SOCIALIST FINANCE.

Otago Daily Times, Issue 20310, 19 January 1928, Page 6

SOCIALIST FINANCE.

LABOUR PARTY’S TWO VOICES. MR SNOWDEN ON THE SURTAX. (From Our Own Correspondent.) LONDON, December 14. Mr Philip Snowden, M.P*, who has been challenged by Mr James Maxton, M.P., to state where he exactly stands in relation to the surtax proposals of the Labour Party, replied in a speech at Bindley, near Wigan. He made it clear that, while he favoured the principle of the surtax, he did not think it would realise the amount which had been estimated, and said details would have to be considered by a Labour Chancellor of the Exchequer. The surtax was only necessary for debt reduction. He considered the capital levy was a perfectly sound proposition. "If it is not now practicable to carry out that scheme we are not relieved from the necessity of devising some plan which will more speedily reduce the burden of the national debt. I should say that a surtax of 2s in the £ on personal income from investments would not be likely to realise anything approaching the figure that has been mentioned. That does not affect in the least the principal of the tax.

“ The proposal of the surtax is a broad outline of a structure, the details and precise form of which cannot be settled until in a Labour Government the Chancellor of the Exchequer reviews the whole position of finance and trade at the time and the obligations he has to meet. “ The resolutions of a party conference must always be of a general character. No party conference can go into detail. They cannot form a scheme. They can give general instructions as to the principal that should be observed, but no party conference can make a Budget. Nobody but a Chancellor of the Exchequer can make a Budget. “ All this would be as comforting as it sounds,” says the Morning Post, ‘‘ if we did not know that it conflicted with the facts. The Labour Party adopted the surtax proposals at their Blackpool conference in October last, and both in the resolution itself and in the memorandum explanatory of the proposal, every word of Mr Snowden’s suave assurances is contradicted. The objects therein stated are not merely the ' reduction of debt,' but also tho abolition of taxes on necessaries,’ and the development of the social services.’ Nor is there anything left indefinite. The ‘ special surtax ’ is to be ‘on incomes over £SOO a year derived from property and investment ’ ; the amount is to be (according to the memorandum) ‘ graduated,’ and ‘ the average rate about 2s in the £.’ THE CONTRARY VIEW.

” Not only so, but Mr Snowden’s leader, Mr Ramsay MacDonald, threw over the debt reduction part of the scheme in his historic speech at Aweravon. He said there that the proceeds of the surtax ‘ shall go ilk no direction but the supply of those large, human, national, social services that are essential because the individual incomes of the working class are so low as to be not in themselves sufficient to afford a decent standard of life.’ And when Mr Snowden says that it would be ‘ folly ' for the Labour Party to estimate the yield of the surtax, we reply that the Labour Party has committed folly, since their official estimate, as stated in the memorandum, is ’ £86,000,000 a year.' Lastly, it may be observed that the surtax would lose its intended appeal if its proceeds were to be devoted to debt reduction nd not to the largesse indicated by Mr MacDonald” “Mr Snowden, says the Daily Chronicle, “ is far too honest a man to try to mislead the working classes in this way, knowing that reckless spending and steadily diminishing capital mean unemployment and ultimate bankruptcy. He is right in insisting on the importance of reducing the national debt. But even with this limited object we do not think that in these days •of very high taxation the surtax is likely to effect his end. If calculated to produce anything approaching £85,000.000 a year it would diminish the incentive to save, reduce the supply of capital, make money dearer, and so entirely frustrate the schemes ot debt conversion such as those by which America has enormously reduced her national debt. But that is not all. With the Labour Party behind him clamouring for money to spend, any revenue that might be'released by reduced interest on debt would be appropriate as a right, and the taxpayer would pay ns before. Indeed, Mr "Snowden seems to admit this.”