Budget Contd Condensed

Budget Contd Condensed

Budget (cont'd)A condensed version in approximate round numbers of the state-ment of revenue and expenditure for a recent financial year, and the estimates for the following financial year, is shown in the table on webwebpage 45. The statement is divided into two parts: Above-the-line and Below-the-line accounts.

(A) 'Above-the-line' revenue from taxation is in three parts:

(1) 'Inland revenue' comprises income tax, surtax, profits tax, death duties, stamp duties, etc. (or, broadly, the proceeds from direct taxation).

(2) 'Customs and excise duties' are levied on goods such as alcoholic drinks and tobacco and include purchase tax on motor-cars, furniture, etc. Customs duties are levied on goods from abroad, excise duties on home-produced goods (broadly these comprise the proceeds from indirect taxation).

'Other revenue' includes receipts from the G.P.O., receipts from loans, surpluses on Government trading services and a large and varied miscellaneous group of revenues, none very large.

On the expenditure side Government spending is in two main parts. (1)The 'Consolidated Fund services'. The Consolidated Fund was established in 1787 to ensure that the revenues previously earmarked or particular expenditures should go into one central fund from which all regular annual public expenditures should be paid. Parliament decides by statute which expenditures shall be met from the Consolidated Fund and not from the annual supply votes. The main charge on the Consolidated Fund is National Debt Interest and Management (although some National Debt Interest is charged 'below-the-line' and balanced by interest received on Exchequer loans). Other charges include payments to the Northern Ireland Exchequer, Civil List payments, expenses of parliamentary elections.

(2) 'Supply services' are financed by annual votes of Parliament. Approximately one-third goes to Defence and two-thirds to the Civil Services: Central Government, Home Department, Commonwealth and Foreign Estimates, Education, Health, Housing, Local Government, Trade, Labour, Supply, Works, Agriculture, Transport, Pensions, National Insurance, etc.

(B) Below-the-line receipts are in two groups: interest received on loans and (2) repayments of principal of such loans by local authorities, nationalized industries and others.

Below-the-line payments consist mainly of loans to local authorities, the Public Works Loans Board, nationalized industries, the G.P.O., New Towns and the Colonial Development Corporation, plus some non-recurring items such as Post-War Credits, War Damage Payments, etc.

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