H.B. TRIBUNE THURSDAY, AUGUST 20, 1931 BRITISH NATIONAL FINANCE.

Hawke's Bay Tribune, Volume XXI, Issue 211, 20 August 1931, Page 4

H.B. TRIBUNE THURSDAY, AUGUST 20, 1931 BRITISH NATIONAL FINANCE.

When writing last week on the above subject several successive symptoms of exceptional pressure Were cited. The significance of these as then pointed out is in no way lessened by what we hear to-day aS to the remedies Which Britain’s Labour Government propose to apply. They, indeed, very decidedly emphasise the conclusions previously drawn. As yet we have merely a journalistic forecast of the form these remedies are likely to assume, but as this appears in the Labour Party’s official press organ, it may be taken as going pretty close to the mark. The first thing to strike the eye is “a general 10 per cent, tariff for revenue purposes.” This ingredient ol the prescription must surely prove the bitterest of all for the MacDonald Government, and particularly for its Chancellor of the Exchequer, to swallow. Mr. Snowden, well backed by his chief and most of his other ministerial colleagues, has most vehemently declared against anything that might challenge his rigid Free Trade principles. Now, however, faced with financial conditions that have mani-

festly got beyond his control, he is forced to have recourse to a ".■avy all-round import duty, '"st nauseous admission of all st it be to have to confess :it, in order to serve its re-venue-producing purpose, this will have to be extended to the

foodstuffs which he had vowed would never be taxed in his day of office.

The second proposal, the suspension of the National Debt Sinking Fund, can be only a little less unpalatable to Mr. Snowden. He has hitherto held the provision for this to be inviolable, and has on many occasions twitted Mr. Baldwin’s Chancellor, Mr. Winston Churchill, with having made undisclosed inroads upon them. On the other hand, critics of Mr. Snowden’s latest Budget have shown clearly that the sum he earmarked for the sinking fund would be greatly exceeded by the amount borrowed to bolster up the “dole.” Thus the aggregate debt, instead of being reduced, would be appreciably increased. It would seem that the Government is now at length convinced that the course it has hitherto pursued with regard to unemployment insurance, from which the "dole” has sprung, cannot be maintained. So we have provision for increased contributions — presumably from all three parties, the Government, the employers, and the em-ployees-7-that are expected to give net relief to the Treasury to the extent of nine million. In this connection it is to be noted that these increased levies "may or may not” be accompanied by reductions in the "benefits” drawn from the fund. It may be remembered that the parliamentary Economy Committee recommended an all round reduction of 20 per cent, in these benefits. At the time we were told that this suggestion had been "received with ridicule and contempt in Labour circles,” while Labour M.P.’s “expressed the opinion that the recommendations were already dead.”

It would seem, however, as if there were now some chance of their being resuscitated. But, whatever may happen with regard to “dole” reductions, there appears to be a definite intention to make “administrative changes designed to prevent abuses.” Probably the original unemployment insurance scheme, as instituted by the Conservative Government in 1927, was by no means watertight in this respect. Still, it did provide some fairly effective safeguards against its invasion by large numbers not strictly entitled to benefit under it. It was one of the MacDonald Government’s first actions on coming into power again to remove practically all of these safeguards ,thus enabling abuses—not infrequently the result of secret understanding between employer and employee—which helped to bankrupt the fund and did, in fact, give payments from it the character of a dole. Probably the “Daily Herald’s” forecast will not have covered all the new proposals the Government has in view, but on this point we shall probably hear more when Mr. MacDonald, as in duty bound, has consulted the executive of the Trade Union Congress, by which his policy is largely dictated. It will then be for him to ascertain how far what he gets leave to do will commend itself to the other parties in the House.