BRITISH BUDGET.

New Zealand Herald, Volume LXV, Issue 19931, 27 April 1928, Page 11

BRITISH BUDGET.

FIXED DEBT CHARGE. RELIEF OF LOCAL RATES. t..,, ~ BILL TO BE INTRODUCED. IMMEDIATE TAX ON PETROL INCOME TAX REDUCTIONS. By Telegraph—Press Association—Copyright. Australian Press Association—United Service (Received April 25, 5.5 p.m.) LONDON. April 24.

In the House of Commons this afternoon, the Chancellor of the Exchequer, Mr. Winston Churchill, introduced the Budget.

In the course of his speech he said the Budget of last year had succeeded, in spite of adverse circumstances. One blow was the decline of £5.000,000 in the revenue from beer. There would have been ti deficit for the third year in succession but for the continuance of the Government's economy campaign, through which £10,500,000 had been saved by Government departments.

Encouraged by his success last year, he proposed to repeat the process, and to save money wherever possible in administration. The Exchequer had done well during the year in the repayment of debt. The new sinking fund had been raised above the early level of £50,000,000 to the unprecedented figure of £65,000,000. In addition, the Budget had borne the payment of more than £15,000,000 for accrued interest upon Government saving certificates. Total of National Debt.

The nominal dead weight of the national debt on April 1, 1928 was £7,527,000,000. He had found £28,000,000 more for redemption of debt than Mr. P. Snowden, the Chancellor of the Exchequer in the Labour Government, had done in 1924. The position for dealing with future conversions had been greatly improved by what had been accomplished in the past. He proposed to return to the policy instituted by Disraeli's Government, when Sir Stafford Northcote was Chancellor, in 1375, and to establish a fixed debt charge. He proposed to put the figure at £355,000.000 a year. This annual payment would extinguish the external and internal debts, including the debt to the United States, without any addition to the present taxation, in a period of 50 years.

The total expenditure for 1928-29 was estimated at £806,195,000. The expenditure on the Consolidated Fund service was placed at £395,000,000, and the total for the supply services at £407,000,000. The total expenditure, compared with the estimate of £833,390,000 for last year was £833,585,000 actually spent.

Gradual Increase from Taxes. The Chancellor then proceeded to estimate the revenue on the existing basis of taxation. He said the customs and excise revenue would increase by some £2,000,000 to £3,000,000 a year, in accordance with the growth of the population and the general maintenance of consuming power. He saw p. chance of a recovery in the revenue from beer, which emboldened him to repeat* his estimate of revenue from that source last year. The revenue from spirits, on the other hand, must be expected to resume its continuous descent.

The increased duty upon tobacco had more than realised expectations. The taxes on silk and on imports under the Safeguarding ot Industries Act showed on the whole an increase. He expected a yield of £3,250,000 this year from the betting tax, against £2,700,000 last year. The yield from the duties on tea arid sugar in the coming year might ha expected to respond to the slow upward movement of consuming power. Speaking on the revenue, Mr. Churchill iaid: —"Unless a catastrophe on a great scale happens, the national finances ought strongly to revive in 1929, through the steady revival of trade and business, and 1929 should be a year of real advance toward prosperity. Indeed, my position in 1929 promises to be the least unsatisfactory that I have had during my tenancy of the Chancellorship.'

Changes in Customs Duties. Mi. Churchill said he proposed to make A few minor changes in the customs and excise duties. He proposed to raise the excise duty on British wines, which was instituted last year, from Is to Is 6d a gallon. This would yield £65,000 this year, and £70,000 in a full year. As from April 28 he proposed to levy a customs duty of 6d on mechanical lighters, and an excise duty of a like amount on home-made lighters. This would yield £40,000 thin year, but its object was to preserve the efficiency of the far more important match duty, from which several millions yearly were derived, by curtailing .the use of mechanical lighters. He also proposed to make a very small adjustment in the customs duty on cinema films, in order to place British Empire films on the same footing'as those produced abroad by British companies. This Was estimated to yield about £350,000. The committee sppointed under the Safeguarding of Industries Act had recommended a customs duty on buttons. Therefore buttons used for fastening or decorating apparel would be subject to a duty of 33£ per cent, ad valorem from April 28, but that would not mean that buttons already on imported garments would be chargeable. This duty was estimated to yield £IOO,OOO this year and £200,000 in & full year.

With these variations the total customs revenue would come to £133,500,000, and the total excise revenue would be £139,000,000. He estimated that the income tax, which would remain at the existing standard rate of 4s in the pound, ,Would yield £235,000,000. He estimated the gross revenue on the Existing basis of taxation, with the aforementioned minor charges, at £812,497,000, inaking a prospective surplus of £6,302,000.

The Chancellor then entered upon what lie described as the most controversial ttart of his task. He said an unsatisfactory picture was presented by the heavy basic industries, in which the unemployment taxation in the form of rates entered directly into the cost of production, and frffected the competing power of these in-

dnstries at home #nd abroad. According to the latest ascertained information every one of the colliery districts showed a net loss in working, and yet the coal industry was being required to pay several millions yearly in local government taxation. Frequently depressed ' industries left heavily-taxed areas, and thus threw an increased burden of taxation on the industries that remained. Some relief from local taxation was urgently needed. He had therefore proposed to the Prime Minister, Mr. Baldwin, that as the concluding financial effort in this Parliament, he should try to form a "mass manoeuvre fund" of between £20,000.000 and £30,000,000 a year for a great, operation upon local government taxation. The Government had completed its plans, and the legislation required for this purpose must inevitably become the most important measure of its kind. Ho had to find a substantial amount of new revenue to carry out this policy. Ho did not suppose anyone would have much doubt where he ought to turn for it. During the 19th century the industrial power of this country rested on a basis of coal, but the 20th century had been becoming increasingly dependent upon imported liquid fuel, scarcely any of which was found in the British Empire. The Government had therefore decided to impose a new duty of ' 4d a gallon on certain kinds of imported oil. The new tax would bo confined to the lighter hydro-carbon oils, including petrol, but excluding heavy oils and lubricating oil. The tax would be imposed as , from tomorrow. I'i was estimated to yield £14,000,00(1 this year and £17,500,000 in 1929-30. Reduction in Sugar Duties. In order to balance the extra fiscal burden which the tax on kerosene might throw upon the consumer, Mr. Churchill said he proposed to reduce the existing duties on sugar. The duty on all imported sugar would be reduced by an amount equivalent to per lb. in the retail price. By this means it was possible also to afford relief to the British refiners, who had long complained that while Empire sugar production had been assisted by preference, and while the home-grown beet industry had been helped, the British refiners had been left to engage without assistance in a struggle against their competitors, domestic and foreign. The reduction in the duty was designed to encourage the importation of raw sugar, which would undergo refining in this country, rather than the importation of white sugar refined abroad. Relief in Income Tax. The Chancellor kept his announcement of income tax relief as a surprise, at tho end of his speech. He said his resources had not allowed a reduction in the standard rate of tax, but he realised that the burden of bringing up children should be lightened where possible. Therefore he proposed that the allowances for children, which were at present £36 for the first child and £27 for other children, should be raised to £6O and £SO respectively. Furthermore, a concession would be made so that the allowances should be applicable to the year of the child's birth. This would mean that a married man with three or more children, who is in receipt of an income of £4OO a year, would be free of tax. If he were receiving an income of £SOO a year it would mean that his present tax would be halved; if one of £7OO a year, the reduction would be 17d on the standard rate; if £BOO a year the reduction would be 14d; if £IOOO a year, the reduction would be Bd. The cost of these reductions would amount to £2,100,000 in the present year, and £4,500,000 in a full year. Mr. Churchill spoke for three hours and eleven minutes.