Evening Post MONDAY, OCTOBER 7, 1940. ONLY PART OF POLICY!

Evening Post, Volume CXXX, Issue 85, 7 October 1940, Page 6

Evening Post MONDAY, OCTOBER 7, 1940. ONLY PART OF POLICY!

"This was only part of the Government's policy of conscripting wealth," was one of the statements made by the-Minister of Finance in his reply to the debate on war finance. The statement is disturbing, for if the Government continues on the lines it has followed so far, it will be impossible for any business organisation, or even the individual in the higher-taxed groups, to arrange his affairs. We expect additional imposts in wartime, but the least the Government should do is to give timely notice of its estimated requirements and how it proposes to meet them so that the taxpayer or lender may have a chance of maintaining some order in his arrangements. As it is ; the taxpayer has no sooner begun to see his way clear for the payment of Social Security, National Security, and income tax than he must start again to plan—at a few days' notice —a substantial subscription to the compulsory loan. The Minister may say that notice of this was given in the Budget, but the Budget contained no indication whatever of individual liability. If this is "only part of the Government's policy of conscripting wealth" what new embarrassments are the other parts to cause? The Minister's speech was unsettling in this allusion, and unsatisfactory in other ways. The only satisfactory part of it was the rejection of easy credit methods. "To issue money without any goods being there," Mr. Nash said, "was a crime against the State and meant a definite deterioration of every individual in it." We can agree wholly with this. Already the issue of money has been [carried too far. It may have been tissued against goods and services, i but a considerable part of those goods and services is non-consumable and does not give full value for the credit issued. To carry on the issue now would quickly lead to a condition of uncontrol, with inflation taking charge. But Mr. Nash should consider whether he is not helping the easy money propagandists whom he condemns when he demands loan money without interest. . There is a difference certainly, but the man in the street, prompted by the propagandists, will see more similarity than difference.

The reasons given by the Minister for making the loan free of interest did not justify the measure. In fact they showed just how wrong it is. "If someone has control of goods expressed in money and they arc needed to defend the people, we are not going to argue," said the Minis-

ter. "We have to defend this country, and the only way is to takej the goods that we produce and use! those goods." Mr. Nash said that interest transferred the right to use! certain, goods without price. The Government said it had the right to use all the goods it required for the! war for three years without paying: anything for the right to use the goods. We So not question the right of the Government to use goods required for defence, but this right should be exercised with equity as between different classes of citizens. If the Government needs munitions, clothing, or boots for defence it obtains them and pays for them. By this payment it pays also for the factories and machinery and for the labour used in production. The right to payment for capital thus employed has been accepted by the Government. Then why should the centrol of goods, when it is expressed in money, be transferred without payment? The interest-free provision which, as Mr. Nash said, applies only to little more than 18,000 people (15,000 individuals and 3000 companies), is an application of the right of free use to one section only and is therefore inequitable. It has not been argued that llie hardship on the majority of individuals will be great, but it is greater than some of the Minister's examples suggest. The Minister said that a single man with an unearned income of £2000 maximum would have to subscribe £430. That means that he paid £480 income taxation last February and £100 Social Security Lax during the year. But this year the same man will pay almost £840 in income tax, Social Security and National Security taxes. It he has to find his loan subscription from income the £2000 this year will come down to about £730. The rearrangement of spending to meet this demand will be difficult, for all kinds of commitments —housing, insurance, and so on —involving other people will come into the business. We think it will be agreed that taxation and a compulsory loan that lake almost twothirds of an income, though it is called "unearned." after one year of war, are making the sacrifice heavy at the start. ! The embarrassment, of the individual, however, is by no means the'1

worst feature of the scheme. It is the trouble that will be caused to companies that is likely to have the most unsettling effects on the country's industry and production. The economic disturbance consequent on forced | lending by companies which lack j substantial liquid assets will be serious. Mr. Nash admitted there would be difficulties for those who were liable to 10s to 15s in the £ income tax. Many companies will share these difficulties. The Minister failed completely to answer the objections based upon this economic factor. There is, indeed, no answer. To save a small amount of interest and try out an interest-free theory the Government is going to involve production and industry in difficulties which will weaken their power to aid the war effort.