No Inflation, No Extra Taxes In Britain

Northern Advocate, 27 April 1944, Page 2

No Inflation, No Extra Taxes In Britain

LONDON. April 25

The House of Commons today had the smallest attendance of any Budget day in anybody's recollection. The Chancellor of the Exchequer (Sir John Anderson) spoke foy 105 minutes and took less than a minute to deal with taxation proposals. Members took the Budget cheerfully. Speeches following Sir John's statement contained little criticism. Mr. Arthur Greenwood was of opinion that we were a long way from inflation at present and added: "Nothing that the Chancellor asks for in the prosecution of the war will be denied him."

Sir Percy Harris said a feature of the Budget was the unexampled courage of not placing new taxation on the country. There is optimism behind the Budget which will have a healthy reaction on the country. Mr. Logan thought the Budget pointed out to labour and employers a new era of co-operation. Revenue Buoyant

“No additional taxation this year. My prescription for the patient is the mixture as before,” said the Chancellor of the Exchequer, concluding his hour and three-quarters’ Budget speech in the Commons. From this it would appear that the country’s wartime balance-sheet has assumed an almost static condition. Apprehensions that the high duties on tobacco, beer and spirits would be raised were unfounded. The effect of the higher wages received by some classes in the community was shown by the fact that revenue from beer last fiscal year was £18,000,000 above the average. It was hoped that the present horse-power tax on motor cars would be replaced, but, on the ground of inability to afford the change the Chancellor decided against it. Sir John Anderson said tat last year’s finances made a better showing than his predecessor, Sir Kingsley Wood, anticipated. On the revenue side actual receipts from income tax. including surtax, were £1,184,000,000. or £9.000.000 more than the estimate. The excess j profits tax realised precisely the cs- j timated £500.000,000. Total revenue! amounted to £3,039.000,000, which was: £131,000.000 over the Budget estimate, j and the excess of expenditure ever: revenue was £2.760,000.000, or £89,-! 000.000 less than the estimated deficit. j Pay-As-You-Earn The Chancellor added that we might j still reckon that our finances remained ! on an even keel. All reports indicated j that the “pay-as-you-earn" system I had been successfully launched. Per-1 sonal incomes in 1943 were £600.000.-,. 000 above the 1942 total. Of this j amount £385,000,000 was paid away in J additional taxes and £221,000,000; saved. Despite the large increase in | incomes, the amount spent on con- j sumption was actually reduced. In j 1938, 76 per cent of the personal in- j come was spent on consumption. By 1942 the percentage had fallen to 58. and in 1943 to 53. Cash For Over Half

Sir John Anderson said he would be justified in asking a very round sum for a vote of credit, which would be £5,000.000.000. On that basis the total expenditure to be provided for 194445 would be £5,9374)00,000. Towards that total various inland revenueduties were expected to provide £122.000.000 more than 1943-44 and rise to £2,000.000.000. The increase would be almost all attributable to in-come-tax. He estimated that the excess profits tax would bring in £500.000.000. The total estimated revenue for the year would be £3:102.000.000 leaving an excess of expenditure over revenue of £2.835.000,000. Revenue from taxation would be almost 52 per cent of the total expenditure—a higher proportion than any previous year. It appeared to be within our capacity to finance the prospective deficit from ravings and other sources of noninfiationary character. Sir John mentioned the magnificent contribution from the Canadian Government last year, and said he had learned that the Canadian Government would again make a contribution on similar lines to meet the external costs of military operations overseas. He said Britain already had parted with £ 1.000,000,000 worth of overseas assets and incurred overseas liabilities amounting to another £.2.000,000,000. “We are not at the end." he added. “We have parted with nearly all of it to our Allies. I make no complaint because we are in this war with all we have got. This second world war will complete a revolutionary change in our financial position. The last war dealt our export trade a heavy j blow. That loss entailed tragic con-1

sequences, for it was the main cause of long-continued unemployment. This world war is making further deep inroads into cur international income and investments. Dependent on Exports

''When it is over, we shall cease to be a large-scale creditor country. We shall no longer be able to rely on financing - any part of our important needs from overseas investment income. It will be indispensable to increase our exports. The Government cannot make export trade. It depends

upon manufacturers, merchants and work-people. What the Government can do is to try io make conditions in which export trade can flourish. “It is vital to maintain confidence in the value of sterling. Burdens are heavy indeed. Our debit balance may be even larger than stated, but the productivity of this country is also large. I am more concerned to see a

; steady income from exports than the , building up of a temporarily improved position on our foreign exchange. We ■ shall always be a country prcdomin- , antly of high-class products. They can only hold their own. and find their market if we keep our light shining a little ahead of the rest.” Subsidies Under Test The excessive cost in' subsidies 1 1 1 s;;.biiiso tii,. cost or iivine. WAS siibjfrt Willi which Hit* rh;im*Hlor dealt. He said I lie was not altogether happv a haul tho* I trend. Tie- cost of living index in i!HI | was 2S per eeiu. <• \vr the pre-war lieiuv. • and Lfii per (•(•nt. today. .Meanwhile mis’idb's had boon increasingly costly. Tlmy had risen from U7o.lmiil.oimi in into a, C 1 iO.iiCO.OOO in i;m, ;md U 1 f»<».CiM).iiiM> for tin- eurvont year the oust would be greater still. lint fur tb •,e subsidies the cost of living index wonj.l probably roach f>o per cent, above tiie pro-war level this year, hut in lUdthe increase in wage rates had risen :f> to ::ti per cent, on the average. and today the rise amounted to -10 per com. “I am afraid we can no Printer regard the present cost of living' figures as sacrnsanet. it would place the stabilisation policy in altogether a false perspective, and the purpose of it would he largely stultified if the Oovernment eontinn.d blithely pouring' out subsidies to keep the* cost of living down rigidly to a piv-d* - rei ininod level without regard t» > Hi- cm - rent level of wages and prices. Ihe Chancellor mentioned further assistance to industry in the post-war reconstruct!* it period in the shape of rebates mi income tax for installation of new plant, machinery and buildings.