TOPICS OF THE DAY.
THE BUDGET.
IN explaining the Budget in the House of Commons on Wednesday Mr. Boner Law surpassed himself in conciseness. and lucidity. His speech, dealing with huge and complicated figures, was delivered almost without notes, and was in itself a feat of memory and clear-headedness. It is very plain why Mr. Boner Law's reputation has been growing among men of all parties. The first thing to say is that the Budget was a revelation of our financial strength. A Budget speech is not generally cheerful reading for any one, but few men with their minds earnestly fixed on the business of winning the war could read this particular speech without being put in good heart. For we shall stand the strain. If we fail at any point, it will not be in finance. But having said that much, we must next remark that the very financial strength of the Empire makes it deplorable that we should not pay " on the nail " a- higher proportion of our titanic indebtedness. The proof is clear that we could do this, and we certainly ought to do it. As Mr. Bonar Law explained, we are paying out of revenue twenty-six per cent. of the cost of the war. In our opinion, that • is not enough. In the Napoleonic Wars we paid nearly half the cost out of revenue in the Crimean War we paid almost the same ; in the Boer War we paid about a quarter—very much the same proportion as we are paying now. The Boer War was an unsatisfactory model of finance, and we are sorry that it is being imitated. It will be said that, even as it is, we are paying a higher pro- portion of the cost out of revenue than any other belligerent nation. That is true ; but we are proud enough to say that British finance has always been a lesson to the world, and it is no consolation to our pride to be told that we are superior to our inferiors. We shall mention later some taxes which might very easily be increased without unfairness to any one, and we hope that these may yet be imposed.
We must now summarize Mr. Bonar Law's statement. He pointed out that Mr. McKenna's estimate of expenditure last year was £1,825,380,000 and the actual expenditure was £2,198,113,000—an excess of £372,733,000. No one cam blame Mr. McKenna. In the circumstances, estimates are bound to be very rough guesses. Loans to our Allies and the Dominions and the increased expenditure on munitions were all greater than could have been foreseen. There is one financial front for the Allies as well as one military front. Unexpected demands are often made on us to keep the finan- cial front unbroken, and we must respond with just as much alacrity and thoroughness as we are bound to do in a sudden and unexpected emergency on the military front. As a. matter of fact, the Dominions are finding more money from their own resources than we had darec-Lto hope; and on their account there is no increasing strain on the British Exchequer. Last year the total amount of our -obligations to our Allies, was £540;000,000 and to the Dominions £54,000,000. In the whole war so far we have advanced £828,000,000 to our Allies and 042,000;000 to the Dominions. The Chancellor of the Exchequer then made the most reassuring statement that the estimate of revenue had been exceeded by E;1,153,000.
Imagine a Chancellor of the Exchequer with such a surplus' to play with in the days of peace ! Unfortunately it is' engulfed to-day and simply disappears into the maw of this devouring war. The only item on which there has been a deficit is that of Excise and Customs. This has fallen by £9,059,000. The chief increase of revenue came from 'the Excess Prate Duty, which brought in £139,920,000—an increase of -03,920,000. The total revenue for the past year was £573,428,000 and the expenditure £2,198,113,000. That leaves a deficit of £1,621,685,000 to be met by loans. After reviewing the splendid figures of the last War Loan, Mr. Bonar Law said that the most satis- factory feature was the way in which men of small means had contributed. The impetus of thrift among the least well-to-do classes had not spent itself. This is indeed good hearing. We sincerely hope that the discovery by the poorer classes of the advantages of investment will never be forgotten: After .the war every sort of practical encourage- ment should be given for this state of things to continue. The simplest possible procedure for the investment of small: amounts, should be devised, and it may not be fantastic to hope that British labourers may at lest emulate the desire of. French peasants to become rentiers. The National Debt, Mr. Bonar Law went on to say, was increased last year by 11,114,000,000 and now stood at £3,854,000,000. Of course from this huge sum we are entitled to deduct- the, advances to our Allies and the Dominions.- Mr. Berm Law then entered. into a very interesting exercise in examining our financial position on a peace basis. The result is as follows :— !‘ our total revenue is 1573,428,000. If you deduct Excess Profiti Duty and other non-reourring revenue, like interest from the Dominions and Alliek, the amount is £137,000;000 roughly, -leaving a, total revenue of £416,108,000. The pre-war expenditure was approximately £173,000,000. If you add the additions, and they will not be less, for pensions and' education, the amount is 00;000,000: If you take theDebt charge at the rate of interest of 5i per cent., which would pay it off in from forty-two to forty-three years, the amount is £153,700,000. On this basis at the end of last year there was a balance in our favour of upwards of f59,000,000:" The total.expenditure during the war has been 0,318,000,000. Of this, £1,137,000,000 has been derived from revenue— the twenty-six per cent. of the total to which we have already referred.
We come now to the increase of taxation. There are no new taxes, but three existing duties are increased. The scheme may be summarized as follows :- " ENTERTATX3IENT TAX.—An addition estimated to yield £1,500,000 to be put on. The first tax yielded 0,000,000. No alteration'on tickets costing ld. or 2d. Free tickets to be taxed.
TOBACCO TAL—Inereased by ls. 10d. per pound, estimated to bring in 16,000,000.
EXCESS PROFITS TAX.—ThereaSed from 68 per cent. to 80 per-cent. Excess Profits Duty to begin as from January let last. Munition Levy to be merged.in Excess Profits Duty."
Last year there was no falling off in the consumption of tobacco, and those who cannot do without this hinny— though it is more of a necessary to many men, including Mi. Boner Law on his own confession, than most things classed as necessaries—should be ready to .pay for it. All shipping, except coasting vessels, is to be taken over by the Govern- ment, and the owners will be allowed a rate of profit equal to that before the war.
Finally, Mr. Bonar Law framed his estimates for the coming year in the light of the increased taxation. His task was complicated by the fact that he was unable to say what finan- cial help the United .States would give us. He was sure, however, that she would help: us in bearing the burdens of the Allies and the Dominions to the extent of her ability. He estimated our total expenditure for the year at 12,290,381,000, and this included a sum of 1400,000,000• for advances to our Allies and the Dominions—in other words, £150,000,000 less than last year.. Let us hope that the estimate will not be reached. The daily expenditure for the coming year was estimated at £6,275,000, as against £6,022,000 last year. If the advances be left out of the account, the daily expenditure will be £1,315,000. The chief source of fresh revenue is again expected to be the Excess Profits Duty. Mr. Bonar Law hopes for an increase of 160,000,000. Alto- gether, he hoped that on a peace basis he would be £2,000,000 to the good at the end of the financial year.
Mi. Bonar Law's principal excuse for not introducing new taxes was that it was impossible to supply staffs to manage the new machinery that would be' required. That may be a perfectly sound reason in itself, but it cannot be held to apply where the machinery of taxation. already exists. In our opinion, the duties on sugar, tea, petrol, and matches should be immediately increased. The tax on dogs,. in particular, should be increased. Dogs throughout the country, par- ticularly large doge, eat -a great deal of-food over -and above the scraps of which it might be said that they would otherwise be wasted. The licence for a dog: might . be increased from 7s. 6d. to at least a guinea. If more than one dog were kept by an owner, the tax. might rise progressively. Many dogs would be killed, of course, and as dog-lovers we. should bitterly regret this. But: we must be serious. Our ,need is extreme. We must not lose the war through dread of losing our dogs. The cost of licences on motor-cars and motor-bicycles should also be increased,. A tax on female domestic servants is most desirable.• If it be said that this new tax would require new machinery—though probably the present machinery is sufficient—the existing tax on male servants could be immedi- ately increased. Lastly, we sincerely hope that the Govern- ment, before it is too late, will make the Income Tax a universal tax.. Thousands of artisans actually escape the tax, though they are liable under the present rules, because they, happen to receive their wages weekly. Politicians who call themselves democrats excuse this gross case of privilege in the name of democracy ! But we should like to see the Income Tax applied to all incomes. Every person should' pay a direct sum, however small, for' the protection he or she enjoys. The price of a few visits to "the- pictures" would be-simply nothing of a sacrifice compared with the sacrifices of om' soldiers and sailors.- -
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