IMPERIAL FINANCE.

Evening Post, Volume LXXVII, Issue 101, 30 April 1909, Page 7

IMPERIAL FINANCE.

MR. LLOYD-GEORGE'S BUDGET. PRELIMINARY FIGURES. A HEAVY DEFICIT. ADVERSE EFFECT OF DEPRESSION IN TRADE. By Telegraph.— rress Association.— Copyright. (Received April 30, 8 a.m.) LONDON, 29th April. The Right Hon. D. Lloyd-George, Chancellor of the Exchequer, has issued a White Paper embodying the facts usually contained in the first part of the Budget. This statement shows the following results :—: — Estimated Revenue, 1968=9 £154,350,090 Actual Revenue, 1908-9 ... £150,578,000 Estimates for the coming year are as follow :—: — Estimated Expend., 1909=10 £164,152,000 Estimated Revenue, 1909-10 £148,390,000 Leaving a Budget deficit of £762,000 (?) [The figures are given as cabled, but evidently there has been an error in transmission. The actual difference between the two sums is £15,762,000.] The decrease in the expected revenue was due to the necessity of estimating a reduction of a million in Customs, and a million and a-half in Excise, as compared with 1908-9. The aggregate of incomes assessed for income-tax was 1040 millions, on which a penny in the pound produced £2,833,000. The National Debt amounted to £754,121,309. The diminution in foreign trade in 1908 was 114 millions, of which from a third to a half was accounted for by a general fall in prices- below the 1907 i level. It was impossible, says the statement, to prophesy an immediate rapid recovery, but there were some indications that foreign trade was beginning to improve. The death duties amounted to £]0,370,000. INTEREST IN THE BUDGET SPEECH. GREATER THAN FOR MANY YEARS. (Received April 30, 8.35 a.m.) ' LONDON, 29th April. The interest with which Mr. LloydGeorge's Budget speech is anticipated is keener than in the case of any Budget since that of the late Sir William Harcourt in 1894. Sir William Harcourt's Budget of 1894 was brought- forward at a time when party strife was keen, opposition bitter and determined, and the inteiests laid under new tribute powerful. Nevertheless, the Chancellor's proposals became law without material change. A change in the incidence of taxation had been generally anticipated. There had been a demand in tho country during the autumn of 1893 for an increase of naval strength, which the Government felt bound to comply with, and the Chancellor had to face an estimated deficit of over fonr and a half miUions. His proposals provided for transferring certain amounts, previously met out of revenue, to the National Debt : for a substantial increase in the beer and spirit duties ; for a rise of a penny on the income-tax ; and for a remodelling ot the death duties so as to provide for all needs and leave a balance of a quarter of a million r at tho end of the next fin:incial year, however, it wan found that the actual surplus exceeded three-quar-ters of a million. THE CHANCELLOR'S PROPOSALS. DUTIES INCREASED. TAX ON UNEARNED INCOMES RAISED. BEER, TEA, AND SUGAR UNCHANGED. (Received April 30, 12.5 p.m.) LONDON, 29th April. Mr. Lloyd-George has delivered his Budget speech in the House of Commons. The proposals include — A reduction in the Sinking Fund, An Increase in the death and sue* cession duties, A heavy increase in the spirit duties, An increase in the taxation on unearned incomes, An increase of the tobacco duty. Beer, tea, and sugar are un» changed. SPECULATIVE INSURANCES. In view of the appro.uh of Budget day, many speculative insurances are being effected (bays a recent London paper) tit Lloyd's, iigain^t a general allround increase in taxation. So far most of the insurances have been effected to pay a total loss in the event of an increase in the present tea and sugar taxes, although some "risks" have been taken up lespecting increased spirit and beer duties. The variety of commodities selected to insure against the risk of additional taxation bho'^sthat city people are absolutely in tner^lark how the additional money required by the Chancellor of the Exchequer is to be found. NO GROWND FOR ALARM. VIEWS OF A LIBERAL MEMBER. It has been known for some time past that the Chancellor of the Exchequer would have to make provision in his Budget for a serious deficit, but it is held by Government supporters that there is no cause for alarm, and that the wealth of (he country is able to cany tar more than its present burden of taxation. Mr. L. G. Chiozza Money, Liberal member for North Paddington, an authority on fiscal ques^ tions, writes as follows in tho London Chronicle : • It is true tha', expenditure has grown and must grow. It is not tiuc, however, that our national expenditure has grown at a rate greater than oul resources, or that any undue proportion of the national dividend is taken for public purposes. The gloomy pictures which ni a being offered to the leaders oi Opposition journals, hem the Times downwards, in tesgeet of th«

Budget of 1909-10, can only be described as wild exaggerations. Let us get at the essential facts of the subject by setting out our Imperial expenditure in the last ten years, and by comparing that expenditure with the gross assessments of income to income tax. Tho following table is a plain statement of the facts :—: — Growth of (1) Imperial Expenditure and (2) Gross Assessments to Income Tax (1898-9 to 1908-9), in millions of £. Year ended Imperial Assessments to March 31. Expenditure. Income Tax.

Imperial expenditure nas grown, it will be seer> from £118,000,000 per annum to £156,000,000 per annum (gross) in ten years. To understand whether the growth has been disproportionate to the growth of British wealth under Free Trade, let us turn to the third column. Here we see that the gross income of the in-come-tax-paying classes rose fromli/63,000,000 in 1899 to £1,025,000,000 in 1909. (Students of statistics should note that the last Blue Book figure is the £944,000,000 of 1907. The £980,000,000 of 1908 is official, however, although not yet published. The £1,025,000,000 of 1909 is my own estimate.) The dominating fact emerges that while expenditure has increased in ten years by £38,000,000, or by 32.2 per cent., the income of the upper classes has increased by £262,000,000 per annum, or by 34.4 per cent. The income specified above is that of the small part of the nation which pays income tax. I shall deal with this more specifically hereafter. Here let it suffice to say that it broadly represents the income of about 1,000,000 families, or, say, 5,000,000 men, women, and children, out of our population of 44,000,000 people. Let is be clearly understood that the £156,000,000 of expenditure in 1909 contains the pajment of only three months' old age pensions. Old age pensions ere now costing us about £8,500 - 000 a year ; but, as payment of pensions began on Ist January, 1909, only a sum of £2,110,000 is included for them in the expenditure of the financial year 1908-9, which is the twelve months ended 31st March, 1909. The Imperial expenditure increased from 118 millions in 1899 to 162 millions in 1909, an increase of 44 millions, while during the same period income assessed for tax rose from 763 millions to 1025 millions — an increase of 262 millions. The increase per cent, was 37.2 in the caso of national expenditure, while incomes advanced only 34.4 per cent. The alleged "difficulty" of paying for old age pensions looks a trifle ridiculous in view of these salient facts. Even when full payment of the whole year's pensions is taken into account, the national expenditure has grown by 37.2 per cent., against an increase of 34.4 per cent, in the aggregate income of those persons having more than £160 per year. HOW WILL THE DEFICIT BE MET ? 'The London Times of a recent date, reviewing the financial position as then disclosed, said : — The estimates for supply services are : — Army, £27,435,000 ; Navy, £35,142/700 ; Miscellaneous Civil Services, £40,070.171 ; and Revenue Departments, £52,350,730, making a total of £124,998,601. This total is about £11,486,000 in excess of the corresponding grants for 1908-9, and, if we assume the Consolidated Fund charges to be the same in both years, will represent I the increase of the whole Budget. To it will probably have to be added some portion of the deficit of unknown magnitude in this financial year's Budget. The deficit must be provided for in some way or other ; it will be too big to be debited entirely to the Exchequer balances, which vere materially below the level of a year ago in the returns of 6lh March, the last available. If we assume that the deficit amounts to £4,000,000,^ after making allowances, on the other side, for such "underspending" as may occur in some departments, we may, perhaps, assume that half of it will be provided out of balances. The total deficiency would thus be raised to £13,486,000, but, of course, forecasts of this kind are guesswork. Even supposing, however, the excess on last year's grants is no larger than £13,300,000, we have to note the fact that this would make the total Estimates' for the year, including the Consolidated Fund* Services (£39.705,000), about £166,500,000, and that the revenue for 1909-10, on the basis of existing taxation, will, to all appearance-, bo about £4,000,000 less than the Estimates for 1908-9, or £149,000,000, so that Mr. Lloyd-George will, on a favourable estimate, have to find about £17,000,000 either by "raiding, the Sinking Fund" or by fresh taxation, unless he is bold enough to budget for some- improvement in the revenue of 1909-10 on that of the year just ending.