REARMAMENT COSTS

Wairarapa Times-Age, 1 March 1939, Page 5

REARMAMENT COSTS

SIR JOHN SIMON’S POLICY REASONS FOR LIMITED CALL ON RESERVE. MANAGEMENT OF VAST OUTLAY. (British Official Wireless.) RUGBY, February 27. The second reading of the Defence Loans Bill giving effect to the financial resolution adopted by the House of Commons last week providing for an increase to £800,000,000 of the Government’s borrowing powers for defence was moved today by the Chan cellor of the Exchequer, Sir Johr Simon.

Sir John stated that his object in indicating in advance of the Budget the proportions in which the total expectec defence expenditure of £580,000,000 in the next financial year will be met from revenue and from money on the loan account and his object in all hit actions in connection with the defence loan programme had been to promote confidence by removing uncertainty. He claimed that his statement last Monday had been very well received, and it had operated as an encouragement to British trade and finance. Referring to comments on the fact that he apparently proposed to take only £230,000,000 from revenue for defence next year, which was less than in the current year, Sir 'John said that he could say, still without expecting his Budget statement, that the Budget for the next year must reflect to a certain extent the conditions; of the past year. INDICATIONS OF RECOVERY. Those conditions, while not those of marked depression, were certainly not those of a year of great and exceptional prosperity. But all the indications for next year were indications of recovery, and it was, therefore, extremely likely that the Budget for the year ending March, 1941, would reflect more prosperous conditions than the Budget for the coming year. The Labour Opposition had put down a reasoned amendment, which was later moved by Mr PethickLawrence, stressing the urgency of more effective measures being taken for the co-ordination of the various defence services, the organisation of supply and the strict limitation of profits. OBTAINING GOOD VALUE. Referring to the question of profits. Sir John Simon said that the Treasury was deeply concerned to secure in every practicable way that good value was obtained for the vast outlay on armaments. It was part of his duty to the public to make and stand by that declaration. He had closely examined with his officials the general system by which profits on contracts were checked, and he was convinced that it was a good system. In conclusion, he said, the Prime Minister had the confidence of the country, which rightly regarded him as pursuing a policy of peace, toward which the building up' of the strength of Britain was a contribution. After Mr Pethick-Lawrence had moved the Labour amendment, Sir Archibald Sinclair, Leader of the Opposition Liberals, had indicated that his party would support. it, the Air Minister,’ Sii’ Kingsley Wood, intervened to refute charges of excessive armament profits so far as his department was concerned. He claimed that the methods of financial control available to the Air Ministry were sufficient to enable it to feel reasonably confident that 'the contracts it made allowed no opportunity for exaggerated profits. In a tribute to the British aircraft industry for the manner in which it had expanded its undertakings to meet the demands of the Government’s air programme, ihe mentioned that its prices had been shown to be in many cases lower than those of American firms. He deprecated charges of profiteering against manufacturers, which created bad feeling between employers and employed and discouraged nation; al service. , NAVY ESTIMATES CONSTRUCTION ,PROGRAMME INCREASED. (Received This Day, 9.30 a.m.) LONDON. February 28. The Navy Estimates for 1939 are £153,686,681, an increase of £2,471,500. The new construction programme is increased by two destroyer flotillas, twenty escort vessels and ten minesweepers. The year’s programme therefore provides two capital ships, one aircraft carrier, four cruisers, two destroyer ' flotillas, 22 escort vessels, ten mine-sweepers, one river gunboat, one hospital ship, six motor torpedo boats and two boom defence vessels. It also includes provision for a new Royal yacht, replacing the Victoria and Al-( bert. The cost of the 1939 programme is £60,500,000, excluding the Royal yacht and the battleships Duke of York. Jellicoe, and Beatty, which will be launched during the current year. * MORE EXPANSION. ESTIMATES TO BE HIGHER NEXT YEAR. (Received This Day, 10.20 a.m.) LONDON. February 28. A high Admiralty official stated that

the Navy Estimates would almost certainly be even higher in 1940. Two hundred ships were being constructed during 1939. The King had intimated that, in the event of war, the Royal yacht would be used as a hospital ship. The. sum of £11,750.000 at present was being devoted to the fleet air arm. DISCREPANCY IN FIGURES. (Received This Day, 11.20 a.m.) LONDON, February 28. A strange discrepancy puzzling everybody is that the Admiralty’s bulk total for the Navy Estimates is £153,666.681. while Earl Stanhope’s figure is £147,779,000, which does not appear anywhere in the Admiralty s table, yet forms the basis for comparison with last year’s figures. The Admiralty includes effective and non-effective services It promises an elucidation later.