Mr Churchill's Budget.

Press, Volume LXI, Issue 18369, 30 April 1925, Page 8

Mr Churchill's Budget.

Mr Churchill's first Budget seems to justify tlio interest with which it has been expected. It is a bold step • to begin with to strike sixpenco off the income-tax, reduee the super-tax, and all but doable the exemption allowed income-tax payers in the l.ower grades. For wc must hot suppose that thjre has already been a big enough improvement in the financial situation to onablo the Chancellor to announce these reductions, even when set-off by heavier death duties and new luxury taxes, with anything approaching airy indifference Though thero has never been a deficit since 1920, the Budget has been balanced by methods calling for the greatest patience and sacrifice on the part of all sections of the public, and the reductions now offered are rather the daring cuts which it is hoped will increase business than an indication that sacrifice has achieved its end. There is no indication in the information already cabled that the revenue which is being surrendered will bo balanced by cuts in necessary expenditure. It is not proposed, for example, to suspend the Sinking Fund, or do anything else calculated to bring Britain at last to the unfortunate position of some of her neighbours. Apart from the addii tions to revenue already mentioned, Mf Churchill seems to be building on ~nothing but the country's gradual re-

covery from depression. It is perhaps not very bold to assume that many people this year will earn bigger incomes than they earned last year, and that many who paid nothing last year will this year pay some small sum at least. It ought to be safe enough also to count on a steady growth in the consumption of articles subject to indirect taxation. But the fact remains that the nation has accepted its burdens as it accepted the sacrifices of the war. that it is carrying them without much fuss and would have continued to carry them, and that it will actually be astonished to discover that some casement is already possible. The "Eco"nomist," for example, which has never taken a pessimistic view of the nation's finances, declared only six weeks ago that '' the moment is not one "for relaxation. It is an occasion "rather for onc f mprc great national "effort to bring the good ship Great "Britain safely into port."

But the announcement which has aroused most comment, since it affects not merely the United Kingdom, but the whole Empire, and indeed the whole world, is the statement that we return forthwith to gold. Though it is not easy for the layman to grasp all that this implies, the change has been strongly urged by experts, and will be welcomed by the public as an escape from a condition of things in which they have not been able to feel full security. But it is not certain that some of the immediate effects will not he a little disturbing. Though a gold standard does not mean a gold circulation, there is a risk that its immediate adoption may bring about a fall in prices. For of course America is not only Britain's creditor, to the extent of thousands of millions sterling, but she is also the world's biggest holder of gold, and it would be natural for her to rejoice if the value of gold increased, or, in other words, if prices of goods decreased. But even if America seeks to bring this about, she will not be able to maintain her advantage permanently in a world which produces more gold than it requires. The return to gold is apparently the only way of getting rid of the exchange movements which are so hampering to trade, and it cannot be doubted that it will give additional security to Britain's credit. And if it adds to credit and" prestige it stimulates industry, so that there is nothing to fear but that the present may not be the most opportune moment for bringing the change about.