BRITAIN’S INCOME

Nelson Evening Mail, Volume LXX, 3 October 1936, Page 13

BRITAIN’S INCOME

NEW HIGH LEVEL IN 1935 i TAXATION TAKES 25 PER CENT. The national income of Britain in 1935 reached a higher level “than in 1929, which was the highest of all years previously recorded, exceeding it by a little over 1 per cent. Between 1929 and 1935, the average price of home-produced goods and services had fallen by 5 per cent., and thus the real value of income was 6 per cent, higher last year than it had ever been before.

Mr Colin Clark, lecturer in statistics at Cambridge University, has estimated the net national income (private and Government) for 1935 at £4,446,000,000 net private incomes representing £ 3,842,000,000. These figures are net after making full allowance for the maintenance, depreciation and obsolesence of capital. The higher of the two figures represents the value of all goods and services consumed, or additions to capital, during the year. Out of this total, £604,000,000 accrues, to the Government and local authorities in the forms of Customs duties, excise duties, local rates, and so forth, leaving £3,842,000,000 of private incomes. An examination of how these incomes are spent on various goods and services, or saved, shows that retail sales through shops amounted to £1,950,000,000. Mr Clark defines retail trades as covering only those articles sold in retail shops properly so-called, and excluding motor cars, petrol, coal, drink, tobacco and newspapers. Outside the scope of expenditure at retail, £400,000,000 was spent on rent, rates and repairs of homes, and £90,000,000 on gas and electricity. A little over £500,000,000 was extracted from private incomes by direct taxation. Expenditure on the three principal luxuries —drink, tobacco and entertainment —amounted to £450,000,000. Savings in 1935 amounted to £IBO,000,000. The greater part of the national savings is being invested in new buildings. The whole burden of State and local taxation in Britain (including compulsory employers’ contributions to health and unemployment insurance) is just over £1,000,000,000 a year, or 25 per cent, of the national income. Sixty per cent, of this is met by indirect taxation. Although 25 per cent, seems a high proportion, it compares favourably with 30 per cent, of the national income taken by Federal State, and local taxation in the United States, and with nearly 40 per cent, taken by State and local taxation in France.

Of the £3,842,000,000 of private income, Mr Clark estimates that wages of manual workers accounted for £1,520,000,000, salaries of non-manual workers £937,000,000, rents £339,000,000 home-produced interest and profits, £831,000,000, and interest and profits from overseas holdings £215,000,000. Mr Clark also presents an interesting analysis of income levels, showing that 11,600,000 people received less than £125 a year, 4,925,000 between £125 and £l5O, 1,527,000 between £250 and £SOO, 508,000 between £SOO and £IOOO, 199,000 between £IOOO and £2OOO, 100,000 between £2OOO and £IO,OOO, and only 10,000 more .than £IO,OOO a year.