BRITISH FINANCE.

Sun (Christchurch), Volume VI, Issue 1788, 6 November 1919, Page 11

BRITISH FINANCE.

HOUSE OF COMMONS DEBATE. MR LLOYD GEORGE REPLIES. Bu Cable. — Press Association. — Copifriflht. (A. & N.Z.) LONDON, 0ct.,30 (delayed). The Prime Minister replying to the Financial Debate in the House of Commons, expressed the opinion that the Chancellor had knocked the bottom out of the case of his critics. He emphasised their disagreements in regard to where to retrench. The greatest expenditure was for the Army and Navy, and he pointed out that the Navy would presently be only a pre-War Navy, and it would be less at the end of the financial year. Dealing w : ith details in regard to the reduction of the personnel of the Army, and Air Forces, he said that the February forecast for March 31 was for 825,000 men. Actually there would be only 300,000. Next year there would be a substantial surplus for the, reduction of the debt. The provision for the liquidation of the debt in 50 years was one Of the most magnificent propositions concerning international liability ever advanced, and was a testimony to British courage and foresight. The Prime Minister said the Government had established pensions amounting to £120,000.000 annually. There had been exceptional charges in the current year owing to abnormal difficulties. The British Army had been more scattered over the world than any other army. In reply to a query, Mr Lloyd George said that they had evacuated Armenia to economise. They were unable to police the world, and he honestly thought other Powers ought to share the responsibility. Then the Government was criticised for not demobilising more quickly on the grounds that they knew Germany \Vould sign the Treaty. "On the contrary," he said, "the conference did not know till the last minute that" Germany would sign, and then, she only signed because she knew- that Great Britain maintained a number of reserve divisions in France ready for this eventuality, and with which force Marshal Foch was prepared to march to Berlin. Without this undemobilised force, we should have substituted defeat for deficit and thrown away all our terrible sacrifice to make the accounts balance in 1919. Any Government doing this would have deserved impeachment and undoubtedly would have had it." Owing to the way in which we were dealing with financial difficulties, Great Britain need not fear comparison with any country in the world. Conscription in Germany had gone, and her navy was at the bottom of the sea. This significant fact gave grounds for confidence in the financial stability of the future. Great Britain could weather this storm as she' had weathered every other. Nevertheless, he hoped that the economises would not deny the expenditure of moneys on objects essential to the national life, such as education. The War had fullv demonstrated the value of technical education.

Mr Lloyd George urged that the truest economy was increased production. The depreciation of the sovereign was at present the heaviest tax. The only remedy was production, which could be got only by the co-operation of a contented people. It was the greatest folly to urge the cessation of expenditure on the health, comforts, and training of the people who had been prepared to sacrifice their Jives on the battlefields for the country they loved. Mr J. R. Clynes moved an amendment declaring that the present national war expenditure was unjustifiable. He advocated a levy on capital and the reversion to the State of war fortunes for the purpose of reducing the National Debt. He said that the Labour Party contended that the financial situation was so extraordinary as to call for extraordinary measures. He urged that an inquiry be made into the question of a capital levy. Mr Bonar Law, winding up the debate, referred to the amount due from Germany for the upkeep of the Army of Occupation. This, the first instalment of Germany's debt, would undoubtedly be obtained. As regards our £8,600,000.000 debt, certain items should be offset against it. The Allies owed us over £ 1,700,000,000. Then the Dominions owed us £200,000,000 and India £221,000,000. bringing down the debt to £7,000,000,000. Furthermore, he did not think Russia would always be a bad debt. As regards the German indemnity, he was confident we would get a considerable sum io reduce our debt. Sir Donald McLean asked permission to move an amendment on the Labour amendment.

The Speaker ruled it out of order. Sir Donald McLean said he regretted lie and his colleagues would he unable to vote against the Government because they could not enter the lobby with the Labourites unless an inquiry was held before the capital levy was decided. The House rejected the Labour amendment by 405 votes to 50, the minority being almost exclusively Labourites. The Government resolution was then adopted unanimously. THE CAPITAL LEVY.

(A. & N.Z.) LONDON, Nov. 1. In the House of Commons, Mr Bonar Law declined to so frame the reference of the War Fortunes Inquiry Committee that it would permit the investigation of the question of a capital levy.