THE DEFENCE BILL

Evening Post, Volume CXXIII, Issue 48, 26 February 1937, Page 9

THE DEFENCE BILL

CHANCELLOR'S SPEECH

"NOT A WAR MEASURE"

OPPOSITION CHALLENGED

(British Official Wirelesß.)

(Received February 26, 11.20 a.m.)

RUGBY, February 25,

The Chancellor of the Exchequer, Mr, Neville Chamberlain, moving the second reading in the House "of Commons of the Defence Loansl Bill, welcomed the absence from the Opposition's rejection motion of the suggestion made last week by Mr. Attlee that the Bill was "a war measure." It would be very unfortunate, the Chancellor declared, if any apprehension of imminent war were created at a time when there was no reason or justification for any such fears. Citing the Opposition's invitation in the motion for the House to view with misgiving the massing of huge competitive national armaments, the Chancel|lor reiterated his own horror of Europe's re-armament and unproductive expenditure, in which it had involved the nations. Even now, though the prospect was discouraging, he did not despair of presently finding- some new fields in which fresh contacts might be made to avoid the necessity for pursuing- such folly to its bitter end, but in the meantime they could not afford to relax until they had provided for the country's safety and its ability to fulfil its international obligations. . NOT FOR AGGRESSIVE WAR. Mr. Chamberlain twitted the. Labour Party on. its repeated affection of ignorance of the relations which the Government's re-armament programme bore to its foreign- policy. "The relation has been described and defined with the utmost clearness by the Foreign Secretary," he said, "but Opposition members continue to ignore his statements. I must therefore ask the House to bear with me while I once more repeat the Foreign Secretary s The Chancellor then read Mr. Eden's well-known declaration at Leamington on November 20 commencing:—"These arms will never be used in a war of aggression, and will never be used for a purpose inconsistent with the League Covenant or the Pact of Paris." He challenged Labour speakers to say whether they considered British arms should not be used-for any of the purposes described by the Foreign Secretary or whether they considered the> should be used for any purpose in addition. Not until they ceased evading such straightforward questions and gave a plain answer was he called upon feriously to.deal with such obscurely insinuated criticisms. ANTI-PROFITEERING MEASURES. Mr Chamberlain then turned to the charges that the proposals in the: Bill would weaken national credit and depress the standard of living, and -that the measure contained no effective provision to prevent profiteering. He said that no matter, in the whole of. ,tne problems connected with the re-arma-ment programme had received more continuous or more" concentrated attention than the prevention of excessive prices. "I have no hesitation in saying that nothing that human ingenuity can devise or human effort can achieve to this end has been left undone," he declared. He explained the machinery set up by the Treasury for the purpose and the principles on which it was working, and concluded: "You can take it from me,' from the point of view of the Treasury, that I am satisfied that the interests of the taxpayers are being adequately protected." The Chancellor complained of exaggeration in the statement that the proposals would adversely affect the national; credit, and of confusion of mind regarding the effects on the one hand of the vast armaments expenditure and on the other of borrowing to meet pai't of it. The national credit .had been steadily built up during the last six years. During the crisis other countries had added to their debts. The national debt of the United States had increased during the last six years by a sum exceeding £3,000,000,000. There was nothing' comparable in the British case. It had been necessary to suspend' the sinking fund, but in three years from 1933 to 1936 there were realised surpluses amounting to over £40,000,000, in addition to the debt redemption of £32,500.000, making a total of £72,500,000. Also, the unemployment insurance fund had been put in a solvent condition and reserves had been accumulated which, if no distribution took place, would reach by the end of the present year the sum of between £52,000,000 and £60,000,000. USE OF DEBT REDUCTION. Moreover, the real burden of the nation's debt was to be measured by the annual charge. In 1931 the interest on the British national debt was £282,500,000. This year the debt charge would be about £210,500,000, so that the saving of £72,000,000 in interest alone would almost be sufficient to cover the average rate of borrowing contemplated in the Bill. At the same time the standard of life had been protected by the provision of a constantly-increasing sum for social services. In the last Budget of- the Labour Government, when unemployment was high, Mr.' Chamberlain pointed out, provision for social services was £45,000,000. In the current year, when employment had enormously improved, the provision was £68,000,000. Referring to the prediction that the Government's policy would cause iiir flation, the Chancellor countered the Labour Party's forebodings by calling attention to a speech yesterday by the well-known economist, Mr. J. Maynard Keynes, in which the latter expressed the opinion that it would be- possible for the Treasury to raise £400,000,000 by borrowing without causing inflation. Mr. Chamberlain agreed with Mr. Keynes that the sum represented only a fraction of the ' available savings, while admitting that there were other demands upon those savings. But he maintained that the suggestion that inflation was necessary or likely was the work of a piece of imagination. Finally, the Chancellor declared that the Labour Party's suggestion that the whole of the defence expenditure should be met out of current revenue— necessitating the imposition of fresh and crushing taxation —was pushing financial orthodoxy to dangerous pedantry. "INVITING A SLUMP." For the Labour Party, Mr. H. B. Lees-Smith refused to be reassured by the Chancellor or Mr. Keynes. He contended that the Government's bor- ] rowing policy should be reserved for a time when i armaments expenditure fell off and a slump threatened, in order to arrest an oncoming depression. A contrary policy by which armaments expenditure and borrowing j were to cease simultaneously invited a catastrophic slump. Mr. Lces-Srnith also expressed dissatisfaction with the degree of planning and co-ordination

disclosed in the speeches of the Minister for Co-ordination of Defence. Out of seventeen Cabinet Ministers in the House no less than thirteen had to answer questions concerning preparations in the event of war. There was no evidence that Sir Thomas Inskip was co-ordinating those thirteen colleagues. Mr. Lees-Smith suggested the appointment of a Civil Planning Committee to work along parallel lines with the Committee of Imperial Defence on aspects of the defence problem which he asserted wore obviously being neglected.

Sir Robert Home (Conservative), speaking later in the debate, which is continuing, expressed the opinion that the country could take £40,000,000 of borrowing in its stride.