BRITISH BUDGET

Dominion, Volume 14, Issue 181, 27 April 1921, Page 5

BRITISH BUDGET

REDUCTION OF FOREIGN DEBT

NO REMISSION OF TAXATION CONVERSION LOAN TO BE ISSUED 'Ey Telegraph-Press As aoeiation-Oopyright London, April 25. Mr. Austen Chamberlain, speaking in the House of Commons, said the post year, had been the most remarkable in Britain’s financial history. He had provided in his Budget for a surplus of .£231,193,000, and the realised surplus was *£230,500,000. Corporation profits had produced only *£850,000, instead of *£3,000,000. This was due to initial difficulties in starting the now tax. The total amount applied in debt extinction during the year was *£259,500,000, The debt weight on March 31 was *27,573,000,000. The floating debt had been reduced by *237,000,000, instead of the anticipated *070,000,000. The foreign debt had been reduced by *2117,000,000, and the country had paid off half tho Anglo-French loan in New York, an operation which had cost "*251,370,000. This, with other repayments, had reduced tho American debt during the last twelve months by *£75,000,000.' Practically tho only debt Britain now had outside the United States and Canada was *£826,000 to Sweden.

The estimated expenditure is *£974,023,000, and ths revenue *61,057,150,000. Mr. Chamberlain said his estimates of revenue and expenditure would both be affected by the coal strike. He expected to receive *2120,000,000 arrears of excess profits duty. Legislation would bo introduced to wind up this tax. Tho estimated special revenue from war assets was £158,51)0,000, but there was special expenditure on transitory war services of *265,705,000. No credit had been taken for anything that might be received from reparations. There w r ould be no remission of taxation until economies were; secured. A specific duty of 15s. pel - gallon was to bo imposed on sparkling winesl in place of the present fixed ad valorem duties. Tho surtax on imported cigars was to be abolished.

Ho had io provide *£80,000,000 to meet foreign obligations, and as tho domestic obligations required *2113,000,000, tho whole surplus would bo required to meet them, without being entirely sufficient. There was no prospect of making ends meet if tho revenue was reduced this year. The existence of tho huge floating debt was gravely inconvenient, and further large additions would ba a standing menace to our credit, security, nnd prosperity. Tho time had como to make a serious effort to secure its conversion into long-dated securities. It was proposed lo convert *£632,000,000) [of war bonds maturing in the next two years into 3i per cents. The prospectus of a conversion loan would bo issued that night. If the whole *2032,000,000 was converted tho resultant figure would bo just over *21,000,000.000. Tho Budget foreshadowed drastic reductions in all/ Departments. In tho debate ,Mr. Asquith said he was disappointed at the efforts to reduce tho floating debt. A new conversion loan would have the effect of creating a belief that Britain was adding to the country’s capital debt —a danger not to be ignored. The real remedy lay in the reduction of, expenditure. He hoped tho Government would create an Estimates Committee with some real power to check expenditure. Mr. Thomas said tho figures would create apprehension. Tho sum required for fighting forces to carry out the Government’s foreign and Irish policy was disproportionately high. The Labour Party claimed, first, that remission by taxation should 100 on indirect taxes, particularly tea. —Aus.-N.Z. Cable Assn.

LOAN GENERALLY APPROVED ATTRACTIVE OFFER TO INVESTORS (Rec. April 26, 5.5 p.m.) London, April 25.

Tho loan is the only sensation in a featureless Budget. It will increase the interest paid on war bonds from 311 millions to 35J millions. Nevertheless, it is generally approved, as it will take the State out of competition with industrial interests in the money market. It is understood that Sir Robert Horne is out to secure cheaper money, while the Board of Trade is impressed with tho difficulties industries now have in financing themselves., Tho city editor of the "Daily Express.” though approving of the loan, points out that the issue will be expensive to the taxpayer, as the investor who converts at the rate of *£l63 per *£loo will securo a permanent income of *£s 145., compared with the present *£s. In view of the inevitable reduction in the value of money this offer is attractive.—Aus.-N.Z. Cable Assn.

“BLUNDER OF FIRST MAGNITUDE” LONDON "TIMES” CONDEMNATION

OF THE BUDGET. (Rec. April 26, 8 p.m.) London, April 26.

“The Times” says editorially:—“Wo consider the Budget is a blunder of the first magnitude, but it causes no disappointment, because everyone knew that the Government intended to drift towards national insolvency. Tho estimate of national revenue is quite unwarrantable. The. amount is. only to lie raised by a crushing burden, which will greatly retard the prospects _ of recovery, and result in an intensification of the deplorable economic depression. driving millions of worklees to wander the streets.” “The Times” adds: “If tho Government cannot reduce expenditure, let us make room for somebody who can."—“The Times.”