BRITAIN'S OUTLOOK

New Zealand Herald, Volume LXX, Issue 21411, 8 February 1933, Page 8

BRITAIN'S OUTLOOK

With Parliament reassembling after the Christmas recess, it is stated that Britain's chief domestic problems lie in unemployment and finance. The two are practically indivisible. The end of the financial year is approaching, and if the result should prove less favourable than was predicted in the "grim" Budget of last April, the disappointment will be profound. It allowed for a nominal surplus of £796,000, but no provision was made for the December debt payment to the ;United States, which cost £29,500,000 in sterling. However, as the Chancellor of the Exchequer explained at the time, the amount was covered "partly by recourse to the lower rates of interest on Treasury bills and partly by the funds provided for sinking funds which are no longer required by statute on account of the rise in the value of gilt-edged securities." Certain loan redemption operations are suspended when the price of the securities concerned, in the open market, rises beyond a given level. The cost of the American debt payment has not, therefore, disturbed the budgetary position. Unemployment has, for the supplementary estimates, issued on December 15, showed that the Ministry of Labour required £18,010,000 more than was provided in the Budget. The only other item was a sum of £3,411,000, asked for because the land annuity payments had not been made by the Irish Free State. This, it was explained, would be offset in part by the yield of customs duties on Irish produce. The cost of unemployment was the main disturbing factor. It arose because the level of unemployment had apparently averaged some 200,000 more than the figures on which the Chancellor based his estimates. The most recent returns indicate that revenue in most departments has come fairly well up to expectations, though it is too early yet to pronounce confidently on the yield of income tax. The unemployment item is the main problem, because if it proves intractable it may upset expectations for the coming year, when an easing of the situation through the savings by the great debt conversion operations was expected. When the burdens imposed by the last Budget were accepted it was hoped they represented the climax of the national effort to restore financial stability. The next few weeks will show whether that hope has been realised or again deferred.