Defence Loan

Hawke's Bay Herald-Tribune, Issue 25, 13 February 1937, Page 10

Defence Loan

BRITISH PR0P0SAL Authority Wanted to Raise £400,000,000 REVENUE NOT ENOUGH fBritmf RUGBY, Feb. 11. To meet the rapidly-growingj expoiiditure on the defence pro-' gramme/ the Government is taking powers to raise capital oi*! to use Bndget surpluses for defence purposes over a period of| ftve years and to a maximum ^xed-: for the time being at £400,000,000. This important announcement was made at qnestion time in the Ilouse of Commons by the Chancellor of the Exchequer, Mr. Neville Chamberlain, who reealled that in his last Bndget he had said that the exceptional nature of the defence programme made it inequitable that the whole cost should fall upon the revenue in a single five-year period. The general experienee of the last twelve months had in no way relieved the urgency of the heavy task nor lightened the* cost of raising the forces to a proper standard of defensive strength. It had only confirmed his earlier judgment. Revenue Insufficient. ''The defence expenditiire is growing at a pace which makes it impossible to meet it entirely out of revenue," he said. "How much may be made available out of current revenue and in what manner must be left to the Budget Statement. So far, however, as revenue must be supplemented by appropriations from capital, it is necessary to ask for preliminary statutory authority. The Government therefore proposes forthwith to introduce a Bill which will authorise the raising of capital or alternatively the use of any realised Budget surpluses for defence purposes over a period of time." Neither the total amount to be raised nor the total period over which. it must be spread could at prescnt be predictcd he proceded. Flexibility and adaption to changing circumstances was the essence of the defence programme. But traditional usage required-that; upward limits not to be exceeded unless by further statutory authority should . be speciiied in a Bill, and the Government proposed to ask for general power to raise capital or to use realised surpluses, for defence expenditure up to a sum not exceeding £400,000,000 spread over a period not exceeding five years. Supervision by Parliament. The Chancellor then described provisions for service and redemption of any capital raised and for safeguarding Parliamentary control. The Bill authorising the action proposed would not itself give authority for any expenditure. The whole of the proposed expenditure of the defence departments, both normal and exceptional, would continue to be laid before tho.House of Commons. No sums would be applied from capital or from realised surpluses towards meeting expendituro save with the knowledge of and after the approvnl of Parliament, which would in this .way control in each succeeding year both the total expenditure on defence and the proportion in which it was to be met from capital. Provision' would be made annually on the defence votes for interest on the new debt, and also, after the end of the borrowing period, for redemption of the debt within thirty years. Facilities for Debate. At the end of the Chancellor 's statement, the Leader of the Opposition, Mr. C. R. Attlee called attention to the serious import of a proposal unprecedented in times of peace, and asked for the laying of a White Paper on Defence before the House was called upon to reach a decision. The Prime Minister, Mr. Baldwin, promised to consider whether a White Paper would bo the best means of presenting the information which the House might desire to have in advance of a general debate, for which he offered facilities. Mr. Chamberlain was asked whethei his statement meant that soon after thi Bill giving the authorisation for raising large sums of money was passed there would in fact be issued stock foi the purpose of Taising the money. The Chancellor replied: "I cannol possibly answer that question to-day."