POST-WAR TAXATION

Dominion, Volume 37, Issue 203, 25 May 1944, Page 5

POST-WAR TAXATION

High Level In Britain Predicted (British Official Wireless.) RUGBY, May 23. The Chancellor of the Exchequer, Sir John Anderson, replying tp the debate on the second reading of the Finance Bill, assured the House of Commons that the Treasury was getting ready for the situation which was likely to arise at the end of the war with Germany and during the transitional period. He referred to steps which it would be necessary to take to maintain as far as possible a steady level of prices, so as to guard against inflation, of which the risk would be greater when the automatic restraints imposed by the war were relaxed. These questions, he said, were being constantly studied. The whole body of the emergency legislation, which included many important provisions affecting financial and economic arrangements, had for some time been under elose technical examination with a view to seeing what provisions could be dropped, what might be continued with modifications, and what must be continued Substantially as they were now. to maintain stable conditions at the end of the war with Germany. Members had referred to some patriotic illusions prevalent among the people as to what might happen after the war, ho continued. It was most important) that they should all collaborate in destroying such illusions, because the people must approach difficult conditions after the war with a sense of reality. He added; “I fully agree that while the public would like to have a rosy picture painted, they don’t want it unless it is the real picture, and the real picture cannot be very rosy.

No Need for Pessimism. “On the other hand, there is no reason for taking a pessimistic view of our future. I agree that we shall not be a poor country after the war, but our economy will have to be operated much more in the region of distribution than of production.” He thought the public, who had borne great hardships and privations in this war without complaint, were entitled to some little help or. relief. It had to be realized that there would be a period of heavy expenditure after the war. There would be a period during which the gap between tax revenue and expenditure would still be considerable. He added: “It must be our aim to narrow that gap as speedily as possible. We must maintain a high level of tax revenue.- We can only do that by maintaining the balance between direct taxation and indirect taxation. We can only maintain the productivity of direct taxation by keeping the wide sweep which it now has.”

The Finance Bill was then read a second time. Britain is now paying in taxation 52 per cent, of'the country’s total expenditure. This disclosure was made by the. Financial Secretary to the Treasury,! Mr. Asshetcn, during the debate. This’ year’s Budget would make history, ha; said, because in the fifth year of the] greatest war in history the existing high; rates of taxation covered such a propor-■ tion of our expenditure that no further increase had been considered necessary. It was no mean achievement that as the war increased in intensity, necessitating an ev.er-growing annual increase in expenditure. the proportion covered by taxation had increased by from 35 per cent, to 52 per cent, as the war had gone on.