Aprit 23, The failure of the world to solve the disarmament problem is writ large on Mr. Neville Chamerlain's budget, 'The theorists who hold that' Great Britain can adopt a polley' of isolation may ponder over that additional threepence on the: income tax: among other measures: it arises from the need to expand the national defences. Additional expenditure on the fighting services: amounts to £25 million for 1936-37 and to that must be added the sup= plementary estimate of £20 million for the same purpose. The buoyant, revenue is heavily dragged down by these commitments; yot no-one, who accurately sizes up the tion and appreciates some the causes of Great Britain's dimculties in carrying out her foreign policy last. year can do otherwise than support the Government's decision, to proceed with a considered programme of rearmament. The surplus for 1935-36 was £3 million or six times the expectations of last year's Budget. That has been over= med by the supplementary estimates rendered necessary by! the rearmament programme. And, turning to the current year, the country is presented with ated deficit of more than £21 million which Mr. Chamberlain proposes to reduce by nearly £10 million as the result of legislation, limiting tax evasion, withdraw-certain exemptions (presents to ren from their parents) and raiding the road fund to the extent, of £5.25 million, The rest of the deficit amounting to about £11 million is to be covered by raising' the income tax by ad in the £ and the duty on tea by 24 per Ib. The estimated surplus thus budgeted for is about £500,000.
'The Government is fully authorized by the verdict of _the General Election to proceed wi ils rearmament programme, as the' necessity for that step wes plainly! put before the country last Nevember. It is satisfactory to note that, although no increased provision has been made for the redemption of. debt and the Chancellor has not been able to resist the precedent of raiding the road fund, the Budget is soundly framed. Debt reduction has proceeded on normal lines, the National Debt being reduced by £45 million and the floating debt by £515 million. The Exchange Equalization operations again were able to show a profit. Evidence of economic health is forthcoming in the Chaneellor's cheerful view of the revenue's buoyancy. It will be hoped that the increased taxation will not put a drag on the progress of recovery. The proposals for further action against systematic evasions of the income-tax by various devices which ingenuity has conceived will no doubt be hotly debated. Sympathy will be on the Chancelior's side, for some forms of evasion have been adopted by people who actually use their possession of wealth to throw the national burden on to less wel equipped shoulders. It is also curious fact that this abuse of legal procedure is frequently invoked by men and women who distinguish themselves by bemoaning the unpatriotic spirit of the masses and by severely criticizing the lack of thrift shown among the "labouring classes."
Mr. Chamberlain has definitely intimated that the eventual expansion of the defence programme will be met by loan operations. His argument is that it is unfair that the cost should be wholly borne by any one year. He will not be immune from criticism on this account. The orthodox economists will surely assail him, but he may win approval of the contention that seeing how closely he has clung to the path of orthodoxy, biz proposed heterodox may be pardoned on the time-honoured plea that it is "only a little one"—a minor lapse from grace. It certainly may claim indulgence seeing that in setting aside £1 million for the formation of a company to assist the distressed areas—a decision which will be criticized only on the ground that the amount seems to be inadequate Mr, Chamberlain cannot be accused of excessive rigidity in applying conservative principles to his Budget. He may also urge that vou dance of the defence loan can be secured by a satisfactory handling of the disarmament prob-
Jem. The Government therefore holds out the strongest possible inducement to British opinion for encouraging further negotiations on that issue. Generally the Chaneel~ Jor's statement gives a reassuring picture of a country which is not afraid to face the facts, which is not prepared to abandon its responsibilities for Empire, and which still stoutly maintains a robust faith in the world's ultimate ability {0 recover sanity and economic coherence.
Text read from the printed page and cleaned; old type leaves the occasional error.