TOPICS OF THE DAY
THE BUDGET
THE first thing to be said about this year's Budget is that it is an honest Budget. There was need for an increase in taxation, and that need has been adequately met.
Further, there was need for alterations and reductions to secure simplification and the abolition of friction, and these have been skilfully devised and applied. On the whole, then, Mr. Churchill deserves, and should receive, the thanks of the nation for the things he has done, for the things he has left undone, and for the way in which he has refused to yield to the temptation to run . risks.. Mr. Churchill's first specific proposal for the new linsncial year is to transfer 17,000.000 to the Exchequer from the accrued balance in the Road Fund, now amounting to some £19,000,000. Further, he proposes to, take a proportion of the annual revenue of the Fund, a proportion estimated this year . to, yield £3,500,000. We are jealous of anything which may prevent the extension .and improvement of our road system. More .roads and better roads not only help trade, but help also.to prevent urban congestion, and to increase the amenities of, .country life. They, will spread our population more evenly than now. At the same time, we are bound to admit that we have reached a point in national finance where the." needs must " argument must be paramount. Besides, it. would be a piece . of fiscal pedantry to say that our road policy is. likely in practice to be injured by the new proposals. Even after Mr,, Winston Churchill's ," raid," there will be plenty of money left in the accrued balance and in the annual sum set aside for road purposes. The development, in motor traffic, and therefore in motor revenue, is so rapid that we shall still be spending as much, as was regarded needful, and indeed possible, only a couple of years ago. We are not abandoning our schemes, for ,,road . development, but merely not using the whole of the windfall which the development of motor transport has brought into the Road Fund. . _ Incidentally, we may note, that what has happened shows that it is very difficult for a nation to play the schoolboy trick of having a special pocket out of which to buy " tuck," or cricket equipment, or surreptitious cigarettes. The . State, like the individual, has only one pocket, and earmarking can never be more than .an aspiration. Personally, we hold that the money required for roads. should be raised by a loan and be irrespective, of the revenue received from a particular tax. By such a system we should avoid the unfairness Of making any one year responsible for procuring benefits which will affect several generations. If eVer there was " capital " _expenditure, it is road expenditure. There is neither reason nor expediency in making the taxpayers in these lean years-endow so largely the men of the future. No doubt the men of the future will have to maintain the new roads, but the embankments, the bridges, the viaducts, and the deep cuttings will remain. Roads financed by loans raised on annuities terminable in sixty-five years would, in our opinion, be the scientific way of handling the problem.
Mr. 'Clinrchill'S propOsal to impose a -duty of 5 per rent. froni November 1st next on • all legal bets made with a bookmaker, a duty of £10 on certificates to be taken out by bookmakers, and a duty of £10 as a regis- tvetion fee on each set. of premises occupied by a book- maker for receiving bets on credit, is very welcome to the Spectator. It embodies proposals again and again inade by us: Mr. Churchill 'expects to get E5,000,600 a year from this 'source,- and we should not wonder if UltimatelY the revenue from the taxation of betting amounted to double that amount, Meanwhile, no one need feel that by what is being clohe betting is being encouraged; or being given a sanction which was withheld before.. All that Mr. Churchill's proposal' does is to secure that betting, which can fa be called the extreme form of luXurY expenditure, shall not escape the claims of the Treasury. If people are to be taxed because they " walk in silk attire," own high-Speed and luxuriouslY fitted motor-cars, or go to cinemas and other places of amusement, why should they not be taxed when' they spend their money' on what the Courts- have decided is legal betting Y That legal betting should remain untaxed was a preposterous anomaly. What 'makes it more absurd was the fact that the Post Office, 'the police, -and other *ituthoritieS spent a great deal of public- Money in giving facilities' to the British citizen to bet. Inthis problem common sense has at last prevailed. We do not doubt that regulation -will be found,- not more, but less 'demoralizing than our present hypocritiCal and utterly 'futile attitude towards wagers On the -speed of race-horses.
The question of-prohibiting all bets is another matter. If Parliament were ever to do that then no doubt to tar betting would be as unmoral as to tax brothels.
Under the heading of beer, Mr. Churchill has made an adjustment by which the State Will be the gainer, but without injustice.
The three years average for Schedule D of the Income Tax is to be abolished. What a man has received in the way of income in a particular year is an ascertainable fact, and when it has been ascertained he should pay a definite proportion of his revenue to the Treasury. Less income, less tax ; more income, more tax. That is not only just and reasonable, but it tends to simplifica- tion. Here, again, is a reform which the Spectator • has 'always asked for.
Another fiscal proposal on which, as our readers know, we have again and -again expressed Strong views, has to our great satisfaction received Mr. Churchill's adherence. We have repeatedly urged that Parliament will, not be doing the best it can for the safety and welfare of the nation if it does not prevent, not only the terrible financial waste, but the terrible injury to the nation's health and happiness, caused by our barbarous practice of burning coal as we now burn it. We send its most valuable derivative products up our chimneys in the form of smoke to hide the sun and pollute the atmosphere. The practical remedy we have proposed was to coin our coal into the oil we require in greater and greater vohime to drive our motors on land and our ships at sea, and to assist in warming and lighting our houses and generating our electric currents. The shortest and safest road to reach that goal, we have argued, is to raise our motor revenue, not by taxing horse power, but by taxing motor spirit. In that way we make the tax paid pro- portionate to the use of our roads, arid do not, as now, dictate Crudely and unscientifically as to the special form of motor engine to be constructed in our factories.
Therefore the direct effect of a petrol tax would be beneficial. The indirect effect would be as good. Since the tax would be levied at the ports, we should be giving the best possible form of encouragement to the low temperature carbonization of coal. We should make it abundantly worth while to carbonize, and yet while we were doing this we should not disturb or hamper trade- Another result would be an automatic insurance Against what is almost certain to come—an oil famine consequent upon the world's .demand for mineral oil getting ahead of the supply. If we were caught in an oil shortage, the British Empire, poor in natural oil products, might be very badly squeezed. It is evident that Mr. Winston Churchill's. mind is working along these lines. That is a great source of satisfaction Although he has not actually pledged himself to substitute a motor-spirit tax for A horse-power tax lie has promised to introduce it if he can. His ingenious, optimistic, and resourceful intellect could not be better employed. Once more, if he can coin our coal into oil, as he evidently believes he can, he will stand high in the ranks of our masters of finance.
Here we may say incidentally that, though we do not want to-day to deal with national expenditure, but only with the new proposals for taxation, there is a passage in Mr. Winston Churchill's speech which shows that his mind is working on another point often emphasized in. these columns. Our present system of keeping expenditure on National Defence in three watertight compartments, Water, Earth, and Air, is extravagant and inefficient in a high degree. If all three forms of National Defence were co-related, as they ought to. be, we should not only spend less, but should get far better value. If, as may well be the case, the power which brings safety has passed from the water to the air, it may lead to national suicide to lavish our money on sea force. This important subject is dealt with in our next leading article.
Among the minor alterations proposed in our taxing system are an import duty on wrapping paper at a little over sixteen per cent. ad valorem with a preferential rebate of one-third for Empire goods. The proposal is sure to cause discussion. For ourselves, we prefer to say nothing till the two sides have had their say in Parliament.
There will probably be little or no serious opposition to the making of the Key Industries duty continue for a further ten years, with the addition that the rate on optical glass and instruments is to be fifty per cent. ad valorem, instead of, as at present, thirty-three and a third per cent., and that on arc lamp carbons.a shilling a pound.
The reform under which the duty on hackney motor vehicles will be made uniform in all districts by raising 'them to the higher Metropolitan scale up to those seating forty persons is clearly sound, as is also the considerable 'increase on the duties to be paid on the heavier vehicles. They are not only great users of the roads, but also great .users-up of their .surfaces. Again, commercial trucks and road vehicles of two to four tons should justly pay higher duties. There is also to be an extension of customs duties to the commercial goods • vehicle.. The proposed new rates are not of a crushing nature, and we shall therefore be by no means surprised if the revenue received exceeds the estimates.
Finally, dumping immediately before the coming into 'operation of new duties is to be stopped by making the duties apply from the date of introduction ; and the . principle of a ten years' guarantee is to be extended to articles now enjoying Imperial Preference.
. It will be seen from what we have said that the new Budget might almost be called a Spectator Budget, ,We get a betting :tax, the abolition of the three-years .average, the virtual promise of a petrol tax instead of a, horse-power tax the first step towards the removal ,of smoke pollution), and a strong gesture in favour of national defence being treated on scientific lines. All these proposals have been advocated by us.
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