VIGOROUS REPLY

Manawatu Standard, Volume LX, Issue 126, 27 April 1940, Page 9

VIGOROUS REPLY

BUDGET CRITICISM. TAXATION PROBLEMS. BRITAIN’S WAR EFFORT. (United Press Association—By Electric Telegraph—Copyright.) LONDON, April 25. Criticism of the inadequacy of Britain’s financial effort was again the keynote of the Budget debate in tlie House of Commons to-day. Hr. H. Dalton (Labour) said that tlie war effort was gravely inefficient. There was a large amount of money which had not been jspent by discredited Ministers Who were waging the war half-heartedly and lackadaisically. A vigorous reply was given by the Chancellor of tiie Exchequer (Sir John Simon), and his colleague, Captain H, E. Crooksliank.

A Liberal Party spokesman declared that the nation’s sacrifice under the Budget was not as great as that of France. Several speakers expressed the opinion that the scheme of compulsorj ■savings formulated by the economist Mr j. M. Keynes, or some similar plan, would have to be resorted to in the course of time. Dr. Dalton, in his criticism of the Budget, said that Britain was not pioducing enough aircraft or arms, and not producing them fast enough. Also, she was not producing a sufficency of other necessaries. Many quarters were most concerned over the wastage of foreign assets due to the leakages in tlie control of foreign exchange. The economic war was also being waged most inadequately. The Treasury's clammy hand still retarded the economic war in South-East Europe and elsewhere. , Dr. Dalton said that if the proposed purchase tax was imposed upon foods without differentiation the Labour Party would have considerable criticism to offer. He criticised the increase in postal rates and suggested that the imposition should be rather on trade circulars. He urged the adoption of a tax on capital which should be paid in part bv the surrender of securities. GOVERNMENT’S INTENTION. The Financial Secretary to the Treasury (Captain H. F. Crooksliank) said that the Chancellor of the Exchequer would be satisiieu wycli tlie Buuget criticism, as the criticism had not been pronounced and had been directed to statements that tlie taxation was not high enough. This criticism would be aecepteu in the spirit in which it was made, and the Government would see what more could be done to secure even more vigorous prosecution, of the war, which all desired. Dealing with Dr. Dalton s criticism that the Budget did not evenly distribute the burdens, Captain Crooksliank pointed out that the increase announced m income vax was nevertheless an increase even U it was announced last September. Referring to the cost of the war to Germany, he said he did not know where the figures suggested in a Swiss report came, and he thought it should ha treated with the utmost reserve. He pointed out that in considering the amount of the Allied war expenditure figures, France and the Empire, as well ns Britain, must be put into the scale. Speaking for the Liberal Opposition, Mr Clement Davies also criticised the Government’s war expenditure and said that the national sacrifices could not be compared with those of I ranee, where out of a national income of £2,500,000,000 M. Reynaud’s Budget was £1,800,000,000. He appealed to the Chancellor and the Opposition “not to dig themselves in in hopeless opposition toUvir Keynes’s proposals.” CHANCELLOR’S REPLY. Sir John Simon, in reply, said he believed it was fundamentally true that there never had been such unanimity in Britain as to day, and on entering the war never before had the nation been more of one mind. The taxation lie proposed totalled a larger' sum than ever before had been imposed, but on the whole the main complaint running through the debate was that the sum ought to have been more.

It followed that those who took such a view thought that there must be more taxes. With the exception of Dr. Dalton, the Chancellor said, no one suggested how this could be done, and he pointed out that in the last three Budgets covering only the space of 12 months additional taxation was imposed which' in the full year would produce an increase of £330,000,01)0. "Because we are faced with such prodigious totals we may well fail to realise what an enormous amount that is," Sir John remarked. The criticism might be right in showing that the expenditure might be greater, but there was no way of making the imposition of taxes operate and multiply at the same rate as the expenditure, Sir John Simon added. He explained that the diminution of dividends ol companies would he the subject of a Bill distinct from the Finance Bill. Winding up the debate, Sir John Simon said: "Under war conditions we cannot expect to get from the existing taxation what we got before. While the cost of the war must rise enormously, there cannot he a corresponding rise in the yields from taxation."