Mr. Bonar Law went on to say that the revenue
for 1918-19, on the existing basis of taxation, would yield £774,250,000, of which £200,000,000 would come from Excess Profits Duty. He proposed to raise £67,800,000 by new taxation, leaving a balance of 12,130,147,000 to be covered by loans. His new taxes would yield in a full year £114,000,000. This would make up the difference between the permanent revenue on the present basis and the normal expenditure, as swollen by a Pension charge of £50,000,000, and by a Debt charge which would be £380,000,000 if the war ceased before March 31st, 1919. Mr. Bonar Law declined to regard our advances to Russia as a bad debt. But, assuming that we recovered only half of our loans of £1,632,000,000 to the Allies, besides our loans of £244,000,000 to the Dominions and of £64,000,000 to India, he estimated that our net National Debt in March next would be £6,856,000,000. He calculated the annual charge at a rate of 5tt per cent. for interest and sinking fund.
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