THE BRITISH BUDGET.

Sun (Christchurch), Volume V, Issue 1309, 24 April 1918, Page 5

THE BRITISH BUDGET.

HUGE FIGURES. FINANCIAL SIDE OF WAR. NEW TAXES ON ALL HEADS. (A. 4 X.Z.) "LONDON, April 22. There was a large attendance at the House of Commons, although all the Nationalists were absent, during the delivery of the Budget by Mr Bonar Law. The Chancellor of the I Exchequer, in a preliminary statejment, gave details of the revenue for jthe year ended March 31, as compared with the estimates and revenue of the previous year, as follow: Increase Increase compared Revenue, over ■with 1917-18. estimate, last year. £ £ £ Customs .. 71,241,000 511,000 7011.000 Excise .. 38,672,000 3,722,800 '17,708,000 Estate duties 31.fi74.000 2,674,000 442,000 Income tax 239,509,000 18,509,000 31,476,009 Excess profits tax .. 220,214,000 20,214,000 80.294,000 Land duties 085,000 285,000 164,000 Stamps, etc. 11,025,000 425,000 567,000 From taxes 613,040,000 43,340,000 Other revenue .. 94,235,000 25,295,000 34,873,000 Totals .. 707,235,000 68,635,000 133,808,000 * Decrease. Mr Bonar Law said that the figures exceeded anything ever known in any country. The United States advances to the Allies had amounted to £950,000,000, including £500,000,000 to Britain. The latter's advances to Allies during the vear had amounted to £505,000,000. The taxation had been increased under every heading. A notable item of the revenue was £30,000,000 excess profits tax from controlled firms. Tobacco showed an increase of £1,700,000 over the estimate, and the entertainment tax had yielded £5,000,000, being £500,000 over the estimate (and over £2,000,000 over the previous vear's return). The income tax and super-tax had yielded £21,500,000 over the estimate.

The total expenditure had exceeded the Budget estimate bv £406,000,000, of which £155,000,000 was represented bv the Armv estimates and £139,000,000 was "represented by foodstuffs and other commodities, while the balance consisted of increased advances to Allies. Britain borrowed to a great extent from the United States as the other Allies had borrowed from Britain, but as far as the war was concerned Britain was self-supporting.

They must make allowance for the possibility after the war of not receiving the interest due from their Allies. Therefore, he proposed to take half the Allies' debt, namelv, £816,000,000, and deduct this from the National debt and also to deduct the Dominions' debt of £24-1.000,000, and India's obligation of £64.000,000, making a total of £1,124,000,000, and leaving a national debt for which Britain was liable of £7,856,000,000. The interest on that amount at 5§ per cent, would amount to £380,000,000, which, added to normal expenditure, made £650,000,000 to be raised from revenue. The deficit was now £110,000,000. He proposed new taxes amounting to £114,000,000. The actual expenditure for the vear was £2,403,000,000, at the rate of £6,986,000 dailv, compared with £6,583,000 daily in 1916. The money raised for war expenditure to the end of 1916 was £1,044,000,000, and to the end of the current financial vear on present estimates would be £1,686,000,000. These figures proved that the country's financial strength, after four years of war, was much greater than could have been anticipated, and was an amazing testimony to the country's financial spirit. He estimated the credit votes during the coming year at £2,550,000,000, and the estimated advances to Allies at £300,000,000. The total estimated expenditure was £2,972,000.000. The National debt at the end of 1918 would be £7,980,000,000.

Mr Bonar Law said that he did no! regard the Russian debt as bad. Sooner or later Russia would again have order and government. The excess profits dutv was expected to yield £300,000,000' in 1918-19. Britain's duty was to levy as much taxation and bear as much of the war expenses out of revenue as possible. Without weakening the conduct of the war taxation must not be on such a scale as to cripple industry. The Government did not propose to increase the excess profits duty. The tax on higher incomes had been raised to 6/-, vielding £41,400,000.

Regarding the double income tax, the extra shilling would not be paid where the combined tax reached 6/-. The super-tax was increased to fourpence, beginning with incomes of £2500 instead of £3OOO. This would yield £14,150,000. In view of the feeling that Ihe farmers were not paying a fair share of the burden, it was proposed to tax them upon the assumption that their profits were double their rental. This would yield £5.300,000. The penny letter postage was raised to lid and the inland postcards to Id, yielding £4,000,000. The tax on cheques was increased to 2d, yielding £1,000,000. Dealing with the receipts from the increased taxes, Mr Bonar Law gave the following estimates:—

Spirit dutv, increased from 14/9 to .TO/- n gallon, to yield an extra £11.000,000. Beer duty, increased from 25/- to 50/a barrel, to yield an extra £15,500.000. Tobacco dutv, raised from fi/5 to 8/2 a pound, to yield an additional £8.000.000. Matches dutv, raised a farthing a box, to yield £OOO.OOO. Additional tax of 11/8 per cv.t. on sugar, to yield an additional £KS,2OO,UOO; involving the raising of the price from aid to 7d a pound. The proposed luxury tax of twopence in the shilling would be similar to the French tax. There would he three classes: First, luxury articles such as jewels; second, a tax on articles above a certain price; third, a tax on luxury establishments. A Select Committee would draw up the necessary schedules. Dealing with Germany's financial position, Mr Bonar Law said that Germany's daily expenditure was til millions. Her war debt was (i2OO millions. Germany's new taxation aggregated 365 millions, as compared with Britain's 744 millions. Germany's war debt would be 8000 millions, and the deficit would be at the least 3S7> millions. Her new taxation was insufficient to pay interest on her war debt. If our case were the same, Britain would not he far from bankruptcy. Germany imposed no direct taxation, because the only classes which had any influence with the Government were the wealthy, whom the Government were afraid to tax. The House of Commons agreed to the Budget resolutions.