10 JULY 1936, Page 2

A Budget Deficit Mr. Neville Chamberlain's sudden announcement last week,

that already he could foresee a Budget deficit for this year, startled the House of Commons. But his statement also caused some satisfaction, for it meant that the rearmament programme is far enough advanced for Supplementary Estimates to be necessary. It is not Irnown. how large they will be and Mr. Chamberlain could not tell the size of the deficit. But it is almost certain that a defence loan will be raised. Mr. Chamber- lain went on to soothe the alarm he had caused, with hopes that seem too optimistic to be true. In the next few years, he said, the costs of rearmament would be heavy ; but they could be expected to decline again once our defence programme was completed. Such a hope is hard to reconcile with what is known of armament programmes. There is no absolute limit to the needs of our defence forces ; they are relative to those of other nations, whose strength has revealed our weakness. It is hard to believe that our neighbours will so con- veniently adjust their programmes to ours and wait for us to achieve equality or superiority. But if they do not, then the costs of rearmament are likely to be even heavier than they are at present.