Britain Raises Beer And Cigarette Prices: Changes In Taxation

Greymouth Evening Star, 7 April 1948, Page 5

Britain Raises Beer And Cigarette Prices: Changes In Taxation

(Rec. 9.30 a.m.) LONDON, April 6. • The Chancellor of the Exchequer, Sir Stafford Cripps, opening his Budget speech and economic survey, said last year’s hopes were not realised. They had got considerably less imports and paid more for them. The Government expenditure abroad exceeded expectation by £36,000,000 and the earnings from invisible assets were £90,000,000 below the forecast. “We had to continue selling some of our foreign assets,” he said. “The drain on our gold and dollar reserves was most obviously the serious feature of the whole situation.”

The gold drain was over 50 per cent, greater than the overall deficit, amounting to £1,023,000,000 during the year. “The import programme for the first half of 1948 is estimated to cause a drain on reserves of over £200,000,000. Such a high rate of continuing drain, if allowed to continue without external aid, would exhaust our remaining reserves in 1948. “Time A Scarce Commodity”

“United States aid can help to reduce the reserves drain, but we must redress the grave unbalance during the next four years and use the aid, not to improve our living standard but to strengthen our physical resources. Producers must think of the national interest as indicated by the Government plans, rather than quick profits in easy markets. “Marshall aid will give us time to change our exports policy, but time is our scarcest commodity. We cannot afford to waste it.

“It is clear that the large Budget surplus last year did not decrease the inflationary pressure to a marked extent. We must secure an exceptionally large Budget surplus in the coming year to yield a balance after meeting all forms of Government expenditure.” No cut will be made in the social services expenditure. Food subsidies will continue at the rate of £400,000,000 yearly. The estimated yield from income tax is £1,395,000,000, compared with £1,190,000,000 last year. The Chancellor said he would leave further restriction on profits until next year. Beer And Cigarettes

Sir Stafford announced an increase of Id per pint on beer, 2s 4d on a bottle of whisky, a £1 per gallon increase on all spirits, except perfumed spirits, an increase of Is a bottle on foreign heavy wines and 6d a bottle on light wines. The duty on Empire wines is unchanged. Cigarettes are up from 3s 4d to 3s 6d a packet of 20. The tax on football and similar pools is raised from 10 to 20 per cent. Bookmakers on dog courses will pay a graduated licensed duty on each meeting. The reclassification of the purchase tax means that the tax on a large number of articles will be reduced from 50 per cent, to 33 1-3 per cent. Reduction Of Prices The overall effect of the purchase tax changes will be to reduce prices generally by 10 per cent. The reduction will be worth £500,000,000. A capital levy is impracticable at present. A levy is to be placed on investment income at the rate of 2s in the pound for incomes from £250 to £5OO, rising to a maximum of 10s in the pound on £5OOO. The entertainment tax on “live” shows has been reduced. There is complete exemption on seats up to Is. The tax on dearer seats is reduced by half. Income Tax As income tax reliefs, the first £5O of taxable income will be charged »at 3s in the pound and the next £2OO at 6s in the pound. The 3s in the pound tax on the first £5O of taxable income represents no change, but instead of only the next £75 being taxed at 6s in the pound, the amount taxable at this rate has risen to £2OO. The income tax on the earned income allowance would be increased from one-sixth to one-fifth, subject to a maximum of £4OO. The exemption limit was raised from £l2O to £135.