§ Before I come to the subject of the new taxes, the Committee would wish to know how we stand with regard to Revenue and Expenditure. A preliminary consideration is essential. The Committee will understand that the difficulty of estimating in a time of war is overwhelming. New military requirements, a change in the method of carrying on the War entails additional expenditure far beyond what would have been anticipated, and Estimates which are framed in one month fairly and accurately in accordance with the knowledge of the time may prove to be hope- 348 lessly inaccurate in the succeeding month. Subject to this caution, I will give to the Committee such estimates as I can.
§ In 1913–14, that is to say in the last year of peace, the Revenue and Expenditure nearly balanced at about £198,000,000. In 1914–15, the first year of the War, our Revenue, including the new taxation proposed by my right hon. Friend, rose to £227,000,000—I am giving round figures—and our Expenditure to £561,000,000. The deficit for the year was, accordingly, £334,000,000. The estimate of Revenue made last May for the current year was £267,000,000, and on the hypothesis that the War would last at least until the 31st of March next, the estimate of Expenditure was £1,133,000,000. With later experience these Estimates have now to be revised. On the existing basis of taxation the Revenue may be put at £272,000,000, an increase of £5,000,000, and the Expenditure is now estimated at £1,590,000,000—an increase of £457,000,000. Great as is this total, I am sure that the country is prepared to face it with courage and with confidence, and to meet resolutely every demand which the continuation of the War may entail.
§ To enable us to cope with our colossal task, every section of the nation must be called upon to contribute and to make great sacrifices. It is obvious that by taxation alone a small part only of the deficit could be met. On a previous occasion it was my duty to submit to the House proposals for raising a loan, and hon. Gentlemen will remember how magnificently the country responded. On some future occasion I shall have to borrow again. I have now to lay before the House proposals for taxation which, however little they may do in the way of meeting the deficit, must be upon a scale never before imposed. I do so in the firm assurance that both the House and the country will be prepared to support the Government in carrying through whatever measures of taxation are deemed to be necessary, both now and in the future, for the successful prosecution of the War.
§ I have given the total Expenditure of this year at £1,590,000,000, and on this basis we may estimate the Dead Weight 349 Debt at the close of this year at £2,200,000,000. Our accumulated wealth is great, and a National Debt even of this magnitude will by no means cripple our resources. But with regard to our Expenditure, there is a consideration which should be borne in mind. We must not overlook the strain which that Expenditure imposes upon our sources of supply. The Expenditure of £1,590,000,000 within the year means that goods and services to that value have to be found for our own support, and for the support of those whom we are assisting. So far as goods and services can be obtained by us by loan from neutral States, or as the price of securities sold abroad, there is an immediate relief to the burden cast upon our own powers of production. But, subject to this relief, the whole of the burden to provide the balance of the goods and services falls upon the shoulders of this country. When our expenditure is reaching such gigantic proportions, and while it is still rising, I am sure that the Committee will not think it out of place for me to call attention to the real burden which it imposes upon our powers of production.
§ Four and a half months ago, in a forcible passage in his Budget speech, my predecessor described the triple task which this country has assumed in the War—to keep the command of the seas, to maintain an Army, and to assist our Allies by furnishing them with supplies, and by aiding them in financing their purchases in countries other than their own. My predecessor pointed out the interdependence of these military efforts and their mutual limitations. When he spoke he had in mind a Navy which during the current year was to cost £146,000,000, an Army which was to cost £600,000,000, and External Advances to the amount of £200,000,000. We have now to contemplate a Navy costing £190,000,000, an Army costing £715,000,000, and External Advances to the amount of £423,000,000. Grave as was the warning of my right hon. Friend last May, his words have a far weightier significance to-day.
§ 4.0 P.M.
§ I make no apology for dwelling upon our Expenditure. It is a subject upon which 350 hon. Members when they are asked to vote taxation ought to have all the information which is in my possession. When my right hon. Friend the Prime Minister introduced the Vote of Credit last Wednesday, he gave £3,500,000 as the current daily rate of net expenditure from that Vote. As the Committee know, we have to meet Expenditure from Votes other than the Vote of Credit, and we have to form an estimate of Expenditure over a longer period than the Prime Minister could take into review in moving his particular Motion. My survey extends to the end of the financial year, and it includes our Expenditure on all services. Taking the whole period until 31st March, the best estimate which can be formed of the total daily rate of Expenditure on all services from now onwards is upwards of £4,500,000, and in the later weeks of the financial year it may have risen to more than £5,000,000 a day. The Committee will realise what this rising scale of Expenditure must mean in the ensuing financial year. I will complete to the Committee the details of the Expenditure in the current year. In addition to the main heads to which I have already referred—the Navy, the Army, and External Advances—there is a charge of £36,000,000 for pre-and post-moratorium bills, etc., arising out of certain arrangements made in the City at the outbreak of War, and £170,000,000 for our ordinary national Services, excluding the Army and Navy, but including charges for Debt. Food supplies and some minor items, together with allowances for contingencies, make up the total to. £1,590,000,000. A total of this kind has, of course, never before been reached, but I go further and venture to say that there is no record of a nation having voluntarily accepted liabilities bearing so high a proportion to the total national income for which provision has to be made within a single year. Such is the account I have to give to the Committee of the Expenditure, past and future, during the present year.