|The Rushden Echo and Argus, 11th September 1931, transcribed by Jim Hollis
The Budget at a Glance
Income Tax Up: Allowances Drastically Reduced
Mr. Snowden, the Chancellor of the Exchequer, yesterday introduced his Supplementary Budget in a crowded House. Below are the outstanding points. To-night at 9 p.m. a speech on the Budget by the Chancellor will be radiated by the B.B.C. from all stations.
The Government have decided that borrowing for the Unemployment Fund and Road Fund must cease, and this decision must apply to the current financial year, said Mr. Snowden early in his speech.
“It is undoubtedly the fact,” said Mr. Snowden, “that foreign countries have been looking with nervousness on the national financial position of this country. Apart from that, an unbalanced Budget is a very serious thing for this country itself.
“IT IS UNDOUBTEDLY THE FACT THAT, NATIONALLY, WE HAVE FOR SOME TIME PAST BEEN LIVING BEYOND OUR MEANS AND LIVING TO A CONSIDERABLE EXTENT ON OUR CAPITAL.
“This is the problem I have to solve, and it can be solved only in two ways either by reducing expenditure or by increasing taxation or by combination of both.
“I am faced with a very serious drop of revenue this year £25,000,000 in Inland Revenue, and £4,000,000 in Customs and Excise.
“THERE IS AN ESTIMATED DEFICIT ON THIS YEAR’S BUDGET OF £74,700,000.
“We have a loss of revenue from taxes of £29,000,000 and on reparations a loss of revenue of £30,300,000, which makes £59,300,000 loss.
“Supplementary estimates will amount to £813,000. The cessation of borrowing for the Unemployment and Road Funds means an amount of £31,000,000, which brings the total to £94,000,000.
“WE ARE SAVING £13,500,000 INTEREST ON THE AMERICAN DEPT, AND £5,750,000 ON THE SINKING FUND. THESE TWO AMOUNT TO £19,250,000.
“If you take £19,300,000 from £94,000,000 we can get an estimated deficit on this year’s Budget of £74,700,000.
“It is clear that disagreeable measures will have to be taken, both drastic economies and heavy taxation.
“I shall not give details of the economies just now, but nine-tenths of the items were proposed and adopted by the late Government.”
“There are considerable economies in the Defence Forces and Civil Votes, and economies over the whole field of Government expenditure on unemployment, and savings from the Road Fund, and these altogether will amount to £70,000,000 next year.
“After taking into account the economies and savings on Sinking Fund, which together represents £35,700,000 towards the £74,000,000 there is left a net deficit of £39,000,000 from the current year, and £80,000,000 next year.
“The balancing of the Budget this year and next demands the imposition of additional taxation to yield these amounts.
Income Tax Increase
“The government have come to the conclusion that the Sinking Fund provision, instead of £50,000,000 should be £32,500,000 both this year and next.
“We propose to make a readjustment of the fixed debt charge.
“I PROPOSE TO INCREASE THE INCOME TAX STANDARD RATE BY SIXPENCE.
“I propose to compensate industry for the additional burden placed upon it, by an extra sixpence in the standing rate of income tax. Relief of roughly the same amount will be given by means of a special increase on the existing allowance for depreciation of plant and machinery.
“I propose to revise various personal and other allowances which determine the scope and graduation of income tax.
“I PROPOSE THAT PERSONAL ALLOWANCES SHOULD BE REDUCED FOR A SINGLE PERSON FROM £135 TO £100, AND FOR A MARRIED PERSON FROM £225 TO £150.
“Children’s allowances will be reduced on a scale from £60 to £50, and from £50 to £40.
“I propose that in the current year the first £175 should be charged at half the standard rate.
“There will be an increased allowance on earned income from one-sixth on the maximum of £250 to one fifth on the maximum of £300.
“THE INCOME TAX CHANGES IN THE RATE OF ALLOWANCES ARE EXPECTED TO GIVE THIS YEAR £25,000,000 AND £51,500,000 NEXT YEAR.
“There will be, in addition to the increase of sixpence in the standard rate of income tax, an addition of 10 per cent to the amount payable by all surtax payers. This will bring in £29,000,000 this year and £57,500,000 next year.
“I PROPOSE AN INCREASE ON BOTH CUSTOMS AND EXCISE DUTIES ON ALL ORDINARY DESCRIPTIONS OF BEER, BY 31s PER STANDARD BARREL, RE-PRESENTING ONE PENNY PER PINT.
“I anticipate an additional yield of £1,500,000 this year, and £10,000,000 next year. The increase will take effect to-morrow.
“I PROPOSE AS FROM TO-MORROW CUSTOM DUTY ON TOBACCO SHOULD BE RAISED FROM 8s 10d TO 9s 6d PER POUND, REPRESENTING AN INCREASE OF EIGHTPENCE.
“It will yield £2,500,000 this year and £4,000,000 next year.
“I PROPOSE AN INCREASE IN OIL DUTY BY A FURTHER TWOPENCE A GALLON, IT WILL BRING £4,500,000 NEXT YEAR.
“Entertainments Duty I feel affords a ready instrument for all sections, and I must call on the occupants of the cheaper seats to join in contributing.
“I am proposing a uniform scale of 16⅔ per cent increase in the duties.
“The Entertainments Tax will be re-enacted on the cheaper seats. The change should bring in £1,000,000 this year and £2,500,000 next year.
“To meet the estimated deficit of £74,000,000 this year I now have economies £22,000,000 dept redemption, £13,700,000 new taxation, inland revenue £29,000,000. Custom and Excise £11,500,000; total £76,200,000 giving me an estimated surplus of £2,000,000.
“The effect on the next year’s Budget will be this. I had an estimated deficit of £170,000,000 for next year, towards, which I now have: Economies £70,000,000 dept savings £20,000,000 new taxation. Inland Revenue £57,500,000. Customs and Excise £24,000,000; total £171,500,000.
“The Finance Bill will provide facilities for converting the 5 per cent War Loan with a lower rate of interest.
“I am making these arrangements regarding conversion in order that I should be able to seize the first suitable moment to launch the operation.
“IN THE LAST FEW WEEKS I HAVE RECEIVED THE MOST AMAZING LETTERS INDICATING THE WILLINGNESS OF ALL CLASSES TO MAKE THEIR CONTRIBUTION. I HAVE ENDEAVOURED TO DISTRIBUTE THE BURDEN AS EASILY AS I COULD.
“I believe the country will accept these sacrifices.”
Little children had sent shillings and half-crowns from their savings to help the nation in its need, said the Chancellor. He believed the country would accept his proposals, and so show to the world the indomitable British spirit in facing difficulties. “Come the world against us, England still shall stand,” he concluded, amid loud cheers.
The Chancellor finished his speech at 5.10 having spoken an hour and 17 minutes.