EXPENDITURE ON DEFENCE

Wanganui Chronicle, Volume 83, Issue 44, 22 February 1939, Page 7

EXPENDITURE ON DEFENCE

FRANK BRITISH FORECAST AN INCREASE IN BORROWING POWERS ARMAMENTS PRODUCTION SOON AT FULL BLAST (British Official Wireless) RUGBY, Feb. 20. The debate on defence was opened in the House of Commons to-day by the Chancellor of the Exchequer, Sir John Simon, whose speech was notable for its frank forecast of the approximate proportions in which the 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 for the £580.000,000 whieh it was revealed in last week’s White Paper would be the total of expenditure on defence, ineluding civilian defence, in the coming financial year, approximately £240,000,000 would be available from revenue and about £350.000,000 would have to come from the 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 did not occupy much time re-arguing the case for borrowing for part of the present defence expenditure, originally debated in 1937. The principle of borrowing for this purpose was, he claimed, established and acceptable, and it was generally recognised that financial strains involved in the re-organisation of defence were greater than the revenue could bear alone. What was necessary was that they should demonstrate their readiness to bear each year a proner share of the burden, and in evidence of such determination he cited figures to show, taking the three years ending March, 1940, together. that out of the total expenditure of about £1,250.000.000 for defence about £700.000,000 would have to be met from revenue. Repayment of Loans. The provision for the repayment of borrowed money in connection with present proposals was quite specific. When a department had received a duly authorised issue of loan money, then interest at the rate of 3 per cent, was charged against the department to the end of the five-year period and thereafter sums had to be repaid to the Exchequer. A resolution moved by Sir John Simon provided firstly for an increase in the borrowing powers authorised by the 1937 Defence Loan Act from a total of £40.000.000 to £800,090,000. and secondly for a redefinition of defence services for the purpose of the Act so as to permit of expenditure on loan account for civilian defence and grants in aid of the essential commodities reserve fund. The Chancellor said that civil defence was more and more seen to be an essential part of defence as a whole, and it was illogical that nonrecurrent expenditure for air raids precautions, for example, should not benefit by the Act. Any expenditure.: moreover, on food stores in connection with the safety of the country was obviously an appropriate subject for loans under the Act. Progress Year by Year. Speaking of the formidable total of defence expenditure with which the country was fared. Sir John Simon reviewed the progress of the re-armament programme. The first year had been largely

( one of preparation; the present ' year had been one of rapidly in- [ creasing production; and the third year, with the great expenditure they now contemplated, would be one with production at full blast. It would be a chronicle of the provision of equipment for great increases in the personnel of all three services. For the Navy, the personnel of which had been increased by 33,000, there was a great building programme, including no less than nine capital ships, for four years. The great inflow of Regular Army recruits a.nd the record intake into the Territorial Army called for re-equipment and the accumulation of a war reserve, which would proceed apace next year. The recruitment of manythousands for a Royal Air Force of high quality was matched by the further augmentation of sources of aircraft production. It was deplorable and grievous, Sir John Simon concluded, that so large a part of the resources of the world should be devoted to armaments when otherwise they might be available to promote and sustain peaceful progress, but as long as no general arms limitation, genuinely and effectivelysecured, could be reached they must face a continuance of this heavy burden and fact it in confidence that the British financial strength, the British character, and the inspiration of the democratic faith would enable them to stand the strain as well, if not better, than others. Labour Token Amendment. Sir Hugh Dalton, who was the spokesman for the Labour Opposition, conceded that in consequence of the National Government’s past foreign policy a great increase in the defences of the country was now inevitable, and the Opposition would not vote against the financial measures, but he moved a token amendment to reduce the authorisation to £799,000,000, as an expression of the Labour Party’s grave dissatisfaction with the past record of Ministers in these matters. Civil defence will be debated in the i House of Commons next week, when the supplementary estimates for the ■ Privy Seal Office, the A.R.P., and the i National Service will be bro-/jht forI ward.