The Doiminion. TUESDAY,, JULY 6, 1920. THE BRITISH BUDGET CRISIS

Dominion, Volume 13, Issue 241, 6 July 1920, Page 4

The Doiminion. TUESDAY,, JULY 6, 1920. THE BRITISH BUDGET CRISIS

«- At the head of successive Governments, Mr. Lloyd George has successfully withstood repeated attacks by the newspapers of the Northcliffe group. Apparently they are now indulging in the hope of bringing him down by exciting popular feeling against his colleague, the Chancellor of the Exchequer. On the facts, in sight their onslaught is definitely in the class of hitting below the belt. The Budget which Mr. Chamberlain submitted in April was marked by not a, little courage and' resource, but, dominated as it was by the absolute necessity of raising an enormous revenue, it was bound to inflict a coasidernble amount of genuine hardship and to embody measures of taxation which in normal timcK would be decidedly open to objection. , It is an easy matter for notoriety-hunting newspapers to fasten upon such features in the Budget, while ignoring the unexampled circumstances which justify or make them necessary, and posf'.bly the ■ Northcliffe papers may nd in this way a ready means of stirring up feeling against Mr. Chamberlain, and pursuing their vendetta against his political, chief. Such;tactics, however, are the antithesis of fair and legitimate criticism. One of the strongest points made by Mr. Chamberlain and others who defend the Budget is that critics of the admittedly unpopular proposals it contains have suggested no alternative means of raising the money required. The Northcliffe combination is evidently relying in its campaign upon a noisy, statement of one side of the case in conjunction with an .appeal to selfish interests. The increased excess profits duty, which is the central target of attack, was finally decided upon early in June, Mr. Chamberlain at that time announced that the Government had abandoned the idea of a levy on war wealth on the ground that the dangers of such a levy altogether outweighed its advantages. He had previously made it clear that failing a levy on war wealth the excess profits duty must be increased in order that an adequate revenue might be raised. The excess profits duty is levied on all profits in excess of a pre-war average, and last year was reduced from 80 per cent, to 40 per cent. Hopes had been entertained that it would be abolished this year, but, instead the current proposal is to increase it to 60 per cent. Mr. Chamberlain's critics have paid little heed to the fact that the excess, profits duty at its present level is an alternative to a levy on war wealth—an ' alternative 'preferred partly for the rsjson that it is expected to return twice as much as the levy in a given period. Their case in brief is that the duty is an unjust, oppressive, and paralysing impost on industry, and that its incidence is extremely unfair. Firms which earned high profits before the war escape comparatively lightly under the excess profits duty, while if makes a maximum demand upon firms whose pre-war profits were low. The duty also presses with extreme- severity upon new firms which are struggling to gain a foothold and to make ends meet, and it is asserted by some critics that its general effect will be to decrease production and increase prices. While he disputed some of these contentions, Mr. Chamberlain admitted that he wan not wedded to the excess profits duty, and would gladly accept an alternative, but he maintained that in the absence of such an alternative he was warranted in asking the House of Commons- to continue and increase the excess profits duty. As to the suggestion that the duty would tend to increase prices, he observed that last year he reduced tho duty from 80 to 40 per cent., but where was the fall in prices? He declared-himself more than willing to extend some relief to small businesses and to those who were attempting to establish new businesses. He contended that on the wholo the duty was justified bv conditions of supply and demand, in which business people could not help making "abnormal and extravagant profits." "My first duty," the remarked in the course of the Budget debate, "is to persuade tho House to make a real effort now, while prices are still high, and while trade is still prosperous,, to reduce the vast load of debt which we have to carry as a result of the war." This presentation of the case so far silenced criticism, and appealed 'to the House, that a motion tc abolish tho excess profits duty was 'defeated on the voices, and a motion to reduce it. to -10 per cent, was negatived by 287 votes to 73. It is, of course, admitted that in framing his Budget, and particularly where the excess profits duty is concerned, Mr. Chamberlain, was reduced to a choice of evils. With its defects, however, the Budget is boldly planned. It aims at the reduction of debt/by £531,000,000 in the space of two years, and At giving Britain as speedily as possible her former standing "in the very front rank of financial, industrial, and commercial nations." Detailed discussion has brought to light no alternative method of achieving these results, and with this faet in mind it is not difficult to estimate at its true worth the attempt of tho Northcliffe newspapers to make tactical use of the inevitably unpopular features of the Budget in promoting a political crisis.