BRITAIN’S DEFICIT

Hokitika Guardian, 13 February 1931, Page 6

BRITAIN’S DEFICIT

RETRENCHMENT NECESSARY. [United Press Association—By Electri Telegraph.—Copyright.] LONDON, February 11. In the House of Commons, Sir L. Worthington Evans, on behalf of the Conservative Party, moved a vote of censure on the Government for its continuous additions to the public expenditure. Sir L. Worthington Evans said that the country was already committed to various relief works involving an expenditure of IdO millions ,and the Liberals were demanding more. While in its handling of the national insurance, the Government, was borrowing money to relieve the current expenditure, one of the Treasury’s principal officers had declared that the whole stability of the British financial system was endangered. Sir L. Worthington Evans said that Continental financiers were withdrawing their balances and their gold from London. The Government was leading the country to the brink of financial disaster by the means which had wrecked Australia’s finance. He did not believe that the present Government could restore confidence either at home+or abroad. The House ought to act as a Council of State, and ought to pass his motion.

Replying to him, the Chancellor of the Exchequer, Rt. Hon. Phillip Snowden, said that none would welcome any suggestions for economy more than he would, and no such proposals that would be submitted would fail to receive his closest an dmost sympatheticattention. ..

Mr Snowden also dealt with a Liberal amendment proposing to sot up a Committee to overhaul the national expenditure and to recommend economies This amendment was afterwards moved by Sir Donald Mac Lean. Referring to it Mr Snowden emphasised that only the •smallest economies could be hoped for in the cost of administration. It was only a policy, he said, that any large saving could be made, and the House of Commons must face that fact. He added: “Having pointed out the difficulty, I say, with all the seriousness that I can command, that drastic* and disagreeable measures will have to be taken if the Budget equilibrium is to be maintained and if an industrial recovery be made.” Expenditure which might be easy and tolerable in prosperous times has become impossible in the present state of grave industrial depression. Schemes involving heavy expenditure, however desirable, will have to wait until prosperity has returned. This he said, was necessary in order to maintain the present standard of life. This was a crisis which no one foresaw but the country and the House of Commons must realise the gravity of the situation and must unite in an effort to overcome temporary difficulties and to restore the tormer prosperity. Mr Snowden said that it was no secret that there would be a heavy deficit at the end of this financial year. No budget would, or could, stand the unexpected strain caused in past, years by the increase in the unemployment. The expenditure of the State had increased and its revenue had declined. Furthermore its productive capacity had fallen off twenty per cent. He con-tinued:—-“When the history of tin way in which the war debt and the debt to Washington were incurred and ol the recklessness, extravagance and unnecessary commitments'came to be know I am afraid prosperity will curse those responsible.’ Despite the world depression, Britain has suffered less than any other groat industrial community. We are the world’s financial centre. Other nations are watching us. Any well-grounded fear that Britain’s budgetary equilibrium is unsound might have disastrous consequences. Therefore we must maintain our financial

reputation, and wo can do that! Our position is fundamentally sounder than' that of any country intlie world. All that is necessary is an effort to get over the present crisis. That can he done. It will involve temporary sacrifices irom everyone. Those best able to boar them will have to make the largest sacrifices to which the Cabinet is prepared >o make substantial contribution. Ibis is a. crisis which no one party can solve. Tlie country and the House must reaD ise the gravity of the position,, and, instead of party bickering, must unite in a common effort to take elleetive measures (,o overcome these temporary difficulties and to restore our former prosperity.”

The Chancellor said that under the present conditions, any increase in taxation would be the last straw.

Sir D. Mac-Lean then moved the billera I amendment aforementioned, demanding that a Committee should he sot up to recommend practical and immediate economies. lie pointed out that, the country had to lace the fact that, even in the most favourable conditions, there would be chronic unemployment of at least one and a-quartei-millions for from seven to ton years. Ways must lie touud for distributing the national cost ol relief, in the shape of wages.

Mr W. .1. Brown (Labour) said that Mr Snowdon’s speech was one ol tin* most revolutionary speeches that had been heard in the present Parliament. It meant- that Mr Snowden now bad so high a regard for the City ol London and for the interests of- the hankers and the money-lenders that he was prepared to go hack on tlie whole ol his own political career. It meant his surrender of the whole* of the Labour philosophy at the bidding of the financial interests. Mr Brown said that the Labour Party had become the handmaid of Capitalism. It was monstrous that a Socialist Chancellor of the Exchequer should make such a speech. The Government, he said, bad no unemployment policy, and it was staggering from crisis to crisis. The Government appeared neither to have the guts to govern nor tlie grace to get out.

Mr Norman Angel! (Labour) said that, instead of harping on cheese-par-ing economies, there should be a cost, ol living index figure applied to the holders of bonds. Sir Robert Horne, (Conservative) thanked Air Snowden for one of the gravest warnings that, bad ever been uttered from the ’lreasury bench. H would brace the country to a new view of its responsibilities and duties, but. despite his grave warning, Mr Snowden bad allowed the introducing of a Series ol Hills all ol them involving large, expenditure, such as the School Age Bill and the Land Bill. The Government had had every chance and every opportunity, hut it had imprnvldently spent the nation’s sustenance and had depleted the country’s resourc-

Hon. Mr Graham (President of ilm Hoard of Trade) said whatever Government had been in that office, il would have been faced with a similar crisis. The enormous growth of unemployment was due mainly to the tall in commodity prices. He saw little sign that the bottom had yef been reached. There was no need for pessimism and despair, hut the need was for sustained enlightened, and constructive opliinism. and •i realisation that the country could survive and build up a far greater appeal to world trade than ever before. The Conservative motion was defeated by RIO to 2X5. The Liberal amendment was chalVnged only by tlie Lefj AViug Labourites, and it was carried by -1 (>S to 21. Mr Snowden’s speech is generally regarded as one of the most remarkable md most important Parliamentary utterances for a long time past. The Labourites are alarmed at the implications of Mr Snowden’s remarks and some of them believe iliattlicy can see in them the death knell ol the Government, because Mr Snowden definitely rejected all new expenditure and he contemplated economies at the expense of the unemployed. Mr Snowdon’s reference to “temporary sacrifices for all” is regarded as being an allusion to wage reductions, as well-as to the curtailment of State activities of the beneficial kind.

The “Daily Telegraph’s” political correspondent asserts that the Cabinet, have already decided on ten per cent, reductions in their own salaries. Hie saving thus affected, lie says, would, ol course merely he a drop m the ocean, but it is intended as a practical gesture in the hope that the Ministers’ example will be widely billowed, I lie correspondent adds : “Some members of the House of Commons may follow* the Ministers’ example.” He stales also that cuts in the civil service are probable. LONDON, February 12, The “Daily Telegraph's” political contributor says that the Conservative considered Mr Snowden displayed courage in speaking so plainly .11 is suggested that the Government. In sanctioning the Chancellor’s warning, intended to check extravagant demands from their own party rather than anything else.