The Press Friday, March 18, 1932. The British Budget.

Press, Volume LXVIII, Issue 20499, 18 March 1932, Page 10

The Press Friday, March 18, 1932. The British Budget.

The revenue figures quoted in cable messages yesterday and to-day indicate that the British Budget will certainly be balanced, an achievement which Mr Baldwin describes as "a victory for "the whole nation." How much more this is than rhetoric is best understood if the position a few months ago is recalled. In introducing his Budget for 1931-32 Mr Snowden had said that if it were possible to effect substantial economies during the year and if trade improved, the Budget for 1932-33 need not be "unduly alarming"; otherwise, those heavy increases in taxation which he had tried to avert would be inevitable. He had averted them, however, largely by using non-recurrent items of revenue, and his hopes were disappointed. Trade did not improve, but became worse; revenue fell away while expenditure climbed; and by September the outlook was exceedingly bad. The first National Government was formed, and faced the rescue of the national finances as its first task. Introducing the revised Budget, Mr Snowden showed that on the existing basis of taxation revenue would fall short of the estimates by £4,000,000 in Customs and excise, £25,000,000 in inland items, and £30,000,000 in miscellaneous items, including reparations and war debts receipts suspended under the Hoover Moratorium and therefore largely offset by the suspension of debt payments to the United States. Expenditure, on the other hand, though debt services absorbed £13,500,000 less, was increased by nearly £39,000,000, through the stoppage of borrowing for the Unemployment Insurance Fund and the Road Fund, and when every decrease was accounted for stood £15,500,000 above the estimate of £803,400,000. This meant that for 1931-32 there was in sight a deficit of £74,700,000, which if the scale of expenditure and taxation remained unchanged would rise to £170,000,000 in 1932-33. To close the gap at once the Chancellor of the Exchequer proposed economies worth £22,000,000 in the current year and £70,000,000. in a full year, sinking fund reductions of £13,750,000 [£20,000,000 in 1932-33], and neiv taxes to yield £39,000,000 [£80,000,000.] The sweeping economy proposals included reductions of £4,500,000 in political, departmental, judicial, and defence salaries, £10,300,000 in education, and £5,000,000 in the defence services, while the Unemployment Fund was saved from bankruptcy by cutting expenditure by £25,800,000 and raising the contributions by £10,000,000. The preceding are full-year figures, as are the estimates of the yield of the new beer,, tobacco, petrol, and entertainments duties (£24,000,000) and the increased income tax and surtax (£57,500,000). On this revised basis, Mr Snowden expected the current year to close with a small surplus of £1,600,000, and the coming year, for which he sketched a Budget, with another of about the same size. What influence on next year's figures the emergency tariffs will have it is too early to calculate; nor can their effect easily.be traced ,in the cabled figures, which show that the yield from Customs and excise, to date, is nearly £2,000,000 ahead of the revised estimate. But this, though connected with the rumoured possibility of 1 taxreduction in the approaching Budget, is beside the present point. Five months ago British finances had slipped and- were threatening v to slip faster. The weaknesses of the Budget, by no means of new development, were in part'the' cause of declining foreign confidence and of the slump in the pound. Within this very short period the drift has been corrected and confidence revived; and great as is the material value of this achievement, its psychological value is even greater. It is the . most heartening demonstration of the energy and firmness of the British people since the War.