BRITISH BUDGET

Grey River Argus, 23 April 1937, Page 6

BRITISH BUDGET

FEARS OF NEW TAXES By Big Business SHARES SLUMP. (Aus. & N.Z. Cable Assn.) LONDON, April 21. Markets closed raggedly and 1 gener aily lower, but. there was little trad I ing pending clarification of the profit: tax. The Au-tralian Associated Press’; City Editor finds the general op.n.oi is limp dealers ma<r'ked down price.' to o sharply. While the tax may not be a: crippling as at first reared, calcula tions based on company results in t'he past, year reveal glaring -nequaiitiv: in the incidence. Imperial Chemical, whose profit "was li'<,2(Jo,(mo wouiu have had to contribute £170,000, oi around’ 2J per cent, of profits, if the tax were operative. Vickers, with a profit of £1,162,000, would have made a eontMbution of £58,000, or over 5 per cent. John Brown’s who were most severely hit, by the depress.on, out, of a profit of £400,000, owttld have contributed £90,000, or around 23 per cent. Baker’s Deptiriment Stores, scarcely anected by th e slump, made a profit of £1,891,000, and would have made a contribution of only £4000, or less ttlian a quarter per cent. City businessmen suggest the, tax should be amended, to take the years 1934.6 as a standard, instead 1 of from 1933, which was the depth of tile de. pression. Many companies, whose efficiency raised them from the. depression, are now penalised. GLOOMY VIEW. LONDON, April 21. The disposition of the market, this morning, was t° take a gloomy view pf the Budget. Industrials opened weak, armament and shipping shares being espeeiali'y depressed. The markets took better heart in the afternoon, as it was realised not only that industrials are considerabl.v under:' the year’s high levels, but that the new tax will leave the companies a substantial proportion of incieased profits. Iron and steel shares remain depi’essed', but shipping shares are slightly better. Rubber .shares are stronger. Commodity shares are active and stioug. CONSERVATIVE CRITICISM. LONDON, April 21. Not only citv businessmen but a ilirge number of Conservative Members of the Commons, criticise the injustice of the new tax. Fears ate expressed thtit it will retard the establishment of new enterprise in the distressed areas. 'flic “Financial News’’ estimates the ax will take about 15 per cent, of the increased profits of industry, and dds; As 25 per cent, already goes in : income tax it is wonder that people L'ouble to hold shares at all. One of the shrewdest Labour Mem. bers told “The Times's” .Parliamcn. iary correspondent that the tax would not. be removed from the sGitute book in a lifetime. Armament Taxation WHAT WILL IT LEAD TO? (British Official Wireless.) RUGBY, April 21. The national defence contribution piovided for in the Budget aroused ini. mediate interest in the lobbies of the Commons, and all its implications are not yet fully appreciated. Discussing the project, in a broadcast talk, the Chancellor said; “It is not that I consider' the profits, now happily being earned by trade and industry, to be excessive. The depression, whilje it lasted, wa s very in. tense ajd not only did shareholders go without dividends but in many eases they lost a great 'part of their capital as well. In (those circumstances, it is 11 to the good that they should have been able to recoup some of their losses, and re-equip their factories, so as to be able to meet competition in 'the export marketis. “But irow that we have to find this exceptionally large sum for defence,i ’in a comparatively short time, I do not think it unreasonabl’e to ask that businesses which are doing so much better should make a special and fem- B porary contribution to the cost :>f ■national defence. After all, any help ■which they may give now will add materially to national security, which is essential to the.- maintenance of their prosperity.”

After declaring the maintenance of 'peace was worth more than any reduction in taxation and that a sthong Bri. ■tain was the surest guarantee- that ■ peace would be preserved, Mr. Chaniiberlain concluded: “Perhaps some day, .when this madness of arming is over, a successor of mine may have the good fortune to be given the- opportunity to remit the taxation, of which I have been deprived. Let us pray that the day may come soon. Debate Opens

EX-CHANCELLOR CRITICAL. RUGBY, April 21.-. 1 * The Commons began consideration of t the Budget proposals in earnest;, to- i day. ] Mr. Pethick Lawrence, for the Lab- j our (Party, wanted to know how the P (Chancellor’s plan for national defence t contribution would work in a number of ways, and expressed the hope that the Treasury had taken to heart the mistakes learned in connection with

war-time excess profits duty. Sir Robert Home paid’ a high tribute -to the Chancellor’s conduct of the nation’s finances during a long period of office. He- had pursued an u:i deviating course of resolution and |T?etitude with the result that the country was the envy of tthe world. ( Sir Robert however, was critical of the proposed national defence con•tribution, the scope of which lie thought, l too wide, and which he feared would result, in a cheek on enterprise. He urged the opportunitv which he believed offered, should be seized for securing a trade agreement with Hie United States. Sir Archibald Sinclair attacked what he described as tfhe Canceller’s protectionist polliey and indicated the Liberals would have preferred strict control of armament prices rather than a scheme of taxation which made the Government a partner i n ingSir Alan Anderson thought the mea.

sure such as a national defence contri. bution was absolutely necessary, when the whole people were being called upon to bear a heavy burden, although he admitted that 1 the schemes for taxing excess profits were full of difficulty and danger and generally unsatisfactory. TREASURY RETURNS. RUGBY, April 20. The optimistic foieeast of the year’s revenue in the Budget statement is supported by Exchequer returns, showing that the total ordinary revenue amounts to £37,179,680, compared with £31,145,641 at the coresponding .date last year. ' The revenue from income tax is more than £1,000,000 higher, at £8,164,000, and the yield of eustfonis has jumped from £8.596,000 last year to £11,123,0000 this year The total ordinary expenditure is £43,175,039, compared with £46,931,. | 196 at the corresponding date in 1936. PRESS COMMENTS. LONDON, April 20. “The Times.” in an editorial says: “Mr. Chamberlain has avoided all ex. tremes in apportioning costs between revenue and loan, in idie manner least likely to encourage a boom or start, a downward movement.” The “Daily Telegraph” says; “The .

- new tax is an endeavour to take . back at least a portion of the extra gaini which may arise from the increased expenditure on armaments, but it will apply to all forms of increased business profits.’’ The “Manchester Guardian” (Libeia!) says; “Mr. Chamberlain deserves high credit for anticipating the public demand for a duty on excess profits, and for allaying possible unrest, because of the spectacle of high profits made- from the country’s need.” The “Daily Herald” (Labour), in a full page leader on the Budget/, praises Mr. Chamberlain’s courage, but considers that if he had carried his principles to their logical conclusion, he would have prohibited any direct profits from aimaments. PARIS', April 21. The Press considers that Britain will win the armaments race, as she is drawing on reserves at the moiiieniq. when Germany has exhaust, ed hers, but Britain no more than Germany can live by rearmament, which destroys instead' -of creating capital