc,) Duties. "The Primo Minister refused to reoognise in May, 1908, that a period of extreme trade depression was at; hand, and generally reduced taxation, counting npon an expansion of the revomie. He, did, however, add to tho death luties—though theso were already heavy—an additional and graduated tax upou largo estates ivhich ho expeoted would yield XGOO.OOO. Sofar :his anticipation has not bpen fulfilled. There :omes a point in all taxes where further increase ceases to be productive, and it looks as though HI the presont year the yield 'of the loath duties, despite tho moro onorons burdons imposed,; will bo actually, less than in tho immediate, past." The cabled Budget figures show a falling-off of £"00,000 in the death duties whioh.tho ilew taxation .proposals further- increase. Income Tax, -. In 1007 a departure was mado by tho Liberal Government from tho shilling income tax, discrimination being, mado'in'favour-of earned insomes to tins extent: in tho case of incomes not sxceeding J32000, a relief .of 3d. in the £ was illovrfd on earned incomc, the earned bdinff tluis taxed a». 9d. in. the £, anil th* un«arnou it Is. • The new income tux.arid a'nper-tax should at jny rato have tho support of the Labour party. ?i , prepared olubornto tables for »t higher, taxation tho'lnrjj«r incomcs, and Mr. Iveir Ilardie lately dcciarod that Labour's ftUcrnatlvo to tariff roform waa a 10 per ooufc, tax on inootuca .iiOvU % jCAXt »