BRITISH RE-ARMAMENT

Nelson Evening Mail, Volume LXXII, 30 November 1938, Page 7

BRITISH RE-ARM-AMENT

ADDITIONAL EXPENDITURE £100,000,000 NOT SUFFICIENT FURTHER BORROWING TOWERS NEEDED (British Official Wireleael (Received 30th November, 10.15 a.m.) RUGBY, 29th November. In view of the. further expenditure on defence now contemplated, the Chancellor of the Exchequer, Sir John Simon, has decided that some increase in the limit of £400,000,000 authorised by the Defence Loans Act, 1936, for borrowing in connection with the rearmament programme, will be necessary.

For some time the suggestion has been made both in Parliamentary and financial circles, that with a view to allaying anxiety on the part of industry and trade in regard to the future incidence of the cost of rearmament, the Chancellor should make some statement in anticipation of the Budget, and it was in reply to a question in the House of Commons on these lines that dr John Simon announced to-day that he had come to the conclusion that some further borrowing powers would be needed, and it was his ! intention at an appropriate time next year to ask Parliament to pass legislation for this purpose. While emphasising that it would be neither desirable nor practicable to depart from the rule of providing an anticipation of the estimates or provisions of the Budget, the Chancellor said he recognised that the considerable increases in defence expenditure which had already been announced brought to the forefront the question as to how they should be met. The Act of 1936 had authorised borrowing up to £400,000,000 and by the end of the present financial year they would have met the cost of rearmament out of borrowed money to the extent of about £IBO,000,000. Some £220,000,000 therefore remain, so that the problem of authority to borrow was not urgent, but he thought that at a time when new commitments had been incurred they should prepare a plan in advance.

Sir John added that it would be impossible to mention figures in anticipation of the new Bill, but he had made the statement in order to remove uncertainty as far as he could.