General Press Approval

Northern Advocate, 26 April 1940, Page 6

General Press Approval

(Received 11 a.m.) RUGBY, April 25. The full principles and details of the Government’s proposals for financing the war, which were expounded in Sir John Simon’s Budget statement, despite their drastic character, met with general approval. The “Daily Telegraph” says: “The Chancellor was aware he could rely on the unanimous support of the country for a bold and realistic approach to the problem of meeting the stupendous cost of modern war. “Tie has taken full advantage of that assurance to impose heavy increases in taxation, and, whatever criticism may be raised in detail, there will be none against his general principle of gathering in large additional revenues out of taxpayers* pockets.” Stated the Financial Truth. “The Times” characterises it as a Budget which possesses the greatest merit of stating, without concealment or softening, the truth of the financial position. The “Daily Express” criticises the proposed purchase tax foreshadowed by the Chancellor, and says: “In effect it is a sales tax, although it carries another name.” The “Daily Herald” adds to this criticism that such a tax would increase the cost of living, “Courage Failed Him.” The “Daily Mail” says the purchase tax makes the Budget bad for the shopkeeper and trading community. Much probing into the structure of various industries will be necessary before a basis for the tax can be found. The “Manchester Guardian” says the Chancellor’s courage failed him. His Budget is less drastic than the situation warrants. The estimate of expenditure is well below the rate of Germany’s spending, which is nothing to be proud of, but which is a reflection on the imperfect mobilisation of Britain’s resources. Priority Allocations The Chancellor explained the system of priority allocations of imports, so that the first essentials were given to the war effort. The second priorities met the claims of the export trade. The residue was available at appropriate prices for general consumption. They were finding £60,000,000 a year in subsidies for cheapening food prices, Sir John Simon said. By a system of costing and contract procedure the Government was endeavouring to secure that the rate of profit on Government work was reasonable, but the taxing of excess profits was part of its economic policy. “I have one further announcement to make.

“There is another contribution _to this end which ,1 have in mind which will necessitate legislation. “It is complementary to the whole economic policy I have outlined. Limitaltion of Dividends “Excess profits duty is at a heavy rate, but it leaves a certain proportion of the increased profits in the hands of the trader. “That is essential, but I think these increased profits, where they occur, are valuable in proportion as they remain in the business concerned. “They will be very useful if they are available to sustain and repair industry in the difficult period after the war. They are far less valuable if they are used in the hands of shareholders. “I propose, accordingly, to provide public companies, which shall not distribute a greater dividend, on ordinary shares than was distributed in any one of its three pre-war periods.” The Chancellor also announced that it was the intention to prohibit the issue of bonus shares. Dealing with war expenditure he said that he estimated that what would be needed in this financial year for war purposes only, would be £2,000,000,000.