BUDGET DEFICIT EXPECTED

Press, Volume LXXII, Issue 21827, 6 July 1936, Page 9

BUDGET DEFICIT EXPECTED

BRITAIN’S EXPENDITURE ON DEFENCE CHANCELLOR’S WARNING (BEITISH OFTICIAL WTEELBS3) (Received July 5, 5.5 pun.) RUGBY, July 3. In winding up the third debate on the Finance Bill m House of Commons, the Chancellor of the Exchequer (Mr Neville Cha berlain) intimated that the acceleration in the defence _ Programme made it practically certain that the would be a deficit on the present budget. The additional taxation represented but a fraction of the expenditure which was being incurred for defence. The third reading of the bill was carried without a divison. The Financial Secretary to the Treasury (Mr W. S. Morrison) took part.Mr Morrison, in introducing the third reading, said that the Government’s being able to meet the heavy charges for defence with such slight additional taxation showed an amount of financial strength in the country that was very impressive. _ Mr Chamberlain, replying to criticisms of the Government’s reticence regarding its defence plans, said it had been perfectly straightforward in this matter. He had said that the programme was not one that could be completed in a single year. “It must depend,” he said. “upon what the other countries do, what developments there may be regarding science and tactics, and it is bound to change as the years go by. Definite information has been given where the Government could be definite. “We are spending large sums of money to make this country safe and to fulfil our obligations,” he said. “It is a fortunate fact that this new liability comes upon us at a time when we are far better able to bear it than we were a few years ago.” If nothing happened to shake confidence, he believed that there was no reason why the country should not be able to support this liability, and at the same time support a rising standard of health. He could not agree with the suggestion that the rising expenditure on armaments would continue indefinitely. Replying to criticisms that in the Finance Bill the Chancellor should have risked a deficit rather than an increase in taxation, he replied that it was practically certain that there would be a deficit. The only question was what would be its size. The supplementary estimates would have to be introduced during the year.

The political correspondent of the “Daily Telegraph” says Mr Chamberlain’s budget deficit announcement completely surprised the House. It is believed that rearmament expenditure for the current year will be at least £ 5,000,000 more than was contemplated when the budget was framed.