BRITAIN’S EXPENDITURE.

Otago Witness, Issue 4041, 25 August 1931, Page 27

BRITAIN’S EXPENDITURE.

.1 NATIONAL EMERGENCY.

BALANCING THE BUDGET. RUGBY, August 20.

The Cabinet, after nine hours of discussion on the plans for balancing the Budget, adjourned at 10.30 last night. Ministers will reassemble to-night to receive the report of the Prime Minister on the series of important conferences which are being held. There will be a . further Cabinet meeting to-morrow. To-day’s meetings began with an inter- , party conference at Downing street, the /Prime Minister and the Chancellor of 'the Exchequer meeting members of the Conservative and Liberal Parties. The were represented by Mr Neville Chamberlain and Sir Samuel ■i/Hoare. The Liberals present were Sir ..■Herbert Samuel and Sir Donald Maclean.

It was anticipated that the conference would conclude in time to permit the Prime Minister to meet the Consultative ■ Committee of the Parliamentary Labour Party at 11 o’clock, but it was not until noon that the Opposition Party leaders left Downing street. When they withdrew the Consultative Committee was received. This committee was formed to serve a link between the Cabinet and the rank and file of the party while Parliament is in session. It is suggested that a party meeting may be called as a result of to-day’s conference.

The General Council of the Trades Union Congress met at 2 o’clock, being followed one hour later by a joint meeting between the council and the National Executive of the Labour Party. . A statement issued after the meeting read as follows: “.The Prime Minister and the Chancellor of the Exchequer briefly reviewed the national financial ■emergency, and indicated the principles underlying the proposals that the Government has under consideration with a view to balancing the Budget. At the conclusion of the joint meeting the National Executive resumed its session and gave consideration to the situation as presented by Ministers to the joint meeting. After a statement by Mr Henderson and Mr Clynes, it was agreed to leave the position with the Government.”

The Government’s statement was considered later by the General Council of the Trades Union Congress, the views of the council being communicated to the Cabinet.

Referring to the inter-party conference, Sir Samuel Hoare, who was interviewed, stated that they had had a preliminary interchange of opinions in a frank and free informal talk. They had figures submitted by the Government. Although they surveyed a very wide field, the survey had not yet been comprehensive. A solution of the crisis demanded ecenomy, which presupposed sacrifices by all classes. Sir Samuel Hoare added that since the conference he and Mr Neville Chamberlain had been in communication with Mr Baldwin, who is at Aix-les-Bains, and they had consulted other colleagues. The Conservatives were most anxious to co-operate in the national emergency.

GOVERNMENT PROPOSALS. LONDON, August 21. The Cabinet meeting was concluded tonight and the Economic Committee then received a Trade Union Congress delegation.

Political circles are of the opinion that the chief Conservative objection to the Government proposals is the weakness of the economy side, while the Cabinet itself is sharply divided as regards ways and means of economy. The question of cooperation between the three parties will be in the balance until it is certain that the Government will go further in the direction of economies.

The Daily Mail says: “ This has been the most dramatic day in politics since the war. The Government’s fate was in the balance at midnight, when it was clear that there was determined opposition. It was equally evident that the Conservatives are not anxious for office, preferring to retain the Labour Government, instead of inheriting difficulties. It remains to be seen whether Mr MacDonald will prefer to make a dramatic stroke. If he resigns the Conservatives will be compelled to take up the government of the country or there will be an immediate election.”

SITUATION GROWING WORSE. LONDON, August 21.

“ Although the Government approached the balancing of the Budget in the right spirit, it is unfortunate that the day has ended without a sign of a definite time table for the next few hours,” says The Times in a leader emphasising the urgent necessity for action, owing to the finan~cial situation deteriorating every hour. '* Until there is some dramatic proof that the extravagance policy will be reversed the delay will cause a renewal of the nervousness of the world. An antidote must be administered within a few hours.”

GOVERNMENT’S BAD DAY. LONDON, August 21.

It , is generally agreed that the Government experienced a bad day and it had to face candid criticism from frien is and opponents in the Trade Union

General Council,' which sat hi continuous session for nine hours.

The Daily Express says that Mr Ramsay MacDonald gave a joint meeting only an outline of the Government’s proposals and a trade union n presentative who was present said afterwards that these were no different from what he had read in the papers. There was no mention of a tariff until someone inquired about it, and the reply was: “ Tariffs are in the air; we have not made a decision yet.” Mr Philip Snowden is pessimistic and he refused to disclose the details of his taxation plans. It is understood that dole economies are the chief cause of the difference between the trade unions and the Cabinet.

The Daily Mail says that the Trades Union Council bluntly told the Government that its proposals were not acceptable.

REVENUE TARIFF RULED OUT. LONDON, August 21. The position late to-night remained critical. The Government still refrains from making a statement. Cabinet sat continuously until 4 o’clock. The Big Five then summoned the Conservatives and the Liberals.

The Trade Union Congress Council announced its decision to refer the Government’s proposal to the full congress at Bristol on September 7. This amounts to a volte face, because the Trades Union Council is well aware of the necessity for urgent action. The Trades Union Council rejected the' proposals for economies in unemployment insurance, and in salary reductions. '■

It is learned that Cabinet, which has again been pressed by the banks, has decided to repudiate the Trades Union Council and to proceed with the plan for drastic economies. A revenue tariff was definitely ruled out

The Conservatives and Liberals told the Big Five that the proposals were useless. They demanded greater economies and less taxes. Cabinet will therefore probably have to rearrange the entire proposals. There is still a possibility of the Government falling.

POLITICAL CRISIS LIKELY.

LONDON, August 21

The Daily Mail says: “The Government’s position is more precarious, and a change of administration is rapidly becoming a more definite possibility. It is understood that the Conservatives suggested to the Liberals the formation of a coalition to tide over the crisis, pro posing /Mr Lloyd George as Chancelloi of the Exchequer.” The Daily Telegraph declares that Mr Snowden’s reply to the Trades Union Congress officials was to the effect that it was impossible to agree to their behests. This has led to a general impression of vital difference which might involve the end of the Labour Party as at present constituted. The Council of the Trades Union Congress declares that it is able to count at least 120 to 150 members of the House of Commons who will decline to support the Government.

REASON FOR DROPPING TARIFF. LONDON, August 21.

The Daily Telegraph says that it was established on Friday night that the Government had come to the conclusion that a tariff for revenue purposes could not be placed in its pro gramme, as a split in the Cabinet and possibly in the Socialist Party might occur, and, moreover, make further Liberal assistance impossible.

COST OF SOCIAL SERVICES. RUGBY, August 21

Speculation as to the nature of the Government’s economy proposals continues, but little importance can"be attached to the details of the published forecasts. All that can be said with certainty is that during yesterday’s interviews, the Government communicated to its opponents and its supporters its view of the situation which, unless it is firmly handled, may become exceedingly grave. Evidence was given of the Government’s determination to balance the Budget, and to spread the burden equallj’ among all classes of the community. It is further known that the proposals are entirely concerned with measures for effecting economies in the State expenditure, including, it is reported, |)lans for reducing the cost of the social services. It is further stated that no suggestion was made by the Government that the imposition of a tariff or any other means of raising fresh revenue could be regarded as an alternative to drastic retrenchment. The Government’s efforts to devise proposals for balancing the Budget, which will be assured of a wide measure of approval among all parties in the House of Commons, were continued throughout to-day. A broad outline of the economy measures was laid before the General Council of the Trades Union Congress yesterday, when its members, with the National Executive of the Labour Party, attended a joint meeting which was addressed by the Prime Minister. The Labour executive later decided to leave the position with the Government, but the General Council, after considerable discussion, communicated its views to the Prime Minister through a deputation which was received at Downing street late last night. A further meeting of the Cabinet has been summoned for 9.30 to-morrow morning.

At a meeting of the General Council of the Trades Union Congress a report from the five representatives who conveyed to the Cabinet the council’s views of the Government’s proposals was received. A communique was issued stating that the council endorsed the report and instructed the Economic Committee to watch the developments in the situation with a view to the council presenting a full statement of the position to the Trades Union Congress at Bristol on September 7. A Treasury minute was published tonight giving authority to the Bank of England to issue fiduciary bank notes to a total of £275,000,000 for a further period of three weeks. The minute says that the bank represented to the Chancellor of the Exchequer that it was expedient to maintain the increase in the fiduciary note issue.

FINISHING TOUCHES ON PLANS. LONDON, August 22.

The Cabinet met at 9.30 and adjourned for luncheon at 12.10. Immediately afterwards Mr Ramsay MacDonald requested the Opposition leaders to visi; Downing street. Mr Neville Chamberlain, Sir Samuel Hoare, Sir Donald Maclean, and Sir Herbert Samuel arrived within a few minutes to interview Mr MacDonald and Mr Snowden. An official statement which was issued later stated : “ The Cabinet has been putting the finishing touches on a scheme which, it is believed, will meet the situation. They will meet to hear the results to-morrow.”

SITUATION MOST CRITICAL. LONDON, August 22.

The whole of the press agrees that the situation is most critical and that the Government’s position last night was precarious. According to the Daily Herald the Conservatives are demanding that 75 per cent, of the Budget deficit should be met by economies and only 25 per cent, by taxation. The Times says that 30 members of the London County Council have sent a petition to the Lord Mayor requesting him to appeal to Mr Ramsay MacDonald to relieve the distressed state of the people and restore international confidence.

The National Chamber of'Trade, representing 100,000 traders, has sent messages tc Mr MacDonald, Mr Snowden, and the Opposition leaders, demanding real economy.

KING RETURNING TO LONDON. LONDON, August 22.

In view of the political crisis his Majesty the King is returning to London from Balmoral. He will arrive at Euston on Sunday morning, and will motor back to Buckingham Palace.

KING AND PRIME MINISTER. LONDON, August 23.

Crowds cheered His Majesty on his arrival at Euston, and again when he drove through the Palace gates. Another message states that Mr Ramsay MacDonald arrived at the Palace at 10.20. A large crowd broke loose, and surged round Mr MacDonald as he left the Palace after an hour’s audience. He was apparently cheerful.