IMMENSE COST

Manawatu Standard, Volume LIX, Issue 71, 21 February 1939, Page 9

IMMENSE COST

BEARING THE BURDEN. REVENUE AND LOAN. (British Official Wireless). Received February HI, 11 a.m. IJUGBY, Feb. 20. To-day’s debate in the House of Commons on defence was opened by Sir John Simon (Chancellor of the Exchequer), whose speech was notable for its frank forecast of the approximate proportions in which defence expenditure in the coming year would have to be met from revenue and from borrowed money, respectively. Sir John Simon told the House he was working on the assumption that for the £580,000,000 which it was revealed in last week’s White Paper would be the total of the expenditure on defence, including civilian defence, in the coming financial year, approximately £240,000,000 would be available from revenue and about £350,000,000 would have to come from the Loan Account. He added the warning that no one should draw any further conclusion—presumably as to the time or manner of further borrowing, or as to the taxation proposals of the forthcoming Budget—from that forecast.

The Chancellor claimed that the principle of borrowing for this purpose was established and acceptable, and it was generally recognised that the financial strains involved in the reorganisation of defence were greater than the revenue could bear alone. What was necessary was that they should demonstrate a readiness to bear each year a proper share of the burden, and in evidence of such determination he cited figures to show—taking the three years ending March, 1940, together—that out of a total expenditure of about £1,250,000,000 for defence about £700,000,000 would have to be met from revenue. Provision for the repayment of borrowed money in connection with the present proposals was quite specific. When a department had received a duly authorised issue of loan money then interest at the rate of 3 per cent was charged against that department to the end of a five-year period, and thereafter the sums had to be repaid to the Exchequer. ;V The resolution moved by Sir John '4 Simon provided, firstly, for an increase of the borrowing powers authorised by the 1937 Defence Loan Act from a total of £400,000,000 to £800.000,000 and secondly, for the redefinition of the’defence services for the purpose of the Act so as to permit the expenditure on the Account for civilinn defence, <ind grants in aid of the cssential commodities reserve fund. CIVIL DEFENCE. Sir John Simon said civil defence was more and more seen to be an es- , sential part of defence as a whole, and it was illogical that the non-recurrent expenditure for the A.R.P., for example should not benefit by the Act. Any expenditure, moreover, on ioo<l stores in connection with the safety ot the country was obviously an appropriate subject for loans under the Act Speaking of the formidable total ot defence expenditure with which the country was faced, Sir John Simon reviewed the progress of the rearmament programme. The first year had been largely one of preparation, the present year had been one of rapidly increasing production, and the third vear. with the great expenditure they now contemplated, wotild be one witti production at full blast. It would be a

chronicle of the provision of equipment for the great increases in personnel for all three services.

For the Navy, the personnel of which had increased by 33.000. there was a great building programme, including no less than nine capital ships for four years.

The great inflow of Regular Army recruits and the record intake into the Territorial Army called for re-equip-ment and the accumulation of a war reserve which would proceed apace next year. The recruitment of many thousands for the Royal Air Force of a high quality was matched by the further augmentation of sources of aircraft production. DEPLORABLE POSITION. It -vvas deplorable and grievous. Sir John Simon concluded, that so large a part of the resources of the world should be devoted to armaments when otherwise they might be available to promote and sustain peaceful progress, but as long as no general arms limitation genuinelv and effectively secured could be reached they must face a continuance of this heavy burden, and face it in the confidence that the British financial strength, British character, and the inspiration of the democratic faith would enable them to stand the strain as well as, if not better than, others. LABOUR’S ATTITUDE.

Dr. Hugh Dalton, who was the spokesman for the Labour Opposition, conceded, in consequence of the National Government’s past foreign policy, that a great increase in the defences of the country was now inevitable and the Opposition would not vote' against the financial measures, but he moved a token amendment to reduce the authorisation to £79y,00.000 as an expression of the party s grave dissatisfaction with the past record of Ministers in these matters. Civil defence will be debated in the House of Commons next week, when the Supplementary Estimates for the Privy Seal Office and the national service will be brought forward.