ARMAMENT BUDGET

Grey River Argus, 27 April 1939, Page 5

ARMAMENT BUDGET

BRITISH TAXES UP 630 Millions for Defence REVENUE below estimate. RUGBY, April 25. The Chancellor of the Exchequer (Sir J. Simon) opened the largest peace-time Budget, in a crowded Commons, this afternoon. Its most-impres-sive feature was the revelation that the expenditure on defence alone win be £630,000,000. In, all, taxpayers will have to find £942,000,000 in the nresent year, and defence loans will teing in approximately £380,000,000 The chief points in the section dealing with proposals for raising the required revenue are as follows: No alteration is proposed in the. standard rate of Income tax, but surcharges are imposed of a ru^.® r per cent, on incomes up to £BOOO, ana a further 10 per cent, on incomes over £3OOO. A surcharge of 10 per cent, is added to the existing duty on estates exceeding £50,000. The horse-power tax on motorvehicles, as from next January 1, is to be increased from 15s to 255. A new excise duty is on photographic plates and films manufactured m Great Britain, which is equivalent to about twopence on the most-popular r.izes of roll films used by amateur photographers. The basic duty on tobacco is in creased from 9s 6d to Ils 6d pei lb. One farthing per lb is added to the duty on sugar. Reviewing the actual results of last year, he said that the revenue, which was estimated at. £944.750,000, in fact totalled £827,250,100, and he att.ribuied the falling off of the estimated revenue to the uncertainties which arose out of the international situation. The expenditure from revenue last year, including payments of under £13,000,000 in respect of sinking fund, totalled £93,999,000. The whole of the country’s finance was governed and conditioned by the defence expenditure, which last year was £254,250,000, and which, with tne issues under the Defence Loan, gave a total of £382.500,000 for the tnree defence forces. With the addition xor expenditure on food storage, almost exactly £400,000,000 was spent on defence last year. It was most relevant to bear in mind that figure, when they came to the far bigger expenditure to be provided for in the present year After noting the results of the year’s workings on various items of revenue and expenditure, Sir J. Simon said that the net total of the national debt increase during last year was £826,000,000, raising it to £8,863,000,000. Of this increase, £180,000,000 was represented by the National De fence Loan, issued at £9B, in July.

Massing to the prospects of estimates for the present year, Sir J. Simon said that he proposed to leave the fixed debt charge at £230,000,000 and to repeat the precaution taken in recent years, of getting authority to borrow for the purpose of meeting the statutory sinking fund, if the provision in the fixed debt charge was not sufficient. The tota] estimates for tne Civil Service would be £675,244,000. This figure includes an estimated expenditure in the present on airraid precautions of £42,191,000, on which £37,000,000 will be found from borrowed money, and th® remainder from revenue. Omitting de ■nee supplementaries, the total expenditure from revenue for which he had to provide in this year’s Budget, he said, added up to £922,444,000. The fact that such large sums had to be provided for defence had not meant that social services should be reduced. The cost of social services and civil expen ■ diture as a whole was increasing. The total growth since 1925 of civil expenditure from taxes alone might be put at £186,000,000. Much amusement was caused when Sir J. Simon opened his speech by recalling that Mr Gladstone, in a speech which lasted three and three-quarter hours, presented the first of the thirteen Budgets for which ho was responsible, in 1853, when the expenditure for the year reached a grand total of £53,000,000, and Mr Gladstone proposed a progressive reduction in income tax, which then stood at sevenpence in the pound, until it finally disappeared in 1860. Unfortunately, added Sir J. Simon, the Crimean War broke out. Expenditure rose, ana the prospect of abolishing the tax vanished beyond recall. His task, Sii’ J. Simon proceeded, was to present Budget proposals at a time when the standard rate of income tax was 5s 6d in the pound, and the total expenditure was more than twenty times that of the 1853 Budget. Mr Attlee said: “I am glad to see certain concentration is being made on luxuries. The Government should have gone further, not necessarily! from the viewpoint of soaking , the, rich, but concentrating on necessities and not luxuries,” Mr Attlee asked whether the peak expenditure on armaments had been reached. He said that the Chancellor shirked the problem by borrowing, which would lead to inflation. The mass of the people would have to pay the price. Accumulated wealth would have to be taxed, sooner or later. Sir A. Sinclair also stressed luxury The demand upon skilled labour suggested that skilled workers engaged in the motor industry might be better employed on rearmament. The Budget showed little evidence of the mobilisation of the country’s economic and financial resources.

Mr Boothby expressed the opinion that it was necessary to devise a technique for extending export trade, and avoiding a serious adverse balance. The national income must be increased by increased production. Mr A. P. Herbert regretted that betting was not taxed, and described this as national imbecility. He referred as an example tp Australia, saying, “I was there in 1926, when 10 per cent, of every bet was taken in New South Wales. Twenty millions per year could be raised here, which was nearly the sum the Chancellor wanted.”

The nation listened to Sir J. Simon broadcast, to-night. “But for defence expenditure, we should be able to reduce taxation and increase social benefits,” he said. “The expenditure on defence, this year, will be at least £630,000,000, which is not far short of £2,000,000 per day and £l3 per head of the population of the United Kingdom, and more than three times the total public expenditure- for all purposes before the war. The total pro-< vided for defence in the Budget of l

1914 was £80,000,000. “The whote .world knows .that our purpose Is pacific,” he added. “No one anywhere suspects us of intending aggression. Remember, though, these burdens may be' hard to bear. Britain’s best contribution to peace is .that sne should be strong. To-day’s five taxes are so arranged as to call for a contribution from all kinds of citizens, and n 0 one will entirely escape. Objections will be raised, but the truth is that there are no good taxes.” Sxr J. Simon concluded by repeating, “Tn e price we are paying is the price or British safetv and security.” LONDON, April 25. City circles regard the Budget as favourable, except for the increase in tobacco and motor taxes, although in the case of motors it is believed that the intention is to divert motor manufacturing to armaments. The increase applies only to private cars. The fact that the Budget, has not increased the income tax is regarded as a “bull” point for business generally. It is believed that Sir J. Simon has distributed the burden of taxation as fairly as possible. The Automobile Association said that it was difficult to see what justification there was for the severe blow •to motorists. Tobacco manufacturers say that they will pass on the duty Io the consumer. Photographic manufacturers say that the tax is so unexpected that it is impossible to visualise the results. The Princess Royal will launch H.M.S. Prince of Wales, a sister-ship to the George V., on May 3. NEW DUTIES CRITICISED. BY MOTOR INTERESTS. (Recevied April 26, 8.25 p.m.) LONDON, April 26. The House of Commons agreed to the usual resolutions making the new duties provided in the Budget operative. An Automobile Association official said that the taxation on motor vehicles and fuel in 1937-38 yielded £84,700,000. It is estimated that on the existing scale, the yield would be £93,000,000 for the year 1938-39. Motor cars were no longer a luxury. They must be used for business purposes. A tobacco expert expressed the opinion that the increase in that duty would cause people to turn increasingly to Empire tobacco, which would stili enjoy the preference of two shillings per pound duty. A large firm of photographic dealers said that the shilling roll was favoured by amateurs. The duty will be increased by threepence, and not twopence. as the Chancellor estimated.