Britain’s Position Sound

Horowhenua Chronicle, 29 April 1931, Page 3

Britain’s Position Sound

CHANCELLOR’S BUDGET SPEECH

(British Official Wireless.) RUGBY, April 27

In the course of his speach on the Budget, Mr. Snowden explained that expenditure and debt operations the previous year showed that the ordinary revenue amounted to £775,895,000, and the ordinary expenditure to £732,341,000, which was in excess of the estimate by only £532,000, largely as the result of. savings on debt interest, and management, and other items. The net result of the past year, said Mr' Snowden, was a surplus applicable to debt reduction of £43,500,000, and apart from that there was a sum of £9,000,000 received as the proceeds of the German mobilisation loan, which had also been attributed to debt reduction outside the Budget. Surplus in Reality.

’ In reality, there was a surplus of income over expenditure, and it said much for the soundness of the national financial position that after a year of unparalleled financial depression we had not only been able to pay our way, but to make such a substantial reduction in debt.

He announced that he was making no direct addition to the fixed debt charges which would be £355,000,000, as laid down by the Finance Act, 1928. He confidently expected, as the outcome of the recommendations of the Economy Committee, that considerable reductions in expenditure would be made during the current year to go automatically to debt reduction. Also, it was possible that during the year conditions would be favourable for a considerable debt conversion. No Undue Sacrifice. Although in favour of every possible effort to reduce the debt, he held the view that in times of desperate depression and unemployment it was better to use national resources to stimulate trade than to make an undue sacrifice.

Mr. Snowden estimated the yield of inland revenue at £437,000,000, consisting of £248,000/000 from income tax, £72,000,00 from surtax, £90,000,000 from death duties, £24,000,000 from Stamp duties, and £3,000,000 from remaining items. He hoped that the depression Which had upset all expectations last year had reached its limits, and that better times were in store, but it would take a little time after the tide had definitely turned before the revenue would feel the behefit, and he must face the probability of a further decline in Customs and Excise revenue, which he estimated at £238,000,000, a drop of nearly £7,500,000 on last year’s revenue. Less From Liquor.

The -consumption of alcoholic liquors fell last .year, and he estimated for a further fall of revenue this year. This fall seemed to be a permanent tendency, and* from the poinf of national wellbeing was to bo heartily welcomed. Estimates of revenue from sources of ordinary revenue amounted to £702,000,' 000, nearly £2,000,000 above the actual yield of the Corresponding items of last year, although £11,000,000 below the estimate of last year. An addition of £4,000,000 from the rate relief suspensory fund gave a total of £766,000,000 revenue for the current year. On the expenditure side the supply services accounted for £439,000,000, but he hoped in view of the appointment of the Economy Committee that the actual expenditure would fall considerably below this. Of the fixed debt charge of £355,000,000 he had to allot £302,*900,000 as interest and management, leaving £52,100,000 available for which price buyers are not interested. The total estimated expenditure was thus f 803,306,000, and the estimated revenue £766,000,000. The Light Motor Cycle.

Before proceeding to the tax proposals he said that he was taking power in the Finance Bill to enable the present holders of savings certificates to make an extension of their investment and .power for a loan to meet certain costs in connection with the road schemes.

In order to encourage the manufacture of h new type of light motor cycle now being rapidly developed on the Continent, he proposed that the annual tax on vehicles not exceeding 150 cc. capacity "should be limited to 15s, instead of the present 40s. He was proposing changes in the machinery for the coi'ection of income tax, which would place the collecting dervice under a single undivided control as recommended by Royal Commission. A £20,000,000 Windfall. Regarding the problem of finding the necessary additional revenue of £37,366,000, Mr. Snowden said there were the strongest obstacles to any increase in the rate of taxation. Taxes which would reduce the main consuming power of the masses must be harmful to trade. On the other hand, he regarded' this Budget like the war budgets as one

dealing with a temporary emergency and justifying temporary measures.

Members would be aware of the nature of the exchange account representing some £33,000,000 advances as credit during the war to be utilised by' the Treasury for purchases in foreign ex change and to finance payments for obligations abroad. Up to recent days it was not possible to reduce the amount below £33,000,000. Now circumstances arose from the Hague agreement ant the establishment of the Bank of International Settlements. Previously we received payment of reparations and of instalments of French and Italian war funds in sterling but we had now arranged that these funds should be placed to' our credit in the Bank of International settlement in dollars which we could utilise in making the payment of our foreign debt. Those arrangements had been working for a year. It did not follow that the exchange account could be dispensed with altogether, but no doubt the amount was excessive for 'present or future needs and could bo reduced by £20,000,000. Juggling the Income Tax. He had decided not to propose any increase in the standard rate of income tax, but to tide over a period by altering the concession whereunder the tax became payable in two equal instalments. It would be modified so that the first instalment payable in January would be three-quarters. As a result the Exchequer would get an extra quarter on the year>s tax within the present financial year and the estimated gain would be £10,000,000. The Chancellor proposed that the remaining £7,500,000 should be raised by increasing the present rate of duty on oil from 4d per gallon to 6d which would still leave petrol no dearer than before March and lower in price than last September. This would givb him the funds he needed to balance the Budget and the revenue would bo £803,500,000 and expenditure £803,360, 000, giving a nominal margin of £135,000. Any drop which occurred in the finances of the year should be met by economies. EVEN THE CONSERVATIVES ARE Received Tuesday, 10 p.m, LONDON, April 28. The Daily Telegraph says the Budget within the limitations of Mr. Snowden’s free trade principles is an eminently sensible piece of work. It recognises that the paramount duty is to let the taxpayer off lightly. LONDON, April 28. The Morning Post describes the Budget as a “sufficient unto the day scheme.” It states that Mr. Snowden is trusting to Providence to escape a deficit at the end of the year and has closed the existing gap by a process of jugglery. The Daily Herald (Labour) approves of the Budget on the ground that there are abundant signs that the end of the worst of the trade depression is in sight. The introduction of a land values tax makes the Budget a landmark in financial history.

Other city editors describe the Budget as much less unsettling than was at first feared. Brewery and tobacco shares are buoyant and oil shares have recov ered as the import on petrol is less than was expected. .