BRITAIN'S BUDGET.

New Zealand Herald, Volume LVII, Issue 17450, 21 April 1920, Page 7

BRITAIN'S BUDGET.

• i SEDUCTION OF THE DEBT. increased TAXATION. -: HIGHER drink DUTIES. DOUBLE INCOME tax relief. The folio-wing are the principal features of the British Budget statement presented in the House of Commons by Mr. Austen Chamberlain, Chancellor of the Exchequer. Excess profits doty increased from 40 per cent, to 60 per cent. Duties on spirits increased from 50s to 72s 6d the proof gallon. Beer duty raised by 30s the barrel and retail price advanced one pennv per pint Duty on wines doubled, and increased • duty on cigars, with a rebate on sparkling wines and cigars produced in the Empire Tax of Is in the pound o n profits of limited liability companies. Increased postal charges. Ordinary income tax unchanged. Exemption limit on married men, £250; and on unmarried men, £150. Double income tax relief. Reduction of National Debt in current year by £254,000,000. By Telspraph—Press Association— (Received 6.30 p.m.) Press Association. LONDON. April 19 In the House J of Commons, Mr. Austen Chamberlain, Chancellor of the Exchequer, delivering the Budget, said that this Budget -was critical, because the time had come to lay deep foundations for future prosperity. The expenditure in 1920 would be approximately £144,000,000 in excess of last year's estimate, but ■£62,000,000 below the revised Estimates of October, 1919. As regards revenue, the result was not merely more favourable than had been anticipated but greatly exceeded the original Budget Estimates. The actual Exchequer receipts were nearly £133,500,000 more. Reoe'pts from Customs and Excise exceeded the Estimates by £45,500,000, mainly due to an increased yield from the duties on spirits, beer, tobacco, and tea. The increased consumption of tobacco was unprecedented, due, inter alia, to greater smokine by women. The enterta'nments duty yielded £10.500.000. or £2,500,000 more than was anticipated. • The Income ! Tax and supertax yielded £5.000.000, and death duties, £7,500,000 above the Estimates, and the excess profits tax a surplus of £10,000,000 over the reduced estimate of October. 1919, but a deficiency compared with the Budget Estimates. This, however, was only a question of delayed payment. The yield from stamp duties j was a record, being £10,000,000 over the j estimate. Miscellaneous revenue exceeded tv, October Estimates by £130,000 000. ' Under special nvscel'aneous revenue war contributions from India and the col- \ onies had increased by £10,000.000. Realisations from the vote of credit had increased 41.3 per cent., mainly owine to unexpectedly large receipts by the Ministries of Shipping and Munitions. Burden of the Floating Debt. The floating debt as at March 31 was £1.313,000,000, a decrease of £100,000,000 compared with last year. The worst feature of the floating debt was borrowing on ways and means. This was the immediate cause of the inflation of credit and prices Although the revenue exceeded the expend'tne. he was forced m the first ten days of April to borrow 1355,000,000 from the Bank of England on the Ways and Means Account, owing to the nonrenewal of maturng Treasury Bills, to the extent of £64,000.000. He was, compelled to rase the Treasury Bill rat,*, and the bank rate had been simultaneously raised. This showed the difficulty of having an enormous floating debt and the urgent need for an effective remedy ; The external debt was £l.<!7b,UUU ; uuu, showing a reduction of £86.000000. During the course of this year it. would be further reduced by the repayment of the Anglo-French Loan in the United States. It was decided to repay the whole loan next autumn without further borrowing from the United States. The sale of Savvings Certificates during the past year amounted to £48,000,000, accounting for nearly half the reduction of the National Debt. He estimated the revenue on the existing basis of taxation at £1,341,500,000 and the expenditure. £1,177.500,000, leaving £164,000,000 for reduction of the debt. This was insufficient, and he intended to call on th country to make a generous effort to improve the national credit and lighten the future burden. Proceeding into details of the Budget proposals, Sir. Austen Chamberlain announced the introduction of a two-penny rate on three offices in the letter post and a half-penny for each additional ounce, minimum shilling telegrams, and a penny for six ounces on newspapers. The question of telephone charges would be submitted to a Select Committee. He estimated an increase of £5,500,000 in the revenue of the post office and estimated the loss on the post office at £11,000,000. The petrol tax would be superceded by a license duty on motor vehicles. At the end of the year the land valaes duties would be repealed as unworkable, but the mineral rights duties would be maintained. Increase of the Drink Duties. As regards spirits, the profits of the trade were still unreasonable. Therefore, the duty would be increased to 72s 6d the proof gallon, raising the price of spirits to 12s 6d. per bottle retail. He animated that the increase would yield £24,500,000 a year. The beer duty would be raised by 30s the barrel, raising the retail price one penny per pint. This would produce £30,000,000 a year. Both increases would operate to-morrow. The duty on wine would be doubled and on sparkling wines there would be a 50 per cent, ad valorem duty. There would be a preferential rebate of one-third on sparkling wines produced in the Empire. Referring to the wine duties, Mr. Austen Chamberlain said that only consideration for our allies, especially France and Portugal, prevented previous increases, but it was impossible further to increase the duties on spirits and beer and leave wine untouched. There would be an additional ad valorem dntv of 50 per cent, on imported cigars, with a preferential rebate of one-third on cigars from the Dominions and India. The maximum rate of ordinary income tax. 6s in the pound, would be unchanged, but a Bill would be introduced for the carrying out of the recommendations of the Income Tax Commission. The income tax exemption limit on married men would b? placed at £250. and on unmarried men at £150. The excess profits duty would be increased to 60 per cent. Double Income Tax Proposed. It was proposed to adopt the reeom--ndations of the Royal Commission in regard to the double income tax. It was confidentially hoped that the Dominions would adopt the proposals and make relief complete. In any case, it was proposed to put them in operation immediately and unconditionally in the United King Horn. Where the Dominion rate of tax did not exceed one half the United Kingdom rat« relief would be complete. This would cost the Exchequer £2.000.000 a year. It was pro posed to introduce a new tax, w hi<h micht in the future be a substitute for the excess profits tax, namely, a corporation tax of one shilling in thf pound on profits of limited liability companies. As regards the inpeme tax. the proposals of the Royal Commissi. on the subject, of super tax. would h p adopted, as well as those regarding spe-ia! allowances to soldiers. The net rost of the chancres in the present year would he 700.000 and £8.200.000 in a full yesr. It was proposed that the increase of the excess profits tax would operate from January 1, but in the event of Parliament adopting a war wealth levy, he would be able to reverse the decision as regards the increase. Assuming the

ftev±' *? **. cent *• Mlimated " though AZ &r ° ib at £220,000,000. Although the tax was temporal, a permanSeveMiI aDeCfeSSar y- With'a view to a tdn « S the corporation tax from being ho'der* J?™ bur<sen on ordinary shareoei it th t.RT°PQsed duty would not exren?ainT„°CT Sh i llngs n the pound on profits arid 3 *$" th s Payment of interest "1 dividends on debentures and preference shareg The yield of the new tax he £ *£?• at £50,000,000 for a full year, IfeiS, the excess profits duty, and £35,000,000 for the current year. The changes mentioned would produce for a full year £198,000,000, while for the .current yea r they would £rive ft net additional revenue of £76,000,000, and a total revenue of £1,418,000,000. Cabinet Braves Unpopularity. For the current year he estimated that he would have £234,000,000 for a redemption of the debt, of which £50 030 000 would be available for a reduction of *he Hooting debt. Moreover, as a result of rt-JL. changes, he anticipated that £300,000,003 would be available next year for a reduction of the debt, half of which would be available for a reduction of the noat.ng debt. Expenditure on the supply services represented a reduction of nearly sixty per cent, on the previous year, and the current year would show a "further reduction of twenty-five per cent, on the past year. ■ They had been told that two such Budgets might destroy the Empire. He retorted that twenty such would redeem the whole Empires debt. Mr. Chamberlain said he contended that, after a war involving such gigantic financial sacrifices, our position was one of unexampled and unequalled strength. It was true that the Budget involved further taxes and sacrifices which would not bring popularity to the Cabinet, but they had not thought o) their popularity. Their object had been to rise to the level of the great responsibilities, so that when they left office they would leave their successors ample revenue, with the country's credit second to none. Mr. Chamberlain further explained that, though twenty such contributions as at present proposed would wipe out the debt, he did not contemplate, after the first great reduction, that they should continue to pay off at a rate which would mean the extinction of the debt in twenty years. When the first great reduction had taken place it would be for the country to consider how far it might relinquish its efforts. A Times service cable message states that the Budget imposes 6d in the £ on incomes beyond £30,000.