BRITISH BUDGET

New Zealand Herald, Volume LXXIII, Issue 22463, 6 July 1936, Page 10

BRITISH BUDGET

DEFICIT CERTAIN

BURDEN OF DEFENCE CHANCELLOR'S STATEMENT By TeloKrnph— Press Assodation—fopyriprht Itritinli Wireless UIJGIiY, .Inly •! The third reading of the Finance Bill for the current year was carried in the House of Commons to-day without division, after u debate in which both Mr. Neville Chamberlain, Chancellor of the Exchequer, and Mr. W. S. Morrison, Financial Secretary to the Treasury, took part. Mi*. Morrison, in moving (lie third rending of the bill, said the fact that they were able to meet heavy charges for defence with such slight, additional taxation showed the amount of financial strength in the country. That, was very impressive.

Mr, Chamberlain, replying to criticisms of the Government's reticence regarding defence plans, said it bad been perfectly straightforward in this matter. The programme) was not one that could be completed in a single year. It must depend upon what other countries did, what developments there might bo regarding science and tactics, and it was bound to change as the years went bv.

Definite information had been given where the Government could bo definite.

"Wo aro spending largo sums of money to make this country safe ami to fulfil our obligations," said Mr. Chamberlain. "It is a fortunate fact that this new liability conies upon us at a time when we are far better ablo to bear it than we were a few years ago." Jf nothing happened to shako confidence, said the Chancellor, he believed there was no reason why the country should not bo ablo to support this liability. He could not agree with tho suggestion that tho rising expenditure on armaments would continue indefinitely. Replying to criticisms that in tho Finance 13ill the Chancellor should have risked ft deficit rather than an increase in taxation, Mr. Chamberlain replied that it was practically certain there would be a deficit. Tho only question was what would bo its size. Supplementary Estimates would have to bo introduced during tho year.

CITY STARTLED EARLY ANNOUNCEMENT COST OF REARMAMENT (Received July 5, 5.5 p.m.) LONDON, July 4 The Chancellor of the Exchequer, in referring in the House of Commons to the acceleration of the defence programme and tho practical certainty that there will be a deficit in the present Budget, stated that additional taxation represented but a fraction of the expenditure being incurred for defence. Mr. Chamberlain's announcement of the Budget deficit startled the City. There is no precedent for such an announcement so early in tho financial year. The contemplated increased expenditure is believed to be at least £5,000,000. This will have to be mot from borrowings. The situation brings sharply home to tho public the tremendous cost of rearmament and lends special significance to Mr. Baldwin's denunciation on July 2 of the "mad folly" of driving Europe to such ruinous expenditure on war material.

The Daily Telegraph's political correspondent says Mr. Chamberlain's announcement of a deficit completely surprised the House.