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plus of 1,343,0001. over the sum anticipated in the estimates. Beer, Tobacco, Tea and Sugar and the Motor Tax all realised more than had been expected, but the Entertainment Tax and Spirits had fallen below the estimated sum. The Inland Revenue Duties as a whole fell below the original Budget estimate by 110,726,0001., chiefly owing to the shortage of Excess Profits Duty, of which, however, there were still unpaid arrears. To the surplus of 45,000,0001. to be applied to the reduction of debt had been added a sum of 25,000,0001., which was included for debt reduction on the expenditure side of the Budget. The estimated expenditure for 1922-23 was 910,069,0001., and the estimated revenue was 956,625,0001., leaving a surplus of 46,556,0001. When, however, the proposed changes had been made, it was estimated that the revenue would be 910,775,0001., and while the expenditure would be the same the surplus would only be 706,0071. The chief changes proposed were: the reduction of the minimum charge for letters from 2d. to 1 d.; of the postcard rate to 1d., and of the minimum charge for printed papers to fd., subject to certain conditions; also reductions in telephone charges; a reduction of the duty on tea from 1s. to 8d., and of the duty on coffee and cocoa by one-third. The standard rate of Income Tax was to be reduced from 6s. to 5s, in the £. The final Balance Sheet was as follows (see p. 50).
In the debate which followed Mr. Asquith criticised the wisdom of remitting taxes out of what he stigmatised as a remarkably short surplus. Mr. Clynes declared that the War Debt would eventually have to be liquidated by a graduated levy on accumulated wealth.
The debate was resumed on May 2 by Sir Donald Maclean, who specially criticised the decision to suspend the reduction of debt. He said that the only remedy for the present state of affairs was reduction of expenditure, which should have been applied two and a half years ago. Had retrenchment taken place at that time there could have been a reduction of 2s. in the Income Tax, lesser taxes on sugar and tea, and the country would have been placed in a position of which it might have been proud.
Mr. Bonar Law dissented from much of this criticism. He retorted that if Mr. Asquith had been Chancellor of the Exchequer he would have presented a Budget very similar to the one under consideration. One must not think too much of precedents, he said, but look on facts as they were and deal with them in the best way possible. He laid down the principle that it would be quite wrong to fix a certain time within which the debt must be paid off. He contended that the only real principle was that when trade was good and revenue expanding they should give every penny they could give without disturbing trade in order to meet the debt; but when trade was bad it was their duty to take into account what had been done and
slacken their efforts in meeting the burden. The right course for the Government to adopt, he held, was that when trade was as it was at present, expenditure should be met without adding to or deducting from the debt. Looking ahead, Mr. Bonar Law predicted that there were bad times in store, though perhaps not immediately. So far as human foresight could tell, there would be no world war for a very long time, and his belief was that the real strength of this country to meet the difficulty when it came would be found in a strong financial position far more than in anything else.
£ 112,250,000 160,750,000 10,600,000 48,000,000 18,250,000
3,000,000 329,000,000 27,800,000 19,750,000 35,667,000
Mr. J. H. Thomas commented upon the admission by the Chancellor that money from Germany was regarded as a windfall. He refrained from adding his congratulations, especially in regard to relief in indirect taxation, the burden of which on the working classes he described as appalling. He calculated that a working man with a wage of 31. 10s, a week, and having a wife and three children, paid 8s. or 10s. a week in indirect taxation. Additional relief in this direction would have been a greater stimulus to trade than 1s. off the Income Tax.
Colonel Gretton and Lieut.-Commander Kenworthy complained of the absence of relief for beer drinkers. The former said that the utmost amount which the Chancellor of the Exchequer would risk by reducing the duty on beer by 30s. a standard barrel, thus allowing id. to be taken off the price of a glass of beer, would be 20,000,0001. Mr. Neil Maclean advised the reduction of interest on Government securities, stating that anything from 75,000,0001. to 100,000,0001, could be saved in that way, and 3s. taken off the Income Tax.
On May 9 Sir Eric Geddes, speaking at Sheffield, stated that the cuts in expenditure adopted by the Government amounted to only 52,000,0001, of the 100,000,0001. recommended by the Economy Committee, of which he was chairman. He urged that the full economies must be carried out and taxes reduced, or trade could not recover. He said that the sweeping allegations of inaccuracies made by the Admiralty in its notorious Memorandum against the Report were untrue, and that the Chancellor of the Exchequer stated that he could see no error in the calculations. The Report recommended means of reducing an expenditure of 500,000,0001. by 100,000,0001. He congratulated the Chancellor of the Exchequer on what he had been able to do, and firmly believed he was determined to act in the spirit of his Budget speech. The reductions in the coming year were bound to fall in the two great groups which the Committee called the Defence Force and Social Services. They believed that full economies could not be made until one Minister was responsible for the whole expenditure on defence. As regards the Navy, they proposed a reduction of 21,000,0001. in addition to any savings from the Washington agreement. The Navy had given a reduction of 16,000,0001., including those savings, and so far as he could see the real naval economy was only some 4,000,0001. per annum, and was a very remote possibility. A reduction of 20,000,0001. was recommended for the Army in addition to the revisions of garrisons abroad. The Army had given approximately half that sum, including garrison adjustments. In the Air Force they proposed cuts of 5,500,0001., of which about half had already been made. As to education, they proposed economies amounting to 18,000,0001., and the actual cut was 7,500,0001. They strongly urged the evils of the percentage grant system. He said that the country was not getting the best value for its expenditure on education. Until some alternative recommendations were found they looked to the Government to give effect to the Report of the Committee, which were the only proposals before the country.
The Post Office vote was taken in the House of Commons on May 4. Mr. Kellaway then announced that, whereas in 1920-21 there had been a loss on the previous year's working of the Post Office of 7,300,0001., at the end of 1921-22 the deficit had only been 1,800,0001., and it was estimated that in the current year there would be a surplus of over 9,000,0001., 7,500,0001, of which would be applied to reducing postal and telephone charges. The Sunday collection of letters would also be restored. The charge for inland letters and letters to the United States and to all parts of the Empire, weighing not more than one ounce, would be reduced to 11d.; the postcard rate would be reduced to 1d.; the printed paper rate would go down to d.; the telephone rental for private users would be reduced by ll. 10s. a year; local message fees, extra mileage charges, and trunk calls made between certain hours would also be reduced. It had been decided to allow the establishment of a limited number of radio-telephone broadcasting stations in this country. These stations would be limited to a power of 14 kilowatts, and furnished with wave lengths which would not interfere with other services. As regards air mails, the aerial parcels post to Paris effected a saving of from five to six days.
Advantage was taken by Mr. Stanley Baldwin of the vote for the Privy Council for trade and subordinate departments to review the position with regard to the markets of the world. With regard to England, he explained that our great difficulty was to find employment for an increased population in a country already industrialised up to the limit of safety. The coal trade was the only one of our staple trades which had reached an economic level; it had already got back something like its prewar average in export trade, though the demand for industrial coal at home was low. The iron and steel trades and the cotton trade were going through a difficult time, but the wool trade was doing fairly well. The leather trade and the electrical trades, and the trade in textile machinery were busy. London was, he said, still the financial centre of the world, and there was every prospect of our being able to recover, retain and improve on the position in industry which we had always held in the world.
In the middle of May an effort was made by the Labour Party to secure legislation for the benefit of the unemployed. Mr. T. Griffiths introduced a Prevention of Unemployment Bill, the second reading of which was taken on May 12. The Bill proposed to transfer to the Minister of Labour the power to frame and carry into effect a co-ordinated national policy. He would from time to time advise the Treasury how to organise and spread over the different seasons of the year the various national works and services. The Bill made proyision for the appointment of local unemployed committees, representative of employers and workers, to keep in touch with economic conditions in their various areas, and it also gave power to the Minister of Labour to regulate late hours and conditions of labour. After a short debate an amendment for the rejection of the Bill was carried by a majority of 90.
The discussions on the Budget again brought to the fore the problem of economy, and on May 15 Mr. Chamberlain explained to the House of Commons the steps that were being taken by the Cabinet to that end. He said that the Treasury had already taken up with the departments the question of what immediate and prospective reductions could be made in their votes for the current year, and, as soon as their answers were received, would be engaged in discussing with them all possible means of effecting economy. He also announced that committees were being appointed to investigate (1) the practicability of a Ministry of Defence as recommended by the Geddes Committee; (2) the amalgamation and co-ordination of services common to the various fighting forces ; (3) the advisability of introducing a system of making lump sum instead of percentage grants to local authorities. Sir W. Joynson-Hicks pointed to the failure of the Treasury in 1921 to effect economies, and to the fact that the Geddes Committee had to be appointed because it could not control the departments, and asked if the Treasury could be assured that they had the Cabinet behind them. Mr. Chamberlain characterised the question as unfair to the departments and the Treasury. Reductions of 70,000,0001. had been made by the departments and the Treasury in combination before any proposals were submitted by the Geddes Committee. The Chancellor of the Exchequer, the Treasury, and the other departments knew, he said, that the Government were behind them in the efforts they were making.
On the same day a discussion took place on the Turkish outrages which had been reported in The Times ten days earlier. Mr. Chamberlain said that the Turks appeared to be working on a deliberate plan to get rid of minorities. Their method was to deport Ottoman Greeks, large numbers of whom died on the road from hardship and exposure. For preference the Turks chose winter weather for driving the deportees into the mountains, children being driven forward with the rest. So severe were the conditions of deportation that the roads along which the unfortunate victims were compelled to march were scattered with dead bodies. Mr. Chamberlain stated that the Turks had been repeatedly warned that these atrocities, which had now been going on almost continuously for over seven years, would adversely affect Allied public opinion and Allied policy, but these warnings and protests had been entirely without effect. The details received showed such an appalling tale of barbarity and cruelty, practised as part of a systematic policy of extermination of Christian minorities in Asia Minor, that the British Government-which had in the proposed terms of peace assumed a serious responsibility for the protection of