BUDGET EQUILIBRIUM

Otago Daily Times, Issue 21259, 13 February 1931, Page 9

BUDGET EQUILIBRIUM

BRITAIN’S DIFFICULTIES. STATEMENT BY CHANCELLOR. OVERCOMING THE : CRISIS. SACRIFICES FROM EVERYONE. (British Official Wireless.) (United Press Association.) (By Electric Telegraph—Copyright.) RUGBY, February 11. (Received Feb. 12, at 5.5 p.m.) In the House of Commons Sir L. Worthington-Evans, on behalf of the Conservatives, moved a vote of censure on the Government for its continuous addition to public expenditure. The Chancellor of the Exchequer (Mr Philip Snowden) said that none would welcome suggestions for economy more than he, and no proposals which were submitted would fail to receive the closest and most sympathetic attention. Dealing with the Liberal amendment to set up a committee to overhaul national expenditure and recommend economies, which was afterwards moved by Sir Donald Maclean, Mr Snowden emphasised that only the smallest economies could be hoped for in the cost of administration. It was only on policy that any large savings could be made, and the House must face that fact. He added: “ Having pointed out the difficulty, I say with all the seriousness that I can command that drastic and disagreeable measures will have to be taken if Budget equilibrium is to be maintained and if industrial recovery is to be made.” Expenditure which might be easy and tolerable in prosperous times became impossible in a state of grave industrial depression, and schemes involving heavy expenditure, however desirable, would have to wait until prosperity returned. This was necessary in order to maintain the present standard of life. This was a crisis which no one foresaw, but the country and the House of Commons must realise the gravity of the situation and unite in an effort to overcome the temporary difficulties and restore the former prosperity. Under the present conditions any increase in taxation which fell on industry would be the last straw.

Sir L. Worthington-Evans said that the country was already committed to various relief works with an expenditure of £150,000,000, and the Liberals were demanding more. While in the handling of national insurance the Government was borrowing money to relieve current expenditure, , one of the Treasury’s principal officers had declared that the l whole stability of the British financial system was endangered, and Continental financiers were withdrawing their balances and their gold from London. The Government was leading the country to the brink of financial disaster by means which had wrecked Australia’s finance. He did not'believe that the present Government could restore confidence either at home or abroad. The House ought to act as a Council of State and pass his motion.

Mr Snowden said it was no secret that there would be a heavy deficit at the end of the financial year. No Budget would or could stand the unexpected strain caused in past years by the increase in unemployment. Expenditure had increased and revenue had declined. Furthermore, Britain’s productive capacity had fallen off by 20 per cent. “ When the history of the way in which the war debt and the debt to Washington were incurred, and of recklessness, extravagance, and unnecessary commitments comes to be known, I am afraid that posterity ’will curse those who were responsible. Despite the world depression, Britain has suffered less than any other great industrial community. We are the world’s financial centre, and other nations are watching us. Any well-grounded fear that Britain’s budgetary equilibrium is unsound might have disastrous consequences. Therefore we must maintain our financial reputation and we can do that. Our position is fundamentally sounder than that of any other country in the world, and all that is necessary is an effort to get Over the present crisis. That can be done. It will involve temporary sacrifices from everyone, but those who are best able to bear them will have to make the largest sacrifices, to which Cabinet is prepared to make a substantial contribution. This is a crisis which no one party can solve. The country and the House must realise the gravity of the position and instead of party bickering they must unite in a common effort to take effective measures to overcome the temporary difficulties and restore our former prosperity.” Sir Donald Maclean moved a Liberal amendment demanding that a committee should be set up to recommend practical and immediate economies. He pointed out that the country had to face the fact that even in most favourable conditions there would be chronic unemployment of at least 1,250,000 f ir seven to ten years. Ways must be found for distributing the national cost of relief in the shape of wages.

Mr W. J. Brown (Lab.) said that Mr Snowden’s speech was one of the most revolutionary heard in the present Parliament. It meant 'that Mr Snowden so highly regarded the city of, London and the interests of the banker and the money lender that he was prepared to go back on the whole of his own political career. It meant the surrender of the whole of Labour philosophy at the bidding of financial interests. The Labour Party had become the handmaid of capitalism. It was monstrous that a Socialist Chancellor should make such a speech. The Government had no unemployment policy and was staggering from crisis to crisis. It appeared to have neither the “ guts ” to govern nor the grace to get out. Mr R, N. Angel! (Lab.) said that instead of harping on cheeseparing economies there should be a cost of living index figure applied to bondholders. Sir Robert Horne (Con.) thanked Mr Snowden for one of the gravest warnings ever uttered from the Treasury bench. It would brace the country to a new view of its responsibilities and duties, but despite the grave warning, Mr Snowden had allowed the introduction ‘of a series of Bills, all involving large expenditure, such as the School Age Bill and the Land Bills. The Government had had every chance and opportunity, but hud improvidently spent the nation’s sustenance and depleted the country’s resources. Mr William Graham (President of the Board of Trade), in replying, said that whatever Government had been in office it would have been faced with a similar crisis. The enormous growth of unemployment was due mainly to the fall in commodity prices. He saw little sign that bottom had yet been touched. There was no need for pessimism and despair, but there was need for sustained, enlightened and constructive optimism, realising that the country could survive and build up a far greater appeal to world trade than ever before. The Conservative motion was defeated by 310 votes to 235. The Liberal amendment was challenged only by the left wing Labourites and was carried by 468 votes to 21. Mr Snowden’s speech is generally regarded as on© of the most remarkable

and most important parliamentary utterances for a long time. Labourites are alarmed at th" implications and some believe that they see in them the death knell of the Government because Mr Snowden definitely rejected all new expenditure and contemplated economies at the expense of the unemployed. His reference to temporary sacrifices for all is regarded as an allusion to wage reductions as well as to curtailment of State activities of a beneficent kind. The Daily Telegraph’s political correspondent asserts that the members of the Cabinet have already decided on a 10 per cent, reduction in their own salaries. The saving thus effected would, of course, merely be a drop in the ocean, but is intended as a practical gesture in the hope that the example will be widely followed. Some members of th House of Commons may follow the example, and cuts in the civil service are probable. BRITISH PRESS COMMENT. LONDON, February 12. (Received Feb. 12, at 11.30 p.m.) The Daily Telegraph’s political contributor says that the Conservative? considered that Mr Snowden displayed courage in speaking so plainly, and it is suggested that the Government, in sanctioning the. Chancellor’s warning, intended to check extravagant demands from its own party rather than anything else. The Daily Herald says: “ The nation is prepared to face the crisis, but there must be equality of sacrifice.” The Times says: “It is a little late to sound the foghorn wheu the ship is already on the rocks.”