BRITISH FISCAL POLICY

Otago Daily Times, Issue 21642, 12 May 1932, Page 7

BRITISH FISCAL POLICY

RELATION TO INDUSTRY HINT OF FURTHER STATE ECONOMIES (United Press Association.) (By Electric Telegraph—Copyright.) '. LONDON, May 11. (Received May 11, at 7 p.m.) The Chancellor of the Exchequer (Mr Neville Chamberlain), responding to the toast of the Government, at the bankers’ annual dinner, said that tariffs alone were not a cure for Britain’s difficulties. Industry, aided by the Government’s monetary policy, must do this. Sterling was no' longer anchored to gold, he continued, and had not materially left the level suited to the needs of industry, though its equilibrium was at present unstable. A existed for great accumulations of liquid capital to concentrate in sterling. The exchange had disturbed traders in Britain equally with India and other countries with currencies linked to Britain’s. He hoped that special measures such as the Exchange Equalisation Account would become unnecessary. The Government desired to do everything to raise sterling prices to a level permitting remunerative trade, but this/ could not be accomplished without international cooperation. Mr Chamberlain added that it might be one of the objectives of the Government to take such steps as it found possible to raise sterling prices to a level making it possible to conduct trading remuneratively. He emphasised that the Budget had approached the limits of the amount obtainable by direct taxation, but real relief to the taxpayer < would involve changes in the national policy, which hitherto had not been contemplated. Nevertheless, if more drastic reductions in expenditure were necessary, responsible citizens could be trusted to support the Government. Judging from the headlines, the newspapers attach the utmost importance to Mr Chamberlain’s speech, which is described as a grave warning. The Sun understands that the Government is preparing further drastic economies in the neighbourhood of £50,000,000, involving cuts in education, research, housing, and several State subsidies.