BRITISH DEFENCE

Wairarapa Times-Age, 21 February 1939, Page 5

BRITISH DEFENCE

FINANCIAL PROPOSALS SIR J. SIMON’S SURVEY. FRANK FORECAST OF BURDENS. (British Official Wireless.) (Received This Day, 10.35 a.m.) RUGBY, February 20. The debate in today’s House of Commons debate on defence was opened by Sir John Simon, whose speech was notable for its frank forecast of the approximate proportions in which defence expenditure in the coming year would have to be met from revenue and from borrowed money respectively. Sir John Simon told the House that he was working on the assumption that ol the 580 millions which it was revealed in last week’s White Paper would be the total of expenditure on defence, including civilian defence, in the coming financial year, approximately 240 millions would be available from revenue and about 350 millions would have to come from loan account. He added a warning that no one should draw, any further conclusion—presumably as to the time or manner of further borrowing, or as to the taxation proposals of the-forthcoming Budget—from that forecast. The Chancellor claimed that the principle of borrowing for this purpose was established and acceptable. It was generally recognised that the financial strains involved in the reorganisation of defence were greater than revenue could bear alone. What was necessary was that they should demonstrate their readiness to bear each year a proper share of the burden, and in evidence of such a determination he cited figures to show, taking the three years ending March, 1940, together, that out of a total expenditure of about 1250 millions for defence, about seven hundred millions would have to be met from revenue.

The provision for the repayment nf borrowed money in connection with the present proposals was quite specific. When a Department had received a duly authorised issue of loan money, then interest at the rate of three per cent was charged against that Department to the end of a five-year period, and -thereafter sums had to be repaid to the Exchequer. A resolution moved by Sir John Simon provided, firstly, for the increase of borrowing powers authorised by the 1937 Defence Loan Act from a total ol £400,000,000 to £800,000,000, and secondly, for a redefinition of defence services for the purpose of the Act. so as to permit expenditure on loan account for civilian defence and grants in aid of the Essential Commodities Reserve Fund. NEED RECOGNISED BUT GOVERNMENT’S POLICY | CONDEMNED. LABOUR PARTY AMENDMENT. (British Official Wireless.' (Received This Day, 11.15 a.m.) RUGBY, February 20. Dr Hugh Dalton, for the Opposition, conceded that, in consequence of the National Government's past foreign policy, a great increase in expenditure on the defence of the country was now inevitable. The Opposition, he said, would not vote against the financial measures, but he moved a token amendment to reduce authorisation to 799 millions as an expression of the Labour Party’s grave dissatisfaction with the past record of Ministers in those matters.