Cost of Defence

Hawke's Bay Herald-Tribune, Issue 87, 29 April 1937, Page 9

Cost of Defence

(Britisn'OfficiaJ Wireless.)

BRITAIN'S NEEDS Chancellor Explains New Profits Tax EFFECT ON INDUSTRY

RUGBY, April 27, The Chancellor, of the Eichequer (Mr Neville Chamberlain) spoke :vx the House of Commona to-mght on Budget xesolution xelatmg to the pro posed national defence contrihuti . L Bconted the claim of the Opposition that the proposal was the mata of the falls of industrxals and other ordinary shares on the London Stock Exchange, and xeminded the Houae t the Continental Bourses were Itaewise ' disturbed where no such proposaJ was m question, but he admitted that uncirtainty regardtag the new tax was element ta the London markets s de pressed condition. He repeated his explanation ef the vagueness of the seheme that the necessity of Budget Becrecy had prevented his obtatatag the advice ne desired before completing the. details. Mr Chamberlain expressed surprise a the extent of the danger which.it had been suggested would be done by w a he regarded as a mild and moderate proposal, and, claiming that the Trea- ! surv was ta a reasonably good position to estimate the effects.of the proposed taxation, said it was not expecting a higher yield than between £20,000,000 and* £25,000,000 in the financial year 1937-38. " Surely that was not- an mtolerable burden on industry. In reference to the anticipated effects of the defence expenditure on the expansion of .industry, Mr Chamberlain said that exceptional expenditure would have to end. It was not (unlimited. "If oue is to talk seriously.about the matter," he said, "we are. not seeking to domtaate the world. We are seeking only ' to mahe ourselves and our Empire communications safe. Theref ore, I feel justified in saytag that^ we "are not faced here with an uidimitedi or indefinite amouht of expenditure. There ia a iimit to it, and fhere is therefore alimit to the amount We have got to raise." The Chancellor reviewed some oi the errors which had been made in the Pxess. He was Obtaining the taformation' he required before - he could state how the difficulties which had been urged would be met. He was receivtag the comihents of the financial and industrial worlds, and he would study ali this data ta a most sympathetic manner. In the meantime he 'would go somawhat further into two points. The first related to the years of the profit staudard, which, ta the Budget statement, were 1933, 1934, and 193,5. The Chancellor said he was prepared to re- j consider that either by way of some choico given to taxpayers to choose between the different years, or by add- \ ing the other years, or a combination of both, but he would not eommit himself at this stage. The second potat related to the alternative capital standard and to suggested rates of profit on that. basis to which tax would be adjusted.