LABOUR'S FIRST BUDGET

Evening Post, Volume CVII, Issue 102, 1 May 1924, Page 7

LABOUR'S FIRST BUDGET

PREFERENCE POLICY ABOLISHED

BRITAIN'S BURDEN OF DEBT.

(UMTED KioSS ASSOCIATION.—COPYRIGHT.) (AUSTRALIAN-NEW ZEALAND CABLE ASSOCIATION.) LONDON, 29th April.

The House of Commons was crowded and animated when reassembled for the delivery of the Budget. The Chancellor of the Exchequer, Mr. P. Snowden, announced that, the realised surplus last year was £48,239,000, which had gone to reduce the debt by £17,500,----000. The surplus was due to an excess of revenue of £27,750,000, reduced expenditure, and the balance of the surplus in last year's Budget. The surplus of £7,178,000 from Customs and excise was mainly due to spirits and tobacco. The increased consumption of spirits was apparently due to the long, cold winter, and the effects of influenza, for which whisky was- reputed to' be a specific. Motor vehicle duties increased by £1,500,000. The death duties' exceeded the estimate by £5,800,000, and income tax by £8,331,000 ,• but the excess profits duty was twelve millions below the estimate. The death duties yielded, £57,800,000, compared with £56,871,000 the previous year.

As regards expenditure, Mr. Snowden said the National Debt services amounted to ' £304,250,000, supply services to £405,000,000, the Army 'to £43,500,000, and the Navy to £52,500,-. 000. Savings under the heading of defence were due, inter alia, to the change Of programme in the Middle East and tha abandonment of the Singapore project. The total dead-weight debt on 31st March was £7,680,000,000, compared with £7,773.000,000 on 31st March, 1923. The floating debt at 31st March was £774,500.000, compared with £810,000,000 a year ago. As regards the provision made to deal with the 5 per cent, war loan, precise figures.- were not yet available, ■ but the Sum donverted was not less than £150,000,000. The Government had to meet nearly £150,000,000 of maturing bonds. THE NATIONAL DEBT Mr. Snowden was afraid the burden of debt would be very heavy for some years. Peuding the report of the Committee on the National Debt, the clearly available resources must be devoted to the redemption of the debt, which would improve international trade and the terms on which money could be borrowed for industrial puiposes, with a view to a great conversion scheme they must carry out soon. The maintenance of British credit was a matter of vital importance. The dead-weight debt of £7,680,000,----000 involved an interest charge of £305,000,000, compared with a debt of ■£3,000.000.000, and an interest charge of £345,000,000 in December, 1919. Oui< one real external debt now was that to tiio United Stales of £40.500,000. and £45,000,000 market loans in America. The total debt reduction, external and internal,-since December, 1919. was over £650,000,000, or practically the amount of the National Debt at the outbreak of the war. That was a wonderful and creditable achievement. Moreover, there were large debts owing to us, and we had to pay interest on these, which was a heavy burden on taxpayers. When, we received interest on some part of these debts we might hope to reduce our indebtedness, or taxation-, much more rapidly than was possible out of our own resources. . The total expenditure for the year was £790,000,000. The total revenue on the existing basis of taxation would be £828,000.000. leaving a surplus of £38,000,000. ' . ■ REVERSAL OF FISCAL POLICY The Government was unable to endorse its predecessors' Imperial preference proposals. It-greatly regretted any disappointment to the Dominions, but declared that the late Government was responsible. No Government should attempt to bind Parliament over a period of years upon such controversial hopes, which were bound sooner or later to ! be frustrated. The Government did not propose the abolition of the preferences now enforced, but reserved full liberty to propose to Parlaiinent a reduction or. abolition of duties on all commcidities to' which preference novr applied whenever it was deemed expedient. The Government would give an early opportunity for a full and free discussion of the Imperial, Economic Con. ference resolutions, and if the House adopted any of them the Government would make provision in the Finance Bill. . ; The tea duty would be reduced by one-half, and. the sugar duty would be reduced by l|d per lb. The duty on dried fruit would not be renewed. The postal rates would be unchanged. The duty on sweetened table waters would be abolished, and the M'Kenna duties would be abolished from Ist August/ The tax on theatre seats up to sixpence would be abolished. There would be •»o alteration in income tax or super tax duties. The duties on cocoa, coffee, and chicory would be reduced by one-half; that on cocoa from 30th April, and those on coffee, chicory,, and tea from ith June. The inhabited house duty and corporation profits tax would be abolished. ■ i Tw,° matters arising out of the Imperial. Conference required finance resolutions. The first, the immunity of State enterprises from taxation,\ he" proposed to postpone till n»xt year, in order to afford an opportunity for further consultations Secondly, he hoped to include in the Fmace Bill a clause giving effect to the reciprocal arrangements made last year in regard to double taxation on Bhm r ,,,cj.~ rt was understood it would "c voluntary and permissive. LIFTING EXISTING DUTIES The reduction of the duty on sugar to lad per lb would operate from 2Cth 0? 1 £17'70P'000 this year and £18,400,000 m a-full year. The reduction in the tea duty would cost £5 400 - 000 a year. The reduction in the duty 2!> ,*°™' C°£ eC' al!d cnicor-v wou)'l ™/t £843,000. The non-renewal' of tiie 50 .per cent, increase in the dried fruits duty imposed in 1935 would cost a quarter of a million. Thus even- one of the food duties would be .reduced at an es timate'l cost of £23,700.000 this voar and £24,893.000 in a full year "The abolition of the H'Kcnnn duties frnm Ist .August would cost £2.500.000. Mr.. Snowden declared the. country gave a derisive vote against these duties at the last election, and the Government was bound to give effect to that policy In addition to "the abolition of the tax payments on admission to entertainments up. to sixpence, the tax on payments up to fifteen pence would be reduced, costing £3,400,000. /rhis year the repeal q£ the corporation profits tax would

cost £2,000.000. The- cost of all the reductions in taxation would total £33.050,000, leaving an estimated surplus of £4,024,000, which he would keep to provide supplementary expenditure. It must not be supposed' this would be sufficient to meet the expenditure outside the estimates which Parliament might sanction during the year. For example, the House of Commons was committed to the removal of the thrift disqualification with old age pensions, and there would be calls for housing and unemployment. Mr. Snowden was convinced that considerable economies could be effected during the year. Mr. Snowden spoke for an hour and three-quarters, and received an ovalion when he sat down.