FINANCE AND INVESTMENT
WITH another week's revenue collections still to be announced it is already certain that Sir John Simons estimate in his first war budget last September will be exceeded by a substantial margin. Income tax, customs and excise, and motor vehicle duties have done well and an excess of £50 millions over the estimated revenue of Just under £1,000 millions is in sight. This is all very encourag- ing so far as it goes. It demonstrates the resiliency of the revenue position and will help to reduce the huge deficit of £938 millions—covered by borrowing—estimated last September. From this strictly limited standpoint the expenditure figures also give cause for satisfaction. So far as one can judge, it seems probable that the nation's out- goings for the current financial year ending on Sunday will fall about £15o millions below the £1,933 million estimate. So, allowing for the prospective £50 million excess of revenue, one can now look for a reduction of about £200 millions in the estimated deficit.
Just why expenditure has lagged so far behind estimates it is hard to tell. The absence of extensive 'military activities must have been one influence and it may be That delay in making payments is another. One can only hope that we are not spending less than the Chancellor expected simply because some departments have failed to keep up to their expansion programmes. Whatever the explanation, out- goings are nevertheless running at nearly double the rate of revenue, which makes it pretty clear that when Budget day arrives the Chancellor will have to impose fresh tax burdens as well as provide for heavier borrowing. On the expenditure side he can scarcely budget for less than £2,700 millions for 1940-41. If he raises his revenue to £1,350 millions he will be hitting the taxpayer hard enough. That leaves a gap of £1,350 millions to be bridged by loans of one kind and another. If inflation is to be avoided, there is obviously some belt-tightening ahead.