BURDEN LIGHTER

Taranaki Daily News, 19 April 1934, Page 5

BURDEN LIGHTER

BRITISH TAX CONCESSION BUOYANCY OF INDUSTRIES TALE OE ALL STATISTICS RECEPTION OF THE BUDGET PRICES OF STOCKS ADVANCE British Official Wireless. Rec. 5.5 p.m. Rugby, April 17. The Budget which Mr. Chamberlain presented in the House of Commons was the first for some years to lighten the burden of the British taxpayer. This was the third successive year in which Mr. Chamberlain has presented the Budget. The Chancellor recalled that m 1932 many dark clouds still hung around the horizon. Last year, although the outlook was distinctly brighter, there was no settled feeling that they had reached fine weather. To-day, however, the atmosphere was completely brighter. During the past twelve months evidence of improvement had continued to accumulate. There was a small but distinct rise in wholesale prices, the rates of short-term interest had achieved new low records, and the position of long-term loans had improved to such an extent that stocks such as the old 2J per cent, consols actually stood higher to-day than before the war. Industrial production had very much gone up, and equilibrium had been restored in the country’s balance of payments. Statistics of such things as the retail trade, consumption, electricity, transport, iron and steel production and house building in every case showed a revival of activity. AU this, combined with the substantial surplus with which the financial year ended, had established a new spirit of hope and confidence. Certain unpleasant facts, however, still had to be reckoned with before their troubles ended. ANALYSIS OF ACCOUNTS. Analysing the year’s accounts Mr. Ch arh berl aI n. drew attention to the extraordinary cheapness of interest on Treasury bills, which over the whole year averaged only 12s 6d v per cent. While the amount of Treasury bills and savings certificates together at their lowest point was over £1,200,000,000, the interest amounted to a little more than £15,000,000 or It per cent. During the year £40,000,000 of 4} per cent. Treasury bonds and £24,000,000 of 5J per cent. United Kingdom dollar bonds were converted into 2J per cent, conversion loan or conversion bonds. Turning to the prospects for the future Mr. Chamberlain said that neither last year nor the year • before had he made provision either for the payment for war debt to America or for the receipt of war debts or reparations by Britain, and in the absence of any further development he proposed to follow, the same line this year. The fixed debt charge would stand at £224,000,000. Among items of expenditure he mentioned that the continued decline in unemployment enabled a saving compared with last year of £10,688,000. Provision had to be made for such measures as the slum clearance campaign, better marketing for agricultural products and improvements in rural water supplies, but taking a reasonably optimistic view the course of trade he was justified in expecting a larger income from all of the most important sources of revenue. The cuts in unemployment pay and In salaries and additional taxation imposed in 1931 were considered by the Government of the day a temporary expedient to meet a temporary emergency, and were accepted in a brave spirit. He felt precluded from considering other classes for relief until a rough equivalent of restoration of these wages had taken place. COMPARISON INVITED. The Chancellor ended his speech by inviting members, if they wished to estimate the wisdom of the financial position which the Government had pursued, to glance at what was happening elsewhere. The Chancellor’s speech lasted 1 hour 41 minutes. The Times and the Daily Mail welcome the Budget as convincing proof that Britain is approaching recovery, which will be further stimulated by the method of distributing the surplus. The News-Chronicle says the great expectations to which Mr. Chamberlain referred were only half realised. His estimated revenue of only £727,000,000 was cautious and narrow. He should have taken a bolder view and distributed concessions more generously. The city editor of the Times reports a favourable impression in business circles, leading to a stronger general tone on the Stock Exchange. The reduction of income tax will not only lessen the burden on taxpayers but will also encourage the financing of new enterprises and create a valuable stimulation to trade recovery. A general rise in industrial shares followed the Budget announcement, business continuing in Throgmorton Street till a late hour. Big motor interests were particularly active as a result of the reduction in the horsepower tax, which was a real surprise to the public and something the motor trade had been praying for. The reduction will enable British manufacturers to compete with foreigners in the Dominion markets. The Daily Herald (Labour) describes the Budget as thoroughly retrogressive end complains of the diversion of the realised surplus to the reduction of debt when every reputable economist is opposed to such a policy. It argues that the surplus should be carried to an insurance fund, thus advancing the day when the unemployment benefit could be raised to a level suitable for a civilised nation, or be used to restore all economy cuts, including those of the social services.

The Daily Telegraph's political correspondent learns that the conservative calculation of the disposable surplus was deliberately done. The Cabinet agreed with Mr. Chamberlain on the necessity for a margin of safety, bearing in mind the possibility of unforseen calls, particularly connected with defence.