Evening Post. THURSDAY, AUGUST 24, 1939. BUDGET AND PUBLIC

Evening Post, Volume CXXVIII, Issue 47, 24 August 1939, Page 12

Evening Post. THURSDAY, AUGUST 24, 1939. BUDGET AND PUBLIC

The Acting Prime Minister made the surprising claim last night that the Budget had been favourably received by the country. If this claim represents the Government interpretation of public opinion, it reveals wilful blindness to facts. There may not have been many resolutions of protest against the Budget proposals, but that is due to public recognition that, in the circumstances created by the Government's extravagant and misguided policy, extra taxation was inescapable. The damage has been done, and the cost must now be met. But acceptance of the new burdens imposed in no sense indicates approval of the policy that has led to their imposition. Certainly it does not favour continuation of that policy. But we cannot credit that the Government is so blind as to think this. It succeeded, probably beyond its own expectations, in deluding the voters last October with its programme of social benefits and its concealment of the financial crisis. But it must be aware that the disclosure in December of the real financial position and the further revelation in the Budget that benefits would have to be paid for by new and excessive taxes have opened the eyes of many electors. Surely the Government's own eyes are open *too. Yet Mr. Fraser's speech gave little evidence of this. He said the public realised that provision for defence must be faced. They do, but they realise also that the additional annual cost of defence by no means accounts for the additional taxation, nor does the capital cost warrant the swollen loan programme. The large majority of the people, Mr. Fraser further claimed, approve the Budget because of the great increase in the social services they are enjoying. But do the large majority realise, as Mr. Fraser must do, that the cost of these services falls very lightly on this Budget because the full health services have not been provided, nor have the maximum pensions benefits been applied for, and part of the cost has been met with the windfall of last year's surplus? When,the full cost of the full Social Security programme has to be met there will be a much heavier call on the Consolidated Fund—and more taxation. Will the approval hold then, particularly as more and more people discover that the more thrifty they are, the less they can share in the scheme? Other weaknesses in the Budget and in Mr. Fraser's defence of it could be cited. For example, Mr. Fraser said that unemployment was down to normal, and he disputed the suggestion that any of the men employed on public works should be included in the statistics as unemployed. But he failed to explain away the provision of £2,900,000 in the Budget for employment promotion —entirely apart from the sustenance money taken from the Social Security Fund. This £2,900,000 is to replace the vanished Employment Promotion Fund. It is a provision which the public were not warned of—except in a passing casual reference by the Minister of Finance when the Social Security scheme was being debated. How can its appearance in the Budget be reconciled with the claim that unemployment is down to normal and that none of the Public Works employees are classifiable as otherwise unemployed? If there are truly less than a thousand unemployed in the country, then, with , sustenance and employment promotion provision exceeding £3,000,000 for them, they are a most expensive thousand. They should be paying income tax on about £3000 each. This is ridiculous, of course —as ridiculous as the claim that a considerable number of the Public Works employees are not really unemployed. Again Mr. Fraser declared that the Budget said "that credit and currency should be utilised in a wise, sensible, and scientific way so as to provide for the equitable distribution of wealth in return for services rendered." He did not add that the Government has admitted, through the Minister of Finance and also in the Budget, that limits are set to the use of credit. The Reserve Bank report plainly shows that these limits have been reached. Despite what Mr. Fraser may say about agreement of all members on Government policy, there is evidence that some would go beyond * these limits. It is on this aspect, the future, that Mr. Fraser's reply to Opposition criticism was least satisfactory and most unconvincing. He gave no hint whatever of how the burdens which the Budget programme involves (particularly in loan works) are to be met. He claimed that the Government was still keeping a firm grip on interest rates, but lie did not show how this grip —M be maintained with Post Office

Savings Bank and other formel sources now failing to yield the supply of loan capital called for. He did not tell the House how the programme was to be financed— whether by heavy borrowing or by dangerous recourse to further credit. In short, he failed entirely to disprove that the Budget burdens (which have been accepted with resignation, not approval) are only the first instalment of a series of imposts which must become steadily more unbearable and hampering unless extravagant courses are speedily checked.